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Volume 23 No. 23

Opinion

About 175 people descended on Pelican Hills resort in Newport Beach, Calif., for our Thought Leaders Retreat this month, which offered a mix of speakers from outside sports, group problem solving, outdoor social activities and networking. The event is off the record, but many people ask me to share the themes and topics, as they offer a glimpse into some of the issues that many of us grapple with on a daily basis. Here are some of my takeaways:

New York Times bestselling author Josh Linkner kicked things off and offered his five mindsets of innovative leaders. He discussed the perils of companies that become intoxicated with their own success and fail to adapt and innovate. He stressed problem solving, defying traditions, breaking rules and getting back up from failure. He also placed a big emphasis on ideation — ideas are contagious, and if you get a group to think on an idea, it becomes six ideas.

A session on organizational performance and leadership saw two veteran HR specialists talk about giving employees inspiration while drilling down into work expectations of the millennial generation. One comment struck a number of attendees when a speaker praised millennials for their approach: “They will save the world and they will push companies. They are also the most organized generation that we’ve ever seen.” This is a generation with a “live at work” mindset in that their expectations for work are the same as at home — good food, support, comfort and even the ability to be with their pets. Those comments drew spirited debate among a group I chatted with later, with one adding, “Why is it we are adapting to them rather than them learning from us?” This discussion also stressed the traits of a good leader as empathy and patience, and raised debate on whether empathy can be learned and if you can even teach emotional intelligence.

The Kaleidoscope Group CEO Doug Harris offered a well-received address that discussed leaders behaving in a consciously inclusive way and outlined how to think, believe and demonstrate inclusive behavior in all situations. His takeaways: Demonstrate empathy, communicate authentically, embrace differences, manage privilege and act courageously.

Over the years, a speaker that has repeatedly been recommended to us is UNICEF CEO Caryl Stern, and this year we were finally able to fit in her schedule. She offered a moving account of her travels around the world, the hardships and heartbreak she’s witnessed, and encouraged attendees to focus on helping children in need.

Sebastian Coe still looks like he could run a record time, and he flew from England to talk about his career as a competitive athlete, politician and leader who brought the 2012 Summer Games to London. He talked about the importance of communication and transparent decision-making by sports organizations, and how the real focus for any Olympic Games organization should be on the local city and delivering a successful and lasting legacy for the host community. He also had thoughtful points of view on the political issues surrounding the 1980 Moscow Games and the nexus between sports and politics. 

Another athlete and leader who showcased his passion and perspective was Paul Rabil, who talked about the challenges of getting his Premier Lacrosse League up and running in eight months. He offered an insightful mix on how leagues and athletes can maximize traditional and social media to grow a fan base. He was refreshingly honest in the heavy lift around the efforts of starting a new league, and while smiling, there was a touch of weariness when he acknowledged, “It’s just challenging every day.”

Finally, there were two full group discussions. There was a focus on day-to-day drivers of sports business, from the viability and measurement of the various OTT platforms to the future economic models and rights fees for properties, to concerns about the future ticket model and the eventual unbundling of the season ticket, an economic bedrock to sports. There was also an eye on the macro issues, from the overall growth of sports to the disrupters in the business and new technologies affecting every aspect of the food chain — and the clear belief that if you fight technology and innovation, you will lose. There was also the concern about the overwhelming demand on consumers’ two most scarce and precious resources — time and money — and how that will affect the sports economy. But overall, there was a bullish feeling about the industry, especially among the entrepreneurs who stated there has never been a better time or more opportunity to be in sports.   

Plenty of ideas and points of view that make you think, and it’s always among the most enlightening and enjoyable two days we produce all year.

 

First Look podcast, with issues Abe is watching this week, at the 30:00 mark:

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

Professional sports leagues fail often and consistently. Recently, another attempt at a major American football league in the United States went belly up. This time the Alliance of American Football (AAF) didn’t even make it through its first season before folding.

Big announcement, big dollars, big splash, speedy decline, gone. This is far from the first story of its kind and won’t be the last.

But that’s not the league that failed earlier this year that you should know more about. That one died rather slowly north of the U.S. border. With little fanfare, the Canadian Women’s Hockey League (CWHL) expired on March 31.  

The official press release included this phrase: “Unfortunately, while the on-ice hockey is exceptional, the business model has proven to be economically unsustainable.” This pithy remark followed 12 years of successful operations as a not-for-profit league.

Gone, girls.

In late May, at the SponsorshipX Conference held in Toronto, a panel involving former CWHL player and Canadian Olympian Laura Stacey (who was also the CWHL’s director of strategy) recalled the final days of the league. She noted that the CWHL’s demise led to players coming together to improve the business value of women’s hockey. 

This puts the focus where it needs to be more often: on women’s leagues. With the exception of the WNBA in team sports and the individual sports of golf and tennis, women’s professional sports continue to struggle mightily. 

