SBJ/December 10-16, 2012/Opinion

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  • How fan, sponsor reactions factor into team decisions

    Have you wondered if the Washington Nationals fully thought out their plan to bench star pitcher Stephen Strasburg in the midst of a tight National League pennant race in September? Are they looking back now and asking if their management decision needed to go beyond factoring in the health of a young right-hander’s arm? Did they stop to consider their fans and sponsors?

    Or how about when Tony Stewart caused a massive 25-car crash during NASCAR’s October race at Talladega? Was he thinking about how his actions might bother his supporters and hurt his longtime sponsor, Office Depot?

    Or perhaps you’d like to measure Red Bull’s October backing of extreme parachutist Felix Baumgartner? Was Red Bull’s marketing team at risk if this space-diving spectacular ended badly? Did they consider risk management and recovery marketing in their decisions?

    We ask because maybe you’ve been involved in a similar situation where a key decision held the potential to alienate your fans or sponsors. Did you ask those hard questions and make informed, risk-based decisions? If you didn’t, we’ll throw some gas onto the glowing ember of your satisfied sponsorship thinking.

    Social psychologists often talk about avid sports fan behavior in two distinct ways. The first holds that supporters of winning teams “bask in the reflected glory” of their team’s most recent victory. It’s called BIRGing and is best explained when fans tell each other, “We won!” all while making themselves unofficial members of the team.

    The converse is called “cutting off reflected failure” (or CORFing) and is usually articulated as, “They lost.” In these instances, fans distance themselves from the team and place blame on the various parties who, in their mind, bungled the event’s outcome.

    Both BIRGing and CORFing are widely accepted concepts.

    So, one interesting aspect of Strasburg’s summer saga was the very real issue of fan and sponsor reaction toward the Nationals for benching the team’s best pitcher in the name of investment protection. If fans got mad, did they stay mad for long? Did it anger them even more when the Nationals lost Game 5 of the division playoffs to the St. Louis Cardinals? Worse still, were the Nationals’ sponsors concerned about alienated fans enough to consider not renewing their sponsorships or reducing their future rights fees or activation spends?

    We know the decision to remove Strasburg (15-6; 3.16 ERA, 159.3 innings pitched) was reportedly made by Nationals general manager Mike Rizzo and manager Davey Johnson and tied to total pitches thrown. It was supposedly worked out as early as spring training and designed to lengthen the career of a franchise-defining player who might lead this team for years to come.

    On many athletic levels, it was logical. Who wants to wear responsibility for causing the elbow overuse that potentially destroyed a young man’s career?

    Washington Nationals pitcher Stephen Strasburg had an innings limit set for him by the team, which made him unavailable for the postseason.
    Photo by: GETTY IMAGES
    But when Washington’s season ended, some fans were probably looking for someone to blame. And while Nationals’ management probably served as the first target, there is a distinct possibility some Washington sponsors caught subliminal heat as well.

    How do we know that? Well, not so long ago, a pair of researchers from Northern Kentucky University investigated whether fans who were mad at a team might also blame the sponsors of the team. The genesis for that thinking comes from the balance theory (by psychologist Fritz Heider) that can be interpreted to suggest that if a fan loves a team and a sponsor supports that same franchise, the fan will feel good about the team’s sponsors.

    Is it possible, the NKU researchers asked, for the reverse to hold? Could fans, mad at the Nationals for benching Strasburg, take out their frustration on the brands they saw on the Nationals’ scoreboard … big brands like Coca-Cola, Miller Lite and Geico? Possibly.

    Even worse for the Nationals, could sponsors see the inflamed interest of the fans as a reason to reduce the priority of that sponsorship? Perhaps.

    From a research standpoint, NKU’s Vassilis Dalakas and Aron Levin looked solely at NASCAR fans and their identification with favorite drivers and their distinct dislike of opposing drivers. Fans of Dale Earnhardt Jr. were not going to cheer for Jeff Gordon or Stewart. Further, they were inclined to dislike sponsors of Gordon or Stewart simply for helping underwrite drivers they disliked.

