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Interest in sports continues to grow as we near the 2020 Olympic and Paralympic Games in Tokyo. However, sports in Japan has not yet been established as an industry, and data are important for creating new value that can overcome this situation. We spoke to Keiichi Kubota of ABeam Consulting about utilizing expertise and know-how in sports and data analytics.
Executive Officer, Principal
Sports & Entertainment Sector Leader
P&T Digital Business Unit
It is possible to create new value with the use of data
ABeam’s new position for the “Sports & Entertainment Sector” was established in April 2017. Until now, consulting and other services were available for certain projects connected to sports, but we are ready to grow in the sports industry by making good use of the expertise and know-how developed in each area of the ABeam Consulting business and applying them in more diverse and versatile ways. An interdisciplinary team composed of specialists from various industries and service lines is available to provide consulting services.
We began our focus on sports in 2013, when news became public that Tokyo would host the Olympics and Paralympics in 2020. We recognized that there would be a great interest in sports, so we established a task force and gained experience while evaluating the best ways of providing consulting services in the sports industry.
The word “sports” holds a positive connotation. Sports can move people, give them courage, and inspire dreams. We believe the thriving development of sports industry plays an important role in energizing Japan and creating a more vibrant society.
The development of sports as a business is the key to its success. However, Japan still lags in that regard, since many stakeholders simply do not understand their customers.
Customers in the sports industry are “people who play” (players), “people who watch” (spectators), and “people who support” (managers and coaches, etc.). Generally speaking, there are four stakeholder groups involved, surrounding the customers : (1) the teams and leagues to which players, managers, and coaches belong; (2) the stadiums and arenas where the games are played; (3) private companies that supply sporting goods and televise games; and (4) governments that provide political support. It is important that these stakeholders grasp the needs of the players, spectators, and managers. When the sports industry as a whole works together to provide products and services that meet those needs, customer satisfaction will increase, profits will be made, and the sports industry will develop.
Data are required to grasp those needs. By ascertaining and using data, customers and stakeholders can build a close connection and create new value in the sports industry.
What data is being gathered and why?
The current focus is on player related data. Recently, with the development of sensors, more players use highly-precise, wearable devices that make it easier to collect a variety of data. However, the problem is determining which perspective to take when analyzing that data and how to best make use of it. Without a purpose, these data are little more than numbers.
At ABeam Consulting, we had the experience of analyzing the physical data of players from a professional sports team. From the data, it was possible to ascertain common characteristics of top players.
Using these data, amateur players who have the potential to become professionals can be discovered earlier, and, with elite training, the collective strength of the team can increase. In terms of development, if the results of the analyses revealed that children who run the fastest eat rice for breakfast, then we can use that information to create new sources of income by proposing promotional planning to food manufacturers, for example.
As another example, data from a soccer team from the top league in France were analyzed to identify the causes of player injuries. Injuries during matches and in training were analyzed through data mining and the factors that cause injuries were determined to include pitch condition, match schedules, body weight, and exercise tolerance.
The results of the analyses clearly indicated that: (1) injuries during training are closely linked to coaching methods, (2) the probability of being injured in a losing match is twice as high as in a winning match, and (3) the risk of injury depends on the degree of exercise tolerance in the three days prior to the date of the injury.
Using data to understand what causes injuries makes it easier to promote specific discussions about their prevention, thereby reducing the risk of injury. In fact, this process resulted in the frequency of player injuries on this particular team.
Balanced investments in the entire sports industry are critical
It is not only the players who want to make use of data. Data usage is also important for club teams, sports facilities, and corporate sponsors, as it leads to new business opportunities and effective activities.
In professional sports, it goes without saying that winning is important. In terms of making a profit as a team, however, it is doubtful that winning is the most important thing. Strong teams have more fans and teams with more fans make greater profits from entrance fees and merchandise sales, for example. However, when reviewing the entire league, a very small number of such winning teams exist. Although all teams do their best to win, most do not earn fans by virtue of their strength. In one sense, whether one wins is up to luck. Therefore, is it right to think that teams can earn money by spending a lot of money on good players?
