Sports as a big business

James Naismith, created in the s, it developed as much through colleges as it did through professional teams and leagues, with the modern National Basketball Association emerging around

Sports as a big business

Historians have since debated O'Malley's motives—including his frustration over not being able to build a new stadium—but no one disputes that the decision caused extreme reactions.

Click to Enlarge Brooklynites vilified O'Malley and decried the loss of Da Bums, a beacon of civic pride from the moment they began play as the "Trolley Dodgers" at the dawn of the 20th century.

Sports as a big business

Some 3, miles away, Southern Californians hailed O'Malley's visionary decision. Many believed that the Dodgers' westward move burnished Los Angeles' reputation as a major-league city.

Such is the emotional dynamic surrounding professional sports franchises. The business of owning pro teams extends well beyond line-item entries of season ticket Sports as a big business merchandizing sales, TV contracts and stadium leases.

Indeed, as a quartet of UCLA Anderson School of Management graduates and instructors who have personal experience as owners can attest, the relationship between sports teams as a for-profit enterprise and as an inestimable community resource is unique.

So, when you own a sports franchise, you're building a relationship, not a transaction, with your audience. You enhance that by aiming not at their wallets, but at their hearts.

You always want to be audience-centric—what's in it for them? They want to be participants. The differences between the sports matter little, he says, because "All sports have one similarity, they're in the business of putting butts in seats, in the most fundamental terms.

Sports as a big business

If you can create these long-lasting experiences, you can turn them into viable advocates for your proposition to move other folks to join the audience.

In the transition period, when you buy a franchise, he says, "You look at where you are and what was operating well and what was operating badly. The idea is, not so much what did they do wrong, but what do we do right now that it's our time at-bat.

You want to provide a competitive advantage for yourself, not just in baseball, but in the designs and plans of management and ownership. He then switched to the other side of the bargaining table, becoming part of two ownership groups in Major League Baseball: Moorad ran his teams with a simple mantra, "Our approach was, it's not impossible to run a business in baseball on a break-even basis," he said.

Always, I was reminded by friends who run businesses in other industries how truly bizarre it is to have as a goal to operate on a break-even basis. Moorad points out that player payroll is "no more than a third to a half of the overall expenses incurred by an organization," which also includes the cost of hosting 81 baseball games during the season, as well supporting a to person front office staff, travel costs and security logistics, medical and insurance expenses, the investment in the farm system and spring training facilities.

Owners must balance financial constraints, Moorad says, with the unpredictability of sports. The ownership group has the responsibility for the long-term viability of the franchise. It has to make bottom-line decisions that are best for them. But the last thing the fans care about is a discussion about profitability.

They only want to win. He also played for the fabled Spanish club during the s—the Hall of Fame striker was nicknamed El Buitre "The Vulture" —and has watched the team claim every important soccer prize in the Spanish professional league, as well as in European club competition.

This is part of representing our shirt, our emblem. When our players walk on the pitch, they know the only result is victory. Club members known as socios, who number around 90, strong and pay annual dues, own the team. Every four years they elect one person to run Real Madrid's operations.

He notes that his father, at age 88, is still a club member—as are he and his children. You become so identified with your club. It provides for social bonds, for life, with members of the family.

The money is "Spent to win. We are able to invest in the club to improve our facilities—the stadium, the training grounds—and at the same time to bring in new players to strengthen the team.The Blitz: Karen Guregian and Kevin Duffy cover the New England Patriots Clubhouse Insider with Jason Mastrodonato, Michael Silverman The Herald's Steve Conroy and Marisa Ingemi on hockey.

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