Sport in the 21st century we are told is big business. We are also told that sport is no longer about the contest, but about entertainment, and as we all know the entertainment business is a massive industry.
However are these claims true of all sports?
Certainly if we look at the the NFL Super Bowl played this morning Australia-time, here is an example of big business and the sport and entertainment business enmeshed as one. Some sports do this incredibly well. As many will argue, some sports have the money to do this incredibly well. Sadly when some attempt to emulate an event such as the Super Bowl it falls so short that it is embarrassing, or even cringeworthy.
If we look at the sports that do these events well, they tend to be the “big” sports in various countries. For example Basketball, Baseball and American Football in the USA, Football in many of the European countries, Ice Hockey in Canada, AFL in Australia, and to some degree also cricket.
These tend to be the sports that have strong administration. Sports where the structure of that administration is suited to the tasks that they are required to carry out. They also have the expertise required to enable them to be sure to operate the business-side of the sport effectively and at a profit. The sport is run using fundamental business practices.
How many sports, especially those second-tier sports can honestly claim that they operate using sound fundamental business practices?
Many sports have tried to copy the business world by creating “silos.” This is where sections of the business are departmentalised and become their own profit centres, and essentially work as their own business unit within the whole business. In sport this has been proven to not work, as in the management of sport there are too many crossovers in these various business streams, and unless there is clear, open and regular communication between these various ‘silos,’ you end up with a dysfunctional organisation, where communication breaks down and costs are frequently doubled.
Many sporting organisations of the past twenty years have faltered as the sporting landscape has changed, and they have simply employed staff with Sports management qualifications straight from universities, or from other sporting bodies. Staff who bring with them no added value from experiences gained in either the entertainment industry or the business world.
In the sporting world “development” seems to simply mean staff ‘lily-padding’ from one organisation to another in the same or a similar role. Their only development being in terms of the experience that they bring from a previous post. Experience that in many cases is simply not broad enough to be an enhancement to the sport they have moved to.
The sports themselves spend little on Staff development, so they often have a high turnover of staff, apart from at the top end. Many simply fail to up-skill their staff.
The London and Sydney Olympic Games are two examples where the success of the two events to a large degree was down to the volunteers. These volunteers were not just people who put their hand up and turned up. Money was invested in these people to train them. That investment made them feel important and valued, and as a result they provided outstanding service to everyone who was fortunate enough to attend those two Olympic Games. How many sports administration staff feel important and valued?
While the volunteers at other Olympic games were friendly and courteous Sydney’s investment in their volunteers, who went through 52 orientation sessions around the country with intensive sessions held on their specific roles, set the benchmark. There was one million hours of training given to these volunteers, starting in 1997 for the first group of 500. In all there were 46,967 volunteers in Sydney and all were unpaid, but all worked hard and committed to be the best that they could be, just like the athletes.
How many sporting organisations rely more and more on volunteers? Yet how many invest in their volunteers today? England Hockey did for the Women’s Hockey World Cup in 2018, and once again that investment paid dividends.
So if sports bodies are not going to invest in their volunteers or their own staff then they need to be sure that they have the right structures in place to run an efficient business.
So if you want to check if your sport is being run properly there are five basic areas to look at. How your sport, be it at state level, national level, and International level addresses these issues will give you an idea as to where your sport sits, and whether it is being run as a business.
People, as mentioned are crucial. They are your sport’s greatest asset and how they lead, motivate and inspire participants, officials and volunteers will have a huge impact on the success of your sport. Communication skills are absolutely essential in today’s sporting environment. A failure to respond to missed phone calls, or not replying to emails is unacceptable, and will do untold damage. Staff have to be accessible. After all by taking on such roles the staff are servants to the game, and those who played it, play it and will play in the future. They are guardians of the game, its reputation and its image.
The Board overseeing your sport, are they the right people for the task? Most people do not know the board members of the companies they deal with and there is no need to. So why is it that Board Members in sport are far better known? Because many come from within the sport, but is that a good thing?
If you are not in a position to employ the best people, then you need the best people on your board, to guide and mentor your staff. Sycophants are the worst people to have on a board, as they will be steamrolled into making the wrong decisions. The way to the best outcomes and the deepest insights come when a board is made up of a diverse team that includes committed people with a wide background of experience in key areas such as finance, Human Resources, management, marketing, sales, and lastly the sport itself, as a player or official. Often these people close to the sport can be the worst people for the sport, as they are too close to make rational decsions. Certainly those with an involvement in the sport need to be limited. The board needs to be made up of principled people unafraid to share their views and be heard.
