“Why is it when successful businessmen become involved in sport, they lose their heads?”
This was an observation shared with this writer by a very successful sports administrator, who came from outside of sport. Having worked for some extremely wealthy men he was ideally placed to make such an observation.
One of the things that sport has had an increasing habit of doing in the last twenty years is giving roles to ex-players; we are not talking about coaching roles.
While there can be no doubt that many athletes develop skills that are an asset in several roles, very few have the experience or the knowledge to fulfil such roles.
The Chairman of the board of one sport was asked recently if they would have a player who has never played at the highest-level play for their representative team. The answer was an adamant ‘no, that would be ridiculous, and embarrassing.’
So, why would you employ someone with no experience in the role you have given them?
This goes some way to explaining why some sports fail to attract any quality administrative staff, or if they do, they soon move on.
The pressure is beginning to build in many sports in Australia, both in performance at the highest level where many of these administrators have dedicated their focus, but also more importantly at the level at which most people play sport.
Rising costs, poor organization, a shortage of officials, competition rules being changed midseason, a disregard for those trying to run the clubs, these are familiar issues across many sports. When these people are paying fees to participate in their chosen sport it is understandable that they expect a higher level of professionalism.
In many cases across all sports the phrase ‘poor communication,’ is constantly being used.
Why is this so?
Many of the volunteers who give up hours each week to run their clubs, – some a great deal more than those employed within some sports – are beginning to ask why is the focus so skewed to the minority? Those players who have the chance of being honoured to play for their country or their state.
In some sports they are also starting to realise that they have been sold a pup.
Australia is without doubt a tricky country in which to try and run national competitions. The distances between the major cities are vast. The cost to travel to these cities is also high and at times extremely difficult, with many flights constantly fully booked.
So, running a national competition is always going to be a challenge.
Throw in the costs of running a team and the money attributed to that and you will find that most level-headed business people will look at the costs and the potential revenue coming in, and will walk away.
Australians hate a tall poppy. Therefore, many do not like the idea of their sporting clubs falling into private ownership. Having looked at the mess that is English football, and the problems private ownership has caused for many historic clubs, Australians are right to be wary.
So how do the various sports make it appear that these clubs are not privately owned, and that those who buy in are not in control? They tell the public that the league is franchise-based. Does that ring any bells to followers of certain sports?
There are plenty of franchises that we all know and see every day that are hugely successful, the likes of McDonalds, 7-Eleven and KFC.
All these businesses have an independent owner who operates under the established brand by paying an initial fee and then an ongoing fee in royalties in exchange for the brand name, the operating systems that are put in place by the Franchisor, and for ongoing support.
How many of the sporting franchise models see the Franchisee return money to the owner of the established brand? In some, the Franchisee waits for the handout each year from the Franchisor!
How many of these Franchised sports have what is genuinely an established brand?
Could you show random individuals walking down the street the logo of these Franchised competitions, and would people instantly know what they were?
This is actually a very important element to the Franchise model, for the Franchisee is supposed to benefit from that brand recognition. If that is not there then one can presume that the Franchise is doomed to fail.
Is this maybe why nearly all the teams in these Franchise-model leagues are losing money hand over fist?
Usually there will be a Franchise agreement that has been drawn up that outlines the responsibility of both parties. One can only assume that this is the case in sport. After all, today sport is business, as we are constantly reminded.
In many Franchise businesses the Franchisor will embark on a thorough evaluation of the interested Franchisee prior to granting them the right to use their brand and operating systems.
The Franchisor once they have accepted the Franchisee as part of the organization then offers ongoing support. That support comes in relation to training staff to ensure that all franchises operate under the same rules and promote the same standards. Does this happen with clubs in Franchised sport?
The Franchisor in the business world will typically do in-depth research as to the best place for the store to be located. It would be reasonable to expect that the sporting franchisors would do the same, especially in relation to where games are played and what time, and on what day to ensure the best return and royalty money returning to them.
There is marketing assistance, to ensure consistency in the messaging which in turn builds up trust and consumer loyalty.
Do we see any of these things with the Franchise leagues? In fact, do we witness any marketing in some of them?
In some sports a failure to attract an independent Franchisee has seen the Sport’s state administrator take on the role of Franchisee. One can only assume that the stakeholders, the clubs, voted on such a move and accepted it. Probably because they would have been advised that the Franchise was going to generate income for the sport.
Unfortunately, that has not occurred because, like many sports it is not a proper franchise model. The result is that the costs continue to rise and so the franchisee must try and find a way to reduce their losses.
The average player and supporter are the ones who end up counting the cost, as they are the ones whose playing fees rise and who must pay the increased price of a ticket to watch a game. Regrettably many are now simply opting not to pay to go and watch.