In Canada, where hockey dominates, we’ve seen multiple failed attempts at women’s pro hockey. The CWHL had been the most successful to date. Still, even that league didn’t work.

Which leads to one question: Why?

Well, research and analysis suggests a few things. First, women (largely) do not underpin women’s professional sports. The majority of fans are men. In the case of golf, for instance, roughly two-thirds of the LPGA’s fans are male (as reported by Sports Business Daily).  

Second, sponsorship and media revenue are necessary for long-term sustainability. In the case of the CWHL, brands were interested in associating with the league and its assets but not in making a significant financial investment. Similarly, the media coverage of the league was growing but not sufficiently to generate acceptable revenue.

Finally, leagues and their member clubs need to be aligned on collaborative revenue generation and on surviving.

Katrina Galas, who was assistant GM of the Toronto Furies, told us the level of transparency and collaboration from the CWHL to each team was insufficient, contributing to a business sustainability problem. 

“The league was seemingly stuck in phase one of a startup scenario,” she said, “and the teams were left to their own devices to market, grow and evolve their team in their respective markets. Unfortunately the league’s sponsorship outreach lacked team alignment and integration, which innately generates value and strengthens any proposal.”

Galas added: “In our 12 years, the league attracted top players from around the world, welcomed new fans and committed volunteers, brought in ambitious and talented team staff, grew ticket and merchandise sales and increased television viewership and social media engagement. In our team’s case, a self-financed livestreaming platform called FuriesTV provided our own play-by-play and color commentators for every home game with our team partner, SportsCanada.TV.”

Although some positive momentum on metrics was observed, the overall, club-based business model was not sustainable. The ownership supported it for 12 years but opted not to continue.

So what went wrong? 

When Galas looked back on her time with the Furies, she acknowledged positioning the team as an official pro team in the over-saturated Toronto sport market was a challenge. Her second point was the absence of a unified approach with “all team staff having a seat at the table, allowing for a true entrepreneurial team culture to enable and drive growth.” 

The secret solution? A partner league that is completely committed.

Need an analogy? What about the Australian rules football league AFL Women’s, which started with eight teams in 2017, is now at 10, and is projected to be at 14 clubs by 2020? Not by accident, the men’s AFL, with more than 40% female fans, is incubating the league during its critical startup phase.

Is it possible that Australia’s men’s leagues are more forward thinking than their North American counterparts? Is it feasible to suggest that women’s leagues (think the WNBA under the NBA umbrella) will work only if economies of scale involving men’s leagues are truly leveraged? 

It was not NHL Commissioner Gary Bettman’s first priority to save the CWHL, nor should it have been. But men’s sports leagues, including the NHL, cannot ignore their obligation to launch or fully support opportunities for women. Some organization — be it USA Hockey, Hockey Canada or the NHL — must acknowledge the reality that letting women’s pro hockey fail repeatedly is not good for ice hockey overall.  

Rick Burton is the David B. Falk Professor of Sport Management at Syracuse University and former commissioner of Australia’s National Basketball League. Norm O’Reilly is director of the International Institute for Sport Business & Leadership at the University of Guelph and partner consultant at T1.

Questions about OPED guidelines or letters to the editor? Email editor Jake Kyler at jkyler@sportsbusinessjournal.com

The sports industry has endured its fair share of crises in recent memory, with scandals rocking collegiate blue bloods like Michigan State and Ohio State; the Dallas Mavericks in the professional ranks; the national governing bodies for gymnastics and taekwondo; and apparel giants Nike and Under Armour.

But as problematic as the underlying conduct in each of those cases is, the most damaging mistakes often come in the aftermath of their revelation as the institutional actors charged with coordinating a response fail to see the consequences of their decisions. Indeed, these errors in management in those crucial moments after a scandal becomes known can compound crises’ legal and public relations impact. It took years and a criminal indictment for Penn State to finally grapple with football coach Jerry Sandusky’s abuse — and the legal and NCAA blowback reflected the extent of the cover-up. Likewise for USA Gymnastics: The governing body for one of the country’s most successful Olympic sports is still reeling after hundreds of victims exposed the organization’s repeated failure to address the known conduct of Larry Nassar. And at Michigan State, the healing process from Nassar’s abuse was frustrated by an interim leadership group that refused to fully cooperate with external investigators. Put simply, the response to the crisis is often more important than the crisis itself.

To avert these additional — and completely avoidable — consequences, below are some of the considerations and factors leaders in the sports industry should account for when formulating and executing a crisis response. 

