NBA Brand Report 2019

With the 2019-2020 NBA season on the horizon, it’s time to take a look at NBA fandom through an analysis of the team fandom and brands. I do these for the various pro leagues on a near annual basis though the last NBA ranking was 3 years ago.

When thinking about NBA fandom, we need to acknowledge that the NBA goes to market a little bit differently than the other major leagues. In the current era, the NBA has been a star driven league. Over the last 40 years, the NBA’s story has been the tale of Julius Erving, Larry Bird, Magic Johnson, Michael Jordan, Kobe Bryant, LeBron James and Stephen Curry. And maybe Charles Barkley Tim Duncan, Shaquille O’Neal, Kevin Durant and a few others.

Those last two sentences are important, debatable, and maybe enraging. Does Kevin Durant belong in the first group or the second? What about Kareem? How about Karl Malone and John Stockton? My list is off the cuff and subjective but what’s important about those two sentences is that those players (plus or minus a few) represent the story of the NBA going back two generations. In most sports, fan loyalty is about teams first and players second. In the NBA it is often the reverse.

LeBron James is probably the best example. When LeBron was in Cleveland the Cavs were a top brand. A TV ratings draw and an arena filler when the team was on the road. As he moves on the Cavs quickly reverted to being a second tier NBA brand.

The upside of this approach is NBA players can become true cultural icons. This means that the NBA generates a lot of “Free” media. I suspect that the daytime ESPN talk shows pay as much or more attention to the top 5 NBA players as they do to all of MLB. The downside is that the players have more control over the fortunes of the league than in the NFL or MLB.

I should probably be more specific – a small group of NBA players has enormous power over the league. This can create challenges for individual teams and can create issues for the entire league. What happens when a team (Toronto?) loses a star player? How do they recover? Try to talk a free agent into coming to a small market (OKC?)? Good luck. At the league level, is there “face of the league” succession planning? When do you stop emphasizing Michael Jordan? Or even better – how do you decide who to market next? Why is LeBron a bigger star than Kevin Durant?

As we go into this next season the big on-court topic (written before the NBA-China relationship blew up) is the same as the big marketing topic. How does the shift towards player empowerment (or player collusion to circumvent the CBA if you prefer) impact the league?

This is relevant to today’s article because the focus is on analyzing the loyalty and engagement of fans across the NBA. Specifically, I am taking a look at and ranking the NBA teams in terms of fan engagement and loyalty. Player movement is a major part of the story. In the NBA, it is tough to disentangle the loyalty to teams versus loyalty to stars. This past off-season, saw significant player movement towards teams that have not historically been iconic NBA brands.

The Metrics

I’m going to skip the details (no one reads them) but I will say my analysis of team brands is different because it’s based on the statistical analysis of 20 plus years of data on winning, attendance, pricing, population and just about any other factors for which I can collect data. The basic idea is that I look at how teams perform in terms of several marketing performance metrics after controlling for factors such as winning rates and market population.

I evaluate NBA team fandom using three metrics. Fan Equity is based on how teams perform in terms of home revenues. This captures pricing power and attendance. Social Equity is based on team’s reach via Twitter. Road Equity is based on how teams draw on the road.

Each metric has advantages and limits. Fan equity is based on consumer’s willingness to attend and spend. This is the gold standard for measuring consumer engagement as it is based on opening the wallet and taking the time to sit in traffic and make it to the arena. On the downside, this metric does not consider a team’s national following and may be constrained by arena capacity. The Social Media metric has advantages as it can capture out of market fandom and fans who are priced out of an arena. I also think social media following skews younger so it is more of a forward-looking metric. A problem with social media is that social followings are “sticky” in the downward direction. When LeBron moves to a new team, we see a huge jump in the team’s social following. But when he moves again, relatively few fans make the effort to stop following the previous club. Road Equity is based on a combination of national following and willingness to travel. In the NBA this is probably almost all about national following. The weakness of the Road equity metric is that national following may be much more about a star player than the team itself.

To get an overall ranking I combine the three metrics using a weighting scheme that treats the Fan equity measure as twice as important as the other two. Debatable but simple.

