 We're here for a special Cube broadcast, sports and big data all coming together and our next guest is John Chatoro, Chief Operating Officer of the San Jose Sharks, another massive franchise in the Bay Area. Welcome to the Cube. Thank you very much for having me. It's a pleasure to be here. You know Hockey is one of those sports where a lot of action is happening, a lot of fan experience. Same deal as the Niners, Earthquakes and here at AT&T Park and Baseball, but a little bit different. I mean there are different kind of schedules, different team makeup, different demographics, but the game is still the same. It's ice hockey. How do you guys use technology today and big data? Share with us your vision on the technology, I mean you're in Silicon Valley, you've got to be technical. We have to be technical and we've been technical pretty much since our existence. Not too many people know this, but the Sharks, when we came to San Jose in 1991, the arena was built in 1993, we played our first two years in the Cal Palace, but we were the second sports franchise to have a website. The Seattle Mariners were the first and we were the second in 1995, so we've been adapted and embraced technology for most of our 20 years and that continues today even though our building is 20 years old. You're right, hockey is a very fast game and you need to be able to capture the speed of the game to the fans that can relate to it. And one of the ways we're trying to do that is with puck tracking technology, player tracking technology, the NHL is very aggressive in exploring those technologies because hockey has a difficult time translating the speed of the game to the viewer on television. It's been an ongoing problem for the sport. Other sports are able to capture their speed more easily. Hockey has a difficult time capturing the pace of the game through TV and HD television has helped, but we're looking at other things to capture that speed and one avenue is player tracking or puck tracking technology where you can see the speed of the puck, the speed of the player and recognize that you have these 6 to 210 athletes on skates going 25 miles an hour and shooting a puck north of 100 miles an hour and that information is very compelling for a viewer. Well, I was a hockey player growing up, I got to ask a question. It just seems maybe I'm just getting old, but are they getting bigger and faster? Or should the rink get bigger? I mean, I watch the games now. It just seems that technology on skates, it seems to be much faster than it ever was. It's much faster. The players are better conditioned. They're more educated in terms of working out and conditioning and nutrition and all that kind of stuff. The players are coming to the rink as a better conditioned athlete and they aren't naturally bigger than they were. I started following hockey 30 years ago in the early 80s and if you had a player who was six feet, 200 pounds, he was kind of on the big side. Now your average player is six, two, two, 10 and that's a big difference. And the size of the rink is 200 feet by 85 feet. That hasn't changed and hockey is the only sport that doesn't have an out of bounds. So when a player gets hit, you get crashes into the boards. Whereas in other sports, you can go out of bounds and it's kind of a safety mechanism. Well, no one better ask me what off-sides is. I'm getting explained. We are getting some trolls coming in on Twitter, but it's actually a legit question that comes in. What does your data say about fights and hockey? The hardcore fans love it, but the tree huggers say ban it. Play to the base or appeal to a broader audience. What's the data say? This is a very fascinating debate. The data comes back very mixed, right? You have your old school hockey people who really enjoy the fight and are in favor of keeping it. You know, what the league says is we need a compelling reason to get rid of it. Many fans do enjoy the fight. Fighting has gone down over the last few years. The statistics bear that out. There have been rules set into play, whether it's the instigator rule or other rules that have limited the number of fights in the game. The other factor is the game becomes too skilled. And you can't really just have a player who's designated there to be your fighter or your enforcer. I think teams now build their players and their teams around team toughness as opposed to fighting. So you probably have... Versus the old days, Gretzky had an enforcer. Anyone hit him, they'd just like go after him. That's correct. I think now you have more of a team tough mentality where there's probably less of a need to fight. But the key component is, in some ways, safety of the player. Many advocates for fighting say the fighting is the way of vigilante justice on the ice. It keeps everyone honest. Because without the fighting, they have players who perhaps are less physical, more inclined. They use their sticks against an opponent or use other parts of their body, like an elbow or whatever, against their opponent. And if there's no threat of retaliation, then that becomes more rampant and becomes more dangerous. I would say the high sticking has been a big problem. Let's talk about the HD. HD has changed the viewing experience. Hockey is unarguably the most popular spectator sport. Watching it in person is spectacular. What is it going to take to go mainstream besides the Hockey Track? Anything else happening with technology? Why isn't it more mainstream? I think there are a number of factors. Hockey does very well in the markets where they are, where the teams are. If you look at our marketplace, the San Jose Sharks are as popular as the Golden State Warriors. We have our own core fan base. If you look at other markets throughout the league, whether it's the Colorado Avalanche or the Denver Nuggets or the Dallas Stars and the Dallas Mavericks, Hockey holds its own. I think where the league suffers or has suffered historically is in places where there are no NHL teams. For a number of years prior to Gary Bettman's era as NHL commissioner, the league did not have a strong national TV presence. Where you had going through the 80s and the 90s, you had Money Night Football, you had Michael Jordan and Larry Byrd on NBA, on CBS, and the like, the NHL didn't have that over-the-air presence. I think over time that hurt the audience. And in order to get it back, we need to do compelling things like HDTV is number