SBJ/Aug. 25-31, 2014/Opinion

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  • Cartoon: Little League, Big Legacy

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  • The dawn of the Rob Manfred era

    What will the Rob Manfred Doctrine on the future of MLB look like? I hope Manfred becomes a change agent, because while MLB has made major changes over the years, there’s a growing sense that more innovation is needed — and quickly. 

    Manfred clearly admires his mentor, Bud Selig, saying after he was elected, “I have big shoes to fill,” and that he hopes to add to Selig’s “great legacy.” 

    That’s a noble goal. Selig is known for his deliberate, consensus-style decision-making that can take time to parse out. Will Manfred follow that tact? Should he? He is an incredibly smart and accomplished executive who understands the game. Look at the strong and loyal support he has from long-tenured owners. Dodgers President Stan Kasten’s recent remark summed up his talent: “He’s as bright a person as you’ll ever find, intellectually. As great a passion for this sport as anyone you’ll ever meet, and a mastery of details involving absolutely every facet of our business — legal, business, on-field — so he’s a wonderful choice.”  

    Separating himself from predecessor Bud Selig and winning over the owners who supported other candidates are just two challenges Rob Manfred will face as MLB commissioner.
    Photo by: AP IMAGES

    I believe Manfred should be a change agent because MLB must evolve. Baseball’s a great game, with strategy, athleticism, stars, history and global appeal. But all businesses need to change and break from the traditional mentality, the traditional way. All sports must be thinking about what the consumer wants, because the consumer is changing. That’s the exciting opportunity Manfred has been handed, and so here’s what I’ll be watching as Manfred charts his path for MLB:

    HOW WILL MANFRED SEPARATE HIMSELF FROM SELIG? Adam Silver was able to use the Donald Sterling controversy to quickly establish himself and to differentiate his leadership style from that of his longtime mentor, David Stern. Silver acted decisively in making a favorable impression in his introduction to the American public. How will Manfred be able to set himself apart from Selig and show that he is his own man, with his own vision and belief system, while setting his own course? 

    Manfred was criticized by some for not outlining a strategic plan in his introductory press conference; he said he didn’t feel it was the appropriate time for such statements. But over the next few months, he’ll have to give an “inaugural address” outlining his priorities and must deliver specific and ambitious goals as he moves ahead with his agenda.

    THE RECONCILIATION: It wasn’t clear what type of last-minute political trading, if any, took place before the final votes that put Manfred over the top, but there were, and likely still are, a certain number of owners he will have to win over. There was a real focus from this group of owners on growing the game at the grass roots, national and global levels, and in making progressive and dramatic changes to broaden the game’s appeal and fan base. Their concern wasn’t so much about legal issues facing the league but instead about big-picture problem-solving as the world changes demographically, technologically, socially, and in media consumption and information flow. What can Manfred learn from the owners who supported other candidates and can he get those doubters on board early so he can continue Selig’s consensus approach — for better or worse?

    TIME IS NOT ON HIS SIDE: I haven’t watched a full MLB game all season. I’ll check my phone often for updates, but generally, the game is on in the background, or I’ll watch just a few innings. There are a variety of reasons for that, the Red Sox’s disastrously boring season being the main one. But even though I’m not in MLB’s target demo, if a 45-year-old fan feels the game is too sluggish, how do we expect today’s younger generation to engage with it? 

    My “sounding board” on issues is my former colleague and founding editor of SportsBusiness Daily, Steve Bilafer. Steve lives in Boston, is a huge baseball fan and is a parent raising sports enthusiasts. I asked him what he would advise Manfred. “The No. 1 issue, absolutely, positively, is he has to do something about pace and length of game,” he told me. “We always have the Red Sox game on, and I ask my 16-year-old son why he doesn’t watch baseball with me. He replies with two words: ‘Too slow.’ There is no earthly reason for Red Sox-Yankees games to go as long as they do. This is not a new versus traditional fan argument. Watch old games in 1970s and ’80s: They cooked along. Batters stayed in the box; pitchers got the ball and threw it. It’s in the rules. Umpires just have to be told it’s a priority. It’s the critical issue for the next generation.”

