SBJ/Nov. 4-10, 2013/Opinion

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  • How to spot, benefit from next disruptive innovation in sports

    Here’s the scenario: You’re stuck in an airport, and out of sheer boredom you wander into the concourse bookstore to consider a reading purchase. Suddenly, you notice an abundance of business books related to technology’s impact on business, management and leadership. Logical, right?

    But maybe that’s just the beginning. Maybe you’re supposed to be wondering about the process of disruptive technology in sports. Are you ready for the pending convergence of television, Internet, radio and voice into one device? Are you considering what impending development might next change the dynamics of your sport, like aero lightweight frames in cycling? What about forecasting those unexpected new markets, like the thousands now competing in Warrior, Spartan, Tough Mudder and, our new favorite, “zombie” runs?

    Our attention was piqued about a year ago in Australia. It started with a line of research with two academic colleagues (Ann Pegoraro of Laurentian University’s School of Sports Administration and Nadège Levallet at Queen’s University’s School of Business) on “disruptive innovation.” By definition, that phrase includes any change or evolution that has more than an expected change on the industry. From a scholarly standpoint, we are seeking to model these innovations and then try to arm practitioners with a framework by which to forecast their arrival and navigate their reality.

    That sounds attractive, but practically, it’s tricky. Things that are disruptive often are resisted, and in the following examples you may see what really happens when disruption occurs.

    Events like the Tough Mudder races created a whole new market for endurance sports.
    Photo by: GETTY IMAGES
    If we go back in time, we can talk about athletic concepts like the development of titanium drivers in golf or curved sticks in ice hockey. These were product innovations that changed the game. But let’s look at how the game was managed. What did Danny Biasone’s 24-second clock do to professional basketball? How did Title IX change the dynamics of the NCAA? How did Billy Beane’s “Moneyball” approach influence the data-mining revolution in team sports?

    There are others we could cite, such as the American League adding a designated hitter rule or various leagues instituting salary caps, granting free agency or establishing player drafts to foster or ensure league parity. We could go down the safety route as well and talk about devices like pop-up vents on race cars (to keep them from flying into the crowd) or the NHL’s recent mandate to include visors as mandatory wear.

    At the venue level, we could discuss personal seat licenses, the creation of luxury boxes at stadiums or the advent of electronic tickets to replace paper ducats.

    We could go on, as you could, with examples that were very disruptive or were just a logical progression of technology that was expected or overdue. Indeed, the list in this run of examples would be almost endless since sports has required numerous innovations to keep games and races safe, exciting, and sustainable.

    But here’s a key thought for you: In the technology world, discussions on innovation and disruption are as regular as nightly scores and player updates. That means the key in this discussion is helping owners, management and sports marketers spot disruptive opportunities before they arrive and then help them to adapt or make them happen. After that, someone, usually a commissioner or a series operator, needs to deal with them.

    This leads to a series of questions:
    n Have you heard about material printing, where scientists are now able to print golf clubs, running shoes and other sports equipment on demand? The potential to disrupt the entire manufacturing process is already there. It may be many years away or perhaps is already racing at us.

    Are you regularly scanning blogs and industry reports for new developments?

    Are you staying in touch with that wise old professor of yours to see what he or she is observing?

    Do you really understand what the process of disruptive change is and how much more to expect in the future?

    We’re early in the research process, but two steps are critical. First, practitioners in club management, marketing agencies and corporate sponsors all need human resources at their organizations who are in the know and constantly watching for disruptive clues as they occur. This means these “forecasters” are researching their industry (or segment) and all the elements that could disrupt it. More than likely, these folks are doing Web research, following scientific journals, attending key conferences and informing their colleagues that something unusual is happening.
    For example, in 1989, if cyclist Laurent Fignon had employed a coach or adviser who understood aerodynamics and new equipment, he could have adopted the new technology like Greg LeMond did and, in turn, possibly have captured his third Tour de France (as opposed to finishing second).