one. But number two, the league has focused on big tent events. And one of them is the winter classic. That engages not just the hockey fan, but the average sports fan tunes in, or the average TV viewer tunes in. To think the NHL in many ways owns New Year's Day, which used to historically be a college football day, people now are watching hockey. And I think the league explores doing more things like that. Players participating in the Olympics is another factor where you get the non-hockey fan engaged. And that only helps to get the, to grow the game. So are you going to do a winter classic as the room is swirling around here for the sharks? We are very close to, well, we have been exploring very seriously with the league, an outdoor game for next year here in the Bay Area. One of our goals, obviously, is to grow hockey in the Bay Area. And the league this year did six outdoor games highlighted from our standpoint by a game done in a warm weather city in Los Angeles. The ducks and the kings played each other in Dodger Stadium, 65 degrees outside. The game was played at night in January. And from an ice condition standpoint, it was a resounding success. So the hurdle of being able to play in warm weather is now past us. In fact, the ice in LA was better than some cases than the ice at Yankee Stadium during the Ranger outdoor game. So the league has passed the warm weather test. And now they're looking at many markets to play outdoor games. All 30 teams want them. But the league will probably do fewer games next year. But Northern California is very much on the short list of locations for a game. We have a tremendously strong fan base. Our brand is very strong. And we have great facilities here in which we can play an outdoor game. Stanford Stadium is a place that we have toured with the league. Wonderful bowl set up for hockey. We came and saw AT&T Park here behind us. Great facility, great sight lines. And of course, there's Levi Stadium in Santa Clara, the new 49ers home. Another beautiful ballpark. So we have options. And I think we'll be making a decision with the league probably within the next month to six weeks. Well, we've got some executives here from the Niners who represent the park there. They get a good word in edgewise. A quick question if I know Jeff wants to jump in top tap. I told you, these two New Jersey boys. The rink issue has been something where home rinks in the old days, neighborhoods had rinks. And whether the markets you were in, New England, Minnesota, you know, Canada, here in California, there's only a handful of rinks. Any plans to look at subsidizing rinks? There's a strategy there. What does the data tell you? Is there data involved? What do you do? Look at the demographics there. There's a tremendous amount of data involved. We have a lot of people who like hockey and who play hockey. And we, part of our vertical integration strategy is engaging in the youth hockey and adult hockey marketplace. In addition to owning and managing the Sharks, Sharks Sports and Entertainment also runs SAP Center. So we book all the events for the facility. But we also manage seven sheets of ice in the Bay Area under our Sharks Ice brand name. We manage four sheets of ice in San Jose. One of the sheet is where the Sharks practice. But we have three other sheets there. We have travel hockey programs there, 28 travel teams. We have figure skating programs. And both of these programs have been highlighted in recent years where the Sharks had a player last year who played a handful of games with us, Matt Tennyson, who grew up in Pleasanton and played a youth hockey with the junior Sharks. So that shows you how far hockey has come. Furthermore, this past February, we had Polina Edmonds compete in the Winter Olympics as a figure skater. She does her training at Sharks Ice. So we grow the game in many ways. And we're looking at ways to expand the Sharks Ice property in San Jose. We also manage sheets of ice in both Fremont and Oakland. OK, Jeff, you want to get a question in? I would love to. So, John, let's talk a little bit about taking to some of the types of data you guys are using to run your business, both in the front office perspective, but also from the fan experience and, of course, on the ice. So kind of walk us, if you could, through those three areas. We've heard from the Sharks and some others here at other sports franchises tonight how they're using data to change the way they select players, the way they manage players when they're on the field or on the ice in your case. What are you guys doing in those three areas? The fan experience, the players, and, of course, the front office. First, on the player standpoint, we're working with SAP. For full disclosure, Hossle Plotiners are the majority owner of the Sharks and he's the co-founder of SAP. We're working with a technology group on scouting software. There are so many hockey players coming from different parts of the world, whether it's high school hockey in the Boston area, junior hockey in Canada or in Europe. We need to find a way to understand or to normalize our evaluation of these players. And the technology out there with SAP is developing to the point where we may be able to use it to evaluate players. Nothing will substitute the GM seeing the player play. At the end of the day, the GM and the scouts will want to see the player play, but if you can get more information to supplement what your decisions are with your eye, the better it will be. It's about not missing anything, really. It's not missing anything, right? And there's so many players and so much information and it also reduces your travel budgets. While you do end up going out seeing players, you can probably see less players and spend less time traveling. But with expansion too, you have new players that you've never seen on your radar, so expansion, you look at that data, it's augmenting. Expansion, that's right. That's one area too. And plus the other thing is with our coaching staff, our coaching staff breaks down video. We have this exo scouting system where it breaks down video of the game so the players on a flight home from a road trip can watch their power play, can watch the opponent's power play so things are broken down and delivered to the players digitally. So that's one area. In terms of our front office, the business office of the team, we use three different SAP products. One is Success Factors, which