Dallas Mavericks: Small Companies, Big Returns

By Edward Cone Print this article Print

Technology is the sixth man for this basketball franchise.

Ken Bonzon keeps a serenity prayer by St. Teresa of Avila taped to his computer monitor. "Let nothing frighten you," it counsels, which is good advice when your boss is Mark Cuban.

As chief information officer of the NBA's Dallas Mavericks, Bonzon works for a technology visionary who is outspoken—and notoriously demanding.

"You learn his way," says Bonzon, 37, standing in his cubicle at the Mavericks business offices in Dallas's Deep Ellum district, not far from their home court at the American Airlines Center. "That means spending less and not believing the hype on every expensive item that comes along." It also means being on call around the clock and sleeping with a PDA by his bed to review and answer e-mails.

The Mavs are no mere rich man's toy. Cuban, who made $1.3 billion when he sold his pioneering Internet audio and video service Broadcast.com to Yahoo in 1999, expects the franchise to perform as a business. He wants to fill every seat at every game, and maximize revenue from concessions and souvenir sales. He expects technology to support his plans every step of the way.

"Everything we do has some level of technology base," says Cuban. "It's just like electricity to us, but with more value-add to it."

Thus electrified, the Mavericks have grown into the eye-popping valuation Cuban placed on the team in 2000, when he paid $280 million for a half-interest in the franchise and its new arena. It was the highest price ever paid for an NBA team, until the Boston Celtics were sold this year for $360 million; it cost the owners of the new NBA franchise in Charlotte, N.C., $300 million to join the league.

Cuban has increased his stake in the Mavericks and reportedly now owns more than 80% of the team. According to the annual Forbes magazine survey of professional sports franchises, the Mavs are now worth $304 million, up 44% from 2002; the average appreciation for an NBA team last year was 13%. Forbes estimates the team's revenue was $105 million last year, with operating income of $3.2 million. The Mavericks organization does not discuss its finances, says Cuban.

Cuban sets the tech game plan, and the soft-spoken Bonzon executes it. "A company can only have one vision," says Cuban. "He knows what I want to do. I stay pretty much on top of what is happening in the I.T. world, and he will run anything of consequence by me first. If I plan wireless, and he wants wired, or vice versa, we have to be in sync or we have a problem."

Bonzon, a native of Queens, N.Y., who started out working in technology services at Reuters in the late '80s, says Cuban is exacting but respectful. "He'll second guess you on technology, but never on a personal level," says Bonzon.

Cuban's strategy to reach his business goals is to give fans the best possible experience, with a high-quality team on the floor and excellent service at arena bars, barbecue stands, and souvenir shops. Last season, the Mavs filled the 19,200-seat American Airlines Center to 103.7% capacity, bringing in folding chairs to handle the overflow demand for tickets; Dallas was named the best NBA city by The Sporting News.

Filling seats is critical—empty seats don't buy sodas and souvenirs, and a full house creates excitement. To track attendance, the Mavs became the first NBA team to put bar codes on tickets, in part to find out if group sales and community-organization giveaways are putting bodies in seats or just wasting tickets. "We want those seats to go to people who will use them," says Bonzon. Groups that show up have a better chance of getting future tickets.

American Airlines Center, a retro-styled brick building that opened in 2001, functions as a giant reverse-ATM for fans, pulling cash out of their wallets as efficiently as possible. Each of 144 luxury suites is equipped with PCs that handle orders for merchandise, food, and beverages; wireless access from all seats is on the way so fans can place orders without missing a dribble. In the big retail store on the ground floor, handheld-wielding salespeople materialize to ring up credit-card purchases when lines get too long.

Application service provider InfoGenesis runs the point-of-sale system for concessions and merchandise, which was built using software from vendor Eatec. All 840 registers at concession stands, restaurants, stores, and bars use the high-end system, sophisticated enough to be used at some Las Vegas casino hotels.

