It and Sports

Executive Summary

The evolving sports industry is facing increasing demand for information as well increased pressure to implement technology by consumers (fans) and shareholders. Information technology in particular is finding its way into the sports industry via video, online-streaming, and RFID systems. These systems are being used to track athlete performance, aid in advertising and merchandising, expand event broadcasting accessibility, and ultimately increase franchise profits. Data-mining software in particular has found many applications in the sports industry such as scouting, team strategy, and statistical analysis. Observed drawbacks of the increased implementation of information technology are the legal implications that must be addressed and the constant battle over royalties and copyrights.

Background

All industries are driven towards the same goal, to become successful and make money, and the sports industry is no different. When looking at how money is made in or through sports there are many different areas to consider, such as ticket sales, merchandise sold and advertising space to name a few. However one can’t also forget the importance of “on field” performance, which is also a major factor in most markets when evaluating success of a team/player/franchise and ultimately making a high profit. It is no coincidence that the teams/players performing at the highest level will, on average, consistently sell more tickets (usually for a higher value) then teams struggling to win.

Although the business of sports relies on many different factors to be successful, some of which were noted previously, make no mistake that all of them are connected to one another. If a team is not successful, who will want to buy tickets? If no one is at the venue then who will be purchasing the on-site merchandise? Finally, if no one is purchasing tickets (or watching on TV) then who will pay top dollar for advertising space? These are just some of the reasons why a teams’ on-field performance can impact all the other areas that are more commonly thought of when thinking of profit.

So that raises the question, how do teams ensure on-field success? To what measures will they go to put a competitive product on the field year in and year out? How do they stay ahead of their competition who is also striving for the same success? The answer to these questions is never the same from year to year, teams are always trying to use the latest and greatest technology to get an edge on an opponent, and they will pay top dollar for it.

Without going into too much detail, this paper will describe how data mining, a method of information technology, is used in various sports including but not limited too the National Hockey League (NHL), National Football League (NFL), National Basketball Association (NBA) and the Olympics. By collecting data from many different sources, analyzing it, and using it to their advantage, teams, players and coaches have found ways to become more successful and show continuous on-field improvement. This idea has become so essential for success that top dollar will be paid for quality information technology systems or companies who will provide the service. One could argue that the importance of having the top IT tools at a teams finger tips could be as important (maybe more) then having the better athlete.

One may read that statement and think that is ridiculous, ultimately the best players are almost always the highest achievers, right? Well how did they team get the best players? The answer is usually through drafting high quality talent or recruiting individuals from around the world. Another method is evaluating other teams’ talent and determining exactly what is needed to make your team better. Once again this is done using data mining or other methods of information technology. A process that involves collecting all or sometimes a sample of all available information, studying it, analyzing it, and using it to their advantage.

Although the success of a franchise weighs heavily on the on-field performance, how do teams afford to buy the state of the art technology (whether in house or outsourcing) if there is no money coming in? Well the answer is, they simply can’t, especially not for any lengthy period of time. This brings us to the marketing side of the business of sports, the ability to maximize revenue through ticket sales, sold merchandise and advertising among many other methods.

Looking more closely into marketing, the industry uses many of the same techniques to achieve a high performance. With many different forms of marketing including, traditional advertising, billboards, internet or telemarketing and many different products (both sports related and non-sports related) such as team/athlete merchandise, events, beer, food etc. one has to find a way to analyze a lot of information to come up with a logical marketing plan to achieve the highest profit. In order to maximize your profit one most consider many questions, such as, who is buying the tickets? How old are they? Will they pay more for different opponents, or day of the week the event is being held on? How about selling food and beverages, what are the best times to promote? Once again this is done in many cases using information technology and data mining. This information is extremely valuable as it sets a part the profitable franchises, from the companies struggling to stay a float.

Everything mentioned above just gets amplified when one considers how the sports industry continues to grow around the globe. With fans located locally, perhaps a short plane ride away or even half way across the world, all interested in one sport and one team, how does one try to maximize the profit they can get from each person. This can only be done by focusing on many different areas of profit at the same time and with the same intensity. Although the local individual may be interested in the authentic winter coat, that might not be the case for the fan in Florida. Similarly the fan in Florida may be interest in signing up for the internet package to watch all the games over the internet but the local fan can simply catch them on the local television station. How does one target both people without wasting advertising space on the other, when do they do that? How do they do that? Although this seems like a difficult task to achieve, with the increasing use of technology (sometimes to the point of outsourcing data analyzing companies) this has become a more realistic expectation by ownership.

No matter what the sport is, whether it is at a professional level or an amateur