Consider that Manchester United FC is involved in the finance business, with credit cards, insurance, and mortgages and its aim is to ensure a continuous and stable income, regardless of whether the team wins or loses. Rather than investing in probability of winning, they invest in a marketing strategy that ensures a stable income. In other words, it is important to build a team that can make money, even if it doesn’t win. To earn money, it is important to make balanced investments in players as well as marketing.
The ideals of sponsors are also important in the sound development of the sports industry. Companies become sponsors to increase sales of their products or services. Sometimes, they also want to support the players and the team, but this is not a sustainable activity. It is important to make the most out of the merits of being a corporate sponsor.
To do so, companies cannot simply pay the sponsor’s fee. “Activation” is necessary in order to promote sponsorship. At ABeam Consulting, we work to improve performance using player and team data, but we are also involved in activation to showcase the capabilities of data analysis to the media. Naturally, this activation requires additional costs, not only for the labor of the consultants who perform the analyses, but also for the cost of media exposure.
Sometimes it is said that one should spend 1.5-2 times the cost of the sponsor fee on activation. Depending on the case, of course, a win-win relationship will likely develop with the sports industry, in which companies can enjoy the benefits of providing sponsorship, and thereby continuing the sponsorship.
Concepts needed in order for businesses to make money
To build a sustainable situation in which stakeholders make money by developing the sports industry, it is important to know what to do in order to earn money. However, new initiatives from this perspective seem still lacking.
In Japan, stadiums and arenas are scheduled for construction in about 20 places by 2025, resulting in a construction rush. The construction of stadiums and arenas, in many cases, follows the procedure of: (1) determining a location, (2) deciding on a building, and (3) considering its management. However, one should ideally consider management beginning with initial discussions, specifically what type of customer each area will attract, in what ways the stadium or arena should attract customers and, based on these determinations, what kind of building and equipment should be constructed. For that reason, it is important to have a system in which private real estate development, corporations, and entertainment businesses are involved from conception of the idea.
Stadiums and arenas are functional 365 days a year, but there will be matches on only 20 days a year for soccer or 30 days a year for basketball. It is important to know how the space can be utilized on the remaining 330 days. It makes no sense to design and construct a building and put its management in the hands of a private company without first considering how it will be used year-round.
Private companies provide management services to make money, so if the building is to be used primarily for music events throughout the year, the building’s design should be optimized for that intent by installing suitable sound equipment, for example. It is necessary to establish a concept to incorporate design strategies from the outset. Therefore, an ecosystem that connects the strong points of all of the players in the sports industry is vital.
Transforming the world of sports by the power of data analysis
At ABeam Consulting, we now work on initiatives that will transform sports through the use of data ourselves. For the first time in Japan, “SAP Sailing-Solutions” has been implemented to the “Team ABeam” sailing team, which is used to design optimal courses by gathering wave and wind information, in addition to tracking information via sensors in real time. The results of such data usage are limited to certain competitions in Japan, but the power of data analysis is being leveraged with the aim of winning medals at the Tokyo Olympic Games.
The management company of soccer player Keisuke Honda, “HONDA ESTILO”, supports coach and player training and strengthening school business. In the sports industry, the attention is on player data management, but there is little interest in coach data management. ABeam Consulting has developed a coach talent management system in order to train school coaches. We have established a coach evaluation system to implement experiments with the aim of raising quality.
In a project with the REAL RACING Super Formula racing team, we are currently pursuing the idea of improving acceleration through the analysis of machine data. In the racing industry, engineers are highly literate with regard to data, so we can quickly implement various initiatives. We anticipate that the initiative between REAL RACING and ABeam Consulting will lead to a revolution in the Japanese race industry and we want to do our best to make that happen.
We are also analyzing and using data to increase the performance of Japan’s first Indy 500 Champion, Takuma Sato, who we have sponsored since April 2017.
Although initiatives to transform sports via innovative data analyses are still underway, there lies substantial potential in this area. We want the Sports & Entertainment sector to play a leading role in the development of the sports industry through the proactive use of such pioneering methods.