Sports Industry Data and Analytics - Takeaways from 2022 – Part 4 - Collegiate Athletics Industry Takeaways; NACDA, NIL, Sports Betting and Beyond.
Collegiate Athletics Industry Takeaways; NACDA, NIL, Sports Betting and Beyond.
To many, college athletics has continued to live in the wild, wild west throughout 2022. This is for several reasons, some of which I will touch upon in Part 4 of this series “Collegiate Athletics Industry Takeaways: NACDA, NIL and Beyond.”?
After a fast start in 2021, Name, Image, and Likeness (NIL) is picking up steam. Conference realignment is in full stride. And the legalization of sports betting by many states has provided great revenue generation opportunities for college and university athletic programs in the form of sponsorships while creating spirited debates about what place sports gambling has on university campuses and the communities they serve.
Data sources and data volume are quickly expanding, and athletic departments must stay in front of this trend to surface insights about how this data may impact the way colleges and university athletic departments manage their fan base, donors, student-athletes and the broader communities they serve.
Two plus years of COVID certainly put a strain on college athletic departments, and as the world transitioned from a response phase, to a recovery phase and to what many of us at SAS have defined as a reimagine phase. The latter is where college athletics and the entire sports industry have been headed over the past year, and will continue to accelerate focus in many of these areas in 2023.
This next installment of Sports Industry Takeaways from 2022 will highlight topics discussed at this year’s NACDA conference, along with hot-button topics circulating throughout the industry, including data and analytics, creating competitive advantages in the athletic department, revenue growth, NIL, sports betting, and where we go from here.?
2022 National Association of Collegiate Directors of Athletics Conference (NACDA)
This year’s NACDA conference returned to Las Vegas, Nevada, and with it, the first time NACDA had been in person since the pandemic started. I’d be remiss not to say that one of the single most important takeaways from this year’s conference was the pure joy of connecting in person with friends, industry colleagues and peers. As much as the world has adopted video conferencing as the norm, there’s no replacement for the energy created when collaborating in person. At least from time to time.
NACDA 2022 was filled with incredible sessions led by industry veterans around the following areas of focus (see below list), and the common theme across the different subject areas is that college athletics needs to continue to adapt because things are changing and changing rapidly. And as part of adapting is the continued efforts around data and analytics to help drive better decisions faster.
Creating Competitive Advantages Across the Athletic Department
Data & Analytics – Fan/Donor Engagement, Student-Athlete and Team Success:
Front and center in this year’s NACDA conference were that rapidly growing data and new data sources had accelerated the continued need for digital transformation across the collegiate athletics market. ?This is specific to using data to generate valuable insights on and off the “playing field.” We’ll touch upon a few of these focus areas below.
Fan & Donor Engagement:
First up, Fan & Donor engagement. Specifically, how understanding your data can help accelerate success across donor/fan engagement, optimizing ticket sales, increase in donation revenues, driving increases to the event per cap, and maximizing sponsorship value and opportunity.
For example, by better understanding your fan/donor data (e.g., transaction history, social media, CRM, and in-venue data), you can tailor sales, marketing and adverting outreach to distinct customer segments delivering the right message at the right time and through the right channel.
By using this data with predictive analytics, athletic departments can better understand the value a constituent brings to the university today and can surface insights that help identify their propensity to act in the future.
SAS has worked incredibly with great partners over the past few years, helping athletic departments better understand their fans and donors. Some of these results are highlighted in the following impact brief: Click Here
Student Athlete Performance & Injury Prevention
Player/Athlete development directors, strength and conditioning coaches, and nutritionists are responsible for ensuring student-athletes perform at their best. Much focus is put on injury prevention as the obvious way to keep athletes on the playing field and performing at high levels. Of course, they are students first, and athletic department administrators and student affairs directors work hand in hand to see student-athletes succeed in the classroom and outside their respective competition arenas. Mental health (which we will not dive into here) is an extremely important topic impacted by the successes and stresses of athletics and academics.
Athletic injuries will never fully be eliminated, but through the use of wearables, video, data and predictive analytics, athletic departments can gain insights that reduce their occurrence and position student-athletes to perform at their best while peaking at the right moments.
Athletic departments, trainers, and medical staff first need to assess what data is available and the condition of the data. Not all data will be statistically significant and can be sparsely populated. Once collected, cleansed, and prepared for analytics, you can start developing powerful insights, such as:
Team Performance & Optimization
The book/movie Moneyball demonstrated a process for establishing which player to choose for a bargain price to "buy" wins, but before a player is selected, a process was followed that established statistical evidence that supported the ideas of the decision-makers.
That process began with accurately estimating the number of wins a team would accumulate based on statistics generated over time. So, following this example, athletic departments and respective sports organizations can attempt to accurately estimate the number of wins. And if this can be achieved, then statistical assertions can be made as to “why” a team wins games. The conclusions of efforts like these, whether recruiting specific or analysis of what happens on the playing field, can answer questions like:
Name, Image & Likeness:
Anyone paying attention to college athletics has heard about this collegiate athletics topic by now, but for those new to it, Name, Image, and Likeness (NIL) are the three components of a student athlete's brand and or right of publicity. In collegiate athletics, this newer policy and regulation enacted in July of 2021 allows student-athletes to benefit financially from their NIL. Yes, a charged topic that has been around for many years and will be debated for many years.
What started with a handful of million-dollar-plus deals in 2021 and a much larger number of small deal sizes has seen incredible growth in NIL “marketplaces” to an estimated $900+ million dollars being spent on NIL deals with an expected $1b plus in the coming year. Average football deal sizes are around $3,400, and women’s gymnastics average about $7k per deal. We’re still very early in the process, so exact numbers are difficult to flesh out, with most of the data coming from the larger NIL platforms*.