While fans of these sports know the brand, the biggest problem is that those who do not follow the sport don’t. With the Franchises mentioned you do not have to eat McDonalds or KFC to know what they offer. The same is true of 7-Eleven.
What do these Sporting brands offer? What do they mean to those who do recognize their logos?
The whole idea behind a Franchise is that it offers rapid expansion in new markets. For the Franchisor this is great, as it results in increased brand awareness and visibility with a small capital investment, that should result in a steady stream of income.
How many times have we witnessed the Franchise leagues look to expand with a new team, but in no time that new team has fallen over?
Every time that happens the brand takes a huge hit. It is damaged, and for some involved in the sport it results in them walking away for good.
Without an established brand it is going to take years and possibly decades before theses Franchised Leagues are truly entrenched in people’s minds.
The A-League has been going now for 22 years. We showed the League logo without the wording to ten random people, people we did not know in any capacity. Their ages – we did not ask – probably ranged from 16- 70. Only two knew what the logo was! After a presence of 22 years that is not good.
In the 1970’s Kerry Packer turned World Cricket on its head when he formed World Series Cricket.
He wanted to broadcast cricket on Channel Nine, but the Australian Cricket Board would not allow him to. So, he bought the best players who at the time were not being paid what they felt they were worth.
It is a fact that the first year of World Series Cricket did not go well. The public did not warm to World Series Cricket despite the best players being involved.
Kerry Packer was an astute businessman. If you listen to those who were involved Packer was not too proud to listen and be informed by those, he regarded experts in their field, players he had signed and ex-players. He listened but he always made sure that they knew that he was in charge and that the final decisions lay with him.
He shifted his attention to the One-day contests under lights. This was at the time a new form of the game, but is today commonplace. He read the mood of the public and gave them what he saw that they wanted.
He also realized that the West Indies deserved a team of their own, and that the public wanted to see them in action, so he made the Super Tests a Tri Series between them, Australia and the Rest of the World.
When 40,000 walked through the Sydney Cricket Ground gates to watch Australia v the West Indies under lights, all involved knew that this was when Packer had won.
It is no surprise to read or hear all these years later those involved state that they all understood that Packer wanted the television rights and once he had them World Series cricket would end. What is interesting is that nearly everyone involved will tell you that Packer was a wise man who listened to what his advisors were telling him, which was something their own cricket boards were not doing.
The players, who the public were paying to watch, and the team managers actually had a say in the organization of the game that they were playing, which had never been the case before. The teams in World Series cricket had managers who were a conduit to Packer. They would feed him the information he needed to make informed decisions.
Packer revolutionized the television coverage of cricket at Channel Nine. Once again, he knew what he was doing. Those he employed to be a part of the commentary team were advised that if they wanted to stay employed, they had to stay relevant. It was no use living off your past reputation as a player, you had to bring more to the table.
His successors at Nine forgot that important fact and lost the coverage Packer fought so hard for, and sadly that edict is one that many other broadcasters of the game forget, as many employed in such roles today have failed to stay relevant.
Packer knew how to run a business. He was at times ruthless, but he was never foolish enough not to counsel opinion and listen.
How many of those given the responsibility to run these various Franchise-based competitions honestly understand how a Franchise-system truly works? Have they even taken the time to go and learn this information, and then tried to create something in line with a successful Franchise model?
When all is said and done the examples of a Sporting Franchise in Australia are not franchises at all. The owners would learn little from those running the competitions in which their teams are competing. They receive little or no support. The clubs competing are not run along similar operational lines. There is no collective marketing. Crucially as everyone is discovering there are certainly no profits shared.
If it were a proper Franchise set-up, would the owners buy-in? Most would not want to be restricted and controlled by regulations put in place by a franchisor. Their egos would not allow that.
The private owners know that these are not franchises. That suits them, as many are not that interested in the sport or the club. They are simply using both as a vehicle to be able to get the ear of the politicians in that state, and further their business interests.
Some would argue that Packer did the same. Yes, he did, however Kerry Packer loved cricket and many of his innovations in terms of the game today, and certainly in its coverage are the result of his intervention. He helped carry the game forward, he enhanced it.
How many of those running these competitions, clubs and teams can make that same claim?
Whose fault is this? Is this due to the lack of experience in those employed to make these competitions work? Is it the fault of those who employed them in the first place? Despite these competitions failing and costing those involved a fortune to be a part of, nearly all who made these decisions are still in jobs and being paid.
Sadly, the people losing out, and on every level are the fans, and often those who play the sport locally and recreationally. They are the ones being asked to underwrite these failing competitions.
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