Data as a Corporate Asset

I first thought about data as a corporate asset in 2012 when a lawyer involved in the purchase of a football club asked me how much I thought their database was worth. He posed the question of how much a fan database adds to the asset value of a club. We discussed the types of analyses that would provide him with the answer; Customer Lifetime Value (CLTV) and propensity modelling being the most relevant and easy to formulate. I also mused that if we could identify their contribution to media rights contracts and sponsorship fees (i.e., if they watched a broadcast or engaged with a sponsor) that would further increase the value.

I then tabled the subject in a blog post one year later and discussed it in the first and second edition of my book, Winning with Data in the Business of Sports, published in 2018 and 2021 respectively. But it was seeing this article by Douglas B. Laney and his killer headline Your Company’s Data May Be Worth More Than Your Company that made me sit up and take notice, and subsequently buy his 2017 bestseller Infonomics: How to Monetize, Manage, and Measure Information as an Asset for Competitive Advantage

And now I’m hooked!

If you haven’t yet considered this area, here’s a primer for you….

The principle behind data as a corporate asset is that it should be viewed as a business asset with its own value and should be protected, nurtured, and utilised in the same way rights owners monetise their logos, trademarks, images, and media rights. And, more importantly, it should have a place on a balance sheet. It’s as important as the sport or event itself, and should be nurtured, protected, and maximised.

At its most basic level, when calculating the value of your database, while you can model your fans’ spending power by analysing historic transactional data, a further question that needs to be answered to provide an accurate evaluation, is how many fans it takes to generate a specific value in sales for the sponsor. Taking this one step further we should also identify how many of our fans are contributing to our media rights negotiations – what impact does their viewership have on the fees we end up securing from intermediaries? Modelling these factors and applying them to your database will add a further dimension to your CLTV, increasing its asset value.

However, Laney’s thoughts go way further than this – he’s not just talking about an organisation’s database – the examples I refer to above – he’s talking about anonymous/unstructured customer data (perhaps your digital estate data, or sports performance data), as well as operational data (e.g., how you manage your traffic and crowds at a major event).

And how do you monetise it?

Here are five of Laney’s eleven drivers for monetising data:

1) Increasing customer acquisition/retention: this is the one I’m most familiar with and expect this will also be the case with you, the reader.

2) Creating a supplemental revenue stream: rights owners already do some of this but via our partners, for example launching a branded credit card, but imagine if what we knew about our fans interest in our merchandise lines could be sold to Nike when they’re developing their next range?

3) Introducing a new line of business: how much can a rights owner really pivot their business? Could knowledge of our athletes’ biometrics enable us to produce our own health product (as opposed to licensing one), or their behaviour on our websites enable us to enter web development? Our gut reaction might be to say no, but consider how the MLB created MLB Advanced Media and then BamTech, now a multi-billion dollar enterprise.

4) Entering new markets: this is key for our rights owners with global aspirations.

5) Reducing maintenance costs, cost overruns and delays: this is a key use case for operational data. For example, while we know we must sell more tickets or sponsorships, knowing how much its cost is to secure and deliver that sale will enable us to be more efficient.

These are my five favourite to discuss but there’s another in Laney’s eleven that I’d like to highlight: enabling competitive differentiation. This is one most rights owners won’t align with. When it comes to fandom for clubs, teams, and athletes we don’t really face competitors for our passion, only for our time, attention, and revenue.

How do you manage your data as an asset?

Laney’s book goes into a lot of detail on this but if you’re not ready to make that commitment, then you can also read this KPMG article 5 steps to managing data as an asset – and why you should. It’s very light, but is another good primer to get you thinking about this.

And of course, if you’d like to discuss it with us, please get in touch – we’re always happy to talk.