The Winners

It has been a few years since I did the NBA rankings and there are some significant changes. The overall winner going into the 2019-2020 season is the Los Angeles Lakers. The Lakers score consistently high across the three metrics. Number 1 in Road Equity and Social Equity and number 2 in Fan Equity. The Lakers are followed by the Warriors, Bulls, Celtics and the Cavs.

The significant changes from the previous ranking are the elevation of the Warriors and the fact that the Knicks are absent from the top 5. The Bulls and Celtics have long been iconic NBA brands. Different histories but similar results. The Bulls are the house that Michael built while the Celtics were built by many.

The Warriors are a great example of how powerful brands are created. Golden State was long a second tier team. Now, after years of Stephen Curry and Kevin Durant winning championships, the Warriors have become a premier brand with a national following of engaged fans. The lesson is that it is not enough to win once. Like the Bulls, brands are built through repeated championships.

The Knicks are ranked 7th on the overall list. The Knicks win the Fan Equity measure but fall short in terms of the Social and Road metrics. I suspect that the control variables do not adequately capture the unique advantages that the Knicks enjoy based on location.

What about the Cavs being ranked 5th? Two quick thoughts. First, I use three years of data to measure current brand equity. This is done because brand equity usually shifts slowly and to average out noise in the data. The problem is that using three years means that the Cavs still benefit from seasons that include a now departed player. The downward stickiness of social media is also an issue in the Cavs results.

The Losers

At the bottom of the list, we have the Washington Wizards, Memphis Grizzlies, Charlotte Hornets, Brooklyn Nets and Detroit Pistons. For this group, it has been different paths to the bottom. Did the Wizards ever recover form the name change from the Bullets? Memphis and Charlotte have never had a history of success. The Pistons are interesting because they also had a period of success at about the same time as the Bulls. Why is the legacy of Isiah Thomas so much less than that of Michael Jordan? Its likely about the scale of winning and maybe something related to the dynamics of Detroit versus Chicago.

 

The Brooklyn Nets are also a curious case. The move from New Jersey to Brooklyn came with a lot of hype. So what happened? First, there was no period of great success to take advantage of the hype. Second, the Nets fall short in comparison to the Knicks (and other major market teams like the Bulls and Lakers). While they play in the same market, the Nets results do not compare to the Knicks on any of the fan metrics.

What is really necessary for a team to move up the rankings is consistent winning. And not just winning in terms of making the playoffs – brand equity seems to be built by winning and contending for championships.

The List

Finally, the overall list. Please enjoy and tell me what you think in the comments. I expect 80% hostility.

 

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Fanalytics Podcast: Sales Force Analytics

In this podcast episode, I sit down with Jon Adler, Director of New Membership and Ticket Sales for the Atlanta Hawks. In the first half of the episode, Jon and I talk about the mechanics of selecting and managing a team of entry-level sales professionals. The conversation focuses of using incentives to both motivate employees and to teach effective sales tactics. We also talk a little about applying “Money Ball” techniques to sales force management. This is an important point because the same basic techniques that can be used to predict the performance of a point guard can be used to select a salesperson.

In the second half of the episode, I take a deeper dive into how different techniques and theories can help sales managers. Salesforce management has some real challenges related to forecasting performance and using dynamic incentive schemes to motivate performance. Recognizing some of the underlying complexity can be helpful because it provides a guide to decomposing managerial problems and identifying the best analytic approaches.

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Fanalytics Podcast: XFL Team Names

 

Recently, the XFL announced team names and logos for the upcoming 2020 season. I’ve been interested in team names, logos and mascots for some time. I’m an Illinois graduate so I’ve witnessed the controversy and passions that surround a mascot change.  In addition, one of my academic specialties is the study of brand-consumer relationships. There may be no more intense brand-consumer relationship than the connection between teams and fans.

However, while most of my work uses data and statistical models to study sports topics, the analysis of team names usually requires a less quantitative approach. With some notable exceptions the analysis of team names and mascots needs to be based more on theory and logic than on data. The approach I use in the classroom is to consider team names from a variety of angles.

