SBJ/January 2-8, 2012/Opinion

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  • Sports industry must find moral courage to act amid crisis

    Have you ever had an employee, a co-worker or friend come to you and admit they’ve attempted suicide? That they are depressed and their marriage is falling apart? That they’ve been embezzling? That they’ve been gambling money that they shouldn’t have? That they’re having an affair with a junior employee or intern? That they can’t stand working for or with another employee?

    Our guess is that many of you have found yourself in that situation but, unlike the matters still smoldering at Penn State, Syracuse and elsewhere, you’ve thought the best course of action was to keep your mouth shut. People know how to get counseling if they need it. People should keep their noses out of other people’s business. The person confiding in me doesn’t see me as an authority figure, they just need someone to talk to that they can trust. They confided in me and expect me to keep this confidential. Ahh, you’ll get over that … or even … I’ve got your back, buddy.

    Any of those lines sound familiar?

    In light of unspeakable allegations at Penn State, and the current situation at Syracuse, the spotlight on responsibility, on moral obligation, on ethical values is suddenly shining brightly on millions in the sports industry. Most of us think we’ll still be able to sidestep any great commitment to justice or intervention (or equality for that matter), but the truth is that these situations are likely to serve as a great historic line in the sand. The attention drawn to these issues, by those inside and outside of sport, has been unprecedented.

    From November 2011 onward, the media, fans, members of your family, your partner, your children and friends are going to be able to say, “Why didn’t you do more?” And to cop a plea, that you told your supervisor is probably not going to cut it. From today on, people will expect that if you saw something and didn’t commit to righting a wrong or to speaking up, that you were “soft” and in some places/cases, you should be removed from your position. These new expectations will certainly be enhanced if you hold a position of any public stature, like the coach or athletic director of an NCAA program or a similar role with a professional team.

    The Penn State crisis reminds everyone of the ethical duty to take action to prevent harm to others.
    Photo by: GETTY IMAGES
    Now, hold on, you’re probably saying. We can’t turn the sports industry into some Orwellian Big Brother machine. We can’t become the modern day equivalent of the East German Stasi with informants lurking behind every wall or ceiling. We mustn’t overreact. In fact, you might be suggesting, we’re obligated to wait until all the facts in the Penn State and Syracuse cases are verified.

    No, we’re not. We need to better acknowledge some innate human tendencies as well as the importance of basic (but comprehensive) moral obligations. For all of us, this is more important than the case at hand, but let’s be clear: The case at hand has drawn the needed attention for the argument to be heard. And attention to victims — people we need to care deeply about — everywhere.

    Marquette University marketing professor Gene Laczniak sees it this way: “When we see abuses or troubles, the easiest thing to do is nothing. So, when faced with some potential intervention to help, whether to connect someone needing a jump-start for their car or to delay our journey to give witness or aid after an accident, there is a natural human disposition not to get involved. Someone else’s problem, we rationalize, will likely sort itself out in due time.”

    Laczniak has spent much of his academic career writing about ethics and building knowledge in this area. It is interesting when he says, “Applied ethics would suggest a higher duty in the case of too many opt-outs. There are times, especially when an action can stop or prevent grave harm to others, when we must summon the moral courage to act decisively. Various philosophers have enumerated self-evident duties (at least self-evident to reflective thinkers) to render assistance when we are opportunistically able. Such moral courage is necessary both to affirm our humanity and to contribute to a better community.”

    Laczniak’s views inspire a number of interesting and thought-provoking questions:

    • Would Major League Baseball have been better off if trainers or team physicians had reported suspicions or knowledge of steroid usage?

    • Would college sports and the NCAA hold a stronger reputation if university presidents prohibited booster gifts from being earmarked for their athletics programs?

    • Should NFL or CFL coaches and owners insist their players be tested for synthetic human growth hormones in hopes of preventing a future scandal and leveling the playing field?

    • What would’ve happened if everyone involved with the Tour de France, particularly the sponsors, had said “enough is enough” when Tour champions were routinely found guilty of doping?

    The tragedies at Penn State and Syracuse provide a teaching moment with the upside of forcing all of us to rethink the ethical duties we each have to help nurture the human solidarity that affirms the goodness of competitive sport. But what should we be telling our peers and employees? In business schools and sport management programs, curriculums include much on issues related to ethics, crisis management and risk management, all elements that — if applied practically — would lead to the consideration of tough questions like those listed above.

