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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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 Podcast: Super Bowl Advertisements

Goizueta Marketing Association’s Vice President of Career Services Nihar Thadani and Professor Mike Lewis do a live podcast on 2019 Super Bowl advertisements. They watch and analyze different advertisements to see what brands are trying to do.  For timing purposes, we have cut out the full version of advertisements being watched in the podcast.

Who are the winners and losers? Opinions are from Emory MBA students who answered a survey.

WINNERS:

  1. Stella Artois – Change Up The Usual
  2. Pepsi – More Than OK
  3. Bud Light – Game of Thrones

LOSERS:

  1. Mint Mobile – Chunky Style Milk
  2. Avocados From Mexico – Top Dog

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Fanalytics Podcast: Super Bowl History

Super Bowl LIII is right around the corner! With the big game being less than three weeks away, Mike and I wanted to talk about the history of the Super Bowl on this episode of the Fanalytics podcast. Talking about all 50+ Super Bowls would be a bit excessive so we picked the ones we felt were the most significant. Our goal was to see how much the Super Bowl has evolved and how it got to become the big sporting event it is today. Hope you enjoy!

Here’s some notes about the games we talked about.

1967 (AFL/NFL championship game):

  • The NFL champion Green Bay Packers defeated the AFL champion Kansas City Chiefs by 35–10
  • 51 million viewers – CBS and NBC two networks because it was the AFL/NFL championship game
  • Ticket pricing: $10 ($74.98 in 2018)
  • The halftime program was University of Arizona and Grambling State marching bands

1969 (Super Bowl 3):

  • First Super Bowl to be called by a number (Super Bowl III)
  • This championship proved the AFL was on par with the NFL for the very first time
  • New York Jets quarterback Joe Namath promised his team a victory – a guarantee that was obviously out of place, as the Colts were favored to win by as much as a 20-point margin
  • The Colts were unable to keep the game within one score, and the Jets took the title, 16-7
  • Ticket price: $12 ($83.15 in 2018)

1973 (Super Bowl 7):

  • Miami 14 – 7 Redskins
  • Miami was undefeated
  • Super Bowl ads did not become ‘famous’ until 1973 when Noxzema ran a commercial for their shaving cream featuring Joe Namath
  • Ticket price: $16 ($86.86 in 2018)
  • Halftime show: “Happiness Is.” with University of Michigan marching band and Woody Herman

1976 (Super Bowl 10):

  • Pittsburgh defeats Dallas 21-17
  • 1976 Up with People performs in Super Bowl X in Miami, FL for a live audience of 80,100 and 57.7 million TV viewers
  • Ticket price: $20 ($88.73 in 2018)

1984 (Super Bowl 18):

  • Raiders 38-9 Redskins
  • Apple MAC ad is a big deal
  • Halftime show: “Super Bowl XVIII’s Salute to the Superstars of the Silver Screen”
  • Ticket price: $60 ($145.24 in 2018)

1985 (Super Bowl 19):

  • Bears Super Bowl shuffle
  • Halftime show:”A World of Children’s Dreams”
  • Highlighted some trends in terms of the super bowl creating celebrities
  • Ticket price: $60 ($140 in 2018)

1991 (Super Bowl 25):

  • This Championship game had a lot of patriotic pride, as the U.S. was in the middle of the first Gulf War
  • The New York Giants were on their way to winning two Super Bowls in 5 years as they played the Buffalo Bills
  • New York had possession of the ball for a record 40 minutes and 33 seconds, with their longest drive clocking it at 9:29 in the third quarter before scoring on a one-yard run by running back Ottis Anderson
  • The Bills had one final chance to win the game on a field goal with seconds remaining, but the 47-yard attempt by Scott Norwood sailed wide, and the Giants sealed the victory, 20-19
  • Ticket price: $150 ($274.89 in 2018)
  • Halftime show: “A Small World Salute to 25 Years of the Super Bowl” featuring New Kids on the Block

1999 (Super Bowl 33):

  • Denver beat Atlanta 34-19
  • WASSUP Ad

2002 (Super Bowl 36):

  • With the attacks on the World Trade Center and the Pentagon on September 11 earlier in the season, it should only seem fitting that the New England Patriots would be competing in Super Bowl XXXVI. Though labeled as the underdogs
  • New England jumped to a 17-3 lead over the St. Louis Rams by the end of the second quarter. The game switched gears in the second half, as the Rams made up the points necessary to put the game at a 17-17 tie
  • On the final play of the game, Adam Vinatieri made a 48-yard field goal to give the Patriots the championship, 20-17. This game marked the first time a Super Bowl was decided on the points from the final play of the game
  • Ticket price: $400 ($554.94 in 2018)
  • Halftime show: U2

2004 (Super Bowl 38):

  • Super Bowl XXXVIII turned into a shootout in the fourth quarter, as the New England Patriots and the Carolina Panthers combined for a record 37 points in that period
  • When it was over, the New England Patriots came on top, 32-29, to win their second Super Bowl
  • The game was also noteworthy for its halftime show and the famous “wardrobe malfunction” when Janet Jackson’s breast was exposed by Justin Timberlake
  • Ticket price: $400 ($529.90 in 2018)

2015 (Super Bowl 49):

