Argyle Conversation: Jay Wessel, Vice President of Technology, Boston Celtics

-- Download article as PDF --

JASON REDLUS: To start off, can you share a bit about the Celtics as an organization, as well as your role as vice president of technology?

JAY WESSEL: If you put basketball aside, the Celtics organization looks a lot like almost any other generic small business. You have about 75 employees and a handful of interns, with all the typical departments. We have a finance department, sales and marketing—which we generally refer to as corporate sales—and HR. We have all the conventional things you would find in a small business. The difference is that our product is putting on a basketball game. It’s very much like a small manufacturing company, only we’re manufacturing an event.

Regarding my role, we call it technology. Although it includes IT, it includes all sorts of other things as well. It’s a small technology department; there are two of us. We do the conventional IT things that many small business IT directors would be hitting—networking, Windows, desktops, laptops, handhelds, phone systems, servers and storage—but also a bunch of other things that are less common. We do a lot of audio and video, lighting and sound, and the arena technology. We generally break our role into three gross categories: generic IT; event technology, which includes actually being in the arena on the day of event and putting on the game—lighting, scoreboards, sound, and working with broadcasters to make sure you see the game at home; and finally, what we call basketball technology, which refers to scouting, statistics and digital video that’s used by the coaches and players. This last category includes all the ways that technology has blossomed around the actual game of basketball.

You mentioned this concept of manufacturing an event. In terms of revenue streams, do those include ticketing, TV and advertising?

Those are the three major sources of revenue. Ticketing is the biggest portion of our revenue, then broadcast rights, followed by what you called advertising. We generally call it sponsorships because some of it’s advertising but there are other things that happen in the sponsorship world. Sponsorship and broadcasting are similar in size in terms of revenue, but both are significantly smaller than ticketing. Our model is pretty simple: The Celtics sell tickets and pay players. All the other things are second-order effects.

Do you own the physical arena?

We’re somewhat unique in that we do not own our arena. We’re essentially tenants in our arena. There’s a big complicated lease between the Celtics and the arena owners, who also happen to own the Boston Bruins. In gross terms, the deal is that we play in their building and sell the majority of the tickets, and the building can make money on selling things like concessions and also some advertising. A few other teams are in a similar situation. The Lakers, for example, play in a building that isn’t owned by them. The owner of the building owns another team, the Clippers, and the LA Kings hockey team.

Do you work in partnership with the NBA?

It’s funny. In some cases, the league drives things. They tell us exactly how things need to be done and we do exactly what they say. Day to day, we manage a bunch of their technology systems. But yet, there are many things that they leave up to us. So it’s both very tight and controlled, and at the same time, there are places where it’s very loose and independent.

You’ve been with the Celtics for over 20 years. Over your tenure, what have been the biggest game changers in terms of how technology has impacted your business?

I started as a part-time consultant in 1990, just doing game nights. Very quickly, there became more and more needs, as 1990 was the beginning of a huge growth in technology. However, more than just technology in general, the real game changer in my mind has been media. The majority of the shift in the way media covers basketball has been in Internet media, but I’m also talking about print and television. The push by the media to be more involved in everything, and to have more immediate access to everything, is huge. It was much more laid back in 1990. You had a few beat writers from the newspapers to talk to after a game. Sometimes you were on TV, but it was nothing like today’s world of cable TV and Internet media. You see stuff on the web now in real time. A play happens on the court and five seconds later, people are commenting about it on the Internet. By the end of the game—sometimes even at halftime—you see video recaps of it online and on cable TV. The way that technology has driven media is really what’s affected us most.

As a result of these changes, does anyone gain or lose leverage?

I think both—the teams gain and lose, and the media gains and loses. It is a struggle sometimes to do enough but not too much. For example, the players and coaches don’t want to get too involved in media on a game day, but they also recognize that without the media, our sport wouldn’t be what it is. They have to try and compromise. If Doc [Rivers, Celtics head coach] and the players had their way on a game day, they wouldn’t see, talk or hear the media. But if you’ve ever been in an NBA locker room pre-game or post-game, or an NBA press conference, they are jammed packed with all different media types.