Know your institutional limitations

A key threshold issue in responding to crises in sports is understanding whether the situation can be adequately handled “in-house,” or if external help is required. The latter is almost always the wisest option. First, legal departments in professional sports organizations and collegiate institutions are often small, meaning that in-house attorneys and staff may not have the bandwidth necessary to conduct a thorough investigation. Moreover, even if in-house legal departments can add a crisis investigation to their duties, whether they should is a thornier question. Facts are king in crisis management, and the best path to accurate and truthful information is for a neutral, unbiased and previously uninvolved party to do the fact finding. Finally, organizations also should determine whether they could benefit from legal and public relations cover, both of which third party investigators can provide, as they navigate through crises. All of this, of course, comes at a cost, which is also a crucial factor in deciding whether to engage an independent entity. The financial, legal, and goodwill costs of mishandling a crisis on the front-end can be significant, and sports organizations must weigh the initial investment in outside help against the potential consequences of going it alone.

Understand your unique exposure

When in crisis, sports organizations must recognize their various points of exposure and craft a response with these in mind. In most cases, the highest priority should be determining potential legal consequences and mitigating them to the greatest extent possible. But even if legal ramifications are safely off the table, there are other constituencies, including leagues/governing bodies, sponsors, players, and fans to consider. Leagues can and do exact heavy punishment for organizations implicated in scandals, and sponsors can as well if they sever ties en masse. Further, players and fans can become disillusioned with their teams when crises aren’t dealt with properly or in a timely fashion, spawning both financial and performance consequences. Harmonizing the oftentimes competing needs of these diverse constituencies is difficult, but a good crisis response accounts for each.

Prioritize legal, public relations goals

Related, good crisis management strikes the correct balance between legal and public relations objectives. But because the “right” balance will be different depending on the organization and the crisis, leaders must determine how much weight to give each risk. Thus, it may be that, in some situations, prioritizing transparency above all else is favorable because of its potential to preserve the organization’s reputational interests — even if doing so compromises its legal position. Though the current media climate strongly incentivizes a robust public relations response, reconciling legal and reputational interests must be done on a case-by-case basis. 

When help comes, don’t fight it

Importantly, if a third party entity is retained to investigate a crisis, they must be allowed to do their work. Stonewalling investigators makes little sense. It wastes time and money, frustrates the search for the truth (remember, facts are king), and creates the potential for even more PR blowback.

The debrief: Mitigating future risk

Finally, and whatever the crisis may have been, sports organizations should critically review their own compliance and response processes so that: A) crises are avoided and; B) if they occur, they are handled appropriately. It is this final step where a comprehensive report authored by a third-party law firm or investigative entity — which can see the entire situation from an unbiased, global perspective — is truly irreplaceable.

Ben O’Neil, a partner at Quinn Emanuel Urquhart & Sullivan LLP, counsels institutions faced with unique and unexpected challenges.

Questions about OPED submission guidelines or letters to the editor? Email editor Jake Kyler at jkyler@sportsbusinessjournal.com

Virginia’s title run also a top story for 2019

I enjoyed reading about the sports business stories that caught your interest halfway through 2019 (Forum, July 15-21 issue). I know it’s impossible to include everything, but as a UVA alum and diehard Tony Bennett fan, I was surprised their championship run failed to make your list.

I am blatantly biased, but I think when it comes time to teach my kids about redemption, I’ll be pointing them at UVA’s story rather than Tiger’s (and I root for Tiger, nothing against him at all). I just have so much admiration for how Tony Bennett led his student athletes through what was probably the most humiliating loss in the history of college sports. There were no excuses — just class, humility and resolve. 

To overcome that loss (and the ridicule, taunts and mocking at every away game, on social media, etc.) by turning around and winning the program’s first national championship the very next season — and without the five-star recruits and one-and-dones of Duke, Kentucky, and many other blue-blood programs), to me, that was the ultimate redemption story.

All while running a squeaky clean program devoid of the cheating and bribery and scandal that’s come to define college basketball. OK, disgruntled UVA fan rant over!

On a serious note, I love SBJ and I hope our paths cross in the near future.

Al Lucia
New York

 

Atkins remembered for her kindness and leadership

This letter is in response to the Forum column (“Marketing execs reflect on legacy of Kristi Atkins”) that appeared in our June 24-30 edition.

Thanks for the tribute to Kristi. When I was coming up the ISC ranks, Kristi was taking the ultimate risk of setting up her own shop with AIM. While I did a few deals with her, it was her grace and style I most appreciated. Most of the time we’d sit in a motor home and tell stories with her AIM girls laughing till our sides hurt, and then get on a golf cart and go tour the grounds laughing even more. Kristi was so genuine. Even when she’d call with tough news like a sponsor not renewing, she did it with such good style that had me admiring her leadership even more.

Her legacy is the people she inspired, connected with and showed by example that being kind is honorable leadership.

Rob Butcher
Swim Across America
Charlotte

Questions about OPED guidelines or letters to the editor? Email editor Jake Kyler at jkyler@sportsbusinessjournal.com