The Cubs Quantum Leap

The Cubs Quantum Leap

Superposition is a term that seems to belong to the world of sports.  In football there is a "superback" that can play multiple positions including tight end, fullback, or running back.  In baseball, there are utility players that can play multiple positions throughout the course of a game.

Superposition, however, actually belongs to world of physics. More specifically, “The superposition principle is the idea that a system is in all possible states at the same time, until it is measured.” In the world of quantum mechanics, the smallest particles (think electrons and protons) exist in every possible position until they are observed. When that occurs, all of the probability collapses into a single position.

If you have not fallen asleep already then a natural question at this point is why are we talking about Superposition (and especially quantum mechanics) and sports? Superposition can be applied to why live games or events will continue to be a value for the sports industry. More specifically, audiences live in superposition while watching games. From the start to the finish of a game, there are many different possibilities of an outcome. The fans, media, and sponsors constantly live in a world of multiple possible outcomes in every game their favorite team plays. This inherent drama and emotion is what drives so much passion about sports. It is only after the final score or outcome is observed that we can know with certainty what will happen to the our favorite team during a game.

[GROSSMAN: Dollars say Dwyane Wade a better investment for Bulls than Derrick Rose]

We can use last night’s epic (or heartbreaking depending on which team you cheer for) Chicago Cubs win as an example of superposition in sports. Going into the ninth inning, the Cubs were losing 5-2 and had a 2.5% win expectancy according to the baseball analytics site FanGraphs. At this particular moment, the Cubs possible states included:

· Scoring zero runs and losing Game 4 by the score of 5-2.

· Scoring one run and losing Game 4 by the score 5-3.

· Scoring two runs and losing Game 4 by the score 5-4.

· Scoring three runs and losing Game 4 in the bottom of the ninth or extra innings.

· Losing Game 4 and winning Game 5.

· Losing Game 4 and losing Game 5

· Scoring four runs and winning Game 4 by the score 6-5 with the Cubs   wining the series 3 games to 1.

Each one of these “theoretical states” exists for the Cubs, and Cubs fans “exist” partially in each of these states until the game is over. Even though the last outcome had a very small probability of occurring, it still was a possible state and part of the overall Cubs superposition. 

[SHOP CUBS: Get your Cubs postseason gear right here]

Superposition does exist for all entertainment options – particularly for movies and television shows. For example, fans are currently thinking about how the show Game of Thrones will conclude at the end of its eighth season (the show just completed season six). However, once viewers see the series finale, Game of Thrones no longer is in superposition. The series is over, and the viewers know what happens.

Unlike other entertainment options, sports are constantly in a state of superposition. That is what makes them such a valuable asset. Every year for many sports, there is a new season with a new slate of games. Each game has a conclusion, but there is a new game and new theoretical possibilities for each team. The team or sport for the most part is never “over”. Even when ratings are down for NFL games year-over-year, the concept of superposition will likely keep fans engaged with the league for years to come. More specifically, fans need to watch each game live to achieve the maximum emotional impact of superposition.

Superposition sounds like a sports concept. Even though it comes from the world of physics, it does not require a quantum leap to see how it shows why fans, media, and sponsors love sports.

Adam is the CEO and Founder of Block Six Analytics. He is also a lecturer for Northwestern University's Masters of Sports Administration and the co-author of The Sports Strategist: Developing Leaders For A High-Performance Industry. Ross is a Partnership Analyst at Block Six Analytics.

Sports business: Using targeted promotions to earn more dollars

Sports business: Using targeted promotions to earn more dollars

In Monday's episode of National Public Radio’s (NPR) Fresh Air Joseph Turow, professor of communications and associate dean for graduate studies at the Annenberg School for Communication at the University of Pennsylvania, ominously "Warns That Brick-And-Mortar Stores Are Watching You."

While this may seem a bit like the real-life equivalent of "Big Brother" from George Orwell's book 1984, Turow is describing the reality that the tracking companies do in e-commerce has moved more fully into the offline stores. Using technology including mobile applications, iBeacons, loyalty cards, geo-targeting, and geo-fencing companies have more information about customers in-store buying and behavioral patterns. This enables companies to design targeted adds and promotions specifically tailored to customers that can increase the likelihood of them making a purchase.

While the ethical implications of this activity would require and entirely separate blog post, Turow and host Terry Gross discussed an important idea that comes from having this technology. In the past, companies have focused on rewarding and retaining loyal customers. Those are the customers that keep coming back and buying a company's products or service offerings. Because the cost of keeping a customer has been much lower than attracting a customer it would seem to make sense that companies would want to focus on keeping the customer's they have.

However, this may no longer be the optimal strategy for maximizing revenue growth. Instead, companies should be focused on the marginal customer rather than the most loyal customer. A loyal customer is loyal for a reason – he / she likes the company's service offerings. Why spend money on advertising and promotions if that person is already likely going to buy the product anyway?