    Why, then, do we continue to prioritize short-term reputations and loyalty over the long-term best interests and the right thing? We bring this question forward today, in the midst of the media scrutiny, to push our industry — practitioners and educators alike — to make ethics important, to do more than talk about risk, to take a prevention focus to crises.
    Simply put, we all need to do more.

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

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  • Cartoon: Bowl rewards

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  • Champions, and lessons to glean from Hollywood

    We’re pleased to unveil our third class of The Champions: Pioneers and Innovators in Sports Business (see story). It’s a diverse group and I love their willingness to take chances and risks. Their stories should be a fantastic read when we publish them in late March and honor them at the World Congress of Sports in California. Selecting this group of Hall of Famers gets more and more difficult, as we limit the class to six each year despite being presented with many worthy names. But we thank everyone for their suggestions and for supporting their mentors, colleagues and friends. If you have someone in mind who should be considered for next year’s class, please let us know.

    HOLIDAY TALK: One thing struck me over holiday dinners, cocktails and conversations. Yes, sports has had its fair share of ugly, sordid and even tragic personnel stories this year. But I was surprised, despite the news out of Penn State and Syracuse, how many times people mentioned the “good guys” in sports that seem to be making a difference. In the NFL, all I heard was about the respect and admiration friends and family had for the Three Kings — Drew Brees, Aaron Rodgers and Tom Brady. All at the top of their game, honed by hard work and combining excellence with humility. Sure, you can take or leave some of what they do, but the league is fortunate to have leaders like these. In the NBA, talk centered on the Knicks’ Amar’e Stoudemire, who treated hundreds of Madison Square Garden employees who were working on Christmas to breakfast, and who continues to impress with his generosity and grace, and the 76ers’ Lou Williams, whose story of treating a would-be robber to McDonald’s brought a sense of holiday cheer.

    HOLLYWOOD'S CHALLENGE: One metric I like to keep an eye on is Hollywood’s box office performance. Many of you saw that this year ticket sales for films in North America were down about $500 million from last year, despite higher ticket prices. Overall ticket revenue still is a chunky $10.1 billion, but that is down about 4.5 percent from last year. Attendance at films was down more than 5 percent this year, on the heels of being down 6 percent in 2010. One of the main reasons cited for the drop continues to be the economy and especially its impact on teens and young adults in going to the movies. So many other elements entertain them these days that the idea of blowing nearly $10 on a film doesn’t work.

    That reminded me of the conversation I had recently with film executive Neal Edelstein, who was the creative force behind such successful films as “Mulholland Drive” and “The Ring.” When talking about green-lighting new projects, he said Hollywood was now OK’ing films largely based on if they would draw today’s youth. Hollywood is going through a crisis in being relevant to this generation, and they are focused on appealing to this age group. I think Hollywood just needs to make better films! The takeaway for all of us in the sports and entertainment business is simple. Of course the world of sports needs to continue to be relevant to today’s youth. It mostly is. But to me, the trip to the theater is similar to the sports venue — all about the product and the experience. When those begin to suck, you have no one but yourself to blame for a drop in your business.

    By the way, I have yet to see a few late releases (and I missed “Warrior” and “Margin Call,”) but my top five so far of 2011: “Martha Marcy May Marlene,” “Win Win,” “Ides of March,” “Crazy, Stupid, Love,” and for providing the best laughs of the year, “Bridesmaids.”

    Abraham D. Madkour can be reached at amadkour@sportsbusinessjournal.com.

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  • Harnessing impact, passion of alumni to make a difference

    I am proud and honored to be part of the Penn State community. Yes, I am saying that publicly. Here is why.

    Like millions of others, I was floored and disgusted by the allegations of sexual abuse at Penn State. As a proud Penn State alum, a passionate football fan and a father, I found myself struggling with a situation that was shaking my identity to the core.

    After two days, I simply couldn’t watch the endless debates anymore. Two particular areas were frustrating me. First, the victims of sexual violence were being forgotten. We were missing a national discussion on how to prevent this from occurring in the future — anywhere.

    Secondly, somehow the allegations against a few individuals were painting the entire Penn State community negatively — from students to alums to athletes — despite them not being remotely involved. It got to the point where I wasn’t sure it was OK for me to wear my Penn State sweatshirt. If you know Penn Staters, you know we are a proud bunch, whether it is around our football program’s approach or our school’s culture of philanthropy, and it just got
    to be too much to handle from the sidelines.

