SBJ/Nov. 1, 2010/This Week's Issue
NBA enjoys the benefits of sharing
Published November 1, 2010
A few years into the life of the NBA’s team marketing division, its leader, Bernie Mullin, was presenting data at a league meeting. For the first time, his group had asked the teams for the financial details of all their sponsorships. Anheuser-Busch knew how much it paid to sponsor each of its NBA teams. Now, the teams would know, too.
When it came time to put the data up on a screen for all to see, NBA Commissioner David Stern rose from his seat and stopped the presentation. Two teams had refused to disclose information, Stern explained.
He demanded that they leave the room.
So was born the story that best illustrates why the NBA has succeeded where others have fallen short, convincing franchises that compete on the floor to compare notes on business matters.
Born 10 years ago out of an assignment handed to a college professor on sabbatical, the NBA’s team marketing and business operations division — now known widely as TMBO — took flight at the insistence of Stern, armed with the clout to overcome vast initial resistance.
“David’s edict on this was pretty simple: If you share you shall receive. And if you don’t you won’t,” said Scott O’Neil, president of Madison Square Garden Sports, who succeeded Mullin as senior vice president in charge of TMBO, running it from 2004 to 2008. “This doesn’t happen without David Stern’s commitment. They saw that and gave us a chance.
“It was tough at first. But at some point we went from ‘What are you doing here?’ to ‘How come you’re not coming back sooner.’”
It happened, O’Neil said, because TMBO delivered results, arming teams with data and tactics that helped them improve their business. There were misses to be sure: Recommendations on ticket prices or game presentation that turned out to be wrong for some markets; bad matches between team and league staff. But, for the most part, teams have seen the benefit of an information warehouse that dwarfs any other in sports.
While the model of having teams share information and lean on a league for advice has worked for the NBA, it hasn’t been a system adopted by most other leagues. Only MLS has implemented a model that goes nearly as far as the NBA’s, and even it has pulled back in recent years (see related stories, Page 35).
In the early days, many franchises viewed TMBO with suspicion. Here was the league sending staff members to review each franchise’s business operations, collecting data so they could be compared and ranked.
It didn’t help that TMBO’s predecessor, the team services department, was best known for its prickly enforcement of league business rules, like policing conflicts between team and league sponsors and fining teams when their halftime shows ran long.
The roots of TMBO trace back to an assignment Stern gave to Bill Sutton, a University of Massachusetts sports marketing professor who was working for the league while on sabbatical. Stern asked Sutton to review research done by the teams and compare it to data collected by the league, searching for ways they might consolidate.
When the project took months, rather than weeks, Stern wanted to know why. Sutton explained that most teams were suspicious of his requests and some refused to share data, even after he told them he was asking at the behest of the commissioner.
“To them, team services was the group that came in and measured how long your halftime was and how loud it was and then fined you,” said Sutton, who now co-chairs the sport management program at the University of Central Florida. “This wasn’t a department that they thought they could look to for help.”
That began to change in April 2000, when the league hired Mullin, a colleague of Sutton’s at UMass. Stern challenged him to build the project out into a McKinsey-styled consulting arm. Sutton would work with him. TMBO not only would collect data, but also offer analysis. Each team would be assigned an account representative, who would come to know its people, its operation, its market and its history.
The tactics that worked best — from staff size and structure, to game presentation, to ways to execute a promotion — would get the label “best practice,” a moniker that has become synonymous with TMBO.
Initially, participation beyond the sharing of data was voluntary. A team that wanted an assessment could request one. TMBO would visit, help create a plan and implement it. The group lived by two primary rules: If TMBO offered an idea that worked, it would be the team that got credit for it; and if a team underperformed, TMBO would make sure the commissioner knew.
“It was tough love,” Sutton said. “But it was love.”
Mullin remembers one owner, whose team ranked low in most categories, approaching him after a presentation one year and asking what he could do to improve. Knowing Stern would back him, Mullin was frank. He told him to spend more to hire staff.
“God bless the owner, that’s what he did and it worked,” said Mullin, who left TMBO in 2004 to run the Atlanta Hawks and Thrashers and now owns an Atlanta-based consulting firm, The Aspire Group. “It was unlike anything going on in the business at that time and we were faced with some holdouts. As people saw the value of the information that was shared back, those resistances went away rather quickly. We proved the value of the resource.”
