Rise in Analytics Attracts Students to Sports Business

In the world of sports analytics, Mark Broadie hit a hole-in-one.

The professor from Columbia Business School in New York primarily performs research on financial engineering and security pricing. But as an avid golfer, Broadie takes the same mathematical tools and research techniques he uses for the financial markets and applies them to golf. The result is a major new golf statistic called "strokes gained-putting," which the PGA TOUR now uses to measure a golfer's putting performance.

"As an academic, you hope your ideas have impact, and financial engineering and risk management have real economic impact," Broadie says. "With golf research, it is more about having fun and creating impact in a different way."

Statistical analysis is making waves in sports as teams and players use sports statistics, data mining tools and research methods from business and economics to gain a competitive edge.

Baseball has used statistical analysis for years. In fact, Bill James, a pioneer in the field, started writing books about baseball analytics in the late 1970s. The concept was made popular by Moneyball, the book by Michael Lewis which was recently made into a movie about the low-budget Oakland Athletics' use of statistical analysis to field a competitive playoff team in 2002. Now, teams in all major sports, including basketball, football and hockey (and individual athletes in golf, tennis and auto racing) use these tools.

Teams use statistical analysis to evaluate player performance, predict future performance and optimize strategies, but they also use it to drive business decisions in sales and marketing, says Vince Gennaro, president of the Society for American Baseball Research (SABR) and author of the book, Diamond Dollars: The Economics of Winning in Baseball. To maximize profit, some Major League Baseball teams use variable ticket prices based on opponents and demand, and they're using statistical analysis to help set these prices.

"Statistical analysis is about providing better information to assist teams with complex decision-making," Gennaro says.

Cutting-edge research is coming from higher education as professors and students in finance, mathematics, computer science and even geography apply their expertise to sports. Technology at stadiums, arenas and golf courses are capturing vast amounts of new data that help drive some of the new analytics.

ShotLink Scores

The TOUR has used its ShotLink technology (see "Golf Analytics Competition Offers Tech Prize to Colleges") since 2001 to track and record every golf shot in near real time. At major golf tournaments, roughly 350 volunteers armed with wireless handheld devices and lasers that pinpoint the ball's location feed that information back to a data center housed inside a trailer, where a team of TOUR staffers manages the entire operation.

ShotLink tracks each player's golf shots — the location of balls, the time they're struck and the distance they travel throughout the 18-hole golf course. The data is immediately delivered to TV broadcasters, onsite LED scoreboards and sports websites, says Steve Evans, the TOUR's senior vice president of information systems. After each tournament, the data is added to the TOUR's historical database at its headquarters in Ponte Vedra Beach, Fla.

Broadie initially developed the strokes gained-putting concept in 2008 by using ShotLink data and his own mathematical equations.

"As a golfer, I'm interested in issues of golf performance and strategy. I wanted to know what separates pros from the amateurs, and the best pros from the average pros," he says. "And to do that, you have to measure the quality of their shots.

In 2009, a team of MIT researchers led by Professor Stephen Graves added to the strokes-gained concept by using Broadie's mathematical formula to rank putters on the TOUR. The following year, the TOUR worked with Broadie and Graves to fine-tune the strokes gained statistic, and last year, the organization introduced it to the golf community. It was the first time in 15 years that the TOUR modified its core set of statistics. Plans are also in the works to add new categories, such as strokes gained-driving .

Today, strokes gained-putting is considered the most accurate way to measure overall putting performance. The new statistic calculates the number of putts a player takes to reach the hole and compares it with his opponents, while taking the distance of the putts into account — something previous putting stats had ignored. In 2011, Luke Donald was ranked No. 1 with 0.84 strokes gained, meaning he gained an average of 0.84 strokes per round over his competition because of his putting skills.

"It enhances our understanding of the game," Broadie says of the new statistic. "Everyone can see who won a tournament, but strokes gained-putting lets you see how much putting contributed to the win."

Measuring Hoops

In the NBA, some basketball arenas are now equipped with multiple video cameras that track player and ball movements, capturing data such as the speed of players, the trajectory of shots and the amount of dribbles and passes per player.

At the MIT Sloan Sports Analytics Conference in Boston earlier this year, Rajiv Maheswaran, a University of Southern California research assistant professor, won an award for his research on basketball rebounding.

Using data from the video cameras, Maheswaran, a member of USC's Computational Behavior Group, saw an opportunity to apply his computer skills to basketball analytics. With the help of USC Research Assistant Professor Yu-Han Chang, Maheswaran developed software using interactive data visualization and machine learning to analyze the video data. "It was a very large data set," Maheswaran recalls. "You have information for 10 players and the ball at 25 frames per second."

The USC team found that NBA players who shoot from close range or far away have a better chance of getting an offensive rebound. Specifically, the offensive rebound percentage decreases by about 1 percent per foot as the shooter gets farther from the basket until, at about 21 feet, the rebound percentage starts to climb again. Strategically, the research shows that teams should either shoot close to the basket or take three-pointers, but not the midrange shot, Maheswaran says.

"People viewed the midrange shot, the long two-point shot, as a bad idea, and this shows that it's much worse than currently perceived," he says.

Take Me Out to the Ballgame

Gennaro, who is a baseball analytics consultant for several major league teams, teaches sports analytics at the graduate sports business management programs at Columbia University and Manhattanville College in Purchase, N.Y.

In his classes, he uses case methods, where students play the role of team executives faced with making operational decisions. It gives students a hands-on opportunity to use quantitative research methods and analytical tools. Gennaro took that concept one step further earlier this year by launching a national case competition, in which undergraduate and graduate students from 14 colleges competed at the inaugural SABR Analytics Conference in Mesa, Ariz.

Given a scenario in which the Washington Nationals baseball team was one game over .500 at the All-Star Break, teams of four or five students from each college were asked: Should they trade away prospects to boost the offense and try to make the playoffs? Or should they build for next year and trade a starting pitcher for a hot prospect?

Students used statistical analysis to determine the likelihood of the Nationals making the playoffs and to weigh the pros and cons of several trade options.

Executives from the Nationals, the Cleveland Indians, Chicago Cubs, Colorado Rockies and San Diego Padres judged the competition. It was a great educational opportunity for the students, and it was also a chance for them to network with team executives and sports networks.

"In the last five years, we have seen a growing popularity of sports functioning more like a traditional business in terms of applying analysis to decision-making," Gennaro says. "It's providing opportunities for these young students who previously went into investment banking or financial services to go into sports."

Moving forward, USC's Maheswaran says he expects academia to delve more into sports analytics in the years to come.

"Now that more data is available, academics are coming around to look at it and see what they can do with it," he says. "We will be able to understand things that we never dreamed of understanding before. We can test hypotheses and investigate long-held beliefs in sports and verify or disprove them."