Dan Claycomb: SMBA ’14 Student of the Week

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Editor’s Note: Each week we publish an interview with the SMBA ’14 Student of the Week. The winner of the Student of the Week (awarded by the previous winner) sits in the front row of class and proudly displays a flag of his or her choice on the famous Tez statue. Dan Claycomb is our next proud recipient for his always exemplary class contributions.

Dan ClaycombNicole McCabe: What was your favorite athletic event to attend at Penn State, your alma mater?

Dan Claycomb: Without a doubt, Penn Sate football games. Over 100,000 fans and one of the best student sections in the country made every game really enjoyable. We weren’t very successful during my first few years, but that made winning the Big Ten later on that much better.

NM: In answering questions in class, you regularly drop specific, obscure sports knowledge off the top of your head. It’s unreal. How do you acquire and retain all that information?

DC: I think I just like obscure sports facts more. If you asked me to name players who won the Cy Young, I’d have some trouble but if you ask me what was the first college football game televised on the Big Ten Network, I’d know it immediately (Appalachian State vs. Michigan, by the way).

NM: You worked in Accounting for Marriott International before coming to this program. How does the excitement level of that position compare to that of your dream job? Continue reading →

The NBA: Where Clutch Doesn’t Happen

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With the clock ticking down on the Golden State Warriors’ legitimate playoff hopes in Game 4 of their Western Conference semifinal matchup against San Antonio, the explosive Warriors’ offense needed just one final basket to break a tie in the game and knot up the series.

Naturally they called a play in which Jarrett Jack pounded the ball for several seconds before tossing up an awful fadeaway jumper with a hand in his face that never had a chance.

The same scenario played out in the other Western Conference semifinal Game 4. With the Thunder and Grizzlies deadlocked in the waning moments of the game, Zach Randolph received the ball on the perimeter and took a horrid fadeaway shot that wasn’t even close to send this contest to overtime as well.

Both the Warriors and Grizzlies came back to win in OT, but I’ve never understood why teams would be willing to live with such bad shots that would not pass muster in any other part of the game during the most crucial moments of the contest, and making matters worse these attempts often come out of a timeout.

If Jack or Randolph attempted those shots with seven minutes left in the second quarter, I would not be surprised to see them hooked from the game. Yet these are the plays their coaches draw up to win crucial games.

The one mitigating factor is that by ensuring you take an isolation shot at the buzzer, you greatly reduce the chance of a turnover and make sure you don’t give the opponent one final shot at the horn. Those are important things, but perhaps they can be accomplished in a manner other than having your (usually) best player take a horrible shot at the buzzer.

It’s clear from watching way more basketball than I should that teams shoot lower percentages in the clutch, and to find out how much worse I analyzed five seasons worth of regular season data from the NBA’s media stats site (2008-09 through 2012-13). I decided against comparing it to the same situations during the playoffs due to the skew toward good teams and the small sample size of the postseason, particularly when it comes to clutch situations. Continue reading →

A Lesson in Sports Negotiation

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One of my favorite parts about the SDSU sports MBA program encompasses assignments that allow us to put our sports nerd hat on while practicing general MBA concepts.

That was certainly the case in the player contract negotiation paper that we recently got back for our sports management/law class with visiting Penn Wharton faculty member Scott Rosner.

In this assignment, students paired up to oppose each other in a negotiation on the contract of a fictitious baseball player with five years of Major League service time. One student represented the player and the other the team.

We were also given confidential fact sheets with externalities about the respective team and player’s situation that became relevant in the negotiation. Along with the financial value of the contract, we negotiated incentives, no-trade clauses, weight clauses, charity contributions and a signing bonus. We were graded on how well we protected our side’s interests as well as the quality of the paper. Continue reading →

Nicole McCabe: SMBA ’14 Student of the Week

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Editor’s Note: Each week we publish an interview with the SMBA ’14 Student of the Week. The winner of the Student of the Week (awarded by the previous winner) sits in the front row of class and proudly displays a flag of his or her choice on the famous Tez statue. Nicole McCabe is our next winner for her outstanding data and PowerPoint work in group projects.

Nicole-McCabeScott Bauhs: Being a tennis and softball player in high school you seemed to enjoy hitting fast-moving objects, but after college you decide to start picking up heavy objects as a competitive power lifter. What inspired the change?

