Sports Business

The Cubs Quantum Leap

The Cubs Quantum Leap

Superposition is a term that seems to belong to the world of sports.  In football there is a "superback" that can play multiple positions including tight end, fullback, or running back.  In baseball, there are utility players that can play multiple positions throughout the course of a game.

Superposition, however, actually belongs to world of physics. More specifically, “The superposition principle is the idea that a system is in all possible states at the same time, until it is measured.” In the world of quantum mechanics, the smallest particles (think electrons and protons) exist in every possible position until they are observed. When that occurs, all of the probability collapses into a single position.

If you have not fallen asleep already then a natural question at this point is why are we talking about Superposition (and especially quantum mechanics) and sports? Superposition can be applied to why live games or events will continue to be a value for the sports industry. More specifically, audiences live in superposition while watching games. From the start to the finish of a game, there are many different possibilities of an outcome. The fans, media, and sponsors constantly live in a world of multiple possible outcomes in every game their favorite team plays. This inherent drama and emotion is what drives so much passion about sports. It is only after the final score or outcome is observed that we can know with certainty what will happen to the our favorite team during a game.

[GROSSMAN: Dollars say Dwyane Wade a better investment for Bulls than Derrick Rose]

We can use last night’s epic (or heartbreaking depending on which team you cheer for) Chicago Cubs win as an example of superposition in sports. Going into the ninth inning, the Cubs were losing 5-2 and had a 2.5% win expectancy according to the baseball analytics site FanGraphs. At this particular moment, the Cubs possible states included:

· Scoring zero runs and losing Game 4 by the score of 5-2.

· Scoring one run and losing Game 4 by the score 5-3.

· Scoring two runs and losing Game 4 by the score 5-4.

· Scoring three runs and losing Game 4 in the bottom of the ninth or extra innings.

· Losing Game 4 and winning Game 5.

· Losing Game 4 and losing Game 5

· Scoring four runs and winning Game 4 by the score 6-5 with the Cubs   wining the series 3 games to 1.

Each one of these “theoretical states” exists for the Cubs, and Cubs fans “exist” partially in each of these states until the game is over. Even though the last outcome had a very small probability of occurring, it still was a possible state and part of the overall Cubs superposition. 

[SHOP CUBS: Get your Cubs postseason gear right here]

Superposition does exist for all entertainment options – particularly for movies and television shows. For example, fans are currently thinking about how the show Game of Thrones will conclude at the end of its eighth season (the show just completed season six). However, once viewers see the series finale, Game of Thrones no longer is in superposition. The series is over, and the viewers know what happens.

Unlike other entertainment options, sports are constantly in a state of superposition. That is what makes them such a valuable asset. Every year for many sports, there is a new season with a new slate of games. Each game has a conclusion, but there is a new game and new theoretical possibilities for each team. The team or sport for the most part is never “over”. Even when ratings are down for NFL games year-over-year, the concept of superposition will likely keep fans engaged with the league for years to come. More specifically, fans need to watch each game live to achieve the maximum emotional impact of superposition.

Superposition sounds like a sports concept. Even though it comes from the world of physics, it does not require a quantum leap to see how it shows why fans, media, and sponsors love sports.

Adam is the CEO and Founder of Block Six Analytics. He is also a lecturer for Northwestern University's Masters of Sports Administration and the co-author of The Sports Strategist: Developing Leaders For A High-Performance Industry. Ross is a Partnership Analyst at Block Six Analytics.

Why Cirque du Soleil, NFL experience could come to Chicago

Why Cirque du Soleil, NFL experience could come to Chicago

With the success of the NFL Draft going mobile, the league may eventually decide to take another NFL experience on the road.

The NFL has partnered up with Cirque du Soleil to launch an interactive exhibit in New York City this fall.

The attraction, titled NFL Experience Times Square, will include interactive screens, an auditorium for 4D shows, coaches clinics, autograph sessions and much more.

[BEARS TICKETS: Get your seats right here]

CSN Sports Business Insider Rick Horrow explains why taking the experience on the move could be a good thing for the franchise value of the Bears.

