Video Tip: Sustainability and the Sports Arena

The Eagles' home stadium has 14 wind turbines and 11,000 solar panels
The Eagles’ home stadium has 14 wind turbines and 11,000 solar panels

When you are teaching Supplement 5, Sustainability in the Supply Chain, you may want to show our latest video on sustainability at the Orlando Magic’s Amway Center. This arena became the 1st gold-certified LEED basketball facility in the U.S.

Now The Wall Street Journal (May 19, 2014) reports that NFL teams are starting to see “green” as well.  The San Francisco 49er’s new $1.2 billion stadium will be the first in the league to feature a “living roof,” a canopy of green and flowering plants nestled across the top of an 8-story tower of luxury suites; this will reduce the building’s energy use and offer other environmental benefits by providing natural insulation. NFL clubs are also developing green programs to reduce energy emissions. They are using solar panels, wind turbines, electric charging stations and other low-carbon alternatives. The NFL is part of a general effort among U.S. sports leagues to embrace cleaner energy, led by a group launched in 2011 calling itself the Green Sports Alliance.

Alliance officials say sports teams that go green help boost public awareness of environmental goals while also benefiting their operations by lowering their energy costs. The $1.2 billion Atlanta Falcons Stadium, set to open in 2017, will include a rainwater-collection system to use for irrigation and cooling. The Philadelphia Eagles’ Lincoln Financial Field has installed features including energy-saving timers and sensors for lighting and cooling equipment. These and other energy-saving features have cut the team’s power consumption by half. The Houston Texans have created an interactive media guide, saving 2.6 million pages used in printing; the Redskins have installed solar panels at FedEx Field; the Rams have printed game tickets on recycled paper; the Vikings have put in reduced-flow plumbing at the players’ clubhouse and training areas; and the 49er’s stadium is net energy neutral, which means it is expected to generate all the energy it needs for the team’s 10 home games.

Teaching Tip: Incentive Systems Work in Sports Too!

If you are over 30 and have followed the NBA along the way, you probably remember one of the most colorful players of the game—Dennis Rodman. Green hair, difficult team player, a pattern of not showing up for games, Chicago Bulls NBA championship, and one of the most unusual incentive systems set up outside the C-suite….those are my memories. Rodman’s base was $4.5 million, with another $5.95 million (which he actually collected!) for completing each of the following: playing every game, leading the league in rebounding, having a 1.5 to 1 assist-to-turnover ratio, and hitting over 66% from the free-throw line. (Details from USA Today, Nov.26,1997, p.12).

Since we cover incentive systems in Ch.10, I am always looking for more current examples to use in class that will be of interest to our sports-oriented students–and I found one.  ESPN.com just reported (Dec. 28, 2010) that NY Jets QB Mark Sanchez and Baltimore Ravens QB Joe Flacco stand to make  millions in post-season contract incentives in early 2011.

Sanchez can pick up $1.875 million if he leads the Jets to a Super Bowl XLV victory on Feb.6 in Texas, and also lands the Lombardi Trophy. He  gets $250,000 for every playoff win even if the final victory is elusive.

Flacco will be paid $200,000 per post-season win by the Ravens. This means a maximum of $800,000 for leading his team to the a Superbowl title.

One could question the need for such incentive systems in general. After all,  they are already paid a small fortune to do their jobs. Maybe  it only bothers me because my dean never gave out such bonuses in the B-school!

Teaching Tip: Baseball and Correlation Analysis

When you are covering the subject of correlation analysis (Chapter 4) and want to provide an example that may interest your students (especially the sports-oriented ones), here is a 2 paragraph quote from a recent WSJ article (Sept.17, 2010,p.W-8). The article suggests that more than any major league baseball season in recent memory, the size of a team’s payroll isn’t tied to winning.

“According to estimated figures updated throughout the season, the correlation between a team’s player payroll and its winning percentage is 0.14, a number that makes the relationship almost statistically irrelevant.  That figure is 67% below last year’s mark and is easily the lowest since the strike.” 

“This outcome represents a stark reversal from the state of affairs a decade ago.  In 1998, the correlation between payrolls and wins was 0.71, a figure that suggests a strong and significant tie.  And in the 1999 season, when the correlation was 0.5, all eight teams that reached baseball’s playoffs were among the top ten spenders.”

This can make for a nice class discussion. First, it shows that terms from the text show up even on the sports page. But let the students compute the R squares for these correlations and interpret the relationships for those values. If the R-square was 0.504 in 1998, and 0.25 in 1999,what explains the rest of the variation?

I love the Journal’s sports section and hope you also find some of the statistics on that page interesting.