No magic formula
When O’Neil went to work for TMBO in 2001, his first visit was to the Detroit Pistons. He phoned the team’s president, Tom Wilson, to arrange the dates.
“Are you coming out here to fine me?” Wilson asked.
“No,” O’Neil told him. “I’m coming out to learn how you do business so well.”
When O’Neil arrived, he found a sales staff of about 50, with 20 of them working in what now is commonly known as inside sales, pitching season tickets over the phone. The Pistons paid them low hourly wages, along with commissions, and told them if they succeeded they would advance. The ROI on their pay was about 10 to 1, O’Neil said.
“If I were another team,” he thought, “this is something I’d want to know about.”
As a longtime team operator, Wilson understood that desire for knowledge might be outweighed by the fear of someone peering into their business and finding flaws.
“If the league has my numbers and they show the owners my numbers and they’re not good, I’m going to get hammered,” Wilson said, “because I’m 18th and I’ve been telling our owner that I’m three. So there was trepidation in those days. Just human nature. Slowly but surely, that went away as people saw the benefits.
“I think TMBO changed everything in the NBA for the better. I really do.”
Typically, Wilson and others said, teams welcome TMBO’s help. But at times a fully revved team services model can create tension, or even resentment. Tactics that work well in many markets can fall flat in those that need the help most.
In seven years as president of business operations for the Memphis Grizzlies, Andy Dolich saw the franchise start off as a darling and then stumble. Dolich’s résumé also includes stints as executive vice president of the Oakland A’s and chief operating officer of the San Francisco 49ers. He admired and appreciated TMBO, and says other leagues would do well to follow the NBA’s lead.
Still, he knows the frustration that struggling teams feel when they’re searching for answers, and those coming from the league don’t seem to apply to their woebegone team.
“No matter what level of proactivity you’re getting from TMBO, it’s pretty difficult to sit in the market I was in and be told, ‘Look at what Boston is doing,’” said Dolich, now a consultant based in Los Altos, Calif. “That’s great. But we’re not Boston. I would put our business group [in Memphis] up against a lot of others. And, yes, I appreciate that you’re going to help me. But TMBO can’t change a market. They can change marketing, but they can’t change a market.
“Team services, purely exemplified in its most positive form with TMBO, is nothing but great for a league. But magic wands? Incredible lanterns you can rub? Thank you, but no. That we can do without.”
TMBO operates much as it was initially envisioned, as a consulting division that assigns account representatives to work with each team and compiles data so teams can see how they compare to others. Practices that work best are outlined in detail and shared via a TMBO intranet site. The top-performing teams are honored each year at a league marketing symposium.
Over time, TMBO’s purview expanded. After focusing on tickets for the first few years, it expanded to track sponsorships, analyze game presentation, study brands and suggest ways to better manage interaction with customers. In the last two years, under Chris Granger as senior vice president, TMBO’s focus has been on analytics that allow teams to act on information more quickly.
What began with Mullin, Sutton and a few carryovers from the previous setup has grown to 15 account managers sharing responsibility for 58 teams across the NBA, WNBA and NBA Development League.
“I can’t tell you the phenomenal resource they’ve been,” said Pete Guelli, executive vice president and chief sales and marketing officer of the Charlotte Bobcats, who joined the team last year after 11 years with the Buffalo Bills. “They warehouse best practices and analytics like nobody. Chris Granger has been available to us 24/7. Aaron Ryan [a TMBO account manager] has basically lived down here for the last year when we’ve needed him.
“They’ve provided a level of comfort that we were doing things the right way, and also another set of eyes on our business that I don’t think is available to teams in most leagues.”
Now running both the New York Knicks and Rangers, O’Neil can contrast the way the NBA and NHL interact with those who market the teams. He has made road trips with the Rangers to Montreal, Toronto, Vancouver and Chicago to better familiarize himself with the way those teams operate. He need not make those sort of fact-finding trips on behalf of the Knicks.
“We’re an extra resource,” Granger said. “We’re there to track down data for you. To say, ‘We saw three other teams do the same thing and this isn’t going to work.’
“We all believe that 30 of us are smarter than any one of us can be by ourself.”