    Second, someone at the organization has to respond when the alarm is sounded and include these potential disruptions in the annual planning process. This, we know, is easier said than done. But look at Silicon Valley and tech startups: They deal with this hourly.

    We think this is an annual consideration (or should be) and that numerous agents inside the organization need to be ready with resources in place. That’s easy to suggest when you are camped out in the ivory tower as we are, or pushing others in the communal think tank. But the rate of change, particularly in technology, is quicker than you think. Logically, it must be almost as fast in sports since our industry relies on technology to keep the fans and consumers buying our respective products and services.

    Remember: Evolution rewards those who adapt the fastest and most efficiently.

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

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  • Cartoon: Daydreaming

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  • Anniversary preview: How SBD gained its foothold

    For months, we’ve been going through files and archive material as we prepare to celebrate dual anniversaries — SportsBusiness Daily’s 20 years of publishing and SportsBusiness Journal’s 15 years. It’s been a lot of fun to reconnect with former colleagues and reminisce about the fun, and challenges, of a startup.

    In September, we brought together in our New York office the original band of SportsBusiness Daily executives for a morning discussion that looked at the idea behind The Daily and the early days of the publication. I led a discussion with Jeffrey Pollack (founder), Steve Bilafer (editor-in-chief), Chuck Todd (assistant editor) and David Abrutyn (director of marketing), as we talked about those early days of starting The Daily in an old Victorian house in Falls Church, Va. In going through the transcript, there were two specific areas that stood out to me about the editorial mission and vision of The Daily that I wanted to excerpt in a preview of the discussion that will run in our anniversary issue, which hits next month.

    First, Pollack discussed his idea and vision for The Daily. “I am 28 years old, and [former partner Doug Bailey] and I decided in 1993 that we would go and figure this out,” he said, sitting in a 14th floor conference room along Sixth Avenue in New York on Sept. 11. “People immediately started telling me [SportsBusiness Daily] would never work, that there wasn’t enough news about the business of sports to fill a daily trade publication. If there was enough news to fill a daily publication, no more than 100 people would ever have an interest in reading it. And of those 100, no one would ever pay for it. I just believed that was wrong. … The intention was not to do a lot of original, or really any, reporting, but to sift through everything that was being written or being said each day about the business of sports and curate that for a business audience. And one hypothesis was that every major paper in the United States every day had at least one article in some section, whether it was business, sports, entertainment, lifestyle, that was related to the business of sports. And if we could just bring that together … it would be a great format.”

    We launched The Daily in early fall of 1994. I had joined the publication that August, and we were developing prototype issues when MLB players had walked out on strike on Aug. 12. So we found ourselves right in the middle of one of the biggest sports business stories in memory. But that was not all: There was Fox getting into the NFL and NHL, and the NHL on the brink of a 104-day lockout that would delay the start of its season.

    Bilafer talked about the fortuitous timing and how this rush of off-the-field business stories was perfectly suited to aggregation in the fall of 1994. “Beat writers hated covering [business issues],” he said. “That’s where our editorial model really fit with the stories. We were able to look across the markets every day, and were able to find out, ‘OK, which writers get it, which men or women are really covering this story the right way?’ And then we were able to highlight that coverage and lift that up and better inform our readership. We were looking at the whole picture and we’re serving this highly intelligent, highly professional readership with, ‘This is what you need to know today. This is what you need to be reading. Forget about these 10 people because they’re just pumping out nothing, but this guy is out ahead of it or this is an interesting angle.’ And we were able to pull these things out for the readers. We were able to synthesize the news and give people in one bite, ‘Here is what you need to know today on this big story or here is what we’re seeing across markets.’”

    It was a fantastic morning, as we spent nearly three hours looking back and sharing memories. We’ll offer plenty more from this discussion in our special anniversary issue, which you’ll receive on Dec. 9.

