Chapter 1. Building a Business

The Point: The sports world, like much of the mainstream business world, has its stories of organizations and teams that seem destined for success, but fail, as well as those that seem to fail, and in fact succeed. Because the sports world has provided both sound and unreasonable approaches to business, it provides useful insight that should be considered by businesses of all sizes, especially when they are being established and built.

What business executive hasn't gotten the nudge from a marketing manager just before giving an important presentation and leaned close to hear a whispered, "Try not to use any sports metaphors." Yet, sports provides a sound metaphors not only for life, but for business as well. Given the sporting world's ubiquitous nature throughout our culture, it is ideally suited to be used as a backdrop against which important business lessons can be enjoyably learned.

You might differentiate your experience as a sports fan from your career and your responsibilities as a decision maker, but by understanding precisely how and why sports and business have converged, you can improve your business acumen and become an even more valuable executive. In short, there is much to be learned and applied from understanding the structure of the sports business. Sports business industry leaders are continuously adapting to uncertainty, not only producing change, but also shaping the future of this lucrative and rapidly growing industry. Along the way, they consistently demonstrate just how varied the results can be when adhering to or dismissing important business tenets.

Like most business executives, sports industry leaders wrestle with how best to segment domestic markets and penetrate foreign ones. Can they just slap their logo on the team's jersey and get the entire country to believe in their brand?

They struggle to establish mutually beneficial strategic alliances that won't compromise their brands or hinder their ability to grow. Is this cable TV network merely the highest bidder for the team's broadcast rights or is it the highest bidder than can and will convey the quality of the team on the field?

These leaders worry about financial and human resource management. How many free agents can a team really bid for without leveraging the team's financial future?

They obsess over customer service and crisis management in an effort to stave off erosion in market share. If we run out of beer, how will our fans react?

Sports industry leaders also concern themselves with employee relations and improving their own corporate standing. Are sports agents happy at a particular sports management firm or are they likely to defect and start up their own agency as soon as they make a name for themselves?

They make it their business to understand government relations and regulatory issues. How much does the organization have to know about the country to employ a workforce to make its baseballs?

In essence, the sports industry mirrors most others and faces similar trials and tribulations, but with a few insightful and different approaches. As the sports business industry continues to evolve, it often does so strangely, drawing the attention of fans and business people alike.