    It was refreshing to hear all the owners stress pace and length of games during the recent commissioner vote. Hallelujah. Read Tom Werner’s telling quote to The Boston Globe: “Too many people are leaving games in the sixth and seventh innings because they can’t watch 3 1/2-hour games, so they’re leaving the game at the point where the game should be getting exciting. You wouldn’t make a 3 1/2-hour movie. The NFL makes changes almost on an annual basis. They’re considering making the extra point from 35 yards.”  

    A couple of things stood out there: MLB doesn’t often point to a rival league as a leader in new ideas, so Werner’s comparison to the NFL will rankle colleagues. The fact is that for the 2013 season the average NFL game was 3:11, and while MLB’s average game time is 3:04, the perception is that MLB is much slower and plodding. 

    Werner went on to say, “I respect tradition, but I don’t revere it.” This was the exact message that a top entertainment executive stressed at MLB’s Industry Meetings last November before an audience of about 800 team and league personnel. He criticized the pace of the game while imploring a need for innovation all while balancing tradition. There are very smart ideas that have been discussed to address this. Many should be tested; others are quick and easy fixes. But little has been done that I can see to speed up the game. Manfred must put action to all the words.

    MAKE IT LIVE AND MORE ABOUT THE GAME: I talked with a top brand marketer about the state of MLB last week, and we both discussed its positives from a sponsorship standpoint: duration of season, time of year, multiple touch points, player accessibility. But he had just come from visiting four ballparks over a week with his son. “The ballpark experience is still lacking,” he told me. “Show more replays on the main boards! Why should someone in a suite or concession stand see a TV replay, but my son and I couldn’t see a replay of every great play while we sat in our seats? It drives me crazy: A great play just happened, and we don’t get to see it? Why? Because the other team made it?” I asked about the increase of replays due to the new replay system and he said, “They will show what they deem to be a controversial replay but they don’t show all the great plays. Show all the great plays!” 

    AN OUTSIDE VOICE: Finally, I reached out to former John Hancock Financial Services CEO David D’Alessandro, who was a major MLB sponsor when he led that brand a decade ago. He’s a baseball guy, a former limited partner in the Red Sox, so he knows the game and speaks from experience. He outlined what Manfred’s top initiatives should be to me last week.

    “Rob faces a legacy issue. He cannot afford to be a maintenance manager and just marginally evolve the game.”

    David D’Alessandro

    Former CEO, John Hancock Financial Services


    Photo by: STUART GARFIELD

    “I don’t think labor negotiations in 2016 or steroids are in his top tier. They are tactics, and while important, Manfred will handle them. I see the top priorities as interrelated. Rob faces a legacy issue. He cannot afford to be a maintenance manager and just marginally evolve the game. Rob is a very capable guy and understands the bigger picture. With the NBA and NFL gaining mind share and fan share at the expense of baseball, there is a real strategic risk. That risk is America’s pastime may become America’s past.

    “Losing the under-30 demographic is very dangerous. Advertisers pay a great premium here, and within Rob’s probable 15- to 20-year reign, these people will become 50! If nothing dramatic has happened by then, baseball will truly be in demise as the majority of the population will find alternative sports to watch.

    “He must build the business and do so by dramatically changing the game to not only be shorter in time, but more exciting for the shorter attention spans of the technology-driven psyches of not only the younger fans, but even the over 30 and 40 crowd. Form a group to push the envelope on:

    • Less innings

    • Less time between pitches and batter’s box time

    • Less games. There is far too much baseball product. When football season ends, many fans want more. When baseball season ends, people are relieved.

    • Shorten every aspect possible

    “While attempts have been made, baseball is glacial in its changes. The traditionalists of the game have far too much sway here, and any change is heresy. 

    “Change how the game is seen, heard and perceived, not only on television, but on streaming and in ballparks. Form a group to start making it exciting to watch so many aspects of the game. Use MIT, Caltech and Silicon Valley resources to measure bat speed, bat contact, speed of runners and accuracy of throws. Use computer chips in equipment to measure athlete ability and the physics of the game. Make the game come alive with real data and insight.

    “Get rid of the droning announcers with stories about the steak they had last night, and arm younger savvy announcers with data on athlete abilities. Give older people a John Madden experience; give younger ones a new excitement.

