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Posts Tagged ‘economics’

Rockets-Lakers: A Tipping Point For The NBA?

Sunday, May 3rd, 2009

As a Golden State Warriors fan – and admittedly a fair-weather one – I could not have found the 2008-09 NBA season much duller or depressing. The play of this uninspired, oft-injured squad and its possibly insane coach drove me well away from following the team despite a raft of discount ticket offers. My inner Assistant General Manager, though, is entirely intrigued by the playoff series opening tomorrow night: the clearly-best-in-the-league Los Angeles Lakers against the Houston Rockets.

Shane Battier with a hand in Kobe Bryant's face

Shane Battier defending Kobe Bryant

This story starts back in February when the New York Times Magazine published “The No-Stats All-Star” by Michael Lewis. One of my favorite writers for his ability to cross great business writing with incisive observation about sports and its hidden-in-plain-sight economy, Lewis had previously written on applying market theory in baseball (Moneyball: The Art of Winning An Unfair Game) and football (The Blind Side: The Evolution Of A Gameexcerpt).

The NYT article centered on the Houston Rockets and in particular Shane Battier, who is used as an example of how basketball statistics are enormously deceptive by only depicting production with the ball. As he’d done so well in his previous books, Lewis makes the argument that glamor statistics like points per game, rebounds and so forth don’t necessarily show how much a player actually helps its team earn what really counts: wins. The Rockets have put together a team of statisticians to develop metrics for what truly produces wins. With those metrics in hand, they targeted Battier, a well-regarded player who had some tough seasons with the woeful Memphis Grizzlies, but had a record otherwise of always playing with winners. I’ll leave the statistical discussion to Lewis’s article, which I highly recommend, but suffice it to say that the Rockets’ stats-based defensive theory is to learn where opposing players become the least efficient on the floor.

The story was published in February. Before Los Angeles played Houston on March 11th, master motivator Laker Coach Phil Bradley showed Kobe this passage:

The reason the Rockets insist that Battier guard [Kobe] Bryant is his gift for encouraging him into his zones of lowest efficiency. The effect of doing this is astonishing: Bryant doesn’t merely help his team less when Battier guards him than when someone else does. When Bryant is in the game and Battier is on him, the Lakers’ offense is worse than if the N.B.A.’s best player had taken the night off. “The Lakers’ offense should obviously be better with Kobe in,” [Rockets General Manager] Morey says. “But if Shane is on him, it isn’t.” A player Morey describes as “a marginal N.B.A. athlete” not only guards one of the greatest — and smartest — offensive threats ever to play the game. He renders him a detriment to his team.

Sure enough, Kobe put up 37 points – lit up Battier and scored 16 in the fourth quarter alone (albeit with Ron Artest guarding him, not Battier) – to lead the Lakers to a 102-96 come-from-behind win.

So now we get a week or two of this matchup. Not to denigrate the Rockets, which fields two other great defenders in Artest and Yao Ming, but this should be an interesting test of schemes versus skills and of statistical gambits versus the NBA’s most successful coach. If this goes the Rockets’ way, expect a sea change in the way NBA franchises run their teams in the very near future.

Personally, I’m rooting for the Rockets – and selfishly. In reading Lewis’s article, it was apparent that my hometown Warriors are definitely not users of any kind of statistical theory in evaluating its talent or running a game. Warriors forward Stephen Jackson was spotlighted for his bizarre tendency:  [he] “is statistically better going to his right, but he loves to go to his left — and goes to his left almost twice as often.”)  Instead the Warriors rely on a well-loved ex-player to run its front office – with disastrous contracts thrown at players of ‘good character’ – and a coach who appears to run the team more on feeling, fear and witchcraft than good sense. Please, Warriors, take a note.

Sports franchises need to take a cue from airlines and Apple

Tuesday, April 28th, 2009

Joba Chamberlain opens the second game ever at the new Yankee Stadium and empty seats outnumber full ones in the exclusive areas behind home plate and the dugouts. The Stadium was packed otherwise.  (Flickr / Fansherpa)

Joba Chamberlain opens the second game ever at the new Yankee Stadium and empty seats outnumber full ones in the exclusive areas behind home plate and the dugouts. The Stadium was packed otherwise. (Flickr / Fansherpa)

With all the fuss over the empty luxury seats at the new Yankee Stadium, I was mildly surprised to find something similar – dramatically so – happening in my own backyard.  We went to Sunday’s A’s-Rays game at the Oakland Coliseum.  All the ingredients for a great day at the ballyard were in place: sunny April weather, last year’s AL champions in town and a Sunday afternoon.  What we found instead was a micro-market in disarray. As the credit markets teetered last October, the market for sports tickets anecdotally seems to be following.

The first indication there was a problem was the total lack of online ticketing activity.  There were practically no offers on CraigsList, even from brokers, and none at all on eBay.  At the walk-up ticket booth, we found that we could buy any section in the house, including the Diamond Level.  This should simply never be the case.  The Diamond Level is a very limited “VIP” area, maybe 60 seats tops, right behind the plate on the playing field level.  Seats go for $225 but also include free food and drink service for the whole game.

Weirdest of all was the scene inside the stadium.  The A’s bifurcate each of the two seating levels – a minimum of two pricing levels in each deck.  In both decks, there was a cluster of people behind the plate, practically nobody for several sections as the seating moved towards the outfield, another cluster in the sections starting the new pricing tier, again fading to nothing.

The mystery to me is why shouldn’t the people forced out to the outfield be able to sit in these empty “mezzo-sections.”  The answer could come from a nimble dynamic pricing system at game time.  As airlines like Virgin and JetBlue have discovered with exit rows sold at check-in, why not enable ask fans as they arriveto purchase a better seat for an extra few dollars?  It would be an easy thing to equip ushers with Palm-style barcode and credit card machines like those carried by the clerks at The Apple Store.  Everybody gets the opportunity to move closer (or elect not to), getting rid of the weird empty spaces and (I’m assuming) presenting a better, more invigorating environment for the home team.  (I know they’re supposed to ignore the crowd, but ask any actor or musician if they’d rather play to a full orchestra than have the front rows empty and the crowd loosely dispersed.)

Meanwhile across the bay, the Giants are trying out a number of dynamic pricing policies.  First, the team partnered up with a firm to build elastic pricing around its unsold inventory for the least attractive games.  Last week, though, came the real reckoning – and a big indication that the team is running scared about its attendance.  Ticket prices were dropped 40% for the Giants series this week against the Dodgers, traditionally the most attractive opponent.  Granted the team is trying to stir up interest for later in the year – it appears they’ll be competitive in a moderately challenging division – but to have to do this so early and against the team’s best natural rivarly is surprising.  One wonders how scared the Giants are about advance sales for the rest of the year.

Susie is quick to point out that the lack of an Oakland A’s ticket market framed by the fact that the Oakland Coliseum is a horrible dump, getting dumpier every day.  The tarps in the third deck look weathered and horrible, while the bathrooms, parking lot and facilities remain some of the worst for a major league sport.  Nevertheless the empty seat patterns – along with all the unsold display ad inventory throughout the stadium – are clear indications that baseball is not recession-proof.  There are easy ways to make profit from making markets more efficient; marketing and pricing are the classics.  Let’s see if the A’s and their brethren take up the challenge.

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