SBJ/June 6-12, 2011/Opinion

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  • The secrets of leadership are often found at the bottom

    In our experiences teaching students aspiring to serve as future managers in the sports industry, we’ve noted a growing curiosity about North America’s sports executives. Indeed, both of us frequently create leadership exercises, and one of us even designed an open-ended case assignment for an undergraduate sport management class at Syracuse that went like this:

    Selecting from league commissioners Roger Goodell (NFL), David Stern (NBA), Gary Bettman (NHL) and media chiefs George Bodenheimer (ESPN) and Brian Roberts (Comcast), write a five-page analysis of where the selected individual came from (examining the trajectory of his career) and describe what early leadership traits (or experiences) best explain his approach to managing his multibillion-dollar enterprise.

    What emerged was a hodgepodge of superficial descriptions detailing recent high-profile challenges the above individuals faced. Much seemed missing. Only one paper on Goodell started as far back as his sporting career in high school. Only one enterprising student dug deep enough to write about Stern working at his family’s deli during summers in law school. Only a few included the nugget that Bodenheimer started in ESPN’s mailroom. None ventured a guess on what these men learned at the beginning of their careers, how their career ambitions were nurtured or how they developed the requisite skills to successfully steward high-profile organizations.

    Granted, taking students to task for writing bad “book reports” is easy, but at the core of this challenge is a reality that teaching sports leadership development (as opposed to regurgitating statements of accomplishment) is often a difficult meal to serve.

    Averting a lockout (or forcing one) is certainly part of the territory that goes with running a league. As is keeping 30 or more owners satisfied with your work. Similarly, buying expensive broadcast rights or acquiring a major media property (as in the case of Comcast taking a 51 percent position with NBC-Universal) is complicated and requires enormous stamina, delegation, instinct and decisiveness.

    But how should today’s students think about the nuances of leadership and the development of managerial fluidity? As a generation, they’re often seen as overly entitled and have been led by their parents to believe they are wonderful, brilliant and deserving of better than whatever they’ve been offered or given.

    These baby boomer spawn arrived courtesy of history’s most successful generation. Yet, many may not attain the same levels of success in their lifetime as their parents. And that covers not only financial accomplishment but also health, longevity and happiness.

    We believe strongly that a disconnect exists between parents’ excessive coddling and their children’s ability to learn valuable leadership traits. It may be a parents’ right to assist their child, but keeping a young person from starting at the bottom may alter his or her capacity to master group dynamics and truly seek out servant-leadership moments on thankless tasks. This problem manifests itself when these same children graduate from college expecting to lead departments or divisions, less than 90 days after graduating. Trust us, this is a major challenge facing higher education today, and not just in North America.

    For some, it may be hard to believe but here’s a hard truth: Entitlement without hard work is a recipe for disaster. Leaders like those mentioned have faced decades of leadership development where traits like integrity, inclusion and imagination were honed during career-defining “fires.” In each case, though, these leaders must have drawn on early-career lessons that allowed them to solve problems and take on new ones.

    In a recent trip to New York City, one of us had the chance to sit down with Bettman and discuss the realities facing his league. Based on an hourlong discussion on many topics, it became evident that, first, this man is very intelligent and well-versed on all things legal, sponsorship-related, consumer mass marketing, player welfare, social media and so on.

    Second, it was obvious Bettman has a firm grasp of what is happening at all levels of his sport. We had deep discussions on issues ranging from youth participation in ice hockey, equipment costs for families, sponsorship evaluation, player injuries and Sochi 2014.

    Finally, and perhaps most importantly, it’s worth noting the clarity of Bettman’s focus when it came to listening to his owners. In this regard, like any smart manager, it was evident that he understands that leadership is about making sure you have the right vision and the expertise required to achieve that vision. Perhaps no better proof may exist than observing that the NHL’s business model (at the moment) appears to be working for the majority of teams.

    So what’s the link between uncertain expectations for our graduating students and the shrewdness of long-term leaders in sport? First, given the low turnover at the top of our industry and the few elite leadership positions in the middle, the odds of a student climbing through the ranks are daunting. However, given those odds, carefully assessing the choices of current CEOs must stand as an absolute.