  • The hype leading up to Super bowl XLIX was some of the biggest of any game in the decade before it
  • The defending Super Bowl Champion Seattle Seahawks and their Legion of Boom on defense would take on one of the greatest post season quarterbacks of all time in Tom Brady
  • Brady and the Patriots had lost their two previous Super Bowl appearances and were looking for redemption
  • A back and forth game saw the Patriots take the lead with just over 2 minutes remaining in the game. But Russell Wilson and company drove the ball the length of the field and had a 2nd and goal situation with 26 seconds remaining. The game looked all but won for the Seahawks, when Malcolm Butler stepped in front of a slant route, to intercept Wilson, and seal the Patriots 4th Super Bowl win
  • Ticket price: $1,750 ($1,839.07 in 2018)
  • Halftime show: Katy Perry, Lenny Kravitz and Missy Elliott

2017 (Super Bowl 51):

  • Patriots 34, Falcons 28
  • It was the greatest comeback in Super Bowl history — the Patriots once trailed by 25 — led by Tom Brady, the greatest quarterback in NFL history, who threw for 466 yards. It gave Bill Belichick and Brady their fifth championship in seven trips, and it cemented the Patriots as one of the league’s top dynasties
  • Ticket price: $1,700 ($1,721.40 in 2018)
  • Halftime show: Lady Gaga

Sources:

ABC

TicketCity blog

History

 

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Fanalytics Podcast: 2018 NFL Playoff Fandom Preview

Before the 2018 NFL season ends, Mike Lewis and passionate sports fan Rhett Grametbauer give their general impressions of various teams’ fan bases. Grametbauer has visited every NFL stadium in the country so who better to ask than someone who has interacted with football fans across the country? What are Pittsburgh Steelers, New England Patriots, Kansas City Chiefs, Chicago Bears, Green Bay Packers, New Orleans Saints, and Los Angeles Rams fans like?

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Fanalytics Podcast: A Visit To Every NFL Stadium

In this Fanalytics episode, sports enthusiast and author Rhett Grametbauer joins Mike Lewis to talk about his thrilling journey visiting every NFL stadium in 16 weeks. Grametbauer took his 1967 Volkswagen bus named Hail Mary to visit the 32 football teams. He wrote about his adventure in his book called “25,000 Miles to Glory.”

This episode delves into the incredible escapade, study of consumers, ethnography, childhood memories, and what makes a stadium special.

To learn more about Rhett Grametbauer: https://www.rhettgrametbauer.com/

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Fanalytics Podcast: Super Bowl Economic Impact

Ever wonder about the economic impact a Super Bowl has on a city? Super Bowl LIII is taking place in Atlanta. Emory University Finance Professor Tom Smith and Marketing Professor Mike Lewis talk about the cash flow going through the city when the big showdown happens. Does it matter who’s playing in the Super Bowl from Atlanta’s economic perspective? Where does all the spending money go? What are the long term impacts a Super Bowl has on a city?

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Fanalytics Podcast: Nike and Colin Kaepernick

In this episode, economist Tom Smith and I analyze Nike’s decision to feature Colin Kaepernick in its “Just Do It” campaign.  This is a complicated and controversial issue with lots of moving pieces.  It’s also a great topic because there are elements of branding, demographic trends and politics.

Is Nike pursuing the right branding strategy?  Are they using Kaepernick to reposition the brand closer to Millennial and Generation Z sensibilities?  Does growing the relationship with this segment make-up from alienating the segment that is currently burning shoes and cutting up socks?

Why has Nike waded into this perilous political territory?  Are they doubling down and supporting the existing star who also happens to be in a feud with the current president? Can brands in the entertainment space be non-political in 2018?

It’s a wide ranging and fuzzy conversation.  But it’s a fun subject.  Multiple elements of fandom with a backdrop of politics.

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Fanalytics Podcast: NFL Marketing Preview

The NFL has long been considered the premier American professional sports league.  In this episode, I sit down with a former professor colleague and current tech industry analytics leader Manish Tripathi to discuss some of the marketing challenges facing the NFL as the 2018 season approaches.

It is an interesting conversation because after years where the NFL almost seem to be impervious to scandal and on an ever upward trajectory when we think about the NFL in 2018 we seem to run into one marketing challenge after another.

We talk about the perennial issue of the “Washington Redskins” team name and symbols, concussions and youth football, and (of course) the anthem protests.  In each case, we actually find ourselves talking more about politics than analytics.  This is important because it serves to highlight the marketing challenges faced by the league.  While the NFL has seemed to be a “Teflon” brand for decades, is it impervious to the political and cultural upheaval of 2018?

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Fanalytics Podcast: The Analytics of Paying NFL Running Backs

The Le’Veon Bell contract situation was one of the more interesting NFL stories of the past month. In today’s Fanalytics podcast, economist Tom Smith and I talk about the story from a statistical and economics perspective.

NFL running backs are an incredibly interesting position for analytics and salary cap management.  The dilemma for teams and the frustration for players comes from the nature of the position.  Running backs are often at their peak during the early career years when the player’s salary is most constrained by the leagues collective bargaining agreement.

In the case of Le’Veon Bell, he is entering the region where past carries (and touches) combined with age start to build some uncertainty about future performance.  This future uncertainty combined with the fact that running backs are a relatively inexpensive position create an interesting situation for the Steelers.  Bell may be the best running back in the league but can they “replace” a significant amount of his production at a much lower cost?

This conversation was wide ranging and had some technical elements.  Probably our most technical episode yet as terms like “hedonic pricing model” and “constrained dynamic optimization” were thrown around.  That said – it was a great conversation.  The economist (Tom) combined with the Operations Researcher (Mike) offers a unique perspective of analytics and decision making.

Hope you all enjoy the podcast and please rate and subscribe on iTunes.

Mike

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