PLAYING GENERAL MANAGER: A SPORT FINANCE EXPERIENCE. Mike Mudrick Sport Management June 7, 2016

Transcription

1 PLAYING GENERAL MANAGER: A SPORT FINANCE EXPERIENCE Mike Mudrick Sport Management June 7, 2016

2 Trivia For the season, who was the highest paid player in the NBA? LeBron James Carmelo Anthony Kevin Durant Kobe Bryant

3 Trivia Since 1984, how many different teams have won NBA championships?

4 Trivia At what age do NBA players typically hit their statistical peak?

5 Background Sport Finance Class size: 22 Juniors/Seniors Second time offered Uniqueness of sport Academically Consumer perceived knowledge Active student learning

6 Fantasy Sport Statistics 66% male, 34% female (FSTA, 2015) 2007: 19.4M USA users 2014: 41.5M Popularity growing amongst college students (New, 2014)

7 Project Outcome Objectives Budgeting Zero-based League Finance Rules Salary caps Luxury taxes Free agency Competitive Balance Analytics & Financial Implications Risk Writing/Reflection

8 Analytics in Sport Why have analytics become useful in sport?

9 Difficulties of Sport Assessment Human error; an inexact science However Predictions and show of causation with statistical significant much better position

10 Typical measures of efficiency Player Variables Three Point Field Goals Made (3FGM) Defensive Rebounds (REBD) Offensive Rebounds (REBO) Steals (STL) Two Point Field Goals Made (2FGM) Blocked Shots (BLK) 0.02 Free Throws Made (FTM) Missed Free Throws (FTMS) Missed Field Goals (FGMS) Turnovers (TO)

11 How can I translate value? What s a good PER? Unheard of successful year 35 Clear cut MVP 30 Viable MVP Candidate 27 Legitimate All-Star 22 Possible All-Star 20 Decent second option 18 Third best on team 16 Somewhat good player 15 Rotation player 13 Not an NBA player 5

12 80/20 Rule in Effect Berri & Schmidt (2010) From to percent of wins produced came typically three players

13 Directions Randomly select NBA team with corresponding budget Draft 13-player roster 4G, 4F, 3C, 2 G/F Salaries provided to class Player overlap allowed Analytic evaluations throughout semester Winner: Most efficient team

14 Winning Team Player Position Salary Starting PER PER 3/9/14 PER 3/20/14 PER 4/8/14 Final PER VARIANCE James Harden G $13,701, Stephen Curry G $9,887, Kyrie Irving G $5,607, Damian Lillard G $3,202, Jeremy Lamb G $2,111, Anthony Davis F $5,375, Tobias Harris F $1,545, Kenneth Faried F $1,367, Markieff Morris F $2,091, Paul George F $3,282, Larry Sanders C $3,053, Demarcus Cousins C $4,916, Nikola Vucevic C $1,793, Total $57,937, Total Alotted $59,113,318

15 Worst Team Player Position Salary Starting PER PER 3/9/14 PER 3/20/14 PER 4/8/14 Final PER VARIANCE Lebron James SF $19,067, Kevin Durant SF $17,832, John Wall PG $7,459, Goran Dragic SG $7,500, Paul George SF $3,282, Damien Lillard PG $3,202, Eric Bledsoe PG $2,626, John Henson C $1,905, Nikola Vucevic C $1,793, DeMarcus Cousins C $4,916, Anthony Davis PF $5,375, Isaiah Thomas PG $884, Kevin Love PF $14,693, Total $90,541, Total Alotted $101,291,208

16 In-class Reflection Highest budget last place Only 4 teams improved by end of semester In-depth salary discussion Guaranteed contracts Fan Cost Index Media contracts, sponsorship deals Lack of competitive balance

17 Student Reflection Paper Assessment of roster, based on value versus player salary Did team receive an adequate return on its investment? Where was best value found? Provide a short and long-term financial plan Considerations Age Future salaries Risk Future strategies must be in accordance with NBA salary cap and luxury tax policies How PER connected to analytics learned in class, has financial implications

18 Student Comments When looking at professional sports, it can be easy to forget that it is not only the actual players that produce wins and success. In order for them to have the ability to play and showcase their talents, managers and team owners must make informed decisions.

19 Student Comments Prior to this assignment, I did not have a large knowledge base of the NBA or the inner-workings of the player efficiency rating and salary relationship. Although it was a new experience looking at player statistics and comparing them against others, I found this assignment to be a helpful learning device for me in understanding the larger picture and role of general managers overall.

20 Project Issues Time Statistics Class size Lack of active management Student reward? Looked at winning, not team revenues

21 Moving Forward More of a business operation Multi-player teams Use of similar project in other sport management classes

22 Discussion Questions Ways to incentivize students to be more engaged? NCAA concerns with student-athletes? Assignment ideas throughout process? Other virtual reality programs out there (non-fantasy) for similar outcomes? Other ways to improve experience?

23 Other Questions?