SBJ/June 25-July 1, 2012/Opinion

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  • Building blocks of great organizations

    A sports executive friend recently gave a guest lecture at a prominent business school. During the question-and-answer session, one of the MBA students asked him what they should expect when pursuing a career in the business world of sports.

    “Subtract the one,” said my colleague.

    The class looked back with a blank stare.

    “What the heck does that mean?” said one of the young business brainiacs.

    “Simple math. Most of you can command starting salaries of between $125,000 to $150,000 when you present your newly minted MBAs to a prospective employer, correct?

    “If you want to work in sports, just subtract the one.”

    “Who would be dumb enough to give up $100,000 just to say they work in sports?” said one of the bright lights.

    “You will,” said my colleague.

    Fortunately for sports businesses, there are thousands of aspiring front-office types who will give up the dough to work in the show. It reminded me of the classic line from the movie “North Dallas Forty,” where lineman O.W. Shaddock complains to his coach, “Every time I call it a game, you call it a business; and every time I call it a business, you call it a game.”

    There is a growing trend in professional sports to look for the smartest person in the entire room. The skill sets of today’s sports business careerists are at an all-time high. These include sales strategy, analytics, media, marketing, finance, law, facility operations and technology. As important as these skills are, they have lost much of their impact because they have become so commoditized in this age of mega-information where everyone has instant access to everything.

    Building a culture of internal cooperation is critical to the success of any business, especially in sports. Teamwork, integrity, a spirit of humility, sense of humor, balance between family and career, and doing what’s right for your fans and corporate partners should be among the foundational piers of any organization. If clients don’t trust you, they will eventually stop buying your product. If the smartest person in the room comes into your organization with this gene missing in his or her DNA, you will have a problem.

    I recently heard Jerry Colangelo, one of sports’ most successful executives, lay out a simple guideline for organizational success: “Win and make a profit.” He told a group of sports business leaders that “if you constantly think you are the smartest person in the room, you are going to get your butt kicked.”

    Healthy organizations minimize politics and confusion and raise morale and productivity to levels that their competitors could never imagine. They seem to attract, teach, nurture, mentor and retain the best people. They tap into all the combined intelligence they have and find ways to work smarter and increase productivity. More than complexity, intelligence or experience, great organizations require courage, common sense and persistence.

    Being the smartest person in the room doesn’t guarantee that you will build a successful career in sports. As part of “management by walking around,” I would always introduce myself to our newest organization interns and ask them to tell me their story of how they came to work for the team and what they want to do when they grow up: “How did you get here?”

    A newly minted Ivy League graduate aggressively shook my hand and told me, “By car!”

    Andy Dolich (andy.dolich@gmail.com) has more than four decades of experience in professional sports, including executive positions in the NFL, MLB, NBA and NHL.

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  • Cartoon: Graduation lessons

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  • Huge media rights deals not confined to the U.S.

    Don’t think the over-indexing on media rights is an exclusively U.S. phenomenon, as one of the top stories covered in our newly launched SBD Global edition was BSkyB and BT combining to pay a record $4.6 billion over three years for live rights to the English Premier League in the U.K.

    The deal, a stunning 71 percent increase over the previous agreement, shocked observers. The markets and most financial analysts responded negatively to it. Even EPL Chief Executive Richard Scudamore acknowledged he was surprised at the outcome, telling the London Times, “There was a gasp in the room when the envelopes were opened. I was as surprised as anyone.”

    As one sports property after another in the U.S. cashes in on its own media rights deal, the lesson of the EPL deal is that we shouldn’t expect to see a leveling off any time soon. A few other elements stand out to me:

    The deal is for three years, unlike the more recent long-term deals that we’ve seen in the U.S., where media companies are trying to lock in their packages to ward off further competition.

    BSkyB, which has held EPL rights for more than 20 years, saw far greater competition in the marketplace this go-round, with ESPN and Al Jazeera making a strong run. But in the end, BSkyB paid what it needed to in order to hold these valuable rights — a similar move to what has transpired stateside.

    BT, the former British Telecom, is really the story to watch. The company views the rights as a major game-changer for its business. BT is looking to launch a new sports channel in the U.K. and will try to do so on the back of a strong package of EPL games. We’ve all seen businesses built by their association with the NFL — Fox and DirecTV are two that come to mind — and BT is counting on the same lift from the EPL.

    ESPN is back on the outside after previously picking up the package held by the former Setanta. It failed to renew that package and, after missing out on its World Cup bid, this marks the second straight major soccer package that ESPN has failed to secure.

    A familiar name to many in the sports business reportedly played a key role in the deal. Tony Ball, the former News Corp. executive who was part of the growth Fox Sports in the mid-1990s, is on the BT board and reportedly advised the company on its bidding.

    What will the EPL clubs do with the increased revenue? With financial fair play regulation sweeping through the league, Scudamore has called on clubs to be more judicious on player spending. Also, many of the league’s facilities are in serious need of renovation, so watch if clubs invest in more high-end, premium and exclusive experiences for their customers or in technology improvements in-venue.

    Expect more big media deals to come. The EPL has a set of global TV and Internet rights left to market, and NASCAR, MLB and a new-look BCS will hit pay dirt in the U.S. I go back to Scudamore, who put it well in assessing the marketplace. After announcing the league’s new riches, he said, “I’ve been five times round this block, and each time people say the bubble has burst.”
    It clearly hasn’t.