Nicole McCabe: The change was mostly due the desire to say in shape in the absence of organized sports. I never was a fan of cardio, so I found myself tossing the weights around a lot. Turns out that I am actually pretty strong for my size, so it wasn’t difficult to make a regimen of it (plus, there’s an awfully compelling male-to-female ratio in the weight room). After college I gave competing a shot, won some titles, and then decided I’d had enough. I think CrossFit might be the next challenge.

SB: You have some great experience with marketing analytics, which has been incredibly handy with some of our class projects. Does this make classes easy for you or did you have to struggle with it as much as some of us (I) are (am)?

NM: Everything has been a breeze so far. Just kidding… It’s been challenging to do math again! In my prior work experience, all the heavy lifting was done by Data Analysts using statistical packages before I ever touched the research, so getting back to basics was tough in both Statistics and Finance class. It’s been nice to have somewhat of a toolkit for research-based projects in Organizational Behavior, Sports Marketing, and Business Law, though. Continue reading →

Sports MBA Podcast – Tariq Virani

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Host Dominic Lucq (SMBA 2014) is joined by SMBA alum Tariq Virani of the San Francisco Giants.  They discuss Tariq’s time at the SDSU program and networking advice before delving into the world of CRM and sports business analytics.

Sports MBA Podcast - Tariq Virani Play Now | Play in Popup | Download

And be sure to subscribe to the pod on iTunes.

Professor Profile: Frank Ryan

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Frank RyanProfessor Frank Ryan is in his third year of teaching Financial Management in the Sports MBA program.  Known for his love of the New York Giants and his quirky applications of all things finance, Professor Ryan’s course is an integral part of the program’s core business classes, and students come to his class excited to see what the day will hold.  In the following interview, Professor Ryan discusses why he enjoys teaching, assesses the financial health of sports franchises and reminisces on his favorite moments both watching and playing sports.

Danny Roach:  Professor Ryan, thanks very much for taking the time to talk with me.  So, you’ve had a successful career in business, but what do you enjoy about teaching?

Frank Ryan:  There’s something about teaching that I find energizing.  There are always new people to meet, and even though I might teach the same material a number of times, it always has to be reformulated for the people I’m currently teaching it to.  I just find it fascinating and I love the subject, so it’s a great combination.

DR:  How does teaching in the Sports MBA program differ from teaching in other graduate programs and what do you like about it in particular?

Frank Ryan:  It’s always fun to talk about sports and I probably do too much of that in my other classes, so it’s nice to be in an environment where that’s encouraged!  I always use sports examples in my other classes to provide a means for people to understand sometimes complicated ideas, so this is a natural fit for that.  And I think a lot of people in the business world are familiar with sports examples, so to the extent that you can understand typical concepts in a sports framework, I think it helps when working and communicating in the business world.

I also like that it’s a cohort program, so the class flows better since everyone knows each other and there’s an existing peer-to-peer sports network that I think is very helpful for everyone’s  learning.  Students don’t spend the first few weeks of the semester feeling uncomfortable about asking questions because you guys get to know each other so quickly.  That allows for more fluid communication in the classroom compared to other classes.  And since you’re dealing with the same faculty year after year, you can more tightly coordinate the curriculum.

The other thing that’s different about the sports MBA program is that there’s not as much variance in ages, and people that come from a sports background, there’s a high energy level.  Students are also very willing to learn and there’s a familiarity in the idea of taking advice in a coaching context that’s a strong element of the sports students.  That common background of having most students in the program participating in athletics either at the high school or college level makes a difference. Continue reading →

Did the San Francisco 49ers Receive Appropriate Value for their Stadium Naming Rights?

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The big news in the NFL this past week was the San Francisco 49ers announcing they had sold the naming rights for their new stadium, which will open for the 2014 season. The deal was finalized at $220M over 20 years, making it the second largest deal in NFL history (MetLife Stadium is still No. 1).

While the deal is very impressive, the expectations for the deal were much higher. Thus far the stadium has been promoted as one of the most technologically advanced stadiums in the NFL as well as being environmentally friendly. These characteristics of the stadium along with the number of technology-based Fortune 500 companies in the San Francisco area led many to expect a much higher price, with one estimate of $330M over 20 years at one point. The expectations have resulted in the general opinion that the 49ers did not receive as much as they could have on their naming rights deal.

