Sports are Weird: A Mental Model for Success in the Sports Industry

Roughly middle-aged in human terms, the academic field of sport management remains a bit maligned and misunderstood, sometimes fairly. Looked down upon by some academic peers, we’re also dismissed by many in the industry as nerds lacking a perspective from the trenches. (Sports industry types love the trenches.) While we professors are left to reckon with this dual-inferiority complex, the field is booming with students keen to enter an industry that has long enchanted them. And of course, there are plenty of young people outside of sport management who would love to work in sports and what follows applies to them as well.

To better serve my students, I have tried to help them articulate a response to a question they regularly encounter, seldom in good faith: why sport management, why not a business degree? My suggestion: sports are weird. There’s likely a more elegant way to phrase this, but I said it once a decade ago and it stuck. So again, sports are weird. Understanding this not only justifies a dedicated course of study in sport, but more importantly, is fundamental to long term success and career advancement in the industry.

So what do I mean here? Simply put, to see sports as directly interchangeable with other business sectors or industries is a perspective that is somewhere between limited and wrongheaded. (And to my peers whose departments treat the field as “management with sports examples”: do better.)

Some examples of the weirdness may help:

  1. The “rebuilding year” and consumer loyalty. I would never buy a product I knew was bad just because I love the brand, letting them off the hook for a “rebuilding year.” No one has ever said “Oh yeah, the new Camry is known to explode when you hit 55MPH, but come on, Toyota’s in a rebuilding year.” Yet the Chicago Cubs have one of the most fervent fanbases in the world, most of whom stuck it out through a rebuilding century. I am still a Raiders fan. This is weird.
  2. The nature of competition. Yes, franchises and schools compete against each other on the field, but are they really competitors in the traditional, market sense of the term? McDonald’s wouldn’t mind putting Burger King out of business, but FC Barcelona needs Real Madrid. When the Cleveland Browns left town for Baltimore, it was the Pittsburgh Steelers who led the charge to reestablish their rival franchise. Best Buy certainly didn’t do the same when Circuit City went under. We’ll leave the discussion of professional leagues and the NCAA operating as cartels for another day.
  3. The oft-used examples of BIRGing and CORFing. (Basking in reflected glory and cutting off reflected failure.) In simpler terms, the sports fan pronoun game: “WE WON!” There are plenty of actors and musicians and I’m a fan of, but I don’t take partial credit when they win an award or make something great.
  4. Locating the product. Are professional franchises in the live entertainment business? The broadcast or digital media space? The service sector? The clothing and retail sectors? Yes. And more. Jim Rooney succinctly captures one version of this in the biography he wrote about his father Dan, the late owner of the Pittsburgh Steelers: Labor deals in professional sports are unique because players are both the labor force and the product. Maintaining labor peace means maintaining the product. I might add that players these days also have a role in the PR functions of the organization. A TV show or a Big Mac can’t tweet, but your star player can.
  5. Let’s not even get started on professional team values and the mockery they make of traditional valuation metrics and multipliers…

6. In his recent book Post-Corona, Scott Galloway distinguishes between two fundamental business models:

One, a company can sell stuff for more than the cost of making it. Apple takes about $400 worth of circuits and glass, imbues it with the promise of status and sex appeal through brilliant advertising, and charges me $1,200 for an iPhone. Two, a company can give stuff away–or sell it below cost–and charge other companies for access to its product: the consumer’s behavioral data. NBC hires Jerry Seinfeld to write a TV show, films dozens of episodes on a studio lot in LA made to look like a sanitized version of Manhattan, then beams it out for free to anyone with a subscription to watch. But every eight minutes, NBC interrupts the witty banter with several minutes of ads, for which it charges the advertisers, who are its actual customers. The product is of course, you.

But Galloway also notes that some businesses combine both. His example? The NFL. The league generates revenue from selling tickets and other things to consumers, but also sells access to consumers to advertisers and sponsors, without cannibalizing itself. Relatively speaking: weird.

The list of examples could go on, but the big picture is what’s important. The aim isn’t to over-romanticize or over-complicate what makes the industry unique, but to identify and articulate the ways in which it IS unique. From there, a reasonable course of inquiry–and hopefully, action–should begin to manifest itself. If you build it get weird, they will come.

Postscript

  1. Thanks to Seth Kessler, Brian Mills, and Matt Bowers for their feedback on early drafts. Matt gets extra credit for letting me bounce this off him for the past 10 years.
  2. As they say, there is really nothing new under the sun. The sport academics reading this may find many parallels to Laurence Chalip’s essential article, “Toward a Distinctive Sport Management Discipline” (Journal of Sport Management, 2006). Chalip’s concern is for academia, not industry, but the gist is quite similar. Not surprising, given I took several graduate courses with him and he gets credit for shaping much of the way I think about these things. What I can’t quite wrap my head around is that I somehow never came across “Toward a…” until a couple years ago. This is embarrassing, but also a testament to his teaching and wisdom: I somehow lifted the idea from him without even being directly exposed to it. Folks with academic library access should be able to find the article easily. Get in touch if you need help. Here’s the abstract:

The current malaise over sport management’s place and future as an academic discipline provides a useful basis for envisioning the needs and directions for the field’s growth and development. The field’s development requires two complementary streams of research: one that tests the relevance and application of theories derived from other disciplines, and one that is grounded in sport phenomena. The legitimations that sport advocates advance for sport’s place on public agendas are useful starting points for research that is sport focused. The five most common current legitimations for sport are health, salubrious socialization, economic development, community development, and national pride. The value of sport in each case depends on the ways that sport is managed. Factors that facilitate and that inhibit optimization of sport’s contribution to each must be identified and probed. Identifying and probing those factors will be aided by research that confronts popular beliefs about sport, and by research that explores sport’s links to other economic sectors. The resulting research agenda will foster development of a distinctive sport management discipline.

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