College Basketball, Crisis Management, MLB, MLS, Minor League Baseball

It Seemed Like A Good Idea…The Start-Up Business of Sports…

It is looking like another idea that has its base in a very noble concept…spring football in football rich states with athletes who have four year degrees…may soon be biting the dust.  The All America Football League went through a variety of very public miscommunication steps this week, and from most accounts the concept will not get off the ground this spring.  Having now lived through a very public sports start-up that has built brand name in a new sport (The International Fight League in Mixed Martial Arts), I offer up some very basic tips for those looking to launch.  Also, as a colleague once pointed out, name the last start-up sports league that has actually turned a profit for its investors….outside of the main names…NFL, NBA, NHL, NASCAR, MLB. select minor league baseball leagues…we cannot think of one (including MLS, WNBA, AFL, Dew Tour, Crocs AVP Tour, WTA, ATP etc. etc.)  What does that say?  It aint easy.

1-No Matter How It Seems Great In Concept, It’s All About Money:  The great sports “ideas” that have tried to launch…the WUSA, the USFL, NFL Europa etc etc…all were great in principle, but in this day and age where everyone needs an ROI, without the long-lead capital (see Major League Soccer and the WNBA) and a clear path to revenue that makes good business sense, the concept is very hard to make practical and viable.

2- Who Is Going To See It and Where:  The Ultimate Catch 22…in order to bring in business partners, one needs television exposure, and we mean TV exposure, that big screen in the living room.  We do not mean streaming sports over broadband as your primary way of reaching people.  There is no proof that the consumer will consistently watch sports on the internet live.  The need to have a secure, consistent time where literally  millions of consumers can view not just your games but learn about your athletes and see  you  business partners products, is essential.  Now the cost of exposure and production can be astronomical, but it has to be factored in, and  be a big, if not the biggest, part of the plan.

3- Fish Where The Fish Are:  A little research goes a long way.  Having a Chicago team play an LA team in Boston to save money as part of a doubleheader may seem like a good idea, but do the consumers care?  Whats the cost in brining in those teams and athletes?  Is hockey in Santa Fae really a good idea?  What about basketball in Las Vegas or Calgary?  Knowing your market, what the right price point is, and when and where to play games BEFORE you start is very important.

4- Slow and Steady Keeps You In The Race:  Like toys on Christmas morning, the appeal of growing quickly, especially with a splashy initial PR hit, can be very intoxicating.  Sticking to the plan, just like in any successful business, and growing at a pace to match cost, is very very important.  Now being able to be innovative and capitalize on an opportunity, especially in the digital space, is  OK, so long as you stick to your core plan and keep financial goals within reach.

5- Overcommunicate:  The biggest problem with any start up is that there is so much going on that many times the left hand and right hand are not on the same page, which in start-up mode, can send a horrible message to business partners. While acknowledging that the only constant in a start up is indeed change, having a clear and regular communication plan, especially on critical news, and keeping everyone on the same page, is very very important.

6- Never Think You Are The Smartest In The Room:  Go and study the successes and failures of those before you…take the best practices from the others and try to meld them together with a clean slate, its the only way to have a chance.

Sports, although sometimes bred out of utopian ideas, is not a Utopian business.  It has real hard costs in a very public forum with little room for error.  Therefore taking the time to plan and communicate with adequate funding can make or break the business. Best of luck AAFL…we hope you make it.

And on to some other good pieces to read…we were very interested to see the Chinese Government accusing the Dalai Lama of sabotaging the Beijing Olympics, as reported by AP… great piece in the Wall Street Journal today on the rapper Lil Romeo and his recruitement to play hoops at USC next year…the Boston Globe also has a nice feature on ESPN’s new baseball promotions, the latest generation after their highly successful NBA road trip campaign…