11 August 2005

Lessons from Hawks ownership battle

The NBA has yet to involve itself in this mess, but David Stern is expected to "suggest" to Steve Belkin that he step aside as team governor immediately, allowing the Hawks to complete the sign-and-trade deal with the Suns for Joe Johnson.  (For details on this mess click here.)



What can we learn from this situation?



  • Ownership groups, like committees, often disagree and are slow to act.  This can be expected when several successful businessmen pool resources to purchase a team.  Often these owners are accustomed to being the final decision maker and knowing their businesses inside and out.  With sports teams, however, the ownership groups must reach consensus, and owners seldom understand the intricacies of drafts, personnel moves, salary cap management, etc.


  • Sports teams and leagues need benevolent dictators.  Using only motorsports as a microcosm, look at the success of NASCAR under the France family, F1 and Bernie Ecclestone (notwithstanding this year's U.S. Grand Prix debacle), IMSA's glory days with John Bishop, and the ALMS under Don Panoz.  Strong commissioners play a key role, too, as witnessed by the meteoric growth of the NFL under Pete Rozell.  Conversely, examine MLB's missteps under Bud Selig (allowing an interim commissioner to own a team, then sell to his daughter when he becomes full-time commissioner; allowing devastating work stoppages; who can forget the emasculating arms-in-the-air shrug during the 2002 All-Star Game), and the NHL's disastrous lost season under Gary Bettman.


  • Successful owners typically function like successful CEOs, in that they hire the right people, and let them do their jobs.  CEOs who dabble in operations can lose focus on the big picture; rare is the owner who knows player personnel better than the GM, although many good potential GMs have passed on positions under meddlesome owners.  In the Hawk's example, Belkin should let Billy Knight do the job for which he was hired.


  • Lastly, the business of sports is unlike any other.  Anti-trust exemptions allow the leagues to play with their own rules.  It's difficult to assign an return on investment for a championship (although the Red Sox and MLB are mighty pleased with the post-World Series merchandise sales).  One can draw a parallel between city's attachment to teams and corporations: recall Seattle's disappointment at losing Boeing to Chicago, although that was less about pride than jobs and the tax base.  Ask any long-time Cleveland fan about Art Modell, however, and you'll learn just how attached cities can become to teams.


Whatever the outcome of the Hawks' situation, we're reminded of the peculiarities of the sports world, and the often warped intersection of sports and business.

08 August 2005

Back from Toronto

Many, many thanks to Ted, Lisa, and their wonderful children for taking such great care of me in T.O.   Far too much time had passed since I last visited their fine city, which was even more remarkable than I'd remembered.  Please check out the photo album when you get a moment.