Securing the future of sports teams and leagues - From "any given Sunday" to "every given Sunday": Delivering off-field sustainability for ...
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Securing the future of
sports teams and
leagues
From “any given Sunday” to “every
given Sunday”: Delivering off-field
sustainability for on-field success
May, 2014
David Mackay, Li-xia Tan
October 15 1
Securing the future of
sports teams and leagues
Sports most fearsome clashes often occur off- However, the benefits of competitive
field balancing remains a hotly debated sporting
topic. Critics assert the forced equalisation
Carlton v Collingwood. Yankees v Red Sox. provides a disincentive for both dominant and
Manchester United v Liverpool. The intensity underperforming clubs to improve their
of the competition between some of our position.
fiercest sporting rivals underscores the
excitement and ethos of modern day sports. While the debate continues, it is clear that the
success of a league is not solely driven by the
Off-field, the competition continues. Club equality between clubs. The English Premier
managers and administrators battle to secure League, a £2 billion revenue per year
the best talent, highest profits, largest competition, has seen the same four clubs
memberships and biggest media campaigns. win the championship all but twice in the last
Meanwhile, mechanisms such as competitive 25 years, yet in the 2013/14 season we saw
balance seek to even out the playing field and numerous occasions where ‘relegation-
ensure every team has the chance to succeed battlers’ defeated ‘premiership contenders’.
and thrive in the competition. The 2013/14 La Liga Champions were
Atletico Madrid, breaking the 9-year
So how do codes and teams deal with the
stranglehold of powerhouses FC Barcelona
apparent paradox of striving for both
and Real Madrid. “Any given Sunday” is still
excellence and equality? How does the
alive even in competitions seen as
sporting industry secure a future where all
competitively unbalanced. Fans (the ultimate
teams can perform at an increasingly
drivers of club and code success) will
improved level, on and off the field?
continue to support the teams and sports
Competitive balance is not the silver bullet they love while there is still even the slightest
uncertainty in the outcome of a match.
Competitive balance attempts to promote a
“fair and level playing field” and reduce the Sports Business Group, 20th Annual Review
performance gaps between clubs. Typical of Football Finance (2011), Deloitte.
balancing mechanisms include salary caps,
Off-field sustainability is the key to the health
reverse order drafts, revenue sharing and
of teams and leagues
luxury taxes. These measures are directed at
ensuring that “on any given Sunday,” any Succeeding in sport has always been about
team in a competition can beat any other winning. Formula 1 boss Bernie Ecclestone
team, a phrase coined by former NFL remarked “whatever sport there is, people will
commissioner Bert Bell. spend what they think they have to spend in
order to win.” Many a successful business
person has fallen victim to their heart ruling
their head when it comes to the sporting
arena.
2
.Securing the future of
sports teams and leagues
Importantly for the success and wellbeing of 1. Set clubs up to succeed
sporting leagues, focus needs to move from
“any given Sunday” to “every given Sunday”; Create an environment and deliver the
providing certainty to fans that their clubs will structures that will set clubs up to succeed.
remain solvent and continue to participate Deliver stability and a clear direction.
and compete week in week out. Establish mechanisms and support to deliver
growth and sustainability. Act fairly but apply a
It is to this end that salary caps and other strong hand when rules are broken. Promote
measures play a more critical role. When good financial behaviour and reward clubs
clubs spend to win salary caps provide who demonstrate strong financial capability.
stability, mitigating the risk of overspending.
Such measures are needed to ensure clubs 2. Grow and promote your brand
can survive, especially in Australia; a highly
The relationship between your brand and
saturated and competitive sports market
success of your league or club is a virtuous
where limited consumer and sponsor dollars
cycle. Embrace public relations, marketing
must be shared. Ultimately, you can’t strive
and social media to connect with your
for competitive balance if you don’t have a
stakeholders. Communicate clearly, and
sustainable competition. Shifting the focus
often. Understand how a strong brand can
from competitive balance to competitive
generate revenue. Find out how your
sustainability is the key to the successful
stakeholders (particularly fans) like to
future of sports teams and leagues.
communicate, and use those mediums.
There are four key drivers to achieve off-field
3. Be fan-centric
sustainability:
Remember that fans are the ones attending
events, buying tickets and merchandise, and
advocating for their teams and sports on
social media. Understanding the
segmentation of your fan base, their purchase
journey, and what they value and who they
are outside your sport is critical.
4. Pro-actively collaborate
The success of teams and leagues is
interdependent. Collaboration is critical to
improve the overall health of a league and
ensure the continued success of teams,
particularly in new and growing sports.
Consider ways to share technology,
infrastructure and data between teams to
reduce costs, build knowledge and develop
new ideas.
3Securing the future of
sports teams and leagues
Grow your sport, grow the game SPP are strategy leaders and can support
you to:
Ultimately, the success of clubs and leagues
is dependent on the health and sustainability • Conduct strategic planning and training –
of the sport itself. The objective of sport has develop end-to-end or problem specific
never been just for only the richest and strategies to help you make the right
strongest clubs to survive – it is for the sport decisions and embed strategic capability
to grow and to be played competitively and at
an increasingly improved level. Sport plays a • Understand your fan base – conduct
critical part in the economic and social detailed customer segmentation, value
wellbeing of Australia, and clubs and leagues proposition identification and how to
can create a virtuous cycle by growing the leverage this for brand and revenue growth
game and reaping the benefits.
• Develop multi-channel digital strategies –
Take the next step to secure your create and implement an ecosystem of
sport’s future digital tools to build your brand and engage
more deeply with fans
Changing financial and economic climates
continue to throw-up challenges for sporting • Develop ticketing and asset utilisation
teams and leagues. The development of strategies – understand your mix of assets
robust strategies, supported by rigorous and how to price appropriately and grow
analysis is critical in navigating these your value proposition
environments.
• Establish measurement and benchmarking
systems – develop the systems and
processes that will enable you to measure
and compare off-field performance
• Engage with industry and build
partnerships – identify key partners and
develop partnership engagement plans to
extend your reach and performance
.
4About SPP About the authors
Strategic Project David Mackay
Associate Director
Partners is a strategy
consulting firm. We
support General
Managers on difficult
strategic and operational David leads SPP’s work in the Sports and Entertainment
challenges. sector, providing advice to National Sporting Organisations,
sports clubs and entertainment providers with a specific focus
Established in 2005, SPP has on creating sustainable models for commercial success.
delivered successful outcomes David assists organisations in developing and realising
business growth and operational strategies from early stage
for a broad range of commercial new ventures to major corporations. David is a passionate
and Government sector clients. football fan and keen runner.
As a result, we have strong
relationships with many
businesses, from Top 50 listed
companies through to small Li-xia Tan
enterprises. Consultant
When we deliver our projects,
whether it’s a strategic study or
the implementation of large-scale
change, we focus on:
• Strong project management Li-xia brings experience in general management, strategy and
• Clarity of outcome public policy, with a specialisation in social enterprise models,
• An obsessive focus on customer engagement and innovation. From strategic
project benefits planning to digital strategies, Li has a passionate interest in
• Robust, fact based analysis delivering lasting financial and strategic benefits for
• Simple communication businesses and crafting compelling value propositions for
• Bringing experience to bear customers. Li is a keen sportswoman and is committed to
improving her efficiency from the 3-point line.
Contact us for more information
Strategic Project Partners
Level 20, 1 Alfred Street
Sydney, NSW 2000
Insight
Influence
David Mackay Impact
m 0407 483 951
e david.mackay@spp.com.au
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