Business: Advanced sports analytics proves to be a game changer

Writing

“Advanced sports analytics proves to be a game changer”

By Rachel Goodman

Hanging high up in the rafters during Sunday night’s matchup between the Dallas Mavericks and Indiana Pacers in Indianapolis, a device was tracking every move of every player on the court.

That device was the 6-camera SportVU system that monitors every movement on the court below at a capture rate of 25 images per second.

In Sunday’s game, SportVU collected data that showed, among many other things, that Maverick power forward Dirk Nowitzki only scored in the second quarter when he held the ball longer than 1.4 seconds before taking his shot. The collection of such minute statistics would not be possible with the old method of recording data by hand.

Developed by Stats LLC, an Illinois-based sports statistical analysis company, the system uses Israeli missile tracking technology to collect data based on distance, speed, player proximity and ball possession. It is just one example of how technological advancements are revolutionizing a wide spectrum of the sports industry’s business model.

“We all know when a player is popular and there are basic stats that can lead you there,” Bob Meyerhoff, co-founder of Stats, said in an interview. “But now, we have such granular data that we can analyze individual situations and better project aging, performance and more.”

In other sports, systems like SportVU can track everything from how often a tennis player hits a specific point on the court to the amount of stress a baseball pitcher puts on his shoulder every time he throws a pitch.

Of the 30 teams in the NBA, 26 have employees dedicated to advanced statistical analysis.

These new analytics are impacting everything from ticket pricing structures, to contract negotiations, to merchandizing and advertising, said Steven Mintz, a statistical consultant who has worked extensively with systems like SportVU.

While the NBA is at the forefront of the analytics movement, other sports, such as soccer, are lagging behind.

Pete Reid, an Austin lawyer who handles sports contracts, said he has seen an increase in the importance of statistics, but that they still take a backseat to gut feelings during the negotiation stage.

“The statistics are part of what attracts a team to a player, but when it comes to the negotiations, they aren’t as influential in my experience,” Reid, who handles a number of player contracts for the Austin Aztex, said. “I’ve seen massive development in soccer in the past 10 years, but even still, the team wants to see the players for themselves, see if they fit with the team — those are the intangibles.”

While Reid might think that gut feelings still reign supreme, there’s evidence that teams are shifting their focus, according to Mintz.

“New money — tech, startups, etc. — are buying up sports franchises,” Mintz said. “People like Mavericks owner Mark Cuban are bringing in business savvy thinkers, not necessarily sports savvy thinkers, to approach these problems.”

One area where advanced statistics are already showing a drastic influence is on fantasy sports.

“Fantasy sports is a billions-a-year business that wasn’t possible in the form we see today,” Meyerhoff said.

To be exact, it’s a $4 billion industry, according to the Fantasy Sports Trade Association.

In a game of fantasy sports, players act as owners by using statistics to compile a team of real world athletes to compete against other fantasy teams.

“The fantasy game is becoming like stock trading,” Vince Gennaro, director of the Graduate Sports Management program at Columbia University, said. “It’s a big business and there is a lot at stake everyday,”

Just as in stock trading, the potential reward is an alluring attribute of fantasy sports.

Since 1988, the number of fantasy sports players has grown from an estimated 500,000 to 41.5 million. That’s an 8,200 percent increase in just under three decades.

The more intricate the analytics, the more enticing fantasy games become, according to Mintz.

“With the proliferation of daily fantasy sites, there’s now a market for private subscription services providing deeper level analysis for fantasy players,” he said. “Using in-depth analytics, fantasy sports players are finding more and more ways to improve their odds.”

            Fantasy sports start up FanDuel, which uses real time Stats data, quadrupled its annual revenue in 2014. The company is just one player in a rapidly growing field of daily fantasy sports businesses using a model that capitalizes on fans trying to make fast money based on player game performances.

According to its annual report, since its first quarter in 2011, the number of people paying to play in FanDuel’s games has risen from just over 3,000 to over a million in its final quarter of 2014.

This extraordinary increase in fantasy sports due to the revolution of sports analytics has most likely played a large role in the increase of television revenues generated by sports, Meyerhoff said.

While the influence of technologies like SportVU is already making a clear impact on the sports industry, most of its implementations are still unknown.

“SportVU data has so many levels of information that people working with it have only been able to understand small portions,” Mintz said.

According to Meyerhoff, the analytics revolution Stats began is at the genesis of the “next brand new.”

“We have all the data but don’t exactly know what to do with it,” he said. “Teams and private companies are racing to identify those directions.”

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