IT is changing the face of baseball
April 19, 1999
(IDG) -- There is a moment in baseball, just before a pitch, when pitcher and batter lock eyes, each trying to figure out what the other is going to do, neither knowing for sure. It's the moment when fans and players share the butterflies, share the same uncertainty. Fans revel in it, but baseball managers and players spend careers trying to reduce the uncertainty contained in this moment through a neurotic obsession with information -- knowing as much about the opponent as possible.
For most of this century, information gathering in baseball was more an exercise in collective memory than a true science, full of hunches, instincts and notes scrawled on scorecards and scraps of paper. But as the 1999 season kicks off this month, technology is turning the game's information neurosis into a more organized and constructive pastime. Players, managers and the game's own breed of spies -- scouts -- are tapping information into laptops that feed intricate database programs producing baseball's first generation of true competitive intelligence, empirical data stored on hard drives rather than inside the skulls of the game's devotees.
This old game of intuition and heart is becoming one of research and analysis, on and off the field.
Between innings of the 1998 World Series, New York Yankees catcher Joe Girardi spent much of his time in the dugout thumbing through computerized "spray charts" that show where the San Diego Padres hitters hit the ball as well as graphics highlighting their weak spots in the strike zone so that he could call the appropriate pitches the next inning. "The Yankees started using the service in 1996, and they won the Series that year," says Randy Istre, whose Minneapolis company, Inside Edge Inc., collects and sells information to the Yankees and other teams. The Yankees pay Inside Edge $41,000 per regular season for its service and half that much again if the team makes it to the playoffs. "The Marlins started using it in '97," continues Istre, "and they won the  Series. The Tigers used it and went from the worst team in baseball in '96 to just under .500 in 1997. It makes us wonder if the power of this information isn't showing in some of the teams' results."
Istre's service isn't revolutionary, just more thorough. Advance scouting, that is, keeping track of what the other teams are doing, has been practiced haphazardly by major league teams for years. But tracking through a database the details of every pitch an opponent throws and everything a hitter does to defend himself is new and growing.
This is only part of baseball's larger quest to know all there is to know about a player, from the time he first cuts a wide swath through his high school and college leagues to the day he strides off the field of a major league ballpark for the last time. The teams contract with baseball-crazed programmers to create their own proprietary software to track every player's (not just their own) contract history, injuries, psychological makeup, and athletic strengths and weaknesses. All this information helps determine in what game situations he performs best and what types of pitches he likes (or hates) to hit (or throw).
But the information is most valuable in determining how much a player is worth. Baseball is becoming a game of payrolls as much as of hits, runs and errors, where the teams with the most money get the best players. The ability to pull player histories out of a database is one of the most valuable tools teams have in making trades and wrangling over contracts with players.
"Scouting is the most valuable application on the front end of baseball," says Bill Bolt, vice president of information systems for the Phoenix-based Arizona Diamondbacks (as well as for the NBA's Phoenix Suns). It's a three-tier system: amateur (high school and college), professional (minor league player development) and advance (competitive intelligence about other major league teams). Scouting applications track player development on all three levels, at a big cost for the teams, which support their own networks of (six or so) minor league clubs. Baseball players spend more time in development than almost any other pro athlete -- at least two years in the minors before they hit the majors. So keeping tabs on everyone helps the teams reduce cycle time and expense.
"Most baseball people are still in high school when we start tracking them," says Bolt. "They're looking to get lucky on Saturday night, and we're looking to find a third baseman. Our bet is this kid will be valuable three to five years after we first meet him."
The teams pride themselves on gathering nuances, like personal presence on the field, and cross-references, like testimony from a Little League coach, about a player whom no other team is looking for. Each team's set of scouting applications is considered its IT crown jewels, and IT leaders refuse to share their secrets with the press or each other -- a collective sense of propriety that seems a little exaggerated.
"About 70 percent of the data-entry fields in these programs are the same across all the teams, but there's 30 percent that teams try to make their own to look at things other teams aren't," says William N. Duffy, project manager for sports solutions at IBM Corp.'s Global Media and Entertainment Industry division in Atlanta. IBM is one of a handful of major vendors trying to crack the scouting application market. IBM scored with the New York Mets, but most team IT leaders sneer at the concept of a "packaged" scouting application.
"IBM tries to come in and say, 'Here's our view of baseball, and everyone should buy our application,'" rails one major league executive who speaks on the condition of anonymity. "But they don't know how the teams work. Each team does things slightly differently. It's true competitive advantage," he says.
Part of the reason we like baseball is because it doesn't change much. What drives IT leaders in baseball crazy is that team organizations don't change much either. Scouts and managers make the Luddites seem like pushovers.
Don Brown, director of management information systems for the Chicago White Sox, still has nightmares about introducing laptops to the White Sox scouting organization in 1991. He claims that the Sox were one of the first in the league to do so. He had to set up the laptops so that they immediately booted up the scouting application and displayed the first required form. "The most important thing was to make it easy for the scouts to enter and send the information," says Brown. To get the scouts to turn the machines on in the first place, he parceled out computer golf games and other adult entertainment (scouts are not '90s guys) to those who e-mailed him reports. Those who didn't, didn't get the "entertainment" loaded on their machines. It didn't take long to get compliance.