First, does the name have a local logic?  Many of the great team names have a direct tie-in to the local area or culture.  The Steelers’ name comes from a time when the city was dominated by the steel industry.  The Gators’ name highlights the wildlife that surrounds the University of Florida. The key question is whether the name provides a connection to the local environment.

Second, is the name innovative or interesting? Being distinctive is usually helpful in creating brand-consumer relationships.  The last thing that a team wants is to be thought of as generic or boring.

Third, is the brand or name well executed?  Does the branding make sense? Is the logo cool?  Is the messaging consistent? This criteria is a little bit more of a judgment call that the others, especially when the team names are newly introduced.

The image below provides summary grades for the 8 new XFL brands. My winner is the Dallas Renegades and my losers are the LA Wildcats and NY Guardians. The Renegades have some nice local tie-ins and are set up to contrast with the Cowboys. This is just about the name. Taking on the Cowboys in Dallas is daunting to say the least. The Wildcats suffer from being generically generic (if that’s grammatically possible).  The Guardians have the most confused branding. Is it about surveillance gargoyles?

The podcast episode provides a more in depth discussion.

 

 

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Fanalytics Podcast: Ezekiel Who? Analytics & the Collective Bargaining Agreement

 

In this episode, Professor Lewis discusses why the Ezekiel Elliott holdout is the most important off-season NFL story. It’s a story about how the collective bargaining agreement’s rules for rookie contracts comes into conflicts with analytics. The conflict occurs because for some positions, like running back, NFL rookie contract rules allow teams to avoid paying market rates for the majority or entirety of players’ careers. The episode talks about how last year’s Todd Gurley and Le’veon Bell deals have gotten us to the point where players may be increasingly willing to hold-out and teams may be less likely to invest in running backs.  

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Fanalytics Podcast: Sports Analytics – Getting Your Foot in the Door

Houston Dynamo Data Analyst and Emory alumni Sean Steffen joins Mike Lewis on this Fanalytics podcast episode where they discuss how to get into the field of sports analytics. Getting your foot in the door can be quite competitive. Sean shares his “non-traditional” journey.

Some background on Sean: In college, he majored in creative writing. From there, he started writing for American Soccer Analysis, a blog that focuses on Major League Soccer. The key to Sean’s success was that he backed up his writing with data and analytics.

The conversation gets a little deep in the weeds and even includes a discussion of the competing programming languages – R and Python. For prospective analysts, Sean recommends learning excel and linear regression.  Mike says SQL, R, and linear regression are good starting points to analyze data.

They also talk modern soccer analytics such as the logic and mechanics behind expected goals.

You can reach Sean on Twitter @SeanSteffen or search him on LinkedIn.

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Fanalytics Podcast: FIFA World Cup Gender Pay Gap

A big topic making headlines right now is the FIFA Women’s World Cup. More specifically, the gender pay gap at the FIFA World Cup.

Professors Mike Lewis and Tom Smith discuss their thoughts on the wage differences between the men and women’s soccer teams on this Fanalytics podcast episode.

Tom also looks at the earning ratios of men and women athletes primarily in the United States.

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NFL Fandom Report 2019

 

Time for our yearly look at NFL fandom.

Each year, I do a quantitative analysis of NFL fandom.  The analysis is grounded in economic and marketing theory, and uses statistical tools to shed light on the question of which teams have the most loyal or “best” fans.

The fundamental question that guides the analysis is simple – Who has the best fans in the NFL?  For the business folks, maybe we phrase this as – What are the best brands in the NFL? It’s a simple question that requires some complicated analyses.  First, we have to decide what we mean by “best”.  What makes for a great fan or brand?  Fans that show up even when the team is losing?  Fans that are willing to pay the highest prices?  Fans that are willing to follow a team on social media? Fans that show up to see the team play in other markets? All good options.

Even after we agree on the question, answering it is also a challenge.  How do we adjust for the fact that one team might have gone on a miraculous run that filled the stadium?  Or perhaps another team suffered a slew of injuries?  How do we compare fan behavior in a market like New York with fans in a place like Green Bay?

My approach to evaluating fan bases uses data on attendance, revenues, social media following and road attendance to develop statistical models of fan interest (more details here).  The key is that the models are used to determine which city’s fans are more willing to spend or follow their teams after controlling for factors like market size and short-term changes in winning and losing.