    As another academic year comes to an end, we can only hope our students have been learning from these leaders. That they are reading their blogs, inspecting their websites, reading their trade publications, dissecting their speeches and ultimately following and analyzing their decisions.

    To that end, our generous graduation gift to them could be this simple piece of advice: Leadership looks great at the top, but the secrets start at the bottom. Be a sponge and soak up everything.

    Rick Burton (rhburton@syr.edu) is the David B. Falk Professor of Sport Management at Syracuse University and former commissioner of the Australian National Basketball League. Norm O’Reilly (norman.oreilly@uottawa.ca) is an associate professor of sport business at the University of Ottawa.


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  • A contrast in coaching: Accountability vs. entitlement

    The fact that Ohio State football coach Jim Tressel resigned on the same day that coach Dom Starsia’s University of Virginia lacrosse team won the NCAA championship was both ironic and annoying (annoying because ESPN decided to run “Jim Tressel resigns” information at the bottom of the screen for about 90 percent of the game, as if this was information critical to the public’s safety).

    Let me be clear about my position: I think that Dom Starsia should be considered ordinary. I think that Jim Tressel should be considered repulsive.

    You probably don’t follow college lacrosse, but if you did you would have learned in the last few days that Coach Starsia has dealt with a number of difficult challenges in the last 12 months. Before last year’s NCAA playoffs, one of the University of Virginia lacrosse team members was charged with the murder of a member of the women’s lacrosse team at Virginia. Before this year’s NCAA playoffs, the coach dismissed the two best players on his team, both All-Americans, for infractions related to team rules and behavior. During this year’s NCAA playoffs, a third All-American player was suspended for a game during the semifinals.

    Yet, on Monday, the University of Virginia won the college championship by defeating the University of Maryland.

    What does this say about Dom Starsia as a coach and as a person? I think it says he’s probably a good, decent adult who provided the appropriate leadership that we other adults should expect from any college coach.

    This is no slight on Coach Starsia. I think he did a commendable job in which he should be congratulated — just not honored. A year ago, he provided leadership to a group of young men between the ages of 18 and 22 as they tried to understand a tragedy for which they had no experience to draw from. This year,
    GETTY IMAGES (2)
    University of Virginia lacrosse coach Dom Starsia (top) provided the appropriate leadership expected of any college coach. Ohio State University football coach Jim Tressel did not.
    he punished individuals with no consideration of their skill level, for behavior that was detrimental to the team.

    I’ll say it again — he did what we should expect any adult in a leadership role to do. Nothing more. I hope the athletic director and the administrators at the University of Virginia reward Coach Starsia with a handshake and a smile and tell him “good job” — which would be commensurate with the job he has done. But, by no fault of his, I’m sure he will be lauded as a hero for making “tough decisions” (I would simply call them “right decisions”).

    I guess you would call Coach Starsia heroic if you are comparing him with Jim Tressel. (I can’t even call Tressel “Coach”.) Tressel provided no leadership whatsoever. Himself overpaid and self-entitled, he allowed the teens and young adults for which he was responsible to behave similarly (despite the fact that being paid at all is breaking the rules and to be self-entitled will result in difficulties out in the real world — so much for college football coaches teaching life lessons!).

    I could write 100 paragraphs on how disgusting I think his behavior is, but it’s a bore. To me, Tressel is a nobody. He’s a footnote. I hope I forget about him by the end of this week, though I doubt ESPN will let me.

    No, what I think is worth writing about is The Ohio State University. Isn’t it considered an elite research university? Isn’t its athletic department held up as a model of success? And if so, what were they thinking? The Ohio State University has embarrassed itself.

    And not just for those who love Ohio State football, but the many more who simply go to school there or went to school there or teach there.

    Because if we think that winning football games can engender school pride, then a football program like this one can surely bring disgrace.

    It’s really a shame that Tressel got off so easy and that the administration, including the athletic administration, at the school did not have a Dom Starsia around — or apparently any reasonable adult — to make the simple decision to hold accountable those who have lied, stolen or broken rules that dishonor the university. The second that it was determined that Tressel had lied, he should’ve been fired. His name should’ve been stripped from any locker room, field or anywhere else it appears. The university should have come out and publicly stated that he had been fired and that no individual associated with the university would ever be allowed to engage in deceptive practices and that leaders would always be held to accountability. That would’ve been the adult thing to do. That should have been an easy thing to do.