    Along with a few fellow alums, we felt compelled to act, to channel the anger, embarrassment and emotion into something positive. The goal: Put the focus back on helping victims of sexual violence by raising $500,000, roughly one dollar for each of Penn State’s 557,000 alumni, in support of RAINN (Rape, Abuse & Incest National Network), the largest anti-sexual violence organization in the country (www.rainn.org). By doing so, we hoped to show the world what Penn Staters are really all about.
    The website was launched Nov. 10 with the help of social media networks, leading to network TV news exposure by the end of the day.

    Strategy and approach

    The strategy was simple. Without any marketing budget, advance planning or university involvement, we focused on activating the national Penn State community through what we knew best: social media. From there, things moved at light speed.

    Nov. 8: Aligned with RAINN and recruited alums with specific skills.

    Nov. 9: Built out core site, Facebook/Twitter presence (www.proudtobeapennstater.com).

    Nov. 10: 4 a.m., launched website and RAINN donation page; 9 a.m., put the word out through the social networks of four Penn State alums and RAINN; by 4 p.m. we were on ABC, NBC and Fox, and it snowballed from there.

    Proceeds from the sale of the T-shirts went to RAINN, the Rape, Abuse & Incest National Network.
    As the frenzy built, a key pillar of our strategy evolved around crowd-sourcing and co-creation. With thousands of emails/social notes coming in and widespread media attention, not to mention our day jobs, we needed to lean heavily on the broader community to support us.

    That converted what had started as a fundraiser into a movement. We had active and former NFL/Penn State stars writing open letters supporting us, Nebraska Heisman winners and fans mobilizing to raise money, brides donating wedding favor funds, jewelry store owners donating portions of Small Business Saturday proceeds, authors of Penn State-oriented books donating a percentage of sales, alumni Avon reps donating commissions, and the list goes on.

    It was wild. In a decade of social and word-of-mouth marketing experience, I had never seen anything like it. We had tapped into some of the most passionate brand ambassadors ever, focused them on a meaningful cause and given them a platform to run with. The results surpassed my wildest expectations and left me feeling personally inspired.

    Results

    In a little over four weeks, we beat our goal of $500,000. Of that total, 50 percent was raised 48 hours from launch and 75 percent within one week. More impressive than the dollars raised is that more than 10,000 individuals donated, highlighting a broad base of support for our grassroots effort and the potential of activating the long-tail of alums. This doesn’t include those who bought T-shirts or used our text-to-donate feature.

    The Takeaway

    While going through this accidental campaign, a broader, strategic question emerged:

    In this new social world, are alums under-leveraged brand assets?   

    Large schools have hundreds of thousands of the most passionate brand ambassadors out there — something large marketers spend tens of millions on desperately trying to create for their own brands.  

    Taking a step back, this goes beyond Penn State and represents an opportunity to mobilize millions of passionate college alums in support of causes, marketing partners and their schools’ brands and fundraising efforts.  

    With the right strategy, better leveraging this brand asset should deepen the connections universities (and their sponsors) have with their alums and drive incremental revenue at a time when they need it most.

    — Jerry Needel
    We reached millions of people through social and traditional media, with appearances on “Anderson Cooper 360,” CNN, ABC, NBC, MSNBC and many others. We drove more than 250,000 people to RAINN’s website to learn more about sexual violence and how they can help stop it.

    Most importantly, however, is the impact on real people who needed help. RAINN’s National Sexual Assault Online Hotline, where people going through abuse often reach out for help for the first time, saw its busiest weeks ever during our campaign, with volume up more than 54 percent. Many of the individuals reaching out specifically said they heard about and were motivated to reach out because of the Penn State campaign. RAINN was also able to double its volunteer recruiting with more than 800 people volunteering to help in their local communities.

    What’s next

    The common thread in the thousands of digital interactions we had with Penn State supporters over the last four weeks was simply, “Don’t stop at 500. Keep this effort going.” With our initial goal behind us, we are now working with our supporters to map out the best path forward.

    I’ll say it again. I am proud of the Penn State community and honored to be part of it. Students, faculty, employees, alums, friends and parents of Penn Staters and fellow fans from Big Ten schools stood up, without hesitation, in a time of crisis to put the focus back on helping victims.

    The Penn State community is bigger than the alleged actions of a few individuals and now, more than ever, we will continue to show our pride by attacking this cause, by fiercely supporting our student athletes and sponsors across all sports, by celebrating our diplomas, by showing the world what Penn Staters are really all about. Our actions will be what define us as a community. We are hundreds of thousands strong and are committed to re-establishing the reputation of Penn State.

