 From Cambridge, Massachusetts, it's the Cube, covering MIT Chief Data Officer and Information Quality Symposium 2019, brought to you by SiliconANGLE Media. Welcome back to MIT in Cambridge, Massachusetts, everybody. You're watching theCUBE, the leader in live tech coverage. My name is Dave Vellante, and it's my pleasure to introduce Matt Kobe, who's the Vice President of Business Strategy and Analytics at the Chicago Bulls. We love talking sports, we love talking data. Matt, thanks for coming on. No problem, good to be here, Dave. So talk about your role as the head of Analytics for the Bulls. Sure, so I work exclusively on the business side of the operation, so we have a separate team that does the basketball side, which is kind of your player stuff. But on the business side, what we're focused on is really two things. One is being essentially internal consultants for the rest of the customer-facing function, so we work a lot with ticketing, a lot with sponsorship, marketing, digital, all of those folks that engage with our customer base. And then on the back end of it, we're building out the technical infrastructure for the organization, right? So everything from data warehouse to CRM, to email marketing, all of that sits with my team, and so we wear a lot of hats, which is exciting, but at the end of the day, we're trying to use data to enhance the customer and fan experience, and that's our aim, and that's what we're driving towards. So success in sports, in a larger respect, has come down to don't be offended by this, who's got the best geeks? And so now your side of the house is not about, like you say, player performance, it's about the business performance, but that's a big part of getting the best players. I mean, if you're successful, I don't know the nuances of the NBA salary cap and everything else, but I think there is one, and so that makes it even more important, but you're helping fund that in various ways. But so are the two teams completely separate? Is there a Chinese wall between them, or are you part of the sort of same group? We're pretty separate, so the basketball folks do their thing, the business folks do their thing from an analytic standpoint. We meet and we collaborate on tools and other methods of actually doing the analysis, but in terms of the analysis itself, there is a little bit of separation there, and mainly that is from priority standpoint. Obviously, the basketball stuff is the most important stuff, and so if we were working on both sides, then we'd always be doing the basketball stuff, and the business stuff needs to get done, so. It would drag you into that. Exactly. Okay, but so which came first, the chicken or the egg? Was it the sort of post-money ball activity applied to the NBA? And I want to ask you a question about that, and then somebody said, hey, we should do this for the business side, or was the business side sort of always there? I think the business side, and probably in the last five to seven years, you've really seen it grown. So if you look at the NBA, I've been with the Bulls for five years. If you look at the NBA seven, eight years ago, there was a handful of business analytics teams, and those teams had one or two people at them. Now every single team in the NBA has some sort of business analytics team, and the average staff is seven. So my staff is six full-time folks, plus myself, so we're right at the average, and I think what you've seen is everything has become more complex in sports, right? If you look at ticketing, you've got all the secondary markets, you have all this data flowing in, and they need someone to make sense of all that data. If you look at sponsorship, sponsorship has transitioned from selling a sign that sits on the side of the court to these truly integrated partnerships where our partners are coming to us and saying, what did we get out of this? What was our return? And so you're seeing a lot more collaboration between analytics and sponsorship to go back to those partners and say, hey, here's what we delivered. And so I think it started on the basketball side, certainly, because that is the most important piece, but it quickly followed on the business side because they saw the value that type of thinking can bring to the business. So I know this is not your swim lane, but the lore of Billy Bean and Moneyball and all that as sort of the starting point for sports analytics, is that a fair characterization? And was that really the main spring of all this? I think it probably started even before that. I think if you, I've gone and see Billy Bean at the MIT Sports Analytics Conference and him talk and he always references kind of Bill James as one of the first. And so I think it started, baseball was, I wouldn't say the easiest place to start, but it was all, it's a one versus one, right? It's pitcher versus batter in a lot of cases. Basketball's a little bit more fluid. It's a team sport, it's a little harder, but I think as technology has advanced, there's been more and more opportunities to do the analytics on the basketball side. And on the business side, I think what you're seeing is this huge, what we've heard the first day and a half here, this huge influx of data, not nearly to the levels of the master cards and others of the world, but as more and more things move to the mobile phone, I think you're going to see this huge influx of data on the business side and you're going to need the same systems and the same sort of approach to tackle it. Yeah, so Bill James is the ultimate sports geek and he's responsible for all these stats that none of us understand and he's why we don't pay attention