The Kraft Group Is Spinning off the Patriots’ Analytics Tech as a Startup

For a long time, Jessica Gelman had just one customer. Now, she hopes to have many.

Gelman, formerly VP of customer marketing and strategy at the Kraft Sports Group, is now CEO of KAGR, the Kraft Analytics Group, a Kraft Group subsidiary that is going to market with the business intelligence technology she helped build for the New England Patriots ownership.

The Krafts’ KAGR (the name is a play on CAGR, compound annual growth rate) is not the first time a sports ownership group has turned its own home cooking into a business. In 2004, Boston Red Sox owners established Fenway Sports Management, an agency that counts LeBron James among its clients. In 2008, the Dallas Cowboys and the New York Yankees started a joint venture, Legends, in game-day operations.

“The concept started a decade and a half ago,” Gelman told me in an interview. She compared KAGR to what Amazon has done with Amazon Web Services. “We’ve built something internally that’s really transformed our business,” she said.

That something is a cloud-based technology focused on data management, analytics, data visualization and strategic marketing. Gelman said the company will go after clients in sports and entertainment. In this case, entertainment means live events. “We’re looking into the college market, which we think is very ripe for needing this kind of technology and strategic guidance,” she said.

KAGR has a team of 18 and is hiring a few more: sprinkled among the Kraft Group’s job listings–mostly bartenders and dishwashers at Patriot Place–are hiring notices for a business development manager, a programmer and a SQL database developer.

Gone are the days when an organization like the Patriots could rely on fan loyalty alone to put butts in seats, said Matt Marolda, chief analytics officer at Legendary Entertainment. I called Marolda to ask for some perspective on the industry. Legendary is the company behind the Dark Knight trilogy, The Hangover and this year’s pending release of the World of Warcraft movie that you’ve probably seen the trailer for. It’s known for applying a heavy dose of analytics to understanding its moviegoing audience.

“They used to be sheeple and now they’re more individual people and thinkers,” Marolda said of the shift in the way moviemakers understand their audience. Producers used to buy an audience with ads, he said; sports teams could just rely on fans to come. Now, with so many choices before consumers, and a finite supply of time and attention span, there’s a supply-demand imbalance in a zero-sum game, he said. “We’re trying to get ahead of it by being forward leaning when it comes to individuals.”

Analytics also have helped Legendary understand the way their marketing efforts will play out on social media, he said. “If a movie’s got bad word of mouth you used to be able to get through a week of box office. Now you can’t get through a day.”

Gelman, who co-founded the MIT Sloan Sports Analytics Conference 10 years ago, credited Patriots owners Robert Kraft and Jonathan Kraft for seeing the need to understand customer behavior on an individual level and investing early. Their name alone will help KAGR get its foot in the door with customers, but in a market with acute need and increasing sophistication, they’ll need impressive goods to stay there.

I asked for screen shots of the product; Gelman said KAGR is still building out the customer-facing offering. The only dashboards they have are the ones they’ve built internally for Patriots and New England Revolution management.

She said KAGR’s success will depend on its ability to offer insights that lead to action. For example, the group has helped the Krafts learn that if a season ticket holder misses a fourth game in one season, she’s probably not going to renew. All well and good–I probably could have told you that. Gelman said what matters is how management intervenes.

“If you are not someone who has really used data a ton, our job is to make it simple and easy for people to use and understand,” she said. “When are the inflection points and what are you going to do?”