DISCUSSION GUIDE BUILDING THE BIG DATA ECONOMY THE WINNING FORMULA IN SPORTS

Underwritten by: JOIN THE CONVERSATION: #BGOVData EXECUTIVE SUMMARY On October 28, 2015, Bloomberg Government, with support from SAP, hosted “Building the Big Data Economy: The Winning Formula in Sports,” a live event that took place at Rayburn House on Capitol Hill in Washington, DC.

Panelists included: Ted Leonsis, Chairman & CEO, Monumental Sports & Entertainment; Pokey Chatman, Head Coach & General Manager, Chicago Sky; Adam Cromie, Assistant General Manager & Director of Baseball Operations, Washington Nationals; Charlie Sung Shin, Senior Director, Strategic Planning, Major League Soccer; Bonnie Bernstein, Vice President, Content & Brand Development & On-Air Host, Campus Insiders; Freelance Host, ESPN & Fox Sports Radio; Mark Lehew, Global Vice President, Sports & Entertainment Industry Business Unit, SAP SE; Brian Burke, Senior Analyst, ESPN.com; Founder, Advanced Football Analytics; Daren Dulac, Director of Business Development & Strategic Partnerships, Sports & Entertainment Division, Extreme Networks; Isaiah Kacyvenski, Sports Advisory Board Chair, MC10; Tim Chartier, Chief Researcher, Tresata; Associate Professor of Mathematics and Computer Science, Davidson College; Robert Ochsendorf, Associate Research Scientist, Offi ce of the Commissioner, Institute of Education Sciences, U.S. Department of Education; and Clay Walker, CEO, BigTeams.

The morning-long conversation focused on how data science is being deployed today to improve athlete performance, safety and health; fi nd the winning edge not just on the fi eld, but in the front and back offi ces and all the way to the boardroom; and engage customers like never before.

THE WINNING FORMULA IN SPORTS Data analytics has infi ltrated every aspect of sports—going beyond the sabermetrics approach, to scouting and recruiting made famous by Moneyball and improving player performance, health and safety. It has crossed over from the fi eld to the business development side where it’s being used to understand fan behavior that, in turn, informs marketing, advertising and ticketing.

In today’s front and back offi ces, it’s become de rigueur to employ math PhDs alongside professional sports lifers. An economics major with experience in econometrics when he fi rst joined the Washington Nationals, Adam Cromie, Deputy General Manager and Director of Baseball Operations, said he wouldn’t hire himself to work in the data analytics department today. “Now, we’re running much more sophisticated models. We’re no longer basing a lot of our decisions on models that are regression-based. We’ve moved into machine learning pretty signifi cantly.”

Cromie said that one of the challenges with combining the “dyed-in-the-wool scout” and the statistician and technology geek is taking complicated data-driven concepts—that may be contrary to traditional thinking—and getting everyone on board. “Oftentimes the thing that we focus most on is presentation,” he said. “The message itself and the content of the message isn’t what wins the day. It’s how you present that message. It’s how you provide the data.”

Beyond the playing fi eld, Charlie Shin, Senior Director of Strategic Planning at Major League Soccer, said there is big competition off the fi eld and teams and leagues try to fi gure out the return on investments from data analytics and what it means to the overall business. “It’s all about how can we leverage those data to make better decisions from a business perspective.”

For the Founder of Monumental Sports and Entertainment and Owner of the Washington Capitals, Washington Wizards, Washington Mystics and the Verizon Center in Washington, DC, it all goes back to the community. “I’m an optimist on connecting the dots on the role government plays, the role business plays, and how data can be used,” said Ted Leonsis. “I also know the central role that sports play in major cities. And sports teams—there are very few big iconic institutions that defi ne what a community is all about.” THE NEW RULES OF ENGAGEMENT When it comes to the consumers of sports, the big question is: How do I get my fans more engaged? “A more engaged fan means more revenue to the organization,” said Daren Dulac, Director of Business Development & Strategic Partnerships, Sports & Entertainment Division, Extreme Networks.

Using data analytics, teams across different sports are developing ways to understand exactly how their fan base is segmented, how those fans are engaging with the brand and how to turn those analyses into the kind of targeted and customized offers and values that they want.

Transparency is key, Dulac said. “It’s democratizing this data for the use by the fans.” Make the data available, he said, and through analytics, you can understand which data consumers respond to, and use those to improve the fan experience.

At the same time, when everyone has access to the same information and to the same understanding, that can lead to “an arms race” among fans for the next level of data and a deeper level of analysis, said Brian Burke, Senior Analyst, ESPN.com and Founder of Advanced Football Analytics. Fantasy sports have changed fans’ awareness of basic statistics, he said. “People are hungrier for the next level,” he said. “Right now, it’s very data rich, and analysis poor.”

While there’s tremendous opportunity in technology to support the fan experience, the challenge is fi nding the balance between being transparent and protecting what’s proprietary. “These things have value,” Burke said. “If something has value, it’s going to be proprietary.”

THE GENERATION Z EQUATION: ANALYTICS + SPORTS = SUCCESS “When I fi rst got online, there were less than a million people online. Today, there are four billion that are connected to the Internet,” said Ted Leonsis. “Young people are living their lives on the [Web] and because they’re living their lives in this new transparent, real-time world, data analytics has become a big driver of what they do. And sports is the greatest way for young people to be introduced to deep data.”

It begins in high school, said Clay Walker, CEO of BigTeams. “High school athletics is such an important part of the community,” he said. “More than 500 million people attended high school athletic events last year. That’s more than all the attendance in all professional sports combined. It’s an enormous audience. High school sports matter.”

Walker said participation in high school athletics is a predictor of later success in life. Robert Oschendorf, Associate Research Scientist, Offi ce of the Commissioner, Institute of Education Sciences, U.S. Department of Education, concurred and said more recent longitudinal research shows that success in mathematics, particularly algebra, is a strong predictor of success in college. “When we think about data analytics as it relates to algebra, that’s basically what it is,” he said. “Algebra is basically students’ fi rst exposure to an analytic framework.”

The potential for big data analytics in sports to draw kids into STEM fi elds that they may not otherwise be attracted to should encourage educators to think of ways to offer elective programs at schools that bring kids into a math-driven fi eld.

“Youth today see data as a way to answer questions,” said Tim Chartier, Chief Researcher, Tresata and Associate Professor of Mathematics and Computer Science at Davidson College. “Because they’re willing to have three screens going at the same time, they’re willing to use multiple fi elds to answer a question. And sports can be that for some of them.”