Instead, targeted promotions should be focused on customers that will only make a purchase if they are influenced in the right way. For example, let's say a customer is indecisive about buying a pair of jeans. In the past, this customer may have tried a pair of jeans on and then left the store without purchasing them. Now, a customer can download a company's app to access additional content, deals, and other helpful information. In return for delivering these benefits the company can receive information from the app that shows the location of the person while he/she is in a store. It can then use a geo-fence, a virtual fence that surrounds a geographic area, to determine when a customer leaves a specific geographic area. If this customer leaves the store without making purchase after spending a certain amount of time (i.e. the time to try on the jeans) then the company could send a targeted ad saying that the customer has 15 minutes to come back to purchase the jeans at a 15 percent discount. Essentially, companies now can identify "disloyal" customers and then attempt to bring them back to stores to make purchases.

Using technology to reward "disloyal" customers is something that sports organizations need to increasingly focus on given the demands of the business. More specifically, there are loyal fans that are going to buy tickets, watch games, and purchase merchandise even if they do not see any advertising from a team. These customers add significant value and should not be ignored. However, sports organizations want to focus on targeting the marginal customer using new technology to encourage ticket sales, in-venue purchases and increase game viewership.

The added benefit of using technology and customer outreach in this way is that it should increase sponsorship revenue as well. Not only can sports organizations use targeted promotions to help their current sponsors expand reach, but organizations can also show how these targeted marketing efforts cause lifts in purchasing. For sports teams, clearly communicating how sponsorship/marketing assets are used to create a lift in sales provides powerful evidence of how similar tactics can drive new revenue for partners. Rewarding "disloyalty" seems counter-intuitive, but there are many ways that targeting marginal customers should lead to substantial revenue growth.

Adam is the CEO and Founder of Block Six Analytics. He is also a lecturer for Northwestern University's Masters of Sports Administration and the co-author of The Sports Strategist: Developing Leaders For A High-Performance Industry.

Crain's releases list of 25 highest-paid Chicago athletes

Crain's releases list of 25 highest-paid Chicago athletes

Crain's Chicago Business released their latest list of the 25 highest-paid Chicago athletes this week.

Even though Derrick Rose has been shipped off to New York, a Bulls guard is still atop the list with Dwyane Wade earning the No. 1 spot.

Wade's salary comes in at $23.2 million — the largest in Chicago — but he also nets an estimated $12 million in marketing for a 2016 total income of $35.2 million.

The $35.2 million dwarfs the rest of the Chicago list as the next closest is White Sox pitcher James Shields at $21.3 million. Most of that is salary ($21 million, of which the San Diego Padres are paying a large portion of) and very little is estimated marketing ($250,00).

The Top 10 list includes three Bulls players, three Cubs, two Blackhawks, one Bears and then Shields as the only Sox representative.

Here is the complete list:

1. Dwyane Wade - $35.2 million
2. James Shields - $21.3
3. Jon Lester - $20.9
4. Jimmy Butler - $17.6
5. John Lackey - $16.4
6. Jay Cutler - $16.4
7. Jason Heyward - $15.7
8. Jonathan Toews - $15.1
9. Patrick Kane - $14.9
10. Rajon Rondo - $14.6
11. Miguel Montero - $14.6
12. Melky Cabrera - $14.2
13. Robin Lopez - $13.3
14. Kyle Long - $13
15. Ben Zobrist - $12.9
16. Jake Arrieta - $11.7
17. Alshon Jeffery - $11.4
18. David Robertson - $11.1
19. Jose Abreu - $10.3
20. Leonard Floyd - $10.2 ($9.7 million signing bonus)
21. Danny Trevathan - $10.1
22. Taj Gibson - $9.4
23. Brent Seabrook - $9.1
24. Todd Frazier - $7.8
25t. Pernell McPhee - $7.2
25t. Anthony Rizzo - $7.2

Almost a third of Rizzo's total comes from marketing ($1.8 million) with 19 different affiliated brands including Buona Beef, ESPN Radio, Jewel-Osco (remember RizzOs??) and State Farm.

Crain's Danny Ecker explains how unique it is to see Kris Bryant — one of the faces of Major League Baseball — not on the Top 25 list, but that's due to his $652,000 salary in 2016 despite monster ad deals with Express Men, Red Bull, Adidas and more.

Ecker also provides context for the athletes who were left off the list, including Chris Sale (who was traded to the Boston Red Sox), Dexter Fowler (who signed with the St. Louis Cardinals) and Jason Hammel (who is currently still a free agent). Then there are the guys who left town earlier in 2016, including Rose, Joakim Noah, John Danks, Adam LaRoche and Matt Forte.

Duncan Keith and Marian Hossa are among those who fell off the list despite retaining residence on Chicago's sports teams.

Last year's list looked like this:

1. Derrick Rose
2. Jon Lester
3. Jay Cutler
4. Jimmy Butler
5. Patrick Kane
6. Jonathan Toews
7. Joakim Noah
8. John Danks
9. Melky Cabrera
10. Adam LaRoche
11. Miguel Montero
12. David Robertson
13. Matt Forte
14. Jason Hammel
15. Pau Gasol
16. Taj Gibson
17. Pernell McPhee
18. Marian Hossa
19. Duncan Keith
20. Jose Abreu
21. Corey Crawford
22. Chris Sale
23. Anthony Rizzo
24. Lamarr Houston
25. Jermon Bushrod

Check out more insight on the list from Ecker on ChicagoBusiness.com.