    Jerry Needel (jerry@proudtobeapennstater.com) is one of the founders of Proud to be a Penn Stater and a word-of-mouth marketing and social media veteran who has helped start and run social media consulting and analytics companies. Other co-founders included Jaime Needel, Larena Lettow and Bob Troia, all with significant social media, advocacy or sports marketing experience.


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  • Two views about impact of media deals

    It was incredible to me that Cardinals slugger Albert Pujols, as an aging 32-year-old baseball player, would get a $254 million contract for 10 years. Is he going to be worth a guaranteed $25.4 million when he is 42 and in the last year of that deal? Even as a baseball fan who appreciates Pujols for being the great player he is, I said to myself, has the Angels’ ownership gone crazy? How can it spend that much?

    Regardless of whether this deal will pay off on the baseball diamond, the question remains, How will the Angels pay for Pujols? While the Angels will likely try to increase ticket prices and concessions, that alone won’t come close to paying the Pujols contract. Rather, the revenue to pay Pujols will come from every person who has cable or satellite TV and has Fox Sports West on his or her TV lineup (that’s pretty much everyone because regional sports networks are always included on the expanded basic tier).

    The day after the Angels signed Pujols, the team agreed to a $3 billion, 20-year contract with Fox Sports West for the rights to continue airing 125 team games a season. The new deal increases the Angels’ television rights revenue by $100 million per year, or about $2 billion in total. Only the most naïve person would think that the TV deal wasn’t in the works at the same time the Angels were negotiating with Pujols. The TV deal was central to the Pujols signing! The formula was simple: Sign Pujols, do the TV deal with Fox Sports, and make the viewers pay.

    As a country, we need to start questioning whether the sports market is working, particularly for the non-sports fans with a pay-TV subscription. Basically, Pujols, the Angels, and Fox Sports West get paid by many, many people who do not care about nor watch baseball and the Angels, let alone know who Albert Pujols is. Ironically, as SportsBusiness Journal reported, the Angels are one of the least popular baseball teams on TV today!

    Small cable operators have consistently warned about the harm posed by out-of-control sports rights fees. But this latest example shows how crass the system is and how uncaring it is to the consumer, particularly the non-sports fan, who is forced to pay for the outrageous fees paid by Fox Sports West, which is layered on top of excessive fees paid by ESPN, Versus, TNT, Golf Channel, Speed and all of the other channels that carry sports.

    Unfortunately, there is absolutely no transparency in the market for consumers to see how they are being forced to pay (because they have no choice) for the Pujols contract, not to mention the Olympics, “Monday Night Football,” Wimbledon and all of the other sports that many people don’t care about or watch at all. In fact, the sports channels want it this way and impose nondisclosure provisions in their contracts. In the last two days, the Angels paid more for two players than the owners paid for the entire team ($183.5 million in 2003 for the team vs. $331.5 million for Pujols and C.J. Wilson)! Why? Because Fox Sports and all of the other sports programmers know they can just shove the product down the throats of all consumers and make them pay whether they like it or not.

    I’m sure more deals like this one are on the way. But I can assure you that we at the American Cable Association intend to let policymakers — who have given the leagues antitrust exemptions and other perks — know that it is the choice-denied pay-TV subscriber who is paying the vast sums to Pujols, the Angels and all of the other sports leagues and sports channels.

    Matthew M. Polka
    Pittsburgh
    Polka is president and CEO of the American Cable Association.



    The following letter is in response to the story “Another jackpot for NFL,” in the Dec. 5-11 issue of SportsBusiness Journal.

    From a team perspective, when you divide the new [NFL] total average yearly media revenues of $7 billion across 32 teams, you end up with a yearly average of nearly $224 million per team, well above the current per team average of nearly $134 billion per team.

    In turn, that’s why the NFL lockout ended up without a single regular-season game being lost, as the growth in total media revenues allowed each side to claim victory. Team owners will pay out a lower percentage of revenues for player compensation, while the players will receive more compensation dollars as team revenues grow.

    Lee H. Berke
    Scarsdale, N.Y.
    Berke is president and CEO of LHB Sports, Entertainment & Media.

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  • Wishes to keep fans happy and business prosperous in 2012

    As the holidays draw to a close, I find myself imagining what sports fans across North America would like to see in the new year and what gifts the sports world could bestow on its fans to make 2012 happy and festive for all — or at least for a significant portion of us.