From a technology standpoint, has this raised expectations?

We’re expected to be able to connect anybody to anything at any time. If somebody walks up with a videotape and random XYZ format, you’re expected to be able to feed them, to be able to help them with their computer or handheld. So yes, there is an expectation of interacting with the media at the reporter level, all the way up through the technology and broadcast side. The expectation is there and we’ve fought really hard to make the relationships work as well as possible.

You talked earlier about the importance of ticket sales to the Celtics’ revenue. How do you handle security in terms of protecting customer data?

Luckily, like many of the professional sports teams, we have partnered with Ticketmaster, so we leave a lot of that up to them. Generally our ticketing happens completely within Ticketmaster’s infrastructure. A little bit of that infrastructure actually lives here, in my data center, but it’s their infrastructure. It’s sort of similar to what I was saying about the NBA—it’s theirs, but I manage it on a day-to-day basis. By partnering with Ticketmaster, we’ve been able to leave some of the big security issues to a bigger company with more resources. We push them, and we review it, but we don’t have to actually implement it day to day. This is true with a lot of things when you’re a small business. You’ve got to find partners that have the resources to do things that you’re too small to do yourself. Our technology partners are very important. We pick them strategically and keep the number of vendors down as much as possible so that the relationships are mutually beneficial.

Do you have to worry about piracy and brand protection for Celtics apparel and tickets?

We often encounter inappropriate use of the Celtics brand and/or logo. There are plenty of appropriate uses—partners who join with us, sign a contract, and get approval. But there are plenty of people who use it without those things. Sometimes we choose not to fight it; if it’s too small to worry about, we might let it go. But if it’s being used in a way that we feel can hurt us, the NBA or the public, we have been known to take legal action.

Regarding ticket fraud, Ticketmaster has certainly pushed the envelope on ticket security over the past decade. Almost 10 years ago, they started bar-coding tickets so that every single ticket has a unique serial number. Even season-ticket holders have unique barcodes for all 41 games. If they lose them or leave them at home, the ticket reprint generates a new serial number and barcode, and automatically deactivates the old one. At the turnstiles, the scanner is only going to let in the new ticket. Plenty of people still try to fraudulently produce tickets, but they don’t know the encryption and security behind generating those barcodes, so the scanners pick it up. People with fraudulent tickets get turned away at the turnstiles. Usually they aren’t happy, because they believe they’re holding a legitimate ticket, even if they bought it from a guy outside the arena saying, “You want to buy some tickets?” With digital technology today, we’ve seen some incredibly good printing of fraudulent tickets, albeit with incorrect serial numbers and barcodes. It gets worse the deeper you get into the playoffs. When we play the Lakers in the finals, those issues are heightened.

Are there any parallels between sporting-events ticket sales and the airline industry?

About 10 years ago, we started looking at things and realized we needed to be more like the airline industry. In the airline industry, there is variable pricing on virtually every seat on every flight. Based on demand and other factors, you can plunk yourself down in any seat on any flight and have paid a drastically different price than the guy next to you. That’s all due to the airline trying to maximize revenue for every seat. Sometimes that means you don’t sell it for the most money. Sometimes you need to sell it for less money because you’d rather take a dollar if it means filling the seat. We have slowly been moving our ticketing models in this direction. We’re nowhere near that fine-grained, but we’re working toward more classes of seats, and different prices for different games. For example, you’re going to pay more money for a Lakers seat than you are for the Washington Wizards on a Wednesday night.

The airlines try to dissuade people from buying last minute by making the tickets more expensive. Do you reward people for buying in advance?

If you sign up with us as a season-ticket holder, you’re going to get the best pricing because we’d rather sell a season ticket and be done with that seat. We sell plenty of half-season packs and even 10-game packs to try and get people to buy in advance. But the opposite is sometimes true. Just as there are deals if you wait till the last minute for flights, sometimes there are deals if you come to a basketball game and we’ve got inventory left over. We try and plan it so we end up with zero leftover tickets, but if we find ourselves with more tickets than we expected at a particular point in time, we’ve been known to do some things to move those tickets.