To his credit, Brown is not proud of what he did to get scout buy-in. "They're on their own with the games now," he says. What they get instead are CD-ROMs with video of the players they'll be scouting in the next town. "The quality isn't great," says Brown, "but it beats lugging a VCR on the plane with you."
The quality of the CD-ROMs will continue to improve, however, not just because of advances in technology but because baseball is becoming a media game owned by media empires. The business of baseball used to be governed by a cordial fraternity of moneyed families (the Yawkeys, the Wrigleys, the Whitneys and so on) who treated their teams as trophy businesses where profit didn't necessarily come first. These families kept the hardball out of baseball and channeled it into the businesses that enabled them to afford the team in the first place.
No more. Today the families are being displaced by powerful media conglomerates like Rupert Murdoch's Fox Entertainment Group Inc. (the Los Angeles Dodgers), Tribune Co. (the Chicago Cubs), Turner Broadcasting (the Atlanta Braves) and The Walt Disney Co. (the Anaheim Angels) that view baseball as a strategic part of their core business holdings.
"The media companies are buying baseball teams to get their name out there and to own the local broadcasting rights," says a source from a team owned by one of those media empires, who requested anonymity. "Once they own the team, they don't have to keep bidding for the rights to broadcast games."
The most important advantage these companies offer to their teams is resources. They have the deep pockets to compete in the salary slugfest that has gripped the sport in the last few years. Last season only three teams with winning records -- the St. Louis Cardinals, Toronto Blue Jays and San Francisco Giants -- had a player payroll under $48 million. The World Series-winning Yankees spent $73.8 million on players last year (second only to the Baltimore Orioles), a stunning contrast to the Montreal Expos, which spent the least -- $8 million in a game where the average player salary is now $1.4 million -- and finished with the third worst record in the majors. In 1988 the difference between the lowest team payroll and the highest was $15 million. Last year that figure was $66 million, a 340 percent increase.
For teams that cannot afford to compete in the payroll game, technology is becoming the preferred route to enhancing the team's return on investment. The Oakland Athletics spent $18.6 million on players last year and finished in the American League West's cellar. Realizing that baseball is at its core a service business, the A's use database marketing to learn more about the likes and dislikes of customers (fans). The A's are one of only three teams in the majors (the Padres and the Giants are the others) that have created "fan loyalty" programs. Like their frequent flier forebears, they reward A's fans for showing up consistently (if you went to 50 home games last year, for example, you might have gotten to take batting practice with the team). More than 32,000 fans signed up for the program last year (its first), and there was a 15 percent reduction in game no-shows despite the team's poor record, says Dave Alioto, the A's senior director of sales and marketing.
Showing up is important to a team's profitability. It's not enough to sell a season ticket anymore. To make money you have to have someone in that seat each game buying team logo caps and hot dogs and beer and programs. If his team goes belly up in the standings in July, Alioto needs to throw in other rewards to keep the season ticket holders coming out in August and September.
The loyalty program, which includes swipe cards that offer discounts on team merchandise and with local retailers (and provides the A's with your consumer profile), gives Alioto powerful information about the buying habits of fans. "We ask them about the food, about the products they buy outside the park and the things that draw them to the park," he says. He has already dropped one of his personal favorite marketing programs, batting helmet day, after fans dissed it on the survey. The program puts Alioto ahead of most of his contemporaries in a sport where marketing is practiced abysmally, if at all. The majority of teams don't know who the next generation of customers is, where they are or how to reach them. Most marketing efforts focus on season ticket holders, a group that's already buying the product. Indeed, if there is a crisis in baseball besides the dangerous game of salary Russian roulette, it is that few teams do much of anything to counteract the negative effects on average fans of higher ticket prices and mercenary players and owners. The Web, which baseball is only beginning to embrace (see "The Baseball Web Site Standings," link below), and database marketing are two ways that baseball can use technology to refresh the current crop of fans.
The corporate advantage: Efficiencies
Although it is being used by the small-market teams to enhance their revenue streams and thereby compete, it is the corporately owned teams that are positioned to win the IT game over the long haul. What owner knows how to market products better than Disney? Who knows more about sports broadcasting than Murdoch's News Corp., which runs the Fox network in the United States and Sky network in Europe and Asia.
These corporate advantages are even more apparent at the IT level. Carl Rice is IS manager of the Chicago Cubs, and the list of things he doesn't have to worry about by virtue of his team's ownership is almost as long as the list of things he does.
Financial application systems for payroll and accounts payable are handled by Tribune's corporate IT department. Nor does Rice have to beg for money for network upgrades and new business applications; the Tribune people do all that and at a much faster rate than the IT leaders at independently owned teams could ever hope to justify to management.
