Sportingly Analytical
After Hollywood, it is time to use analytics in sports.
MIT Sloan recently hosted its inaugural Sports Business Conference. The idea is sure worth millions if you check the recent trade values for the top NBA draws, or club transfers for soccer stars in the European leagues.
With the infusion of private equity and investment bankers, sports teams are increasingly run like businesses and have started using advanced analytics to make decisions.
Dariel Morey, Houston Rockets , said he’s seen the uses of hard data in sports business multiply, to everything from how much to charge for a ticket to whether or not to draft players based on their performance as far back as high school — and how much to pay them if they’re signed
Houston Rockets, Atlanta Hawks and Boston Celtics are already using analytics for improving their revenues by making data driven decisions.
An interesting thought, in addition, would be to assess the possibility of integrating data from multiple sources (a sports datamart?) for not just standalone club/team level analysis but to take it to the level of the game itself. That would surely propel the thinking on a FICO Score look-alike - a Sportsperson Success Index (SSI) for every sportsperson.
That story about the Celtics took me back to a very early blog post - check out What about the Celtics’ Website?
Comment by James Taylor — February 15, 2007 @ 3:37 pm
James! I agree with the sentiment around building predictive models that predict the likelihood of everything (including games saleability, open seats, last minute auctions, etc.) and by looking at all possible dimensions (including the time of the day the ticket is booked, the profile of the buyer, the injury of Paul Pierce, the 18 game losing streak etc.), its not always easy to sell a glacier when all someone is looking for is ice cubes.
Analytical Maturity Models for organizations (yes, thats another model!) would suggest that stakeholders have a layered approach to adding analytical sophistication, more so because its a cost center. so EDM might be comprehensive, but what I would call running a marathon before they learn taking baby steps.
Moreover, I would still have my reservations about the 2 questions you have raised. Its based on the premise that the pricing is being done perfectly real-time, which is probably not the case here. I think the tool, till now, has been used as a feeder into pricing strategy for subsequent periods. As decision makers become more adept at handling the reporting functionalities of the tool, they are becoming more and more agile and dynamic in their pricing, which is far from being real time. EDM, on the other hand, will talk about a real time pricing strategy, quite like the most sophisticated air-ticket pricing systems, which even today are not quite perfect.
A decision engine, yes, is a great idea and at Diamond, we have done a fair bit of them, but the question behind the conference remains - Its an industry which has not used “data mining” to a great extent so far. Lets see if there are more like Celtics out there, ready to experiment!
Comment by Amit — February 16, 2007 @ 7:53 am
This reminds of an idea someone gave me to use Analytics at the big Gambling houses. If you come to think of it, these people have based their entire business around the world of analytics. Think of some gambling websites, with respect to capital required, and revenue generated. Also, Vegas is thus the biggest hub of analytics on earth..
Comment by Sulabh Dhall — February 16, 2007 @ 10:42 am