Thursday night the big battle started in Oakland California. The reigning NBA champion Golden State Warriors were taking on the underdog NBA East champion Cleveland Cavaliers.
This is easily one of the premiere sporting events in the world these days. Not as big as the World Cup or the Olympics but pretty impressive.
Now you may be asking yourself what all this has to do with business. Or maybe you’re not, because you have the necessary brain cells to get that this isn’t just business, or even even just big business. but major league huge business.
The stakes in this series are very high, and not just from the point of view of being able to hoist a trophy and spray champagne all over the place at the end of it. There are literally dozens of things that spin out, and quite broadly, from what is, to the untrained eye, a bunch of basketball games.
How This All Works
First of all, on a player level, there is the value aspect. Winning an NBA Championship is a big deal from a contract negotiation point of view for the individual players and coaching staff on the winning team.
They all become more valuable. Their agents all make more money too and are highly incentivized to go out and make whopper deals for them if they are hitting free agency or negotiate contract extensions and bonuses with their existing teams if they are not
For the team, it means a trip to the White House, some serious bonus bucks, added fear in the hearts of every other team in the league, and the highly treasured championship ring, which, when they are old and grey and by old and grey I mean in their late thirties or early forties they can dine out on that for as long as they want.
For the team’s ownership it means increased season ticket sales and that means easier-to-sell-out arenas for their 41 homes games. It also means potential sellouts at all the arenas they visit on the road, because everybody wants to see the champs in person.
For the less scrupulous owners, it means upping the ticket prices because real basketball fans never let money get in the way of the rush of being there and they know it. Prime center court seats for this series are going for somewhere in the neighborhood of $16,000.
For the local worker bees it means guaranteed continued employment for everybody involved with the organization and the arena in which the team plays.
It also means continued great revenues for all the restaurants and bars in the area as well, because there will be a buzz buzzing on every game night. And there will be full sports bars all over the Championship city watching every one of the away games as well.
For a select few promotional merchandise suppliers this is like manna from heaven with T-shirts, rally towels and a host of other promotional items ordered in the 10s of thousands, which in turn means all the Pacific rim sweatshops where those T-shirts get made are hopping all year round.
For the companies like Nike and Champion and Wilson who sell original team gear that gets sold in the team shops at the arena, every year is a bonanza no matter who wins.
For the charities that the teams support, it means more donations because everybody loves to be associated with a winner.
For the radio stations and TV networks broadcasting the games it will mean higher ratings with an ever expanding audience and jacked up advertising rates during the playoffs.
For digital sports game manufacturers it will mean increased revenues and some new mega superstars to promote. Same for all beer companies, soft drink companies, energy drink companies, car companies truck companies, a host of packaged goods companies…and the list goes on, of companies that rely on superstar pro athletes like Cleveland’s LeBron James and Golden State’s Seth Curry to promote their brands.
For advertising agencies with the right kind of products, it means a bigger audience to market to. And this is not just restricted to the US, because there are hundreds of thousands of people in about 130 countries around the world who are huge hoops fans and even more that that who are watching the NBA finals over the next couple of weeks.
For foreign basketball promoters affiliated with the NBA, it means more greatness to tout and attract and develop talent for their countries’ leagues.
And for all the junk food suppliers all over the world, it means added pizza, Chinese food and chicken wing orders, which in turn benefits all those business as well, all season long, and to an even greater degree during the playoffs.
Big Business At Its Best
The NBA, NFL, Major League Baseball, PGA and NHL, on this continent, are huge megacorps. In other parts of the world, it’s an endless array of football (aka soccer) leagues and cricket teams. Pro baseball is huge in Japan as well, which is obvious from the ever growing number of Japanese players who show up on MLB teams.
Each of these sports megacorps are extremely profitable, both for the majority of the individual team owners and the league itself. But they also employ a hell of a lot of people, and breathe real economic life into the communities where the teams are located.
For some reason the majority of people who own sports teams or run large sports megacorps are a little different from their counterparts in many other private sector enterprises.
And by a little different, I mean they are more human, or at the very least understand that because their product is entertainment, that brand loyalty is not something you can buy or advertise your way into…but very much something you earn by always striving to put the best possible product on the floor/field/ice and by making sure that the individual teams and players are all heavily involved in their communities.
Giving back is a big part of their mandate and they do a very good job of living up to it. Maybe that has something to do with the fact that a lot of the owners used to be players or coaches and learned the value of community relations, publicity and good corporate citizenship very early on.
Corporations in other business sectors can learn a lot from the way these pro sports corporations are run and managed. Especially when it comes to brand loyalty, which is something that you see less and less of these days.
Mainly because while many corporations are nothing more than faceless entities churning out products or services, mostly competing on price, and doing relatively little to humanize their brands, pro sports corporations are much more intent on winning over the hearts and minds of their customers.
Because that emotional attachment that a sports fan forms with his team is the lubricant that helps things all run smoothly.
You could argue that there is a lot of ruthlessness inside the pro sports culture, but because their business is all about promoting talented athletes and supporting the game, you don’t really get to see a whole lot of that.
For me, professional sports provides a substantial part of my TV entertainment, and I am pretty sure that’s true for a great number of number of people.
I support these megacorps by being a fan and doing a lot of the things that fans do, which in turn means I support the market itself.But most importantly, I feel good doing it, which is not necessarily something I can say about a lot of other businesses I interact with as a customer.
I’m Jim Murray and my company is called Onwords & Upwords.
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