    Granted, NASCAR is not baseball and dislike for a driver is certainly not the same as anger at a pro team’s management. But hard-core fans react at every sporting event and sponsors may want to rethink the real downside of fan anger. Team supporters may not hold a grudge long but research suggests fan social identity and avidity can link up negatively with a team’s sponsors.

    In Korea, Sanghak Lee from Korea’s Aerospace University is studying whether crashes are bad for NASCAR sponsors because, while creating stronger brand recall, the possibility exists that wrecks influence attitudes toward the brand, making the resultant brand association negative.

    Many readers may doubt that but at the very least, some big league sponsors (or Stewart) should question the subliminal risks of in-season decisions and perhaps add logical responsibilities to their sponsorship contracts. If we can have dynamic ticket pricing for games, how far are we away from dynamic sponsorship contracts?

    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: The PED-ometer

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  • The thinking involved in Most Influential choices

    Influence comes in many shapes and sizes, and it’s that nebulous, subjective definition that leads to passionate debate as our editorial board puts together our annual list of the 50 Most Influential People in Sports Business. As we have stated, this isn’t a list of the most powerful executives or those who had the most productive or successful years. Instead, it’s a ranking of the decision-makers who change the way sports is valued, consumed, presented and produced. This year’s list has a new executive leading the way, with 11 other new names getting into the top 50. As you’ll see, influence doesn’t always yield a feel-good result or story, and some may view certain individuals as being a detriment to the overall success of sports. But the names here represent, from our point of view, the people who are driving sports at this moment in time. The list inevitably leads to head-scratching, disagreements, sometimes angry phone calls and more than its share of Monday morning quarterbacking. So, here’s a look at some of the names and rankings that may surprise you:

    JOHN SKIPPER: In its final installment as ESPN’s ombudsman, Poynter Review wrote that “ESPN is so big that it occupies a position in sports not unlike that of Microsoft in the ecosystem for computer hardware and software in the late 1990s, or Apple’s place at the intersection of hardware, apps and downloads today.” A research report from securities brokerage Wunderlich this summer stated that ESPN is worth $40 billion. That’s the cultural and financial giant that Skipper leads. In the last 12 months, he has successfully overseen a smooth transition from George Bodenheimer, further pushed ESPN into the digital era, shepherded a key rights agreement with MLB and cemented the network as the biggest player on the college landscape for years. There is a reason why everyone wants to compete with ESPN — its business works and its day-to-day influence on the sports business is without equal.

    ROGER GOODELL: It’s fair to say that it wasn’t the strongest year for the NFL’s commissioner and one he probably won’t mind seeing in the rearview mirror. But while some lobby for other commissioners to outrank Goodell, there is no question that the NFL’s reach holds far more sway, and can have more impact, than any other sport.

    MARK WALTER/GUGGENHEIM PARTNERS: Many will argue that this ranks a sports newcomer far too high. But the aggressive transaction for the Dodgers not only set a new bar for team, real estate and media rights, it put wind in the sail of sports assets around the globe.

    SEAN MCMANUS:  Sports is still a relationship business and with Dick Ebersol, David Hill and Bodenheimer moving on, McManus takes the mantle as the statesman of sports media, fueled by the respect and relationships he’s developed over the years.
     
    BRIAN FRANCE: Often criticized for a detached sense of leadership, France moves up on our list this year for taking a more active and engaged role in trying to move NASCAR forward. He is pushing his executives to try new things and innovate. It may not all work, and France will continue to have critics questioning just how much he cares. But there is a sense he recognizes he must take action and that a commissioner can’t lead from behind.

