Insights

Data Can Help Sports Valuations Continue to Rise

There’s been a lot of handwringing over the steady decline in attendance, and TV ratings, among major professional sports. But somehow the value of sports franchises continues to go up. Remember Steve Ballmer’s surprising purchase of the NBA’s Los Angeles Clippers for $2 billion in 2014? Today, at least 50 sports teams are worth more than that, according to Forbes’s latest count.

How is that happening? Well, winning helps. Successful teams like the New York Yankees, New England Patriots and Golden State Warriors all rank near the top for franchise valuation. But, so do the New York Knicks, who haven’t made the playoffs since 2013.

And even top ranked teams are lagging at the box office and on TV. The Yankees and World Series Champion Boston Red Sox, another valuable franchise, have seen double-digit TV ratings declines this year.

That doesn’t mean people aren’t watching — and caring about their teams. Fans are fans. The community is anywhere they are. We just have to find them. Maybe they’re not in the team’s home city, or even home country. Maybe they’re at a bar on a business trip. Or at a casino watching – and betting on – multiple games. Maybe they’re at a youth soccer game, checking on their alma mater, or their fantasy teams, during breaks in the action.

In fact, you could argue that sports are more popular than ever, including collegiate athletics. Universities don’t come with valuations, but they do produce revenues, including a total of $1.8 billion a year at the top 10 NCAA sports programs. (Texas is No. 1, at least in revenues, according to USA Today).

How can professional and college teams locate their fans, wherever they are, then figure out what they want and how to get it to them? If we really want them to come to the stadium, we need to give them more reasons to do so. Do they want better wi-fi, or cheaper snacks, or a more personalized experience?

Fortunately, understanding their needs is more accessible than ever. The key to access is clean, comprehensive data that paints a picture of the fan as an individual and lets us tailor their experience in ways that surprise and delight them. Does your team have a fan in Europe that wants to buy a throwback jersey for his wife or kids? Is there a group of fans in Houston who like to travel to small market cities to watch the Astros?  The data holds the answer to questions like these. Now, how do we find the answers?

New analytics tools can segment high income fans, use data visualization tools to show where your fans are located and even predict which fans are most likely to purchase season tickets. Understanding which fans will show up if its raining sideways as opposed to who needs a bobblehead giveaway to gain their attention can be segmented from databases and even integrated with CRMs for sales staff to have the most up to date data at their fingertips.

Successful franchises, not to mention collegiate sports programs, have figured this out. It may not level the literal playing field – big money teams will probably win more games than those with smaller budgets. But there’s no reason why a well-run organization can’t generate more revenues and remain competitive, even in an era of declining attendance. Cultivating a devoted fan following, proud to wear their team’s colors, is an important part of building a franchise’s value. Those folks are out there, waiting to be found and engaged in creative new ways. Good data can show us the way.

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