In order to evaluate how well the 49ers deal stacks up against the competition, we need to find comparable NFL cities. Of the 31 NFL stadiums (two teams play in MetLife Stadium), 23 have sold their naming rights prior to the 49ers. However, the Cleveland Browns and First Energy have kept their deal private, leaving us with 22 deals to compare to. (See table below for contract details)

NFL Stadium Naming Rights Deals

TEAM
YEAR
SPONSOR
AMOUNT (in millions)
YEARS
PER YEAR (in millions)
San Diego Chargers1997Qualcomm$18.020$0.90
Tampa Bay Bucs1999Raymond James$32.513$2.50
Washington Redskins1999FedEx$205.027$7.59
Pittsburgh Steelers2001Heinz$57.020$2.85
Detroit Lions2002Ford Motors$40.020$2.00
Houston Texans2002Reliant Energy$320.032$10.00
New England Patriots2002Gillette$240.030$8.00
Seattle Seahawks2002CenturyLink$75.015$5.00
St Louis Rams2002Edward Jones$31.812$2.65
Baltimore Ravens2003M&T Bank$75.015$5.00
Philadelphia Eagles2003Lincoln Financial$139.021$6.62
Carolina Panthers2004Bank of America$140.020$7.00
Arizona Cardinals2006Univ. of Phoenix$154.520$7.73
Tennessee Titans2006Louisiana-Pacific$30.010$3.00
Indianapolis Colts2008Lucas Oil$122.020$6.10
Oakland Raiders2009O.co$7.26$1.20
Jacksonville Jaguars2010Everbank$16.65$3.32
Miami Dolphins2010Sun Life$37.55$7.50
Minnesota Vikings2010Mall of America$6.03$2.00
New York Giants/Jets2010MetLife$400.025$16.00
Denver Broncos2011Sports Authority$150.025$6.00
New Orleans Saints2011Mercedes-Benz$100.010$10.00
San Francisco2013Levi's$220.020$11.00
NFL Stadium Naming Rights Deals

The first fairly obvious trend that stands out is the fact that the larger TV market you’re in, the more expensive the deal. Thanks to Nielsen, we can find other markets comparable to San Francisco.

Of the top 10 NFL markets, seven NFL stadiums have sold their naming rights. The three stadiums that haven’t are Chicago, Dallas, and Atlanta, although Atlanta expects to have a new stadium in 2017 and sell the naming rights at that time (Home Depot Field?). Of the remaining deals, we will eliminate New York since that stadium houses two teams as well as Detroit since the naming rights were sold under market value by the Ford Family to the Ford Family. This leaves us with four comparable deals: Philadelphia ($6.62M/yr), Boston/New England ($8M/yr), Washington D.C. ($7.59M/yr), and Houston ($10M/yr).

Since all four deals were signed between 1999 and 2003, comparing them to the 2013 deal of the San Francisco 49ers deal will be difficult due to inflation. Using the Bureau of Labor Statistics Inflation Calculator, we find that $11M in 2013 was worth $8.7M in 2003. Doing the same for the four comparable deals, we find amount each deal would have been worth in 2003: Philadelphia ($6.62M/yr), Boston/New England ($8.2M/yr), Washington D.C. ($8.4M/yr), and Houston ($10.2M/yr).

When looking at the 2003 values of the naming rights deals, the Houston Texans signed what is by far the most valuable deal, while the Philadelphia Eagles, the largest TV market, has a naming rights deal worth much less than the other teams. The San Francisco 49ers deal comes it as the second most valuable on a per year basis, slightly above New England and Washington D.C. Based on these comparisons, it appears the San Francisco 49ers received appropriate value in their naming rights deal and that the expectations for the deal were unrealistic.

Scott Bauhs: SMBA ’14 Student of the Week

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Editor’s Note: Each week we publish an interview with the SMBA ’14 Student of the Week. The winner of the Student of the Week (awarded by the previous winner) sits in the front row of class and proudly displays a flag of his or her choice on the famous Tez statue. Our very own Olympic hopeful Scott Bauhs is the latest winner after a week of fantastic contributions in class.

Scott BauhsJohnson Tran: You are the only professional athlete in the cohort and have provided a lot of great insight about your running career in class discussions. Can you tell us how you developed your passion in running?