"This is an example of a $25 billion NFL business joint-venturing with another pioneer in the entertainment industry Cirque du Soleil to make it better," Horrow explained. "Here's the case, because the NFL Draft has become mobile with Chicago leading the way, then Philadelphia, the Pro Bowl, the Super Bowl, you can't believe it's not an opportunity for potentially doing this NFL experience along the streets of Madison Avenue, along State Street, as well as Michigan Avenue.

"How about downtown Chicago on the way to other places."

Watch the video above to see what else Horrow had to say about the NFL Experience possibly coming to Chicago.

Sports business: Using targeted promotions to earn more dollars

Sports business: Using targeted promotions to earn more dollars

In Monday's episode of National Public Radio’s (NPR) Fresh Air Joseph Turow, professor of communications and associate dean for graduate studies at the Annenberg School for Communication at the University of Pennsylvania, ominously "Warns That Brick-And-Mortar Stores Are Watching You."

While this may seem a bit like the real-life equivalent of "Big Brother" from George Orwell's book 1984, Turow is describing the reality that the tracking companies do in e-commerce has moved more fully into the offline stores. Using technology including mobile applications, iBeacons, loyalty cards, geo-targeting, and geo-fencing companies have more information about customers in-store buying and behavioral patterns. This enables companies to design targeted adds and promotions specifically tailored to customers that can increase the likelihood of them making a purchase.

While the ethical implications of this activity would require and entirely separate blog post, Turow and host Terry Gross discussed an important idea that comes from having this technology. In the past, companies have focused on rewarding and retaining loyal customers. Those are the customers that keep coming back and buying a company's products or service offerings. Because the cost of keeping a customer has been much lower than attracting a customer it would seem to make sense that companies would want to focus on keeping the customer's they have.

However, this may no longer be the optimal strategy for maximizing revenue growth. Instead, companies should be focused on the marginal customer rather than the most loyal customer. A loyal customer is loyal for a reason – he / she likes the company's service offerings. Why spend money on advertising and promotions if that person is already likely going to buy the product anyway?

Instead, targeted promotions should be focused on customers that will only make a purchase if they are influenced in the right way. For example, let's say a customer is indecisive about buying a pair of jeans. In the past, this customer may have tried a pair of jeans on and then left the store without purchasing them. Now, a customer can download a company's app to access additional content, deals, and other helpful information. In return for delivering these benefits the company can receive information from the app that shows the location of the person while he/she is in a store. It can then use a geo-fence, a virtual fence that surrounds a geographic area, to determine when a customer leaves a specific geographic area. If this customer leaves the store without making purchase after spending a certain amount of time (i.e. the time to try on the jeans) then the company could send a targeted ad saying that the customer has 15 minutes to come back to purchase the jeans at a 15 percent discount. Essentially, companies now can identify "disloyal" customers and then attempt to bring them back to stores to make purchases.

Using technology to reward "disloyal" customers is something that sports organizations need to increasingly focus on given the demands of the business. More specifically, there are loyal fans that are going to buy tickets, watch games, and purchase merchandise even if they do not see any advertising from a team. These customers add significant value and should not be ignored. However, sports organizations want to focus on targeting the marginal customer using new technology to encourage ticket sales, in-venue purchases and increase game viewership.

The added benefit of using technology and customer outreach in this way is that it should increase sponsorship revenue as well. Not only can sports organizations use targeted promotions to help their current sponsors expand reach, but organizations can also show how these targeted marketing efforts cause lifts in purchasing. For sports teams, clearly communicating how sponsorship/marketing assets are used to create a lift in sales provides powerful evidence of how similar tactics can drive new revenue for partners. Rewarding "disloyalty" seems counter-intuitive, but there are many ways that targeting marginal customers should lead to substantial revenue growth.

Adam is the CEO and Founder of Block Six Analytics. He is also a lecturer for Northwestern University's Masters of Sports Administration and the co-author of The Sports Strategist: Developing Leaders For A High-Performance Industry.