Corporate Competition, Minority Recruitment, New Technology All Changing the Career Landscape in Big-Time Sports
By Stefan Fatsis and Peter Keating, from The Wall Street Journal Online
At National Football League headquarters in New York these days, it’s hard to find a senior executive with much experience in, well, football.
The NFL’s finance chief used to work for Goldman Sachs. Its top two marketing executives were at General Motors and IBM. Its lead television negotiator ran sports for ABC and ESPN. The chief operating officer of its cable network handled finance for NBC’s West Coast entertainment division. The head of its international division was a marketing executive for the liquor company Diageo.
Once the playground of family dynasties, ex-athletes and determined fans, the sports business has grown up. The sheer number of jobs in the industry, and connected to it, has surged. And today jobs in sports are less about analyzing box scores than creating brands, running spreadsheets and serving customers. As the NFL’s leadership lineup shows, sports has become a target destination for marketers, accountants, lawyers, salespeople and other executives with skills honed in other industries.
“Our fans are bombarded by ways to entertain themselves,” says Nancy Gill, the NFL’s vice president of human resources. “We need to be able to have people who are familiar with that space in a way we didn’t several years ago.”
David Stern, commissioner of the National Basketball Association, adds: “If you can do it at a major entertainment company or major consumer-products company, it likely has a counterpart in our industry.”
As sports has grown into big business, the teams and leagues have gotten serious about how they find off-field talent. In the 1980s, it was unheard of for sports organizations to use headhunters, and even a decade ago one of the main entry points into the business was personal contact. “You knew a guy who knew a guy whose father was with the Braves,” says Michele James, founder of James & Co., a search firm that has worked with major professional sports leagues. Happenchance was another. Detroit Tigers President David Dombrowski got his first job in baseball in 1977 after bumping into a team executive during the sport’s winter meetings in Hawaii. “There couldn’t have been more than 15 job seekers there,” Mr. Dombrowski says.
Now, well-known executive-search firms, and a few boutique shops, specialize in finding hires from inside and outside sports. The more serious attitude even extends down the ranks. Comcast Corp., which owns the Philadelphia Flyers hockey team, recently posted on an online sports-recruiting service for someone with “excellent organizational skills” and “effective communication and management skills.” The job? Driving a Zamboni at the Flyers’ practice rink in Pennsauken, N.J.
Too Much at Stake
“If you’re going to have these franchises that are worth north of a billion dollars, you’re looking at it really as the business of entertainment, the business of intellectual property, the business of turnstiles,” says Ms. James. “This is a very sophisticated time. It’s not a back-slappy time.”
The booming supply of sports-related jobs extends well beyond the teams and leagues. From giant apparel and equipment manufacturers like Nike Inc. to big sports advertisers like Anheuser-Busch Cos. to Wall Street firms with sports investment arms, there are jobs in sports that simply didn’t exist 30 years ago. Sneaker designers. Interpreters for Japanese athletes. Directors of skateboarding videos.
Unfortunately for job seekers, supply has more than kept up with demand. Some 300 college sports-management programs — most created since the 1970s — churn out hordes of graduates every spring. Entry-level positions in the marketing, sales or ticketing offices of big-league teams often attract thousands of applicants. Joan Barno, human-resources specialist for baseball’s Cleveland Indians, says, “We have people from, I am not kidding you, all over the world apply for jobs.” She says the team recently received 412 online applicants for a 32-hour-a-week community-outreach assistant. “And that’s nothing,” she adds. Last year, the Indians got 1,500 applications for six internships.
Team and league executives loosely divide the sports industry into three overlapping areas: content, or the leagues, teams and other sports organizations; channels of distribution, or television, radio, stadiums and arenas, and the Internet and other digital media; and related businesses, which provide goods or services to the content providers and distribution platforms, like beer and sneaker makers. Opportunities in all have soared. Dozens of new minor leagues and niche sports have emerged in recent years. Leagues have expanded dramatically overseas.
Many of the industry’s central businesses didn’t exist a few years ago, or were much smaller. Major League Baseball’s most profitable entity — its online and digital “advanced media” operation — was formed only in 2000. Nascar wasn’t a national phenomenon until the late 1990s. ESPN was a lunatic-fringe network when it launched in 1979. Before the past decade, stadiums didn’t have “fan zones” to divert customers; they offered the games and an annual Bat Day.
In a competitive entertainment marketplace, and in a business with as many on-field losses as wins, the challenge for teams and leagues is giving customers a reason besides winning to keep coming back. “That’s why [teams] are investing in stadium infrastructure, suites, VIP areas, entertainment areas, better concessions, better LED boards to watch videos,” says Robert Cornilles, president of Game Face Inc., which trains and places sports executives. The governing principle of managing a sports enterprise today, he says, is that “the sports product by its nature is largely out of our control…It doesn’t mean I disregard the players. I hope they do well. But I’m not counting on it.”
At the same time, the new corporate sports executives need to make sure they don’t lose touch with the games themselves. “You’ll hear people say, ‘I’m not in sports, I’m in the entertainment business, I’m here to market, I’m here to sell,’ ” says Miles Wolff, whose ownership of the Durham Bulls in the 1980s helped lead a renaissance in minor-league baseball. “I’ll go to a lot of ballparks and feel the baseball is forgotten.”