Do you analyze customer data from ticket sales to identify trends in your buying community?

We originally hired what we called an e-marketing and database-marketing guy. But essentially, he is a ticket and customer-analytics guy, and that’s actually expanded to two people now. That departmentincludes e-marketing and Internet communication with customers, but it really revolves around analytics and optimizing sales. We’ve only got a fixed number of seats for a fixed number of games, so we want to optimize our revenue. That’s what these people spend their lives doing, and we also found some partners. Ticketmaster helps with some of this stuff as well, and we use some third parties, people who are experts in analytics and data visualization.

How is cloud computing impacting your business?

About four years ago, I started what’s known as a private cloud through a partnership with EMC. We were courting them as a sponsor and I liked their technology, so I bought in and then they came back later with a sponsorship. It was initially called server and storage virtualization, but now it’s called private cloud. It’s an example of how technology trends happen slowly and then people put new tags on them.

About three years ago, I moved all e-mail receipt, filtering and security to a cloud-computing company. They have servers all over the world. My mail first gets delivered to them, then it gets filtered, virus scanned and archived, before getting dumped into my exchange server. The cloud nature of that has helped reliability so much; there’s no longer a single point of e-mail delivery. It can be delivered to tens or hundreds of points all over the world, and still be accepted and moved on to the right place, which eventually is our mail server. This has done two things for me: We moved the single point of failure, and it’s allowed a company with more resources to do our filtering, scanning and archiving. It was becoming a big struggle for me to do enough anti-spam and anti-virus scanning. With e-mail communication being the primary means of communication these days, that was becoming too much to manage.

Is there anything unique about your IT organization, something CIOs might find surprising?

I’m not sure how different we are from any other American or worldwide corporation. Things that I always find surprising myself are mobility and e-mail, and how dependent our staff, particularly our management, has become on their handhelds. With BlackBerrys, we can tell within minutes if something is wrong in the long chain of communication between some executive at another company jotting an e-mail to one of our executives. I’ve got people who can sense before any of my monitoring tools that something’s wrong with e-mail flow. It’s amazing to me that communication has come to a point where we’re so tied to that device that we can feel what’s going on better than other computers that are supposed to be monitoring the system.

Is there a certain industry or company that you feel is state-of-the-art in terms of technology?

I’ve been amazed by a few companies over the past few years. Amazon is one. What they have been able to do continues to amaze me. The fact that they started as a bookstore that grew so big and fast that someone said, “Wow, we’ve got all this computer infrastructure. We should do something with it.” So then, instead of just selling books and stereos and whatever, they started selling computing infrastructure, to the point where they are one of the biggest driving forces in business today. The other story that I think we all have to continue to pay attention to is Apple. The company was written off as all but dead about a decade ago, and now their technologies are disruptive. They come out with something and then the rest of the world has to play catch up. They came out with the iPhone, and now the world is catching up. Maybe other people end up doing it better, but Apple’s was disruptive and the one to shoot for.

What are you working on now? Do you have any big projects that you’re really excited about?

There’s not necessarily a specific project, but the thing that keeps pushing us all the time is mobility—delivering applications anywhere, anytime to any device. That is really what’s been driving us for the last year or two, and I think it will continue for the foreseeable future. We’re very focused on providing access to the enterprise through a Blackberry, iPhone, iPad, or personal laptop. We use Citrix for some of that, and it’s been great. The other person in my department is mostly a developer, and he’s written some custom iPad applications for the basketball side of the world. Doc gets up every morning to an iPad report that he defined. This push to mobility is not just about computer apps. A lot of our important assets are digital video, so coaches and executives can see games or stored footage on their iPads or laptops. Things like access to video databases are going to continue to drive the virtual world. We’re no longer in a world where people are going to come into the office to do their work. They’re going to do their work, but they’re going to do it from anywhere, on a device of their choosing. As much as I’d like to drive their decision on that device, the world won’t let me do that. I have to react to what devices they want. I feel it’s quite important to remember that technology should be about providing solutions to the user community, not driving them. Their needs should drive us.