A data revolution, from hot dogs to fastballs

Baseball has always been a numbers sport, with fans and managers alike tracking strikes, balls, runs, and errors. Only in recent decades, though, has the sport fully embraced the power of technology and statistical analysis, from the ballpark experience to scouting and training.

Chris James, CPA, the director of accounting for the San Diego Padres, spoke at the 2020 AICPA & CIMA CFO Conference about innovation and risk in Major League Baseball. He reviewed the recent revolution in the sport’s management and outlined the changes that fans can expect in the post-pandemic ballpark.

Watching the audience

MLB teams are enduring a tremendously unusual season: Games are being played, but fans are barred from the stadiums. And without ticket sales and concessions, which James said make up more than 30% of the Padres’ revenues, teams are scrambling for cash and turning to debt.

“Frankly, the league is losing hundreds of millions of dollars this year. The Padres are losing tons of money this year,” James said. “We’re doing our best to operate, and we’re doing our best to provide entertainment to our fans, because that’s what we’re here for.”

In the long run, the pandemic could accelerate innovations at ballpark facilities as they try to minimize physical contact and improve operational efficiency.

The Padres and other teams have already invested heavily to build wireless networks that can accommodate tens of thousands of personal mobile devices. It’s the linchpin of a system that carefully tracks fans and shuttles them through the stadiums.

One of the major mobile offerings is digital ticketing, which frees up ticket takers for more roles, such as greeting fans as they arrive.

“A smile from the staff, an engagement,” James said.

Data from the ticketing system also helps the organization tweak staffing levels. For example, management can see in real time that a section of seats won’t be full, James said, allowing the organization to shift staff elsewhere.

At the concession stands, teams are examining purchasing patterns to predict, for example, how many pizzas should be in the queue at a given time. That kind of information can even help a team determine its ideal schedule: A 6 p.m. start, instead of a later start, might encourage more people to come early and eat dinner at the ballpark.

Meanwhile, some stadiums have gone cash-free — a shift that will feed yet more data to the organizations.

The Padres’ concession stands still accept cash, but fans can use an app to make purchases. That allows the team to build profiles on individual customers. For instance, combing through ticketing and concessions purchases might show that an account probably belongs to a family. The team can then cater messages to the account holder, such as offering family-specific deals on upgraded seating.

For now, though, practically every fan is sitting at home. James and others in the sport are looking toward the future but bracing for the long haul. “We don’t expect any sense of normalcy,” he said, “until 2022 at the earliest.”

Tech in the game today

Technology is not just about the audience. Teams are also gathering data from the players themselves. The sport today is defined by sabermetrics, the empirical analysis of baseball statistics made famous by author Michael Lewis in the book Moneyball: The Art of Winning an Unfair Game. James was an eyewitness: He worked as a box office accountant for the Oakland Athletics, the team that Lewis profiled.

“The Oakland A’s were a team that didn’t have lots of local revenue to be able to go out and buy lots of star players, so they had to focus on how to win without spending lots of money,” James said. “And they basically started arbitraging the free agent market.”

Instead of going head-to-head in bidding wars for high-priced players, they dug deep into statistics to strike deals with players who had few other options — and then they developed them into superstars.

“Clubs are spending hundreds of thousands of dollars every year,” James said. Some of the money goes to statistical software packages, but there’s also an array of new hardware to feed data into those analyses.

Different devices can track the spin and trajectory of pitches, or they can show the plane of a swinging bat and the trajectory of a smacked ball. Coaches and trainers have always asked these questions, but they never had authoritative data to answer them.

“We have staff and computers collecting all this data, processing this data, and sharing it back to the coaches and players so they know what’s going on,” James said.

Sometimes, that level of detail can lead to “paralysis by analysis,” he acknowledged. But it can also identify individual facets of a player’s style and turn them into strengths. In one example James gave, a player turned his career around after analysts spotted his natural upward swing and taught him to embrace it.

More than just improving players, these analyses play into an organization’s bottom line. They’re critical to contract negotiations and budgeting as teams try to guess how long a player can maintain his performance.

“Will we still get performance that we valued at $30 million in those last years [of a contract] when, as a human being, he’s probably supposed to break down?” James said.

From intuition to data

This technological bonanza is a relatively new thing for a sport that has been played professionally in the United States since the 1800s. James traces it to the 1970s, when teams found a new technology: the radar gun. “Until this point, it was a matter of watching a pitcher, hearing the ball fizz in … seeing how fast it looked,” he said.

Baseball historians credit Michigan State University coach Danny Litwhiler for bringing radar to the sport. Litwhiler spotted local police using radar spotters and soon had the technology adapted.

The new technology didn’t just help scouts pinpoint the fastest pitchers. It also gave them new data points to analyze pitching styles.

“Now, it is one of the most common things to see at a ballpark or practice, at high school games … a bunch of scouts, they’ve all got their radar guns out, they’re all jotting things down,” James said. “Baseball started in the late 1800s — it took them a hundred years to really start to adopt technology like this.”

It was a change that presaged not just a change in scouting but the widespread use of technology to extract actionable data from players and, increasingly, the crowd. Time after time, innovators in the sport have discovered that they can remake the game by changing how they see it.

— Andrew Kenney is a freelance writer based in Colorado. To comment on this article or to suggest an idea for another article, contact Neil Amato, a JofA senior editor, at Neil.Amato@aicpa-cima.com.