Fall 2007 Wharton Sports Business Club NYC Trek

On November 16, seventeen MBA students traveled to New York to attend the Wharton Fall Sports Business Trek. The group, comprised primarily of first years, was given comprehensive insights into the growing demand for an MBA skill set in sports and sports related media companies. The agenda included visits to 3 leading companies: The National Basketball Association (NBA), Major League Baseball Advanced Media (MLBAM) and TAKKLE.

Under the explicit orders of Commissioner David Stern, the NBA is making a targeted effort to hire more MBA’s into its organization. One of their first initiatives under this mandate was to form a partnership with the WSBC, Wharton’s Sports Business Club. During the breakfast meeting, trek participants heard speakers from Team Marketing and Business Operations, the International Group, and the Marketing and Media Group. Rebecca Chiu (WG04), Director of the International Group, and Paul Bamundo (WG99), Director of Marketing Partnerships, are both Wharton MBA Alumni. They spoke about the NBA’s expansion plans overseas, particularly in the Asia Pacific, and how the league works with corporate sponsors to promote the game of basketball.

The next stop was a visit to what many consider the crown jewel of Major League Baseball, their interactive arm - Major League Baseball Advanced Media. The company operates the official web site for the league and 30 Major League Baseball club web sites via MLB.com, which draws over four million visitors per day. The group met with Justin Schaffer, SVP of New Media, who discussed the company's history and a number of new strategic initiatives. MLBAM was founded in 2000, and already has an estimated $450MM in revenues with double digit revenue growth and EBITDA margins that are 30% of MLB’s entire operations. Each team shares MLBAM's profits equally, which augments the current revenue sharing agreement to ensure more competitive balance for smaller market franchises. MLBAM just recently was able to pay back the roughly $80 million investment used to fund its start—nearly $3 million per team. While CEO and Wharton MBA Alum Bob Bowman was unable to attend, Justin held a highly interactive conversation covering topics such as MLB’s pending fantasy sports litigation, the launch of the MLB TV Channel, and the convergence between sports and social networking.

The trek ended with a visit to TAKKLE, an online social network focused on high school sports. TAKKLE, which recently completed a $7 million financing, is led by Wharton grads David Birnbaum (CEO, WG05) and Mike Mortellaro (COO, WG05). The Company has grown rapidly to 40 employees and is backed by Sports Illustrated. The executive management team spent well over the allotted hour and a half to discuss their personal stories and passions that helped them get to where they are today.

All in all, the Wharton Fall Sports Business Trek was deemed a success by the participants, and planning will soon be on the way for a spring visit to ESPN, NFL and MLS, and other potential future Wharton MBA employers. Reach out to the club to get involved!

Article contributors: Samir Mayur, Peter Spartin, and Tim Lacey

Professor Justin Wolfers discusses his research on racial discrimination by NBA referees

(November 8, 2007)

Last week, members of the Sports Business club were treated to a lecture by Professor Justin Wolfers, the co-author of a study that sparked national debate and significant media coverage earlier this spring. While Professor Wolfers has performed research on such significant subjects as the death penalty, none of his previous research created the stir that his paper on racial bias amongst NBA referees had caused.

First, it is important to consider the motivation behind his research. The main question is whether a referee of a given race shows any bias towards his own or another race. This is not an attempt to discover if these officials are themselves racist, rather it is to find if they harbor a bias, possibly unknown even to themselves.

He chose the NBA for two major reasons. First, while the teams of referees are not randomly assembled, their assignment to a given game is; and given the significant repetition, the result was a quality data set. Second, the group as a whole was a good target, as this type of bias would seem to be rare in a setting with such high visibility, transparency, and strict monitoring. As mentioned by Professor Wolfers, David Stern, the commissioner of the NBA, the referees are closely monitored by the league at all times.

His research eventually concluded that there was some level of bias, but only by a slim statistically significant amount. The bias appeared to suggest that the non-black players in the NBA were called for more fouls based on the makeup of the officiating team. Results aside, more importantly was the subsequent backlash from the national media. Ranging from the cover of the New York Times to significant coverage on ESPN shows such as PTI, the study was scrutinized for days.

In the end, Professor Wolfers’ study is statistically sound, and possibly reveals some underlying biases that exist in our society today. Ironically, while many of his studies have a greater perceived social impact, none have garnered the attention of a study on the NBA. As he noted from a conversation with sports writer Bob Ryan, sports is something people truly feel is “important”.

Professor Justin Wolfers is an assistant professor of business and Public Policy.
See the original article: http://bpp.wharton.upenn.edu/jwolfers/Papers/NBARace.pdf

And the New York Times article about the reaction from the sports media to the controversial research: http://www.nytimes.com/2007/05/02/sports/basketball/02refs.html?n=Top/Reference/Times%20Topics/People/S/Stern,%20David.

Article contributor: Andrew Chun