is basically an employee evaluation tool. We implemented that two years ago and does a very good way of evaluating employees in a more consistent manner. So that's one area. We use BYD, which is Business by Design. It's a Bramizal product, which is an affiliated company of SAP. They help us with our financial analytics as well as our CRM processing. And the third area is where we implemented Jam, which is a third SAP product. But Jam is a collaboration tool where employees can work together on whether it's sponsorship decks or marketing plans or whatever without overloading people's emails. So it's a collaboration tool. People get to work more readily together. So we get some tweets in here from folks. One of them says, explain the revenue side. We had Baseball as a gate-focused business, Net and Bell's TV. What is the mix in hockey? Break down the revenue data for us in terms of how you guys look at it. Mix of all three, is it a market basket? What's the approach? It's a mix of all three, but primarily, most of the revenue comes locally. We have probably a third of our revenue coming from ticket sales. Then we have the league revenue on top of that, which is national TV, revenue, outdoor games, that sort of thing. And then probably sponsorship is third. But ticket is still a big driver in the NHL. And while the national TV deals in the NHL are far smaller than what they are in other leagues, they have grown considerably over the years. So the amount of dollars we're getting from the National Hockey League is growing. And the other events that the league is doing, outdoor games, playing Europe and the like, has also helped the national pie. But we're still mostly locally driven, relying heavily on ticket sales. Talk about the NHL. We were talking before we came on that you were previously at the main base of the National Hockey League. What's going on in some of the league level? Is it franchised like Baseball? Is it franchised rights? Is that structured similarly? Is there like a revenue share thing that goes on that Baseball is trying to do? What's the structure? How does the data trickle down to the teams of the franchised? Well, we have a very strong finance department at the NHL. And part of their analytics is sort of club services. So we get regular reports from the league, pretty much on a weekly or bi-weekly basis of how ticket sales are tracking league-wide, how sweet sales are tracking league-wide. And it's not just the number of tickets sold, it's more than that. It's the number of club tickets sold and sweet tickets and a wet price point. And what's your average price point? And how many comps are included in your mix? All that type of thing. So you get a really good sense very quickly as to where you rank league-wide and where you need improvement on in certain areas. So the analytics from the league standpoint have improved considerably over time. When I was at the league, we didn't have those types of resources available to us. Now this stuff comes to us almost in real time. The other area in terms of communication, the league is very good about communicating labor issues to us and also dealing with the issues with the union as it relates to the CBA and the revenue sharing and the like. So we do have a revenue sharing mechanism in place. It's a part of the new CBA that was negotiated last year. And we also have a salary cap as well. All right, so tell me about something that you've learned over the past years using technology that you could share with the folks out there watching. It's kind of like our last question. Because IT managers don't have the sexy sports position, but also they have the same issues. Right. Business is business and data is data. What would you share with those guys? The biggest thing that I've learned, and I don't come from a tech background, I come from a legal background, so don't hold that against me. But information governance. Very important. The biggest thing I've learned is take a measured approach. You have to be careful of the cost of implementing technology versus the demand versus the ultimate utility. At the end of the day, you have to evaluate all the fan technology we use, or that's out there that could be used in the context of watching a hockey game, or in the context of watching a concert at the arena. We have many fan technology innovations, one of which is mobile ticketing, for example. We think it's very cool for people just to not print out their tickets anymore. It could save us money, not to print out tickets. People just use their cell phone and they come into the arena. What we found is not too many people are doing that because they actually like having the physical ticket with them and they like saving it as a souvenir. So there's an example where there's some costs involved in doing that, but yet the utility is not quite there with the consumer. So those are things that we take a very measured approach on. We've spent, with the help of AT&T, a million dollars upgrading our Wi-Fi and doing other things with 4G and LTE in our building. And we are very, our bandwidth is very strong in the arena. But at what point do you make it even better and at what cost? And those are things that we constantly have to measure and be careful of because you don't wanna have a large capital outlay with no benefit on top of it. Right, well it's that balance because we did hear from some of our earlier guests about be willing to fail, take some chances, but it's also, you've gotta kind of look at it from both angles, maybe that's a legal background versus some of the technologies here, kind of a different way of looking at it. Measured, but also we still consider ourselves to be at or near the industry standards in many aspects of it. So that's, and we also do it in the context of a building that's 20 years old, all right? So the earthquake stadium is new, the 49er stadium is new, our building is 20 years old, so there's some limitations with the facility. John, thanks for coming on theCUBE. We really appreciate the special broadcast. We're winding through the evening with one more left with the Niners, sports and big data, you're a tech athlete and also the sharks. Big presence here in San Jose, I can say living here. Hockey is very, very popular. I congratulate you, I know it's a lot of work you guys do there. So big data sports, we'll be right back with our next guest after this short break. This is theCUBE.