Similar to past years, I use three measures of fan engagement: Fan Equity, Social Equity and Road Equity.  Fan Equity focuses on home box office revenues (support via opening the wallet). Social Media Equity focuses on fan willingness to engage as part of a team’s community (support exhibited by joining social media communities).  Road Equity focuses on how teams draw on the road after adjusting for team performance. These metrics provide a balanced analyses of fandom – a measure of willingness to spend, a measure unconstrained by stadium size and a measure of national appeal.

To get at an overall ranking, I use a statistical tool that looks at the correlation across the three metrics to create a “Brand Equity Factor”.  Similar analyses are available for the NBA and MLB.

The Winners

 

The top five fan bases (team brands if you prefer) are the Cowboys, Patriots, Eagles, Giants and Steelers.  This is unchanged from the last two years – leaving me with little to say. The Cowboys have long been NFL royalty and the Patriots are now firmly established at the top of the league. It remains to be seen if the Patriots will remain near the top when Brady and Belichick move on.

In past years I have noted that the Eagles are a bit of a surprise.  But the strong social and road scores keep the Eagles near the top. The Steelers could probably be a bit higher on the list. The Steelers tend to price near the middle of the league and this limits their Fan Equity score.

The Giants are an interesting case. They do well on Fan Equity (especially compared to the Jets) and the Road Equity score is impressive.  The Social Equity score suggests that the Giants are more of a regional brand but when your region is NYC it’s not a major problem. The Road Equity score is an interesting one to debate. The teams in the NFC East all do well on this measure. I could adjust for divisional affiliation but the NFC East is, for whatever reason, the glamour division of the NFL. My feeling (like I said it’s debatable) is that the teams in that division should be given credit for the divisions appeal.

The next group of five includes the Packers, Broncos, Bears, 49ers and Saints.  A lot of face validity to these results. The 49ers might raise some eyebrows, but it is a team that does very well in terms of attendance and pricing power. The Bears, Packers and Broncos are all strong brands with impressive histories. The Saints are the relative newcomer in the top ten. Like the Patriots, it will be interesting to see how Saints fandom responds when Drew Brees retires.

 

The Losers

At the bottom of the rankings, we have the Bengals, Jaguars, Titans, Chiefs and Rams. Only minor changes from last year. The Browns have edged out of the bottom 5. These teams all suffer from the same issues – relatively weak pricing power and limited social followings.

The Chiefs are the team that will generate push back. The Chiefs have had some success and they have significant star power. The problem is that the Chiefs lack pricing power and do not have much of a social following (I use Twitter). However, the Chiefs and Browns are probably the best positioned teams to make moves up the charts the next few years.

For the Rams (and the Chargers), we should probably include an asterisk. Moving markets and playing in temporary stadiums can lead to questionable data. The Rams – like the Chiefs and Browns – are well positioned for on-field success over the next few years.  The good news for these teams is that on-field success is the best way to create brand equity and fan loyalty.  The bad news is that it takes a good amount of success to move the needle long-term.

 

The Business Implications: Why does this Matter?

This study is about measuring fandom intensity or engagement. The logical foundation is that we attribute over or under performance in revenues or social following to fan engagement. To do this, we have to control for factors like market size and winning. This is the key point. Fan engagement is a little different from brand equity (the value of a brand) because we are controlling for market differences. The preceding results are more about intensity or passion of a fan base rather than the value of the fan base.

Fandom intensity is an important and often overlooked part of brand equity. In a full brand equity analysis, I would want to combine structural elements of a market (population, income, arena, etc…) with a fan engagement factor to assess a team’s brand equity. The value of the fan base is probably best thought of as a product of the passion (or intensity or engagement) and the size of the fan base.

Why do we care about fan intensity?

A standard approach to value sports assets (teams, players and sponsorship deals) is to use comparables. The idea is that you evaluate a future deal based on the characteristics of similar past deals. It’s the same concept used in real estate where housing prices are usually dictated by factors such as square footage, number of bathrooms and the previous sales in the neighborhood.