"I don't have a Y2K project," Rice proclaims smugly. "Tribune is a publicly traded company and they are making sure all the systems they use are compliant, including ours." Rice is free to work on IT issues that have a real impact on the Cubbies -- scouting systems and support -- and on the business -- marketing support and the Web site (which most teams have to outsource).
But Rice still faces the problems that any of his colleagues in baseball and in corporate America struggle with -- people shortages. Baseball spends money on the top jobs like CFO and vice presidents of marketing and IT, but the lower-level staff positions are manned mostly by stressed-out twentysomethings who trade pay for experience and proximity to the show. IT staffs in baseball are usually about two or three people. But baseball club IT leaders -- about the equivalent of a CIO of a division in a corporation -- have a leg up on their peers: Not only can they waltz out of their offices after work, stroll down the corridor and take in a game, they can mix it up with all the latest media and communications technologies—something those in less media-centric industries cannot do.
Baseball's IT leaders can also bask in the rare honor of being sponsored. NEC USA Inc. is a title sponsor for the Diamondbacks and supplies Bill Bolt with the PCs and servers he needs for both the business and baseball sides of the organization. The sponsorship arrangement has its share of glamour, cachet and "access," as they say in show biz.
"I've met [Bill] Gates and [John] Sculley [former head of Apple Computer]," Bolt beams. "If I worked for a very good insurance company I wouldn't have those opportunities. And because NEC is sponsoring our computers, I can talk directly to the top NEC people and Intel people. They wouldn't return my calls otherwise."
Bolt sees the new realities of baseball more clearly than some of his colleagues, perhaps because his office sits in one of the best examples of that new reality: the brand-new Bank One Ballpark (a.k.a. the BOB). Consider that in 1998, a year when Mark McGwire and Sammy Sosa resurrected Babe Ruth's ghost in a delightfully diplomatic home run derby and the Yankees reincarnated their dynastic dominance, the Diamondbacks -- a team with no history whatsoever, the team tied for the third worst record in the entire major leagues -- outdrew the Yankees and every other team except for two, the Orioles and the Colorado Rockies.
These three teams have one asset in common that sets them apart: They have ballfields that take their cue from the grandmaster of outdoor entertainment venues, Disney. These parks -- the BOB in Phoenix, Oriole Park at Camden Yards in Baltimore and Coors Field in Denver -- aren't just places to sit, they are baseball theme parks that evoke the game's most strategic entertainment asset: nostalgia.
The BOB is a new downtown building that looks old, with lots of brick and painted steel, nooks and crannies and idiosyncrasies that help transmit a sense of community and history, even though the former is so far unearned and the latter to date nonexistent. The BOB does so while thumbing its nose at the self-righteous, sanctimonious assumption that the grand old game alone is enough to entertain a nation weaned on TV and theme parks. Fans at the BOB can have a great time without seeing so much as a single pitch. They can drink and eat in an open-air restaurant in left center field, frolic in a swimming pool behind the right field fence or kill time in an arcade full of virtual baseball games.
To build this kind of experience around the fans, you need a capable technology infrastructure, all of which runs off of a single multimode fiber-optic cable -- Bill Bolt's cable.
Bolt is resigned to the fact that, unlike a CIO in a more businesslike operation, he can't hope to control all the new technology systems that the team and business tenants at the stadium use. The stadium's food vendor alone brings in a temporary workforce of 2,000 to 3,000 people each game, all of whom have to keep track of their sales via computer. So Bolt acts as a mediator between the technology vendors and the in-house functional people, looking for conflicts between the proposed new toys and the existing infrastructure and application systems. But the fiber acts as Bolt's control point for access and change. When the tenants want to change their systems in a significant way, they have to come to Bolt to request more bandwidth. "That's the tip-off to their plans," he smiles.
The fiber handles just about everything, integrating scoreboards, controls for the stadium's vast air conditioning system (to take the edge off Phoenix's 105-degree summer afternoons), security (with 90 cameras placed strategically around the park), lighting, fire alarm, cable television and the stadium's retractable-roof control system.
This system, in aggregate, is what makes the experience of baseball in the BOB so much fun for fans, and Bolt knows that if the experience doesn't continue to improve, someone will take that technology ball away from him. "We're in the honeymoon period with the fans," he says. "But if we don't win, they'll eventually stop coming, no matter how nice the stadium is."
That's why the front office of the Diamondbacks, led by owner Jerry Colangelo, who also owns the NBA Phoenix Suns, spent a league-record $118 million this off-season bringing marquee ballplayers to Phoenix, and it's why Bolt has been running around the BOB for the last three years (two of them before the team even started playing) throwing together a state-of-the-art (for baseball, anyway) IT infrastructure.
"The money won't be there for me to do this when the stadium is running 40 percent full," he says. "That's why I'm spending money now. To get ready."
Bolt doesn't know if the Diamondbacks will succeed on the field this summer, but as the season begins he is enjoying the uncertainty just as much as all baseball fans do. After all, that's why they play the game. To find out who wins, who loses.
Why IT changes everything
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