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

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  • How diversity in sports can be example for society to follow

    Lapchick
    There was a great deal of speculation that we were entering a post-civil rights era four years ago when the United States elected Barack Obama as its first African-American president. As the president seeks re-election, it is clear that we are not in a post-civil rights era.

    We only need to review events of the last four months to see that clearly. Trayvon Martin, an unarmed 17-year-old African-American, was fatally shot in Sanford, Fla., in late February. In March, the Southern Poverty Law Center reported that there was a record high 1,018 hate groups in the United Sates. In early April, five African-Americans were shot in Tulsa, Okla.; three died in the race-based shootings. It has not been a good year for U.S. race relations. These are ominous signs.

    As we seek good news to counter the bad, the world of sports continues to provide some highlights. This week, the Institute for Diversity and Ethics in Sport, of which I am the director, is releasing the 2012 NBA Racial and Gender Report Card. The NBA has been the industry leader for hiring practices for women and people of color since we started publishing the report cards 25 years ago. I have been the primary author throughout that period.

    The league led by David Stern has been a model for the NFL, MLB and MLS among the men’s leagues and has received an A for racial hiring practices throughout the last 20 years. The NBA-created WNBA has been the best of all the pro leagues we cover. MLB and the NFL were earning C’s in the beginning; they broke in the B category in the mid-1990s and joined the NBA with A’s in the last few reports. The WNBA has gotten A’s since it was founded. MLB Commissioner Bud Selig and NFL Commissioner Roger Goodell are passionate about issues of diversity and inclusion and it shows in the recent improvements in the records of their leagues.

    The NBA’s diversity success includes the first black woman president of the WNBA, Laurel Richie (left), shown here with NBA Commissioner David Stern, broadcaster Katie Couric, WNBA player Alana Beard and Washington Mystics owner Sheila Johnson.
    Photo by: NBAE / GETTY IMAGES
    Here are some highlights from the most recent report cards, including the recently released NBA report card.

    • For the first time in the NBA’s history, there were more head coaches of color than white head coaches. African-American head coaches represented 47 percent of all NBA head coaches, the highest percentage since the 2001-02 season. Kaleb Canales became the first Latino head coach in the history of the NBA upon his promotion by the Portland Trail Blazers to interim head coach in March. Heat coach Erik Spoelstra remained the only Asian NBA head coach for the fourth consecutive season.

    • The number of African-Americans in NBA ownership groups has increased to include Michael Jordan with the Charlotte Bobcats; Will Smith, Jada Pinkett Smith and James Lassiter with the Philadelphia 76ers; Fred Jones and Elliot Perry with the Memphis Grizzlies; and Sheila Johnson with the Washington Wizards. The NBA’s first Asian owners, Erick Thohir and Handy Soetedjo, are a part of the Sixers ownership group. Raul Fernandez with the Washington Wizards is the only Latino owner in the history of the NBA.

    • At the beginning of the 2011-12 regular season, there were seven African-Americans and two women CEOs and presidents in the NBA.

    • WNBA President Laurel Richie last year became the first female of color to be named president of a professional sports league.

    • For the 2011 season, 42 percent of the WNBA head coaches were African-American.

    • There are two teams in MLB owned by persons of color. Arte Moreno maintains his position as the owner of the Los Angeles Angels. The ownership group of the Los Angeles Dodgers now includes Magic Johnson, who is the face of the team although not the majority owner.

    • For the start of 2012, Major League Baseball had five managers of color, one less than in 2011. There are two African-American and three Latino managers.

    • In our colleges, there has been great news for head football coaches, with 19 head coaches of color among the 120 FBS schools, a 600 percent increase from 2003.

    There are certainly significant areas in each of the leagues and even more in our colleges where there is room for improvement, especially at the team levels. But as can be seen with these highlights, there is good positive news in many of the most important positions.

    I have seen so many examples of how race relations can be improved in communities with the simple acts of the athletes on professional or college teams. Teams that are engaged with their fans are always more appreciated. That is more likely to happen when you have something like NBA Cares. The organization’s public service announcements during the NBA playoffs have been moving and effective. The LeBron James commercial about the dangers of not doing well in school and dropping out is very powerful. The breakthrough series of Major League Baseball ads and PSAs on homophobia and bullying were a dramatic departure from those produced in the past. When athletes are willing to speak out, people look up to them and listen to them.

    In post-Katrina New Orleans, there were bitter feelings about race relations in the African-American community, which suffered more than any other group in the hurricane’s aftermath. The Lower Ninth Ward, where the core of the African-American population lived, was virtually destroyed and has yet to come back in ways that residents would hope. For me, the most hopeful and important days since Hurricane Katrina were when the Saints came home to the Superdome; the NBA All-Star Game and the NBA’s Day of Service; and, finally, when the Saints won the Super Bowl in 2010. Suddenly, it didn’t matter what the skin color of the player or fan was, what religion they believed in, or whether they were rich or poor. Things were beginning to change. Hope was being restored.

    In a sports-loving nation still trying to rid itself of the pain caused by racism, these improvements in sport can help give hope.

    Richard E. Lapchick (rlapchick@bus.ucf.edu) is the chairman of the DeVos Sport Business Management Graduate Program and the director of the Institute for Diversity and Ethics in Sport at the University of Central Florida.

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