Even in State-level sport, it is vital that there is an understanding that not all the world speaks English. The world is a diverse place and so too are many cities, states and countries, so it is essential that people are far more culturally aware when they make far reaching decisions. What may seem obvious in Western Culture could be far more complicated in another culture. A failure to acknowledge that or worse, treat it with a token regard, will lose you more than you will gain. So how genuinely culturally aware is your sport?
Finance is a crucial element in business. Could your sport survive without Government funding or funding from a World Body? If the answer is ‘no,’ why not? If it is truly a business it must be strong enough to survive without the reliance on funding from third parties. If it would go broke as a business without this funding, then your sport is not a business, and those running it are the wrong people.
Funding from television and Governments is only going to decrease in the next decade, so proper day-to-day accounting and finances of your sport are going to be critical to operations. The finance staff are going to have to be able to read, analyze and prepare financial statements, being a book-keeper will simply not be enough. Without this analysis and documented revenue streams how can proper decisions be made by the Board and senior management? Is your sport generating income, or is it in fact increasing debt?
Once you know your financial situation, you can then find the right people and adopt the best strategy. This is where the calibre of your Board is measured, as they should be setting the strategy, they should then employ the right people to see it through. The key questions here are where does your sport compete in the industry? Is it a tier one sport or is it tier two? If tier two, is it likely to become a tier one sport? What will it take? If that is not reasonable then what will it take to be the best tier two sport? How can you create a competitive advantage over all of the other sports? Is your sport able to adapt to a changing business environment or are they continuing to operate under the same structure and take the same approach?
The ability to take a high-level, strategic view of a sport is essential if you are to identify opportunities and to stay ahead of external forces such as new competition and changing consumer habits.
Only once your sport has these blocks in place can they start to consider Marketing it. Something the NFL, NBA and AFL do very well. The reason that they do it so well is because they understand that Marketing is much more than simply advertising a game or merchandise.
This is where so many sports fall over. They employ people who are passionate about their sport to be in charge of Marketing. When you in fact need people who are the complete opposite. A love of the sport makes you myopic. To be successful in the world of sport you need to look at your sport through the lens of the customer. The customer being those who play, the parents of those who play, those who officiate and those who are paying fans. Then you need to establish the value of your sport to those customers?
Once you have established its value you can then look to identify and interact with those customers. If you fail to do this you will always struggle and there are plenty of examples of this in sport. The Hyundai A-League is a great example as to how the Football Federation of Australia misread the fans and what they wanted and are now they struggling to win back those fans that they already had.
For successful marketing staff must stay on top of the changing needs and desires of their core audience and deliver a strong product that is attractive to their customers. Hence the reason silos are a bad management style in the world of sport. Every single employee is the eyes and ears of the organisation. They should all be interacting with the customers and returning with feedback, that helps management change tack if needed.
The sporting landscape is only going to become more competitive in the next ten years globally, nationally and regionally. Having the right people with the business nous to run your sport and promote it is going to be more important than ever. If your sport lacks that know-how, then maybe they would be better off outsourcing it to people who do, so that they can focus on what they do best. Which may simply be collecting registrations, organising fixtures and the like. There is nothing wrong with that, as long as it is done well and efficiently and results in little or no negative feedback.
One of the problems each sport has is that it is a migratory business. Decisions are made and people move on. The ramifications of those decisions are felt by those who love the sport, who play it and watch it. They are also felt by the staff who remain, and often can have a demoralising effect on good workers. So should there be a way in which sport, just like its players have now, adopt a review system over Board decisions and Senior Management decisions, whereby those individuals are held accountable?
That of course is unlikely to happen, however such a mechanism is in fact in place with most Board Members in Australia and Europe. That if they make decisions that have a financial impact on the overall organisation they can be held accountable. However rarely is it enforced.
Maybe it is this rearranging of the chairs at so many organisations where staff are recycled from sport to sport that leads to the same mistakes being made time and again. It was Albert Einstein who is credited with saying “The definition of insanity is doing the same thing over and over again, but expecting different results.”
In business if you make the same mistakes you go broke. In sport it appears you wait for the next round of funding from a Government or similar bale-out.
So seriously, let’s not say that all sports are a business. If they are not self-sustaining, they are a public service, they are definitely not a business! To be a business they must be able to stand alone and be run along the lines of good business practices.