    GARY BETTMAN: This was easily the most debated ranking on our list. Some argued that Bettman has done so much to influence a sport’s shutdown and the negotiating policy of ownership that he should be in our top 10. Others strongly felt that Bettman’s failure to reach a collective-bargaining agreement has eroded all sense of effective leadership and management. We’ve long argued that influence isn’t solely positive, and Bettman’s inclusion on the list is a clear indicator of that. This reasoning also applies to those sitting at No. 46, NHL Deputy Commissioner Bill Daly and Proskauer’s Bob Batterman.

    DON FEHR: Last year, Fehr ranked No. 47, but this year he shoots up 28 slots because of his ability to galvanize the NHLPA. Again, many on our edit board criticized this ranking, believing he had no influence, just a failure to negotiate. But like him or not, Fehr and his brother, Steve, have orchestrated a labor strategy that has kept players unified despite missing four paychecks and 423 games of the season.

    MIKE SLIVE/JIM DELANY: The frequent argument in our newsroom about who is more influential among college commissioners comes down to two familiar names. Is it Slive because of the strength of the SEC or Delany because of the reach of the Big Ten? For us, the fact that Slive oversees a conference that has the programs with the largest and most profitable athletic budgets across the board (nine of 11 public schools in the conference turned a profit in 2011), the game’s most influential coach (Nick Saban), and far and away the strongest football brand in the country gives him the slightest edge.

    KEVIN PLANK: It never hurts to be the hot brand and Under Armour continues to be the talk of the industry for its creative sense and appeal to today’s kids. Also, this is one brand that will be the beneficiary of the University of Maryland’s move to the Big Ten, as now Plank’s product will be seen on the field of larger markets where football truly matters.

    LARRY BAER/JOHN HENRY: Baer’s ranking may raise eyebrows, but from our viewpoint, it’s clear the Giants have become the gold standard among MLB teams, and while Larry is not the sole decision-maker, he’s effectively led the operation for years. On the flip side, Henry takes a steep drop in our rankings as, despite the marquee value of his assets, the brands have absorbed major hits by poor performance and questions about his decision-making — both absent during his successful run years earlier.

    JOHN MARA: The more you follow ownership performance, it’s hard not to admire the work and style of Mara and his partner, Steve Tisch. Mara has the respect from players, union officials, fellow owners and the league office for running an operation that now has become one of the most respected in sports. He may not be the most visible, quotable or press-friendly owner, but his influence extends more than many see.

    And our reasoning for a couple of names that may surprise people for not being on the list:

    JEREMY JACOBS: His influence in the NHL’s negotiations has been widely reported, but it was felt that the failure to reach a deal has damaged his standing.

    HAL STEINBRENNER: While the Yankees remain one of — if not the — most powerful brands in sports, MLB’s recent run of on- and off-field competitive balance means the Bronx Bombers don’t single-handedly dominate the sport the way they did in the past.

    LORENZO FERTITTA/DANA WHITE: The UFC’s leaders continue to grow the sport globally, but the Fox TV deal hasn’t propelled the sport to the heights many had hoped.

    As always, we welcome your questions, thoughts and comments on this list, especially where you think we’ve hit and — better yet — where we’ve missed the mark.  

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

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  • A holiday book list designed to keep execs reading, learning

    The underlying theme of this year’s annual selection of books to note as we move into the holiday season is leadership. The month of October and the campaign trail heading toward the November elections showed me quite clearly how hungry we are for great leaders and leadership.
    Sometimes the best read is a re-read or a new take on some thoughts and ideas that might be more relevant the second, or even third, time around. Whether you are reading on your iPad or Kindle, or turning pages in the traditional way, the key is to keep reading and learning every day. With that sentiment in mind, here are my offerings for gift ideas this holiday season.

    “Positioning: The Battle for Your Mind” by Al Ries and Jack Trout
    I suggest the 20th anniversary edition if you can find it. While it is often hailed as the most influential advertising book ever written, it is also a fantastic read on how best to make sure the message you want to send has the best chance of reaching your audience. I just re-read the book thinking about Twitter and other forms of social media and felt that the core messages and content are applicable regardless of the channel and that technology can only enhance the ideas.