In the world of sports, there are many deals that are valued based on the fans. Stadium naming rights and sponsorships are two prime examples.

But in the case of sports deals, it’s important to consider the passion of the fan base. Let’s consider a non-NFL example to illustrate the point. How might an analyst value similar deals (naming rights, sponsorships, etc…) related to the Clippers and Lakers. Both teams play in the same city so there is little difference in market related factors. If we tried to rely on current winning rates then the Clippers would appear to be the more valuable deal. The missing factor is that the Lakers have a fan base (created through a history of All Star Players and Championships) that is incredibly engaged with and attached to the Lakers brand. If we were valuing competing deals across the two clubs, it is critical that we also consider the passion (and staying power) of each team.

While I present my results as rankings, behind the scenes there are a set of numerical scores for each metric. These numerical scores provide a tool for valuing promotions and sponsorships. The numerical scores provide a basis for valuing the passion of fans across teams. The use of multiple metrics is again useful because each metric has a different behavioral interpretation.

Two quick examples.

The Fan Equity metric is a measure of willingness to spend. Critically, it is a measure of willingness to spend that controls for differences in market characteristics (population, income levels, etc…) and current team performance. In this year’s results, the Cowboys rank number 1 in Fan Equity and the Texans finish number 21. The (behind the scenes) analyses suggest that Dallas’ spend premium relative to the league average is positive 7.79% while Houston’s premium is .39%. This suggests that in a sponsorship deal where all things are equal (number of impressions, median income, etc…) that the sponsorship of the Cowboys would merit a 7.4% premium versus an identical partnership with the Texans. In some ways, this seems like a conservative estimate given the prominence of the Cowboys. But, NFL fandom is intense everywhere and the Fan Equity metric is geared towards local markets.

The Social Equity metric is a measure of transmission or amplification. In terms of Social Equity, the Cowboys rank 3rd and the Texans rank 12th. For this metric, the differences across teams are much more substantial. Relative to the league average the Cowboys have a social media equity index score of 87% (the Cowboys social amplification factor is 87% greater than the average team). The Texan’s index is 1% above the league average. The results suggest that the Cowboys would merit an 86% premium for a nationwide or social media oriented promotion versus the Texans. Again, these results are based on models that adjust or control for differences in team performance and market characteristics.

The Complete List

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Fanalytics Video: NBA Off-Season & Draft

Here’s the latest sports headlines on the Fanalytics video this week! Mike shares his thoughts going into the NBA off-season and the draft happening on Thursday.

 

Fanalytics Podcast: Lucy Rushton and Building Atlanta United FC

How do you build a new team, like the Atlanta United, from the ground up?

In this Fanalytics episode we meet Atlanta United’s Lucy Rushton. As the team’s Head of Technical Recruitment and Performance Analysis, she provides analytics, data and insights that help the team build their roster.  In the conversation with Lucy we talk about two types of analyses.  One part involves the subjective analysis which is watching the players on the field. The other part is the objective analysis which involves data and statistics, emotion is taken out of the analysis. Rushton says it’s important to get a balance between the two in order to drive a successful department.

So what’s the game plan when searching for players for the team? Rushton says to get data and find players that fit in with the club philosophy and playing styles. Styles include players who have fast attacking skills, can entertain, athleticism, and speed. You also have to ask, what are the key attributes of a player for the position they look for? How much do these players cost?

When it comes to statistical forecasting, how much of that do decision-makers want to see? They want to see the insights not the models.

What’s next for Atlanta United? The head scout says the goal is to get better, get another chance to play in the CONCACAF Champions League, and growth in analysis.

In the second half of the episode, we talk about some of the larger lessons related to performing and presenting analytics in any organization. Analytics is seldom a magic bullet for any organizational challenge. More often, analytics informs rather than directs decisions.

Along these lines, we frame the interview with Lucy and the challenge of building a championship roster in terms of decision support realities such as biases in human decision making and the limitations of statistical models.

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Fanalytics Video: NBA Finals & FIFA Women’s World Cup

This week on the Fanalytics video, we discuss the big story lines happening in the NBA finals and FIFA Women’s World Cup. Thanks for checking out the trending sports stories with us on Monday mornings!