    “Specifically, convince your new 30 bosses and their staffs that the road to increased value and regaining market share is by increasing the fan base in the degenerating demographic. Then the economic model, like in football, is based more on a very large and growing fan base. Nothing great will happen for baseball with small incremental changes. Status quo must be shaken up. Make the great game exciting again, increase the fan base, bring the game into the 21st century. Now, that’s a legacy.”

    There is a constant theme emerging here, and we will soon see if Manfred becomes the change agent that so many believe baseball needs.

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

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  • How major sporting events can take guesswork out of costs

    Most major sporting events have become extremely expensive, leading the event owners to seek ways to control the skyrocketing cost of staging these games. So, if you were an event owner and you learned it was possible to save your organization and the cities that will organize your events a substantial amount of money without sacrificing the quality of the event, what would you say?  

    Olympic Games costs have spiraled out of control in the past 12 to 15 years, jumping from $2 billion to $6 billion (1996-2002) to $10 billion to $18 billion (2004-2012) and well beyond in the case of Beijing in 2008 (more than $40 billion) and Sochi this year (more than $50 billion). Other major sporting events like the Pan Am Games, Asian Games and Summer Universiade, which cost in the $150 million to $250 million range just over a decade ago, cost recent organizers four to 12 times more.  

    Games inflation is out of control, and one undeniably negative impact is that many viable potential Games hosts are dropping out of bid races citing high costs as a primary reason. Even cities awarded bids are reneging.  

    A lack of credible information about resources, such as parking space, actually used at an event can lead to overplanning by event organizers.
    Photo by: ALAN SHAW

    So, what can event owners do to help ensure their brand stays healthy, that plenty of viable bid cities are in the pipeline, and that high costs don’t damage or even destroy their franchise? 

    Even though event owners have little ability to control costs when their event is used for political, economic or image reasons, they do have control over at least one practical way to reduce costs and remain healthy: improve and quality-assure the information that passes between organizers. 

    It took working on several major sporting events to make two important realizations:

    1. Future organizers face an unfathomable amount of guesswork, such as, How much do I need? When is it needed? Who will use it? 

    2. As a result, resources are significantly over-scoped for both larger cost drivers (e.g., space, equipment, people) and smaller line items (e.g., meals, training, signage). Organizers egregiously overplan, commonly adding multiple buffers to even worst-case scenario requirements.

    The root cause for all the guesswork and over-scoping is the lack of credible, accurate data/information passing between organizers. And, squarely at the heart of the issue is the fact that rarely does anyone capture, let alone transfer, usage data, which is what future organizers need most to plan well. That means, not what space was planned/allocated, but what space was actually used; not what vehicles were in service, but which were actually used. The context or rationale is also crucial, but it all starts with usage. Two examples:

    1. One organizer passes on to the next that it provided a 145-space permit parking lot at a given venue for a given client (e.g., broadcaster). What might not get passed on is that, during peak times on the days the venue operated, no more than 20 vehicles used the lot.  

    2. An organizer may pass on that it planned 20,000 volunteers. What may not get passed on is that 5,000 of these volunteers were merely cheering competitors from the stands, 2,500 didn’t accept their assignments, and 1,500 never collected a uniform/badge — meaning that 11,000 volunteers (45 percent fewer than planned) were actually used. 

    Such examples are almost endless and, unfortunately, the norm with major sporting events.  

    It takes some work to get the correct data, but usage is reality and, if properly contextualized, is one of the most powerful tools event owners have at their disposal to assist future organizers in controlling costs.

    Over the past few years, a few event owners (e.g., the International Olympic Committee) have wisely invested in improving knowledge transfer between organizers. But many event owners have done little, and even those with more robust programs have room for improvement. There has been more of a focus on the process (cataloging/indexing information to create a knowledge library) than the content or quality of information collected. And, with the exception of a couple of recent projects that uncovered major event usage reality, collection of actual usage has been woefully absent. Information transfer is growing, but information quality is lacking.

    To improve the current situation, to reduce guesswork, overscoping and waste, here are a few practical strategies for event owners to consider:

    1. Agree as the event franchisor and as the organization ultimately responsible for long-term success to take the responsibility to improve the transfer of information between organizers.