    > ON CAMPUS: I always enjoy being around students of sports management programs, and it was great to watch Murray Cohn, the NBA’s vice president of team ticket sales, open the 10th Sports Management Student Career Conference at Robert Morris University just outside of Pittsburgh. On a crisp, fall Friday morning, about 200 students from various programs attended the daylong seminar to pick up career development advice and develop goals for expanding their network. Cohn is an alum of Robert Morris’ Sports Management School of Business, and he opened the day with an energetic and impassioned session called “Are You Ready For This?” where he discussed the interview process, goal-setting and accomplishment. Last year, Cohn said he placed a record of 23 students from the RMU event with NBA teams — and placed 217 people in total — and he outlined many of the success stories of young, talented executives who have landed full-time sales roles within the NBA team landscape.

    He also talked about the interview process and warned students to be careful of how they use personal social media pages, as organizations will actively review those profiles in their candidate review process. He also stressed that students must work on how they can “package” themselves through their résumé or in person. He encouraged them to provide examples that demonstrate what they can do for an organization and the impact of what they have accomplished in previous positions, detailing specific metrics.

    Cohn also touched on some of the more basic but often overlooked aspects: have prepared questions (it’s amazing to me how often job candidates don’t come with questions about a position or organization); the importance of dressing to impress; and the power of the follow-up thank-you. He offered his highlights of things not to do in the interview:

    “Don’t say, ‘I just want to get my foot in the door’” (shows lack of focus and commitment).

    “Don’t start a sentence with ‘Can I be honest with you?’”

    “Don’t say you want to sell when you don’t.”

    What Cohn looks for is positivity, work ethic, leadership and integrity. He left students with the theme that “good is the enemy of great.” All in all, a good, motivational message for these students.

    Mailynh Vu, Cleveland Indians manager of recruitment who also addressed the group, said that for every full-time position open at the club that is publicly listed, she receives more than 400 résumés. She also stressed the power of using LinkedIn in one’s job search, as well as the benefit to unsuccessful job candidates who follow up with her regarding their specific search within the organization. “Those who follow up with me, and ask me specifically why they weren’t selected to move forward in the process, I find time for,” she said. “I can spend time with them and give them pointers and walk them through the process and our thinking about their applications.”

    > FROM THE HOME OFFICE: A few things that we’ve been working on in the newsroom: We’ve started doing SBJ/SBD editorial podcasts with greater frequency — recently we’ve had NFL writer Daniel Kaplan talk about how his interview with Cowboys owner Jerry Jones came about and some of the highlights from his trip to Dallas; media writer John Ourand discussed the likelihood of the NFL going to market with a new eight-game TV package and potential bidders; and Olympics writer Tripp Mickle and Assistant Managing Editor Tom Stinson looked at some of the preparation issues surrounding the Sochi Winter Games. You can access all of our podcasts, as well as other newsroom insights, on our “On The Ground” newsroom blog, accessible at SportsBusinessDaily.com. … I finally advanced into the modern era of cell technology by upgrading from a 6-year-old HTC Touch Pro 2 (that served me very well) to an iPhone 5s. Some of this was driven by our continued efforts to provide mobile content from our publications and conferences. If you haven’t downloaded our iOS app, please do, as it’s certainly an enhanced reader experience from the mobile site, especially for the read-on-the-fly-as-you-go SBD. We will soon introduce an upgraded app that will feature more user-friendly features, including downloading, saving and sharing issues and accessing 20 years of archived information. … Finally, our digital database Resource Guide Live turns the calendar on its fourth month. If you haven’t checked out our new product, just hit the tab “Resource Guide Live” on our home page and request a demonstration. A full real-time online reference tool with executive lists, emails, phone numbers and addresses, as well as updated data on corporate sponsor partnerships, attendance and media deals and other data, I’m using this resource every day, nearly as much as I’m on Google. Check it out — you’ll be glad you did.

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

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  • Three alternatives are proving successful for team ticket sales

    Selling and buying have always existed in one form or another. As society has developed, and as technology has evolved and influenced everything that we do, we have always searched for the next best way to reach our customers and sell more effectively. While telemarketing is still alive and effective, it needs to be augmented by other channels to effectively maximize ticket sales.