    Congratulations to the University of Virginia men’s lacrosse team. Good job.

    Bill Carter (bcarter@fusemarketing.com) is a partner at the youth/sports marketing agency Fuse.

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  • Cartoon: School's out!

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  • How a stadium, surrounding area can boost a team’s revenue

    In the context of acquiring a professional sports franchise, purchasers are devoting more and more energy toward understanding the sporting event experience and contemplating how to improve upon it. By controlling the experience, a purchaser can maximize the potential point-of-sale opportunities that arise at the stadium, in the surrounding stadium area and in the course of a spectator’s arrival and departure from the stadium. Boosting these point-of-sale opportunities results in increased spectator-driven revenue and the purchaser’s ability to retain that revenue.

    During the due diligence process, specialists (attorneys, land-use planners, contractors, etc.) can assist a potential franchise buyer in assessing the following considerations in how to improve the event experience and increase revenue:

    Stadium ownership

    Understand the stadium agreements. What property is included in the stadium agreements: ballpark, parking, exterior retail? Who owns the stadium — city, sports authority, privately owned? A comprehensive understanding of the stadium agreements will provide insight into potential future opportunities and/or limitations. For example, availability of public financing tools for capital improvements, the property tax impact of such improvements, or what, if any, revenue is shared with the public or merchandisers and concessionaires.

    If the facility is leased from public sector:

    • How much time is left on the lease term?

    • Under what conditions can the lease be terminated?

    • Who is responsible for maintenance and repair?

    • Is there a capital improvement fund in place?

    • What are your rights to make improvements?

    Zoning/local ordinances

    Understand the underlying zoning requirements and local ordinances that affect the stadium, the surrounding area, and any other land the purchaser is looking to acquire with an eye toward development. Are there minimum parking requirements? Are there any ordinances in place to regulate street vendors or ambush advertising? The city of Arlington, Texas, enacted an anti-ambush ordinance in connection with the 2010 NBA All-Star Game, and vendor rules govern the area surrounding the Washington Nationals’ ballpark. Does the zoning prohibit certain types of establishments in the stadium area? Are there height restrictions on new development?

    A purchaser should also know if that land is part of a planned development. A planned development is an area of land located within a municipality that is subject to a stand-alone set of zoning requirements. With limited exceptions, those regulations are wholly independent of the surrounding property’s zoning regulations. Note that if a stadium and its surrounding land is subject to a planned development, it is probable that the planned development was established to address stadium operations and development. If the target land does not allow the type of development desired, the purchaser should determine the type of zoning amendments required, the likelihood of having them adopted by the municipality and the expected timing of such action.

    Acquisition possibilities

    COURTESY OF PATRIOT PLACE
    A prospective owner should know whether enough land is included for a development like Patriot Place.
    Understand the type and amount of property being acquired as part of the franchise acquisition, and determine whether the acquired land is sufficient for its operations and future development. Is there enough parking? Does the client want or need to build ancillary development similar to Patriot Place, the Inner Harbor by Camden Yards, or the proposed Ballpark Village in St. Louis to justify purchase price or business plan objectives, and is there land available for that purpose? If the answer is no, additional diligence regarding surrounding properties is necessary to determine what, if any, other property is available to satisfy the purchaser’s needs. Also, is there land available for a third-party to construct a development that could cut into the client’s revenue or improve the fan experience/attendance? If so, is acquiring that land to preclude (or encourage) that development in the client’s best interest?

    Surrounding property ownership or control

    Determine who owns and/or controls the properties surrounding the stadium. How is the land currently being used? What are the potential uses? Does the team have an option to acquire any such property? Any identified property should be subjected to the zoning review described above.

    Physical condition/capital improvements

    Investigate the current physical condition of the stadium. In particular, the purchaser should know:

    • The current age of the stadium.

    • The life expectancy of the facility and its component parts.

    • Recent capital improvements.