This microcosm in college athletics is morphing quickly with athletes signing their own individual deals, athletics departments forming co-licensing agreements where the school's issue permission to the student-athletes to use their logos and brands, group licensing where several athletes enter into agreements with a single sponsor, and “collectives” which are replacing traditional booster clubs which normally raise money to donate to the athletic department, but now these new groups combine boosters, fans, schools, and sponsors as a pathway to pay athletes for the NIL deals.
We have seen great success in how athletic departments, colleges and universities, and industry partners have come together to support and educate student athletes on how to best build their own athletic brand while simultaneously supporting their individual teams, their colleges/universities and the communities they serve.
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Understanding the data is crucial to this success. The implications of this new policy are larger than the immediate financial effect on a small percentage of student-athletes, although that's where most of the public attention is focused on. NIL's impact is anticipated to be very broad and affect how student-athletes: engage with their fans, the public, and the communities in which they live, how NIL will impact play, and compliance, the effect on high school athletes, and how student-athletes prepare for their careers and life after sports.**
*https://www.nbcnewyork.com/news/sports/one-year-of-nil-how-much-have-athletes-made/3765040/
**https://www.forbes.com/sites/andrewzimbalist/2021/10/27/nils-surrogate-markets-and-the-future-of-college-sports/?sh=62c53511f27a
Sports Betting
Much like NIL, this has become a topic of intense debate over the past few years. As of November 2022, over 30 states and the District of Columbia have sports betting legislation. Approximately 28 have legalized it, with a few legal but not operational yet. Others have legislation in play moving through the process.
There’s no question that the ability to generate valuable revenue streams (e.g., sponsorships) will exist with this opportunity. Especially coming off COVID with lost revenue across many athletic departments.
But the single biggest debate is how colleges and universities and their respective athletic departments will manage the great revenue stream potential while protecting the student population and ensuring the wellness of student-athletes and the broader college/university community.
As with NIL legislation and laws, there has been a lack of continuity from state to state, which will continue to create challenges in managing these deals. Right now, the most important thing college athletics programs and universities can do is educate and implement systems to safeguard the students and the broader university community. One example of this lack of continuity and the overlap between Sports Betting and NIL is that most NIL laws prohibit NIL deals with sports betting companies. However, not all states have limited this.***
It’s still very early in the process, and not enough data to tell the full story, but it will be crucial for athletic departments, colleges and universities to lay the groundwork to keep track of this data and analyze it more regularly.
***https://www.nytimes.com/2022/11/20/business/caesars-sports-betting-universities-colleges.html
https://lead1association.com/a-whole-new-ballgame-implications-of-legalized-sports-betting-for-college-athletics/
Conclusion and Key Takeaways
2022 has seen a whirlwind of emotion and continued change across the college athletics landscape. Changes that most of us believe will transform the face of college sports as we know it. And in the long run, I hope and believe for the better.
NIL is ramping up and continuing to evolve quickly, sports betting is picking up steam, and college and university athletic departments continue to push the envelope with ways to better serve their student-athletes, fans, donors, and the broader communities they serve.
And to think we didn’t even get into technologies like NFTs, Augmented Reality (AR) and blockchain, all having major and positive impacts on fan engagement and revenue generation. I will certainly come back to these in a future article.
Where does college athletics go from here? In my opinion, as the industry continues to evolve around the topics discussed in this article. I believe the most important things for college athletics to focus on in the coming months are as follows:
1) Continue to accelerate Data and Analytics efforts:
We've continued to witness how use of data and analytics have impacted decisions across the sports landscape by administrators, coaches, athletes, medical professionals, and team trainers. Better use of data has created competitive advantages on and off the playing field by helping organizations engage their fans/donors better, generate more revenue, help teams and athletes win, and improve athlete performance in areas like injury prevention and off the field around academics.
The use of data and analytics has dramatically changed the way fans now engage with their favorite teams and athletes. One of the many examples of this is providing real-time stats through a mobile app or during an event broadcast.
However, there’s still a marathon to be run, and while, in some cases, athletic departments have done an incredible job of ramping up data and analytics efforts, there’s still a way to go with training, growing infrastructure, and the use of insights to make better decisions. Check out the attached SAS & Collegiate Athletics Impact Brief showcasing how SAS has worked with collegiate athletics programs around Fan/Donor Engagement. Click Here to learn more
2) Education, Education and more Education:
College athletic departments have done an incredible job over the past year with education around NIL and a growing need to do the same for sports betting. And the responsibility to educate falls not only on the shoulders of athletic departments and respective universities but with all the great companies that serve this industry around these areas of focus. This includes education to the student-athletes, the athletic department staff, and all those across the University.
3)?????Monitoring and Measuring:
The bottom line is the data!?College and university athletic departments have also done a great job over the past few years with data collection and analysis on the business side of their respective operations (e.g., Customer behavior, ticket sales, fundraising, sponsorships), as well as continuing to ramp up data efforts for what happens on the “playing field” in seeing student-athletes and teams succeed. However, in areas like NIL and Sports Betting, we're only at the starting line; we’ll need more data to surface trends and understand statistically significant ones.
4)?????Accountability and enforcement:
This applies more to NIL and Sports Betting than other hot industry topics discussed above. I believe many would agree there are and will continue to be many risks with these two topics, and the best way to lay the foundation and level the playing field is to instill a culture of accountability.
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I ask and encourage you to comment and share your data and analytics success stories, your challenges, and experiences with me throughout this journey. And most importantly what you think the future use of data holds for the industry.
Click Here to Learn More about SAS in Sports
Past articles in this series:
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