    “Culturematic” by Grant McCracken
    In today’s world, while we still consume content, we have countless opportunities every day to manage and create our own content and disseminate that content globally in a matter of seconds at very little expense. Culturematics are ways we create meaning and attract interest and attention. I can’t think of anything more relevant to the sports industry in 2013 than creating meaning, retaining customers and attracting the interest of new potential consumers.

    “The Advantage” by Patrick Lencioni
    I recently heard Lencioni speak at the NFL marketing meetings, and as always, he delivered a simple yet powerful message about organizational health that, if acted upon, is a game changer in any business. Through a series of examples and a clearly defined blueprint, Lencioni makes the case that leaders and organizations need to shift their focus to becoming healthier, allowing them to tap into the more-than-sufficient talent, intelligence and expertise they already have in their employees and management teams. Building upon two of my favorite Lencioni works, “The Five Dysfunctions of a Team” and “Death by Meeting,” “The Advantage” is exactly what it promises to be.

    “Meditations” by Marcus Aurelius (translated By Gregory Hays)  
    I recently received this book as a gift and decided to include it here as a self-help tool. Similar to Lencioni in its simplicity and power, “Meditations” is still relevant and meaningful after almost 2,000 years. It speaks to human nature, the importance of knowing your strengths and weaknesses, staying true to your values and beliefs, understanding your core mission, and the challenges of leadership when your integrity and philosophy are challenged daily by interactions with others. A classic read in every sense of the word.

    “Marketing Your Dreams: Business and Life Lessons from Bill Veeck” by Pat Williams
    My recommendation of “Veeck as in Wreck” by Veeck and Ed Linn has appeared in this column in the past, and I believe it is still a must-read. Williams, whom I recently referred to as a modern-day Mark Twain, offers his thoughts on Veeck and his accomplishments and philosophies. I would be hard-pressed to find better information for anyone involved in the marketing and sales of any sports franchise or organization regardless of the level of play or the structure of the league. It’s a great read for anyone in the attendance business or for students who hope to join that area of business. Veeck was a student of consumer behavior and purchasing decisions. Williams is professorial on the subject and provides valuable lessons that are easily understood and waiting to be applied.

    “Great by Choice” and “Good to Great” by Jim Collins
    My advice to aspiring job seekers and students hoping to enter the workforce, regardless of the type of business, is to not show up for an interview without having read these two essential books. The lessons and examples illustrating those lessons are some of the best case studies ever put in print. They are well-researched, with an easily understood theoretical base that translates easily into a series of best practices. “Great by Choice” focuses on uncertainty, chaos and luck — three factors that unfortunately seem as though they are going to be part of our everyday lives from now on because of the global economy and culture that affects what we do on a daily basis. Great leaders in 2012 and beyond must be more disciplined, much more empirical and paranoid about what might happen if they are not continually striving for greatness. According to Collins, innovation must be blended with creativity and discipline to achieve greatness.

    Each year, I ask my son Dan, who joins Google this month after stints with the Martin Agency, Apple, Wieden & Kennedy, and Crispin, Porter & Bogusky, for his recommended reads. This year, he suggested two books that are on my list of books to read:

      “Outside In: The Power of Putting Customers at the Center of Your Business” by Harley Manning and Kerry Bodine
    It focuses on the importance of the customer experience and how that experience can be the key to financial growth, particularly in a challenging economy.

    “Insanely Simple: The Obsession that Drives Apple’s Success” by Ken Segall
    The former Apple creative director, who worked closely with the late Steve Jobs and is credited for the iconic iMac name, focuses on simplicity as the core value that permeates every level of Apple and separates it from other companies.

    Wishing all of my readers a happy holiday season and a prosperous 2013.



    Bill Sutton (wsutton1@usf.edu) is the founding director of the sport and entertainment business management MBA at the University of South Florida, and principal of Bill Sutton & Associates. Follow him on Twitter @Sutton_Impact.


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