    In writing this column, I reached out to Murray Cohn, vice president of team ticket sales with the NBA, who is charged with assisting teams in their sales campaigns. The NBA has long been at the forefront of creatively finding new channels to drive ticket sales. Here are three examples Cohn shared that can help teams and leagues improve their sales results.

    Costco

    Did you know that Costco is the seventh-largest retailer in the world with 638 warehouses, which includes all international locations? There are more than 70 million member cardholders, and 94 percent of them own their own homes. Costco features a wide variety of vouchers, tickets, gift cards for restaurants, resorts, sporting events, movies, spas, local attractions and more in Costco warehouses and online at Costco.com
    Gretchen Kim, Costco’s wholesale nonfoods ticket and gift card buyer, said that the retailer has partnered with 21 NBA teams to offer ticket and voucher programs for Costco members at a discount.

    Partnering with Costco provides the NBA teams with a national brick-and-mortar retail program that complements its online relationships with Ticketmaster and other online vendors, which is essential when trying to attract new buyers and expand the fan base through sampling. As we all know, sampling is most likely to occur when a customer perceives the opportunity to try something new as an affordable option.

    Selling on-site

    Since many companies have initiated nonsolicitation email policies, one alternative is going to the company or organization and selling on-site. The Cleveland Cavaliers have had tremendous success in this area. “Selling on-site is such a powerful tool for us. It allows us to get in front of unique buyers that otherwise we wouldn’t be able to,” said Mitch Ried, the Cavaliers’ senior director of business development. “The companies we work with love this as well because it is a great added benefit for their employees when so many other benefits are getting cut.”

    The Atlanta Hawks have also made this a key part of their group business plan, said Eric Platt, senior manager of group sales. “From our corporate partners to conventions, we have found these opportunities imperative to hitting our group sales goals. The item we’ve found most important is [that] our contact with each targeted group must clearly communicate what our offer is and when we will be there. Once we’re set up, we liven up the atmosphere by raffling off autographed items and bring our mascot and cheerleaders,” he said. “At one convention event alone we did $50,000 in new business.”

    GovX.com

    Many teams and entertainment venues have wanted to offer continuing discount programs to military members and first responders. The problem has been verifying the person’s right to purchase; the process can be embarrassing, and even offensive in some cases. San Diego-based GovX has provided an online solution to that problem by providing a free registration process for active and retired veterans and reserves and first responders. Tony Farwell, founder and president of GovX, said that in addition to providing discounts, “We have joined with our team partners to donate close to 20,000 NBA tickets to military service members, first responders and their families during the NBA’s Military Appreciation Month in November” and throughout the season.

    The Spurs use the GovX platform to improve ticket offerings to local members of the military.
    Photo by: NBAE / GETTY IMAGES
    Cohn said the program works best when a team assigns a group sales representative to GovX’s “Boots on the Ground” program to work with national partners to drive more sales. GovX is partnering with nearly 20 NBA teams “who have stepped up in a meaningful way to thank and honor those who protect and serve our country and communities.”

    Frank Miceli, senior vice president of sales and franchise business for Spurs Sports & Entertainment, said the club believes that GovX can help deepen its relationships with the local military, government and first responder personnel. “Ultimately, we believe that the increased security and verification process that the GovX platform provides will allow us to enhance both the volume and quality of our exclusive ticket offerings to our ‘Military City, U.S.A.’ community,” he said. “Obviously, our goal is to increase ticket sales but, more importantly, we want to be able to do that in a way that provides a maximum, exclusive benefit to our military and government family.”

    These ideas can certainly add strength to every team’s efforts to diversify their sales process by connecting with new demographics, providing enhanced benefits through local business partners and offering secure online discounts to military and first responders.

    And for all of you that served, have a happy Veterans Day and thank you for your service.

    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_ImpactU.

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