    2. For each event, target, capture, filter and validate specific data/information, especially usage data for cost-driving resources. 

    3. Don’t underestimate the importance of using experts with relevant experience to assure knowledge content: to determine what data/info to target/filter, to validate and contextualize it, and to ensure organizers are applying the improved knowledge to more accurately forecast requirements.

    4. Provide future organizers with a more comprehensive games-time learning experience, enhancing observer programs with shadowing opportunities and expert-facilitated discussions. 

    5. Ensure benchmarks are based on usage from prior events.

    6. Critically, don’t assume current organizers can or will provide adequate and accurate information.

    The real beauty of employing these strategies is that the significant savings realized are invisible to client groups, such as athletes and media. The event will be just as amazing — there is no downside to event quality — but, the impact of the savings will be visible. One example: more legacy funding, but the possibilities really are endless. Less truly is more. 

    These ideas alone won’t resolve all the cost-related issues facing event owners, but they are a practical way to dramatically reduce guesswork ensuring future organizers are able to make better decisions, simplify operations and reduce costs … and to ensure the event owner franchise remains healthy.

    Alan Shaw (ashaw@epic-usa.com) is managing director of Epic, an Atlanta-based consultancy providing strategic planning/operations services for major sporting events.

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  • U.S. soccer growth hinges on player development

    Is soccer as a business proposition in the U.S. a stock I’m buying? (SportsBusiness Journal, Aug. 11-17)

    I think your question needs to be answered in two parts. Top-flight international soccer friendlies are a great investment in the U.S. As some of the people interviewed for your article said, Americans love excellence. Watching the top players in the world compete in the World Cup or for their club teams is a treat that people are willing to pay for and will continue to pay for. To answer your question: I’m buying this stock.

    The more difficult question is in predicting the success of Major League Soccer. The single-entity structure of MLS makes investing in U.S. soccer a huge potential growth stock (to stick with your analogy). That being said, two things need to happen: 

    (1) MLS needs to stop signing 30- to 33-year-old foreign stars and start signing foreign top-level talent in their prime. Considering what the top players go for internationally, I doubt that MLS is willing to make that type of investment, especially since thoughts of the former NASL are always lingering in the collective memory of U.S. brass and owners. 

    (2) The U.S. needs to develop more technically sound domestic players (meaning players who can dribble, pass, shoot and “handle the rock” like their European and South American counterparts) who will eventually play in MLS and raise the level of the product. Current U.S. players are noticeably less technical than players in Europe or South America. The fundamentals of the sport are something that are learned over a long period of time. U.S. Soccer, the individual MLS clubs and the grassroots youth soccer apparatus need to make a concerted effort to focus on the development of the individual technical ability of each American youth player. 

    Many critics simply say our players are not as good because the top athletes in the U.S. play the other big four sports. I do not think so. Our U.S. players are subpar due to a failure of coaching in the U.S. Until the coaches become better educated and focused on developing each player’s technical ability, the U.S. will always be a second- or third-rate league, which Americans will not look on favorably.

    Current U.S. coaching icons are products of an era when soccer was extremely unpopular. Bruce Arena, Sigi Schmid, Bob Bradley are considered America’s top coaches. Sure, they have studied the tactics of the game and are capable enough managers; however, their grasp of the fundamentals is lacking, to no fault of their own possibly. Jason Kreis is a nice contrast. He is a generation younger, played the game growing up — played in college, played for the U.S. and had a very good MLS career. He is a much more capable coach than our current American coaching icons. Even still, Kreis is a transitional product, growing up in the old U.S. soccer landscape and being good enough to excel professionally. We will have to wait for the first truly professional players to matriculate through their careers before we see U.S. coaches on the level of those in Europe/South America who can develop our young talent appropriately.

    Short answer: I’d monitor this stock to see how they handle domestic player development.

    Evan Whitfield
    Chicago

    Whitfield played soccer at Duke University, professionally for the Chicago Fire and Real Salt Lake (1999-2005), and for the U.S. Olympic team in 2000. He practices law at Schiller Ducanto & Fleck in Chicago.

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