"It lets us process a large number of credit-card transactions, very fast," says Rick McConathy, assistant controller for food and beverage with Sportservice, the company that handles arena operations. Credit-card purchases take only three seconds or so, because an always-on Internet connection to InfoGenesis' San Jose, Calif., facility eliminates the time needed to dial up and start processing.

The system tracks clothing sales and stock; by enabling improved forecasting for particular games, it has also helped reduce beverage inventories by 50%. "With two years of data, we now know with pretty tight precision what we will sell on a given night," says Bonzon. "We can better plan our purchases. The end result is a huge decrease in onsite inventory." Managers can see during the course of a game which concession stands are busy and which ones can be closed early to cut labor costs.

Technology also supports the Mavs on the court. Coach Don Nelson and his staff run the show on the floor, but Bonzon and Cuban provide their tools. The Mavs have 10 assistant coaches—most teams hire three or four—and each has a laptop and handheld. Game film is streamed over the Web for coaches to view on the road or at home, and everyone can communicate by e-mail with Cuban, who corresponds tirelessly with fans and journalists.

A digital content management system developed in-house matches game footage with the precise, to-the-minute statistics provided for every play of every game by the NBA. The searchable database allows coaches to view, say, every Steve Nash assist or Dirk Nowitski three-pointer from last season, with an eye toward divining the effectiveness of particular plays and combinations of players in different game situations.

This summer, forward Raef Lafrentz requested a CD of every foul he committed during the 2002-2003 season, and got it two hours later. It should give him a better sense of the situations in which he draws the referee's whistle.

Cuban also runs a computer model devised with statistics professors from Indiana University to rate players like forward Antawn Jamison, for whom the Mavs traded this summer. "It allows me to review a player much more quickly and easily than having to chase down tapes for everyone," Cuban says.

Last season, Mavs coaches started using handheld computers to track the performance of each referee in every one of their games. "We can look at trends, see who favors a given team, who calls more three-second violations, and tell the players before games," says Bonzon. The system also gives Cuban, the NBA's career leader in fines meted out for criticizing refs, a database of statistics to back him up in his ongoing battle with league commissioner David Stern.

Another program now under development for use on handheld devices will log different offensive and defensive scheme used against the Mavs, including stats not provided by the league, such as how often the team scores against a 2-3 zone. That will let coaches make adjustments on the floor based on statistics from previous games.

The video production room in the bowels of the arena is crammed with equipment. Bonzon calls the huge display screens above the court "the world's largest TiVo," because Cuban can order up a fan-pleasing replay with a wave of his hand. Management even swaps out commercials during the broadcasts of games shown on concourse televisions for spots the team has sold, bringing additional revenue to Cuban and his partners.

A palatial locker room, hard by the full-size practice gym, boasts flat-screen TVs, game systems, and DVD players for each player. Everyone on the roster gets a laptop and is free to communicate at will with Cuban. There are non-tech perks, too, like the tricked-out Boeing 757 jet, complete with individual monitors at each seat and laptop ports, which Cuban bought to ferry his team to road games.

Increased revenues and pampered players don't necessarily translate into more wins, but the Mavericks' transition from low tech to high tech has coincided with their emergence as championship contenders. Last year's 60-22 record was the franchise's best ever, and Dallas went deep into the playoffs, reaching the Western Conference finals before falling to eventual NBA champion San Antonio. All of which makes Bonzon's job easier.

This article was originally published on 2003-10-01
Senior Writer and author of the Know It All blog

Ed Cone has worked as a contributing editor at Wired, a staff writer at Forbes, a senior writer for Ziff Davis with Baseline and Interactive Week, and as a freelancer based in Paris and then North Carolina for a wide variety of magazines and papers including the International Herald Tribune, Texas Monthly, and Playboy. He writes an opinion column in his hometown paper, the Greensboro News & Record, and publishes the semi-popular EdCone.com weblog. He lives in North Carolina with his wife, Lisa, two kids, and a dog.
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