Yesterday the University of Nebraska announced extra benefits for student athletes, including each scholarship athlete receiving a laptop, and four-year scholarships (and more, go read the article).
Also yesterday Nebraska' Athletic Department released their annual report. I'm not going to into it other than two specific areas:
- Nebraska made $8M on concessions and parking.
- Nebraska had $41M in operating expenses.
There was a key phrase apparently missed by nearly everyone in yesterday's analytics announcement:
Zeleny will head a newly formed department that will be in charge of working with Nebraska's 24 varsity sports to collect, analyze and summarize data related to team and individual performance. Zeleny and his staff will also work with support staff areas within the department to collect, analyze and summarize data related to department operations.
Nebraska's sell out streak is well known. Attendance in men's basketball is amongst the top ten in the nation. You're really not going to draw more customers in the big two sports, so you'd be wise if you came up with a way to make more revenue off your existing customer base.
(Before I start, I want to make sure you understand that I have no inside information as to Nebraska's plans. These are simple observations I'm making from being an IT consultant for over two decades.)
Let's take a look at that $8M in concessions and parking.
There are many questions regarding concessions alone, but we'll go with something simple:
- What foods or drink do fans order the most and at what time during the game?
If the people selling concessions know that 60% of people order a soft drink and a salty snack together, they might be better of having a promotion that combines these in order to increase that percentage to 80%. Hence, more revenue.
That's simple, right?
- What can we do to eliminate food waste?
Know what food is being thrown away the most and you can apply dynamic pricing, lowering the cost of those food items as the game goes on, thus cutting down on waste. Less waste, more profit!
- What about parking?
Parking is an enormous issue in every city, and I have never heard of a campus in existence in which parking didn't nearly turn people homicidal. For the provider (the city or university)
There are few places to park that don't take credit cards. When you go into a lot, you generate a transaction (the gate goes up). When you leave, you leave a data trail (you were there for a certain amount of time and you paid $x). There are times at which the lot is empty, and times at which it is full.
If you know when the lot is empty, you may drop the price to entice more parking; you might even make it free at times. When it's full, you're going to raise pricing because... well, because you can. Take the analytics further, and you know when you have violators and the police department can issue more tickets.
(As an aside, go listen to this Freakonomics podcast on parking. Fascinating. That should tell you how much of a geek I am.)
$41M In Operations Costs
Normally Nebraska fans look at a game day experience as meeting friends and tailgating, going to the game itself, and then getting out of there and heading home (in a nutshell).
Think about your last home game. How many security people were around the stadium? How many ushers? Parking attendants (that again) or people who keep the bathrooms cleaned and stocked?
Could Nebraska get by with fewer security personnel? They could decrease the personnel by 10% and save X dollars, but if they did, how many more incidents would take place? Take those same questions and apply them to the "clean team". How many more complaints do you get about the bathroom if you drop personnel costs by 10%?
If you're not analyzing that data, you have no idea what the answers are.
Other areas of operations in which data analysis can assist:
Every school wants to be "green", but doing recycling increases costs.
Every Nebraska fan who follows recruiting probably knows how much money the athletic department spends on the coaches flying around the nation, but I'd bet few ever think about the costs associated with 24 athletic teams going to away games. Egad.
Training table food costs for student athletes.
I'm sure you guys can think of many more. We have a pretty smart community.
So.. if you're one of those people who're thinking that analytics is stupid, and the analytics department's cost is money down the drain, you're not seeing the full picture. This isn't just innovative in sports. This is innovative in (gasp!) business.
Nebraska can take this step because it's one of the most well-run athletic departments in the nation. All those Academic All-Americans? Not having to worry that the department will go broke? Providing four-year scholarships? That stuff doesn't just happen. It happens because we have an athletic department we can be proud of.