Scott Bauhs: My community has a local road race every year called The Primos Run for Education (Primos being a local pizza place) and the local school kids are heavily encouraged to run the race since the proceeds go back to the schools. I did well for my age group and grew a great affinity for cheap pieces of metal attached to ribbon. I dragged my dad out to run more local races in an effort to acquire more metals (often by virtue of being the only kid there in my age group). In my early days, while being one of the fastest kids in school, I was hardly a star on a national level. I liked racing and beating other kids, but I would rather skateboard than train. It wasn’t until the later years of high school and then especially in college that I grew a true affection for all aspects of the sport by training twice a day and seeing my true potential. Now there’s no turning back.

JT: You wrote a moving blog post about how the running community will be stronger, not weaker, as a result of the tragic events at the Boston Marathon. I totally agree (Boston will be strong as well!). In what ways will the running community become stronger? Continue reading →

Why You Shouldn’t Take Forbes’ Latest Soccer Team Valuations Seriously

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I generally dislike any rankings that talk about the value of an organization, as each organization follows different methods to cook its financial statements. According to Investopedia, a wikipedia for investors, valuation is “the process of determining current worth of an asset or company.”

Estimating the value of a sports franchise isn’t that easy as most franchises aren’t publicly traded and refuse to disclose any financial details. For the few teams that are publicly traded it becomes easier to calculate their worth as their financial statements are out in the open for scrutiny. Forbes recently came out with its soccer team rankings for 2013 and declared Real Madrid as the most valuable soccer club, worth nearly $3.5 billion (around 76 percent more than the club’s valuation in 2012).

Forbes looked at the revenue generated and each team’s earnings before interest and taxes, depreciation and amortization and player trading. However, the evaluation completely overlooks player trading expenses, player salaries and other expenses. Looking at revenues without looking at expenses is meaningless, especially if you are talking about teams like Manchester City, Real Madrid and more recently Paris St Germain, because even if an average player were to join Real Madrid his salary demands almost double.

In addition, a team could have the highest revenues, but if it has minimal costs it is worth a lot more than a club that has the highest costs in the world to match. If solely revenues decided how much a club is worth without giving any regard to expenses, there would have never been a financial meltdown, nor a deduction in points for a bankrupt Portsmouth in the 2011-12 season of the English Premier League, nor the need for Financial Fair Play rules. Continue reading →

Professor Profile: Dr. Amy Randel

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RandelADr. Amy Randel has been part of the SMBA family for several years teaching one of our core classes, Organizational Behavior. As a former student-athlete (volleyball), she connects with us through her love for sports. Dr. Randel graduated from the esteemed Brown University with a degree in Psychology, and then proceeded to earn her Ph.D. in Management from the University of California, Irvine. She is an accomplished author who has award-winning publications in a number of select academic journals. In addition, Dr. Randel sits on the editorial board for the Journal of Organizational Behavior. In our interview, she shares with us her love for teaching, her research interests, her experiences as a collegiate athlete, and the valuable lessons she hopes her SMBA students can take from her teachings.

Stephanie Kimberling: Thank you so much for taking the time to interview for our blog. I think a good question to open with is: What do you find most rewarding about teaching?

Amy Randel: That’s a great question. It’s always super rewarding when I see students nodding when something clicks or when they see something they haven’t thought of before. I also love it when students come back or send an email and say, “I was at work and something you said came to mind,” or “I was in this situation and I remember what you said about what I should do…” I feel like if I’ve changed someone’s perspective or how they approach things in their job or their life – if I’ve made an impact on someone in some way – it’s really rewarding.

SK: I bet. When something you say really resonates with students – I find that really rewarding about teaching. It goes beyond just monetary rewards.

As an OB professor, how do you think organizational behavior is an integral piece to the success of an organization?

AR: I really believe that organizational behavior is something that is going to be applicable to anyone in any line of sports, or any industry for that matter, because no matter what you’re doing you’re dealing with people. You’re either trying to motivate a team, or trying to reach clients, or lead people in some fashion. Even if you’re at the bottom of the totem pole, you still have to influence people and work with people. So no matter where you are in the organization, I think organization behavior is important and relevant to everyone. I believe it’s everywhere you look and is involved with everything you do in a company whether it’s in finance, marketing, accounting, representing players – whatever it may be, you’re using it.

SK: I agree. It’s something we deal with on a day-to-day basis in so many different settings.

You have SMBAs participate in an Organizational Analysis Project. What key takeaways would you like your students to get from this? Continue reading →