    Photo by: NBAE / GETTY IMAGES
    Mark Cuban as the owner of the Los Angeles Dodgers and a return to glory for one of America’s premier franchises. Cuban will make the other owners better and more creative on the business side as he pushes the envelope. His entrepreneurial spirit will be a test for the commissioner and for MLB Advanced Media, but his changes will benefit the fans and expand the audience for the game — especially among younger fans.

    Image: AEG
    NFL expands to Los Angeles and the AEG Farmers Field location. Like Cuban, Tim Leiweke is an innovator who sees things as they can be, not as they are. While I would prefer an expansion team, maybe a city losing a team will cause other poor-performing markets to step up and devote more of their resources to marketing and sales activities.

    Photo by: REED HOFFMAN
    Continued growth for MLS. David Beckham’s play for the Los Angeles Galaxy had a significant impact on the visibility and growth of the league. Expansion cities in the Pacific Northwest have set a standard for fan involvement and community support, and new venues such as Livestrong Sporting Park in Kansas City have provided a revenue-generating model. The success should continue as the quality of play improves.

    Photo by: NBAE / GETTY IMAGES
    Another small-market champion in the NBA. It is critical to demonstrate that championships can be won regardless of the size of the market to slow down the flood of players leaving smaller markets to go to larger markets and team up with other superstars. As I write this in mid-December, I fear that Dwight Howard will be the third premier big man to leave his original team and play for the Lakers (after Shaquille O’Neal and Kareem Abdul-Jabbar). The popularity of the NFL is due in no small part to the fact that its superstars have long careers in their original markets. Bonding fans and players works. So Kevin Durant: Please stay in Oklahoma City for the long term. You will be loved and supported like no other.

    A re-examination of the role and effectiveness of the NCAA. The past year taught us that the system is broken in terms of compliance, priorities, fiscal responsibility, recruiting, student-athlete conduct, coaching ethics and contractual fulfillment. Wish I had suggestions, but situations such as one-and-done in college basketball indicate that being a student might not be the priority for some of our institutions of higher learning.

    Photo by: JOE FARAONI / ESPN
    More quality journalists like Bob Ley of ESPN’s “Outside the Lines.” He is a thorough investigative reporter who is able to present stories without leading the audience or attempting to influence by offering his own take. At the same time, he takes on controversial topics no matter how uncomfortable it might make the audience.

    Sports leaders assuming responsibility and taking decisive actions. The Jerry Sandusky saga has shown us that no one is more important than the integrity and mission of an organization. We need to stop thinking about how something might affect the image of a program or person and focus on stopping damaging behavior and poor decision-making.

    Photo by: GETTY IMAGES
    Acceptance of Tim Tebow by the critics and the experts. All he does is lead with his heart and rally his team for exciting victories that keep the viewers tuned in. The combination of Tebow fans and haters is the ideal attraction for fan interest and involvement. Given everything we have seen in the past few months, why don’t we rally around a true leader who is humble and goes about his daily life with the integrity that we so sorely need?

    Photo by: GETTY IMAGES
    A false-positive test for Ryan Braun. While I fear the worst, I hope for baseball’s sake that the results are a mistake and this young man can be one of the faces of baseball, especially for small-market fans.

    Players: How about a little candor and honesty when asked about a decision you made or your future plans? Sorry, Albert: If it really was God’s plan and you were merely being obedient in going to Los Angeles, I am upset about how God is spending his time. Seems to me we have more pressing needs, although I guess I can see the fit — they are the Angels.

    Finally, I would like Santa and the elves to really rethink this BCS through. There has to be a better system than this: Coaches voting for or against other schools because of how it might impact their own teams — and that is even if they fill out the ballots themselves. Computers, coaches, witches, warlocks — let’s give the players an opportunity to settle it on the field. Because, after all, like the Ivy League, it is all about the student athletes, isn’t it?

    Selfishly, I might have my 2011 wishes come true. My Oklahoma State Cowboys beat Oklahoma, were crowned Big 12 champs and are playing in a BCS bowl, although maybe not the one they should be playing in. While my Pirates were not a .500 team, they did improve, so maybe 2012 will be my 82-win season.

    Wishing you the all the best 2012 has to offer, filled with integrity, sound judgement, logical decisions, and successful business models. It is a wonderful life. Thanks for reading.

    Bill Sutton (wsutton@bus.ucf.edu) is a professor and associate director of the DeVos Sport Business Management Program at the University of Central Florida and principal of Bill Sutton & Associates. Follow him on Twitter @Sutton_Impact.

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