The Sports Business Advisor

Author Thomas Friedman, in his book The World is Flat: A Brief History of the Twenty-First Century, describes the increasing globalization of national economies. Gone are the days when American companies and employees work in entirely domestic markets free from the worry of global competition. The international playing field is now “flat,” where improvements in technology and transportation make it feasible for persons around the world to collaborate or compete on equal terms. Through the magic of the Internet, software engineers around the world may work together on a single programming project. And, when a customer calls a local company’s consumer call center, it’s as likely that he’ll be connected to Bangalore, India, as he is to Bangor, Maine.

But, the economy is not the only thing getting flatter.

Each day, in nearly every U.S. professional sports league, an executive, with “international” somewhere in his or her title, goes to work to plot a global strategy for this country’s sports. That’s why we see NBA games in China, the NFL in London’s Wembley Stadium, and MLB games in Tokyo. Even insular American sports, like NASCAR, are recruiting foreign athletes to improve their international appeal.

And, the globalization of sports is not merely an issue of American athletes playing their games aboard. Many of these athletes representing American sports abroad are not even American themselves. Over 70 players in the Major League Baseball were born in the Dominican Republic. In 2006, NBA team rosters featured a record 44 international players from 25 countries and territories. Even the host of “America’s Game,” the NFL, boasts players from three foreign countries.

Sports leagues know that audience size equates to dollars. With billions of potential fans living in India, China, or the countries of Europe, American sports are working hard to increase international audience share. American sports look to Formula One as the best model of a global sport. With drivers hailing from Europe, South America, and Asia, this historically-European sport derives most of its revenue from television broadcasts watched by hundreds of millions of international viewers. Now, mainstream American sports want their share of the world market.

What does this mean for athletes? Like most things in life, it’s a mixed bag. On the one hand, if American sports are in demand internationally, then an athlete’s services will be in greater demand too. And, if American sports leagues can increase global market share, while preserving their fan base at home, increasing revenues will make their way to the men and women who make their sports possible.

On the other hand, American athletes will face increasing competition for a place in their sport. Gone are the days when athletes had to only worry about competitors from other Division 1 schools. In a flattened world market for sports talent, an athlete must be faster, stronger, and smarter than ever before. It’s as if every national sports league has risen to the competitive caliber of the Olympics for every game.

As Olympics athletes know, it’s a world filled with hungry competitors training every day to eat your lunch. That’s why it’s important to make your business game as strong as possible: hone your communications skills, learn as much as you can about the business of your sport, and create a solid career plan. On a flat playing field filled with competitors from every country on earth, hard work, smarts, and preparation have never been more important.

Posted by Ken Ungar.

When you hear the names “Michael Vick,” “Marion Jones,” and “Floyd Landis,” what comes to mind? In 2006, you may have answered this question by saying “NFL’s ‘Superman’,” “the Olympic Gold Medalist,” and “the Tour de France Champion,” respectively. However, today, the answers might be “Dog Fighting,” “Steroids,” and “Doping.”

How quickly things change.

Is it me or do athlete behavior controversies seem to be appearing too regularly on newspaper front pages nationwide? And, no sport is immune. Every sport or team seems to have some crisis management team in high gear. These poor behavior incidents have run the gamut of consequences: from a slap on the wrist, to multi-game suspensions, to season-long suspensions, to forced retirements, and even criminal prosecutions.

As someone who works in and loves the sports industry, I’ve asked myself, “What’s going on here and what on earth can we do about it?”

Well, it starts with the relationship between athletes and fans, both young and old. To kids, athletes are role models and professionals to look up to. For adults, athletes serve as emotional icons to be admired and respected for their skill and talent. Why else would grown men and women walk around in jerseys bearing their favorite athlete’s name?

Professional sports is a business, and it comes with a brand promise. The brand is what the athlete stands for to the consumer (the fan); the promise is that the athlete’s behavior will stay true to the brand. When a hamburger advertised as “juicy” tastes like shoe leather, the brand promise is broken. Consumers react by staying away from the offending burger joint. Similarly, when an admired athlete acts like a menace, the fans react the same way as they do to the tasteless hamburger. In fact, according to a poll conducted by the Sports Business Journal and Turnkey Sports, forty-four percent of avid fans said poor athlete behavior would cause them to buy fewer tickets to team events.

It seems we not only have an issue of misbehavior, we have a brand problem in professional sports.

In the end, who are the real victims of this brand problem? Not the fans, because they’ll find a new role model (inside or, heaven forbid, outside of sports). Not the sports leagues and teams, because they can change their brand behavior by switching brands (i.e. firing the offending athlete). The real victims are the athletes themselves.

So, what should be done?

Many sports organizations go on the offensive and start a marketing/PR campaign to change the perception of athlete behavior. I’ve just seen one kick off in my hometown, as the Indiana Pacers rebuild an image tarnished by off-the-court player behavior. However, while these campaigns are appropriate responses, they have limited prospects for success. After all, if brands are behavior, trying to change the perception of misbehavior is a lot harder than simply behaving properly. PR campaigns assume that fans don’t know the difference between perception and reality. News-flash: they do.

So, again, what should be done?

First, athletes must take responsibility for their behavior and recognize that behavior has consequences, good or bad. If they’re not savvy enough to understand the social reasons for proper business behavior (and they are a business once they put the team uniform on), they should recognize the harm they’re doing to their own marketability. Pocket book issues get everyone’s attention. I’ve known many sports sponsorship managers in companies and ad agencies. And, I’m having a hard time imagining them justifying a relationship with a misbehaving athlete to their boss or their shareholders. It’s much easier to simply cut and run from the athlete.

Second, we should develop better support structures for athletes. Properly structured and funded career counseling, stress management, and substance abuse programs are a few examples. In certain teams and leagues, we are seeing more and more of these programs offered by player development personnel. This is a positive trend and should be encouraged throughout sports.

Third, there need to be greater sanctions levied by sponsors, teams, and leagues. Sponsorship morals clauses need to be tighter. Sanctions for misbehavior need to have sharper teeth to them. (It seems the NFL has already taken the lead in tightening its conduct policy.) And, there should be closer cooperation between players associations and leagues. After all, all sports business professionals are concerned with the commercial viability and success of professional sports and its athletes. If a few athletes can’t understand the connection between their behavior and commercial success, they have no place in a business which rewards them so handsomely.

Maybe someday soon, we’ll pick up the paper and find three athletes featured on the front page, whose brands are associated with talent, courage, and spirit, respectively. However, if the industry and its athletes don’t face up to our collective responsibilities to our customers, we’ll continue to experience a daily dose of bad news along with our morning coffee.

Posted by Ken Ungar