San Francisco 49ers’ Paraag Marathe: How to Launch a Career in Sports Management
The Stanford GSB alumnus talks team analytics, salary caps, and the untapped potential for virtual reality.
Levi’s Stadium opened in 2014. The $1.3 billion stadium rolled out high-tech tools like mobile ticketing and in-seat concession purchases. | Kelley L Cox – USA TODAY Sports
Spreading risk, leveraging market inefficiencies, finding ways to stay one step ahead of the field — all these sound like the skills necessary to manage a successful stock portfolio. Turns out they’re just as valuable when it comes to leading a professional sports franchise, according to San Francisco 49ers President Paraag Marathe.
We spoke to the Stanford Graduate School of Business alumnus (MBA ’04) about his experiences breaking into the insular world of football, the power of aligning intuition with analytics, and how the 49ers are using technology to rewire the stadium experience.
When did you know that you wanted a career in sports?
I ate sports for breakfast every day since as long as I can remember. But when I saw Jerry Maguire as a freshman or sophomore in college, I saw the club GMs and I was like, wow, there’s this whole other side of the business outside of just being a player. That’s when I realized I really wanted to get into sports management.
What was the toughest lesson you’ve had to learn?
Sports is still a very insular world. It’s really still about who you know, not what you know. Having no contacts coming into the industry, I really had to doubly prove myself, that I was valuable to the people I worked for, because it’s not always the meritocracy that it wants to be. It’s changing a little bit, but when I started and for my first six years with the team, I faced a lot of people in a lot of different positions who were threatened by me on the business side, because who was this guy coming in who didn’t pay his dues by virtue of having a family member having played or coached.
What advice would you have for someone looking to get into sports management?
I’d have three key pieces of advice. One is to pick whether you want to be on the team side or on the business side, because they’re really two separate organizations under the same roof. Taking an internship in PR and finance does not mean that if you prove yourself you’ll be able to switch over to football operations or scouting. That just doesn’t happen. So pick which side you want to be on and wait for the right job in that side of the business.
The second piece is you’ve got to be patient. I have friends who got a job in a week, and I have friends who took five years looking for a job and never got one in sports. Because it’s so insular, you’ve got to just wait for that right opportunity.
Third is instead of just sending your resume around, find an unsolved problem in the sport that you’re interested in and solve it, or at least put together a process on how you would solve it. Send that out to people and say, “I’ve thought about this intelligently. Here’s a better way of evaluating running backs. Maybe it works or maybe it doesn’t, but here’s an example of what I could do for your organization if you give me shot.” A lot of times people — especially people with MBAs or law degrees — say, “Look at my pedigree. I’m awesome. You should hire me.”
What was the problem that you solved?
In 2001, Bill Walsh, the GM of the 49ers, hired Bain to work on a project with the NFL draft. He wanted us to evaluate draft picks — not the players, but the currency value of when you make trades. I put together an algorithm that gave us a better cut-up exchange rate and currency value, one that happened to be consistent with Bill’s intuition already. Bill was known as a master of draft trades. And I didn’t back into it. It just happened to actually verify his genius. The fact that we built something that matched that was what proved myself to him.
Were other teams doing anything like this at the time?
Not really. I wouldn’t say we started it, but we were very early in the NFL in terms of the football analytics movement.
As more teams catch up to you on that analytics front, how do you stay ahead of the curve?
We’re always looking for any advantage that you can find on the football field, whether it’s sports performance and sleep studies or soft-tissue injury studies. Billy Beane put it best a couple years ago when he said that people catch up to what you were working on, but then that exposes something else. That gives you some other advantage. It’s always evolving.
You’re known for your contract negotiation and salary-cap management savvy. What has been your approach on that with the 49ers?
We wanted to build the team like a portfolio — manage the salary cap like any investment manager or hedge fund manager would manage their portfolio, which was to maximize return and minimize risk. It’s all about making sure you capture value when you can, like wholesale versus retail. That’s why the draft is so important to us. Draft is wholesale. Draft is where you have a prescribed price for a player. And if you get a really, really good player, you pay the same price as if you got a dud. You’re still going to pay that player the same through the first four years of the contract. So that’s really important. But it’s also about making sure you distribute assets on the team in the right way. You don’t want to put too much of your money, or too much risk, in one position.
What are some of the challenges or opportunities of leading a team in the Silicon Valley?
There’s an expectation that we are always being on the cusp of innovation. We had a great opportunity with Levi’s Stadium [the 49ers’ new $1.3 billion stadium]. It was like a petri dish of all the latest and greatest technology. But we didn’t want to do technology for technology’s sake. We took all the ideas in, we had our own, and we brainstormed with a lot of the thought leaders here. We came up with around 200 ideas, and stuck with five core ones that we thought had the biggest impact.
What were those five?
Mobile ticketing; replays on demand within a few seconds after any play; in-seat delivery of food, beverage, and merchandise in under 10 minutes; a big loyalty program where you earned 49er Yards [prize points] wherever you transacted in the building; and wayfinding with the fastest way to your seat or bathroom wait times. Should you go to the bathroom now and miss two series? Or should you go when it’s a green light and just miss first down?
What’s one innovation that’s cutting-edge right now that’s going to be commonplace in five years?
I think virtual reality, both in the scouting and playing side, but also on the fan-experience side. I think that’s something that’s underexplored right now.
From an analytics standpoint, something that’s really underexplored is preventing injuries — soft-tissue injuries, ACLs, Achilles tears. Is there a way to better measure players’ propensity for having those types of injuries? Because right now, those are just freak injuries. If a player tears his Achilles, he’s out 14 months. It could be his career. But is there something about him that made him more susceptible to tearing his Achilles? Or was it, in fact, a complete fluke? I don’t know. But I’d like to see more research in that area.
What’s the biggest question facing sports right now?
Continuing to get fans to come to the stadium. TV has gotten so powerful, and it’s a valuable part of the club’s revenue, but there is still always going to be something special about going to a game. How do you convince that first-timer that, yeah, the couch is cool, but if you come to a stadium or an arena or a ballpark, it’s magical?
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