Ben Shields is the co-author of the 2014 book The Sports Strategist: Developing Leaders for a High-Performance Industry, which delves into how sports franchises can have success off the field regardless of team performance. Shields worked for ESPN as Associate Director of Brand & Fan Strategy from 2008-11 and Director of Social Media from 2011-14. He received a Ph.D. in Media, Technology and Society from Northwestern University and is currently a lecturer at the MIT Sloan School of Management.
This is Part I of a two-part interview on the findings of his research. Part II will discuss the impact on people seeking jobs in sports business and will run on Wednesday.
Q: What made you want to write this book?
A: We know sports as the games and athletes on the field, but off the field is a fascinating industry where some of the most pressing problems in business are facing sports leaders. We wanted to write a book that looked exclusively at the business of sports and what separates the most successful sports businesses from the least successful sports businesses.
Our principal question was based on this whole concept of winning on the field. We asked the question “can sports organizations be successful businesses without necessarily winning on the field.” The answer in our research was unequivocally yes, and sports organizations must win as businesses without necessarily winning on the field. So the book looks at that question and presents a variety of ways that the most successful organizations have achieved this goal by focusing on the controllable factors beyond winning that spell the difference between a successful business and one that isn’t.
The quintessential example of a team that has achieved success as a business without necessarily being too successful on the field is the Dallas Cowboys. Prior to the season, they had a 146-142 record over the last 19 years and are coming off three straight seasons of 8-8. Yet according to Forbes, the franchise is valued at $3.2 billion, which is the top of the NFL.
Q: How do the Cowboys go about doing that? I’m sure a lot of that was leftover from the 70’s, so what have the Cowboys done in the last 20 years to do that?
A: First of all, they have retained their identity of “America’s Team” and held that very close to their brand. Because they have become America’s Team, they stand for patriotism, nostalgia; they’re etched in the cultural fabric of America. When it’s Thursday afternoon of Thanksgiving and the Cowboys are on, the nation turns their attention to them, whether or not they’re having a good season.
Q: Now how much did they actively have to do to keep that going, and how much was just good fortune and don’t get in the way?
A: I think it’s a mix. They’ve also been very adept at managing storylines and making sure that the Dallas Cowboys name is relevant 365 days a year – for good or bad. It’s almost like a reality show broadcast live from Dallas. You have Jerry Jones as the P.T. Barnum ringleader. You have Tony Romo as the ne’er-do-well leading man who can never get it right. Dez Bryant as the maybe prima donna, maybe not prima donna. Jason Garrett is always on the hot seat. You throw all these characters together and it’s a constant source of fascinating drama throughout the year. That, to their credit, helps the team maintain its national relevance.
Also, they have built a Disneyland-like environment in Dallas. Not only is it a technologically advanced stadium, but it’s become a year-round destination for fans and tourists. There is an art gallery at the stadium that is a reason for fans to visit whether the Cowboys are playing or not and especially whether they’re playing well or not. So you have these factors of identity – and they’ve maintained that identity for years – you have their ability to stay in the national conversation despite their record, you have a terrific Disney-like environment that is also a good source of revenue for the team, no matter what is happening on the field. That’s just one example. In the book, we talk about a variety of teams that have employed a similar formula focusing on factors that they can control.
Q: The book also talked about Scottish soccer club Rangers FC as the opposite – a team that was winning on the field and losing off it. What were they doing wrong and what lessons can be taken from them?
A: Rangers had won 54 titles in their history, and the last one they won was 2011. The following year, in 2012, they filed for bankruptcy. The key point here is that they put all their eggs in the winning basket. Despite their singular focus on winning championships, they weren’t running a winning business. It’s just a cautionary tale that if they aren’t run successfully as businesses, no amount of winning is going to ensure profitability.
Q: The subtitle of the book is “Developing Leaders for a High Performance Industry.” There are a million high-performance industries out there. Is the idea that developing leaders in sports is the same? Or does developing leaders for the sports industry differ from developing leaders for the oil industry, the banking industry, etc.?
A: It’s a two-part answer. First of all, we believe that leaders in sports face a complex challenge of building a business with an unpredictable product. You don’t know how your team or athlete is going to perform. As a result, you still have to be profitable. So the sports leader is uniquely in position to run a profitable franchise despite the unpredictability of their product. And that’s why we wanted to focus on all the factors within a leader’s control to run that successful business.
The second part of this answer is – we believe this strongly and see it over and over again in our research – that the sports industry is a hotbed of innovation in business. Whether you are in the (consumer goods) industry, consulting, other areas of media and entertainment, understanding what successful sports businesses do to drive business and brand relevance can actually inform how you might do the same in your industry.
So sports as a high-performance industry is a unique market for leaders in any industry to understand and fashion their own best practices based on what works in sports.
Q: What are some things that you’ve found teams are doing better than even three years ago in business?
A: I’d say two. First of all, the adoption of social media platforms has been very impressive. Teams have figured out that they can be their own media company, primarily through digital and social tools. So they’re creating content that more effectively connects with their fans. Social media tools create access between the athlete and the fan, which only develops more loyalty and ensures that fans remain engaged with the team, whether they’re winning or losing.
The second is the use of business analytics to drive more revenue. Sports teams and conferences have aggressively implemented dynamic ticket pricing to maximize the amount of revenue from ticket sales, and this is a change that’s been very positive for the industry. With dynamic ticket pricing, you have a model based on supply and demand, and whereas in the past, tickets may have one price throughout the year, now sports organizations are able to maximize revenue for games that may not be all that in demand and games that are.
Q: Do you risk alienating fans though? That’s one of the concerns. Has that had enough time to prove itself out?
A: I think the jury’s still out on that. There have been some experiments. Actually, we have a case in the book about an auction strategy that Northwestern implemented for its basketball team. The whole idea was to be transparent about the ticket prices and at what price they may go up or down. That’s just one attempt to be more transparent. But we’re still in that test and learn mode as it relates to dynamic pricing.
But back to your original question, the fact that teams are experimenting in this area is a good sign for the industry going forward.
Q: On the flip side of what teams are doing better than they were three years ago, what are things that make you look around and say: “I can’t believe that teams still aren’t doing this. There’s such easy money to be made here.”
A: The first one – and it’s probably top of mind for a lot of us – is crisis management. Crisis is the new normal in sports, and unfortunately, we’re seeing time and time again that many organizations are ill prepared for when crises do occur. Certainly the NFL at this moment in time is case in point. I think that organizations are now forced to do more crisis management planning and proactively assessing what some of the issues may be and putting in place a blueprint to deal with various crises, not if but when they hit.
Part 2 of this interview on the impact of these changes for sports job seekers will run on Wednesday.