Risk Taking
February 14, 2012
The June 22, 2009 cover story of Business Week which I just reread was titled “The Risk Takers.” It featured businesses which during difficult times, instead of playing it safe, placed bets on some gutsy new strategies.
To make a point, the author used an illustration that we can relate to here in Michigan. I paraphrase:
Imagine a driver on a snowy night. If the car starts to slip, the driver’s natural instinct is to slam on the brakes and jerk the steering wheel in the opposite direction. But the laws of physics advise the opposite: laying off the brakes and steering into the turn.
The author reports that from 1985 to 2000, the average merger in an economic downturn created an 8.5 percent rise in shareholder value after two years; while the average deal in good times resulted in a 6.2 percent drop in the buyer’s share value. In other words, mergers – one of the biggest, boldest moves in business – do better in bad times than good. Much better, in fact.
It wasn’t recklessness this article was celebrating; it was risk taking – daring to be aggressive, rather than just defensive, amid a weak economy. Steering into the turn, so to speak.
Just like the winter driving analogy in the article, we who are involved in school sports in Michigan can relate to the big idea of the article because we too made some of our biggest moves at our bleakest times. The MHSAA retrenched in some ways, but the greater theme as we climbed out of our bad times of 2008 was that we made unprecedented investments in new technology.
Today MHSAA.com is the website of highest traffic and MHSAA.tv is the website with the most productions of any comparable organization in the U.S. And all of these investments in technology during those bad times have allowed us to undertake the ArbiterGame project now that will provide all member high schools the electronic tools necessary to make their tough tasks of school administration more streamlined than ever before.
Peddling Influence
February 28, 2012
The Sports Business Journal published in December its annual list of the 50 most influential persons in sports business. No person from the ranks of high school sports is included, causing some to criticize the oversight. I don’t.
If ever a person from the high school level were to make this listing, it likely would be for behaving like those at the college, professional and international levels. No one will make the list for doing the job he or she is supposed to do, which is to assure that the business excesses of those other levels do not visit school sports, and to actively oppose those initiatives that would undermine educational athletics.
I understand fully that there are important business aspects to the administration of interscholastic athletics. But I also understand that these business tasks must be managed within the cozy confines of the educational mission of the sponsoring institutions – schools.
We know how to make a lot more money for school sports from networks, sponsors and promoters. But we also know why that wouldn’t be right for educational athletics. Contests on any day at any hour for broadcast purposes, at any location no matter how far. Highlighting big schools, highly ranked teams and highly rated/recruited players, to improve broadcast ratings and advertiser demands. Brilliant minds and bullying personalities couldn’t avoid this happening in college athletics. Once started, we could not fare better in controlling things on the high school level.
We have the potential to aggregate school sports content very attractively for producers, distributors and sponsors. But it’s best that we don’t. And just fine that we continue to be overlooked by business trade journals.