to batting average anymore, of course I still do. So let's talk about the business side of things. If you think about the business of baseball, it's all about maximizing the gate. Yeah, there's some revenue, a lot of revenue, of course from TV, but it's not like football, which is dominated by the TV. Basketball I think is probably a mix, right? You got an 80, whatever, 82 game season, so filling up the stadium is important. You obviously, NBA has done a great job of really getting it right. Free agency is like fascinating now, so it's really- It's a 12 months a year sport. We talk about the NBA all the time and of course people like celebrities like LeBron have certainly helped and now a whole batch of others, but what's the money side of the NBA look like? Where's the money coming from? Yeah, I mean, I think you certainly have broadcast, right? But in many ways like national broadcasts sort of takes care of itself in some ways from the standpoint of my team doesn't have a lot of control over national broadcast money that's a league level type thing. And so the things that we have control over the two big buckets are ticketing and sponsorship. Those are the two big buckets of revenue that my team spends a lot of time on. Ticketing is one that is important from the standpoint as you say, which is like how do we fill the building, right? We've got 41 home games plus three pre-season games. We've got 44 events a year. Our goal is to fill the building for all 44 of those events. So we do a pretty good job of doing it, but that has cascading effects into other revenue streams, right? As you think about concessions and merchandise and sponsorship, it's a lot easier to sell a sponsorship when your building is full than if your building isn't full. And so our focus is on how do we fill the building in the most efficient way possible? And as you have things like the secondary market and people have access to tickets in different ways than they did 10 to 15 years ago, I think that becomes increasingly complex. But that's the fun area. That's where we spend a lot of time. There's the pricing, there's inventory management. It's a lot of, you know, as you look at traditional CPG, there's some of those same principles being applied, which is how do you, or you look at airline, right? They're selling a plane, it's an asset you have to fill. We have a building that's an asset we have to fill and how do we fill it in the most optimal way? So the idea of surge pricing, demand and supply, but so several years ago, the Red Sox went to a tiered pricing. You guys do the same, you have to, if the Sox are playing Kansas City Royals, is the tickets, you know, way cheaper than if they're playing the Yankees? You guys do a similar type of thing? So we do it for single game tickets. So for our season ticket holders, it's the same price for every game, but for primary tickets for single games, right? So if we're playing, you know, this year would be the Clippers and the Lakers, that price is going to be much more expensive. So we dynamically price on a game-to-game basis, but our season ticket holders pay the same price. Why don't you do it for the season ticket holders? Just haven't gone there yet? Yeah, I mean, some teams have, right? So there's a few different approaches. You can variably price those tickets. I think for us, in years past, the last few years, in particular, there's been a couple of flagship games and then every other game feels similar. I think this will be the first year where you have eight to 10 teams that really have a shot at winning the title. And so I think you'll see a more balanced schedule. And so we've talked about it a lot. We just haven't gone to that, made that move yet. Well, as a season ticket holder, that shares his tickets with like seven other guys with a Red Sox, because you could buy a BMW or you could share the tickets. So, but I would love it if they didn't do the tier pricing as a season ticket holder. So I hope you hold off for a little while, but I don't know, it could maximize revenues. If the Red Sox do, it's probably not a stupid thing because they're smart people. Well, what about the sponsorships? This is fascinating about the partners looking for ROI. How are you measuring that? You're forging a tighter relationship, obviously, with these sponsors and these partners. What's that ROI look like? How are you measuring that? Yeah, so it's measured a variety of different ways, largely based on the assets that they deliver, but I think every single partner we talk to these days, I also lead the sponsorship team. So I oversee, it's rare in sports, but I sit over business strategy and analytics and the sponsorship team. It's not in my title, but in practice, that's what I do. And I think every one we talk to wants digital, right? They want, we've got over 25 million social media followers with the bulls, right? We've got 19 million on Facebook alone. And so sponsors see those numbers and they know that we can deliver impression, they know we can deliver engagement and they want access to those channels. And so from our return on, I always call it return on objectives, right? Return on investment is a little bit tricky, but return on objectives is if we're trying to build brand awareness, we're gonna go back to them and say, here's how many people came to our arena and saw your logo and saw the feature that you had on the scoreboard. If you're on our social media channels or our website, here's the number of impressions you got, here's the number of engagements you got. I think where we're at now is more is still better, right, everyone wants the big numbers. I