Sports management has been a formalized educational discipline tied to the practice of sports management in the US for decades since Ohio University in 1966 started the first master’s program in the world. Andy Dolich was a student of the first cohort when this program started. However, the business of sports has really changed since 1966. Now, the business of sports has grown considerably in size, economic scope and professionalization, and today there are other great sports programs than Ohio University in the US, e.g., University of San Francisco’s Sport Management Master’s program where Andy Dolich and I both teach. Globalization, technology, data, new ownership models such as the growth of portfolio models and investments across various sports and international borders, and the application of sport as a geopolitical and soft power instrument are only a few of many important milestones, which emphasize the major changes with an impact on the sports industry since the 1960s. This article takes the audience on a brilliant journey in the business of sports, which illustrates vital managerial points related to owning, managing and operating a business in the sports industry.
Owners never fire themselves (Andy Dolich speaking about the tendency to fire executives and coaches in professional sports)
There are different approaches to management and in contrast to the tendency reflected in the quote above (for instance, many coaches in professional sports only last in the job for a limited period and a study from CIES Football Observatory showed that coaches in professional football/soccer only were in the job for an average of 48o days on average), the Haas family, who is associated with the brand Levi Strauss & Co., had an excellent approach. As Andy Dolich notes, the Haas family bought the Oakland A’s baseball team in 1980s for just over $10 mio. Now, many players in professional baseball earn more than $10-13 mio. per year, which explains the sports industry development when it comes to the money flow in professional sports over time. However, when the Haas family bought the Oakland A´s from Charlie Finley, they invested in the organization and attached a community label on the ball club. The ownership viewed the organization as a community trust and gave people a chance to paint on the canvas by engaging with the fans in the organization’s public service approach. “By 1982, the A’s shattered their all-time franchise record with a season attendance of 1,735,493 and were named Baseball America’s Organization of the Year”.
Dolich describes how the Oakland A´s under Billy Martin’s leadership was revitalized by Billy Ball, a new brand concept of entertaining baseball and famous Billy Ball ads. Although the Billy Ball era didn’t throw off any championship titles, it provided the organization with an understanding of mixing entertaining play with more controllable brand promises off the pitch. Dolich goes from this narrative into commenting on a new time in sports business management characterized by the junction between sports, analytics and metrics tied to how baseball executive Sandy Alderson played a role in implementing the Moneyball aspect in the organization via his protégé Billy Beane, who is featured in the famous book by Michael Lewis. The story was later reproduced on the big screen with Hollywood actor Brad Pitt starring as Oakland A’s GM Billy Beane.
Dolich also emphasizes the inspiration of working with the football/soccer legend Johan Cruyff, whom he praises as one of his favorite athletes and human beings in history. Dolich served as the VP and GM for the Washington Diplomats of the North American Soccer League and had the pleasure to work with the Dutch super star for two years. This time left a huge impression on Dolich as Cruyff was brilliant on the pitch as well as in business.
Dolich also touches upon the important difference between strategy and tactics in sports. As he mentions, few teams have a coherent business strategy, which is demonstrated in his analogy of the great leadership and management approach under the Haas family. This displayed an approach where success was shared with everybody but where ownership took the hit during troubling times. This example acts as a contrast to many modern approaches with selfish owners showing a tendency to irrationally firing executives and coaches or to pocketing money as an example of ‘free riding’ despite an American frame of professional sports, where everybody MUST chip in to give value to the single entity of the league and thus the respective franchises. Moreover, Dolich speaks about his experience with moving a professional sports team across international borders, i.e., the Grizzlies of the NBA, from Vancouver to Memphis where shipping giant Fedex helped to build a new arena on their home turf.
Additional changes in the sports industry over time are listed below (source: former blog post via www.kennethcortsen.com):
- Explosion of sports in the media.
- Constant increase in value of authentically global sport entities, including athletes.
- The conversion between sport and entertainment.
- Horizontal and vertical integration of sport entities by media and entertainment corporations.
- Integration of sport into the experience economy and ‘popular culture industries’.
- Increased economic growth and impact in the world of sport, including the increasing impact of sport on other industries.
- More venture capital and investment activities in global sports entities.
- Changes in the role of ‘sport governance’.
- Synchronized professionalization and marginalization of smaller sports and leagues (these entities wish to professionalize their management and marketing but the gap between the sport entities that are globally flourishing and those, which remain only domestically feasible, will grow).
- Junction of economic power in sport ownership. Fewer and fewer will own more and more of sport.
- Technology innovation will improve entertainment value and will boost the diffusion and circulation of sport to new markets.
In the sports business podcast below, I welcome Andy Dolich, who elaborates on a long career across various professional sports to set the scene in terms of development in this industry since the 1960s. Dolich provides his excellent sports industry insights and his wealth of knowledge from various positions in the industry, including executive positions in the NFL, NBA, NHL and MLB plus experiences from the former North American Soccer League in the 1970s and a wide variety of sports business consulting tasks for clients such as Nike, the San Jose Sharks, Seattle Mariners, Stanford, the 1994 FIFA World Cup just to mention a few. This podcast is a MUST for sports business professionals as history helps us to explain the current reality and to set new direction on the business of sports.