    • Planned improvements the franchise has committed to.

    • Necessary capital improvements and related schedule.

    Public entitlement/financing

    Develop an overview of available public entitlement and public assistance to support the facility and the team. For example, if the stadium area is located in an economically distressed region, a series of incentives may be available including tax credits, low-interest loans and redevelopment funds to develop and/or drive the purchaser’s future vision for the fan experience.

    Communicate with the municipality

    Devise a strategy to communicate with the municipality regarding the purchaser’s development plans. Is it necessary or desirable? How does the current franchise owner interact with the municipality (contact persons, frequency, friendliness of relationship, etc.)?

    Accessibility to public transportation/infrastructure

    Understand the public transportation system and infrastructure system supporting the stadium, the surrounding area, and any other land the purchaser is looking to acquire with an eye toward development. What ability, if any, is there to increase those systems’ respective capacities? Can new systems be created? The purchaser should also confirm what public transportation and infrastructure improvements have already been funded, even if not yet constructed.

    Keeping all of the above-listed considerations in mind while trying to acquire a professional sports franchise can be overwhelming for a purchaser. The sooner the purchaser has a firm handle on these considerations, however, the sooner it will be able to develop a well-designed strategy that affects the purchaser’s revenue generation and the fan’s sports experience.

    Irwin Raij (iraij@foley.com) is a partner and vice chair of the sports industry team and Erick Harris (esharris@foley.com) is an associate and a member of the sports industry team with Foley & Lardner LLP.


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  • Different perspective on IMG, past and present, worth noting

    One can only feel sympathy for Ted Forstmann as he battles brain cancer. I wish him well as he fights to recover his health.

    I also applaud his focus on philanthropy. I understand he is a good man in this respect.

    However, as a past employee of Mark McCormack’s IMG, I feel compelled to set the record straight regarding the comment Ted recently made in The New York Times about the IMG he bought in 2004. In the story, which ran on May 23 and was excerpted in SportsBusiness Daily, Ted said, and I quote, “It was a piece of [expletive].” That IMG he refers to does not remotely resemble the company as it is today. The Mark McCormack IMG was an exciting, innovative, family of hardworking, creative, loyal men and women.

    Within weeks of obtaining control of the company, Ted, and his accountants, began destroying the heart of the organization. In the name of improved EBITDA, the financial wizards depleted the people who built the empire that Mark so brilliantly led. Ted parted with exceptional human beings, to improve the short-term book value of the company, hoping for a quick sale and an unearned profit for Forstmann and his investors.

    But a funny thing happened on the way to the bank … the marketplace knew what was going on. Ted underestimated the collective intelligence of the businessmen who run the sports industry. Perhaps he anticipated potential buyers would be like his “Barbarians at the Gate,” LBO specialists who didn’t really understand how companies actually worked, what they stand for and how they integrate in an industry. That was one of his big mistakes.

    And, “Oh, by the way,” the senior management at IMG who negotiated the terms of the $750 million purchase price look to have been considerably smarter and more shrewd than Ted and his legion of bean counters. Building a company from scratch, in a competitive, new industry will make some pretty good negotiators out of people.

    There are a couple of other points worth noting. First, Ted continually talks about how profitable he has made IMG, a company he says was “barely break-even” when he bought it. There has never once been the release of any type of audited statement to prove this newfound profitability. And if the company is so profitable now, why are there no suitors lining up to purchase it?

    All the brazen braggadocio about IMG’s recent international expansion is a revisionist history. That expansion was under way long before Ted came on the scene and is well-documented. Mark was in South America in 1990 (Project Cape Horn), China almost 20 years ago, and we were running cricket events all around the world two decades ago.

    Finally, Ted’s view of success and Mark’s couldn’t be further apart. Mark wanted to contribute to the growth of sport around the world. He was an innovator and a builder. He didn’t value personal profits over people. His greatest legacy may well be all of the executives that grew up under his mentorship, too numerous to mention here.

    Ted, on the other hand, wants to make money.

    The two men played in two very different games. Winners both.

    Michael Wright (mgw1424@gmail.com) worked for 20 years with IMG USA and IMG Canada.

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