think where you're starting to see it move though, is that more isn't always better. We want the right folks engaging with our brands. And that's really what we're starting to think about is, if you get 10 million impressions, but they're 10 million impressions to the wrong group of potential customers, that's not terribly helpful for a brand. We're trying to work with our brands to reach the right demographics that they want to reach in order to actually build that brand awareness they want to build. What are your primary social channels? I mean, Twitter obviously. Yeah, so every platform has a different purpose. We have Facebook, Twitter, Instagram, Snapchat. We're on Weibo in China. And every platform has a different function. Twitter's obviously more real-time news. The timeline stuff, it falls off really quick. Instagram is really the artistic piece of it. And then Facebook is a blend of both. And so that's kind of how we deploy our channels. We have a whole social team that generates content and pushes that content out. But those are the channels we use and those are incredibly valuable. Now, what you're starting to see is those channels are changing very rapidly based on their own set of algorithms of how they deliver content to fans. And so we're having to continue to adapt to those changing environments and those social channels. So impressions and the term impressions varies by these various platforms. So I know I'm more familiar with Twitter impressions. They have this definition. It's not just somebody who might have seen it. It's somebody who they believe actually spent a few seconds looking at it. They have some algorithm to figure that out. Is that a metric that you finding your brands are buying into, for example? Yeah, I mean, I think certainly they view, it's kind of the old, when you bought TV ads, it's how many households saw my commercial, right? It's a similar type of metric of how many eyeballs saw the piece of content that we put out. I think we're, the metrics more people are starting to care about is engagements, which is how many people actually engaged with that piece of content, whether it's a like, a comment, a share. Because then that's actual, yeah, you might have seen it for three seconds, but we know how things work. You're scrolling pretty fast, but if you actually stop to engage it with something, that's where I think brands are starting to see value. And as we think about our content, we have a framework that our digital team uses, but one of the pillars of that is thumb-stopping. We want to create content that is thumb-stopping that people actually engage with, and that's been a big focus of ours the last couple of years. Yeah, I presume you're using video a huge way. Yeah, video, we've got a whole graphics team that does custom graphics for, whether it's stats or for historical anniversaries. We have a whole in-house production team that does higher-end, and then our digital team does more kind of straight from the phone raw footage, so we're using a variety of different mediums to reach our fans. Matt, what's your background? How did you get into all this? I spent seven years in consulting, so I worked for Deloitte in their strategy group out of Chicago, and I worked for CPG companies, like at the intersection of retailer and CPG, so a lot of in-store promotional work, helping brands think through just general revenue management, pricing strategy, promotional strategy, and stumbled upon greatness with the Bull's Job. A friend gave me the heads up that they were looking to fill this type of role, and I was able to get my resume in the mix, and was lucky enough to get the job, and it's been, when I started, I was single-shingle, so I was a team of one. Five years later, we're a team of six, and we'll probably keep growing, so it's been an exciting ride. And your background is math, stats, what was it? I was business undergrad, and then I went to Indian undergrad business, and then went to Kellogg Northwestern, got an MBA in strategy, so that's my background, but I've dabbled in sports. I worked for the Chicago 2016 Olympic bid back in the day when I was at Deloitte. And so it's always been a dream of mine, I just never knew how I'd get there. Like, I always wanted to work in sports, I just didn't know the path, and I'm lucky enough to find the path a lot earlier than I thought. How about this conference? I mean, I know you've been to other MIT events. How about this one, how we found it, some of the key takeaways, things you've been learning? I think this has been great, because a lot of the conferences we go to are really sports focused, so you've got the MIT Sports Analytics Conference, you have CET, you have MBA-type programming that they put on, but it's nice to get out of sports and sort of see how other bigger industries are thinking about some of the problems specifically around data management and the influx of data and how they're thinking about it. It's always nice to kind of elevate and just have some room to breathe and think, and meet people that are not in sports and start to build those relationships and with thought leaders and things like that. So it's been great, it's my first time here, but I'll probably be back. Good, Matt, well hopefully you get to see a game, even though the Red Sox aren't playing that well, and thanks so much for coming to theCUBE. And sharing your thoughts. Appreciate you having me. All right, it was great to have you. All right, keep it right there, everybody. I'll be back with our next guest with Paul Gill and Dave Vellante here in the house. You're watching theCUBE from MIT, CDOI-Cube. Right back.