To understand how sports-related jobs have changed, you don’t have to go back very far. As recently as a decade ago, few leagues or teams hired from outside the sports industry or used professional recruiters to identify talent. Hiring “was less merit-based, and it was certainly less specialized,” says Joe Bailey, who began working in the NFL in the 1970s — his father was the Dallas Cowboys’ team doctor — and left in the mid-1990s for the search firm Russell Reynolds Associates. “You conceivably could have gotten somebody in the finance department who wasn’t a CPA,” says Mr. Bailey, who returned to the NFL last year as chief executive of Dolphins Enterprises, which runs the Miami Dolphins and their stadium.
That changed as pro leagues’ television contracts swelled. Teams started to behave less according to the idiosyncrasies of their founding families and more along the lines of modern management theory. They expanded their finance, marketing, ticketing and communications operations. With “functional talent” becoming more important, Mr. Bailey says, teams and leagues recruited more aggressively from other sports and other industries, not just within a sport.
“Nowadays, it would seem perfectly natural for someone who has been selling soccer to go promote Nascar,” says Buffy Filippell, president of TeamWork Consulting, a Cleveland firm that recruits for the sports industry. “But it was like, ‘You’re going to take someone from another sport?’ Leagues and teams had to become better versed in the professionalism of finding the best talent in another league.”
It didn’t take long for them to do that. In 1989, Mr. Bailey at Russell Reynolds was asked by the NFL to find a marketing director for the Barcelona Dragons of the league’s European operation. He recalls posing the task at a staff meeting, where one recruiter immediately suggested a Yale graduate who spoke Catalan and worked for Ringling Bros. in Buenos Aires. He got the job.
New team owners from outside sports have also provided an impetus for conventional business practices and broader searches. Since paying $545 million to buy the NFL’s Atlanta Falcons in 2001, Home Depot Inc. co-founder Arthur Blank has used a search firm to identify candidates for the jobs of general manager and head coach — positions historically filled based on reputation and word-of-mouth. Other new owners, led by Internet executive Mark Cuban of basketball’s Dallas Mavericks, have brought tech-boom entrepreneurial energy and thinking to buttoned-down leagues.
Teams and leagues also have discovered that managing complex salary caps and labor deals requires quantitative talent as much as traditional scouting and salary negotiation. When Terry Donahue, then the San Francisco 49ers’ GM, wanted to figure out whether the 23rd pick in the 2001 NFL draft was worth trading for the 57th and 58th picks, he called Bain & Co., a Boston-based consulting firm. Bain sent over a Stanford business-school student named Paraag Marathe. Mr. Marathe, 29 years old, is now the 49ers’ director of football operations.
Even legendary teams like the New York Yankees and Green Bay Packers, whose generations-long fan appeal virtually exempted them from the need to innovate, are changing. In football, growing disparities in locally generated income have forced teams to get more aggressive about how they sell their product; as part of a stadium makeover, new management in Green Bay decided to build a year-round team hall of fame. The Yankees recently contacted Game Face about training sales executives in preparation for tripling their number of pricey club seats to 9,000.
“There was a time when you sort of lived with whoever was out there,” says Wendy Lewis, Major League Baseball’s vice president for recruitment and diversity. Now, she says, sports like baseball have to compete with the general marketplace for talent, and “we want to keep folks, too.”
One of the downsides to the new corporatization and specialization is that young workers don’t get to touch all the bases the way they used to. “There were so few people, you got to know everybody much more,” says Mr. Dombrowski in Detroit, who started as a gofer on the Chicago White Sox’s baseball operations staff. Now, he tells the Tigers’ 30 summer interns that the team has more of them than the White Sox had front-office employees when he entered the sport.
To combat that problem — and attract top graduates of undergraduate programs, business schools and law schools — leagues are offering newcomers broad experience. The NBA runs a yearlong development program for recent college graduates. Major League Baseball this month began an executive-development program with an inaugural class of five people who will spend two years in the sport: the first year in baseball’s central office in New York, and the second with a team. The goal is to create talent in baseball operations, team businesses and league management.
Minority recruitment also is driving change. Ms. Gill of the NFL says the league’s summer-internship effort “was always a friends-and-family program.” In 2002, that changed to focus on minority students; about 2,000 people applied for 30 positions this year. The NFL now is rehiring interns for a two-year postgraduation rotation: six months apiece in the league’s business-ventures, international, marketing and consumer-products departments.
Chasing the Dream
So, how does somebody actually break into the sports industry? Throughout the business, the most common entry point remains the ground floor. TeamWork Consulting has an online board that has helped teams and leagues fill more than 2,200 jobs in the past 15 months. The most popular positions: marketing, public-relations or community-relations jobs that require little experience. Earlier this summer, TeamWork had about 100 ticket-sales positions listed. “Sometimes they’re in Reading, Pa., or Bismarck, N.D.,” Ms. Filippell says. “But if you’re 22 and moveable, you should be able to find a job in the sports business.”
After working for the sports-management firm IMG in the late 1970s and early 1980s — she represented tennis whiz kid Andrea Jaeger — Ms. Filippell suggested to a search firm that she do sports recruiting. “They looked at me like I was crazy,” she says. Ms. Filippell joined Korn/Ferry International in 1985. “There was no such thing as the sports business,” she says. “You could not go to one of the top business schools and get an emphasis in sports management. They’d never heard of such a thing.”
Now, undergraduate and graduate schools have placement programs for sports. The NBA met recently with career officials from the University of Pennsylvania’s Wharton School and the Harvard Business School on how to better interest top M.B.A.s in the league. Kara Costello, a Wharton career placement administrator, says only five or six of the school’s 800 M.B.A.s every year take jobs in the sports industry, but the number of interested students is growing.
The Pay Lag
One problem for business-school graduates who want to go into sports is what Kenneth Shropshire, director of Wharton’s Sports Business Initiative, calls the “hockey-stick theory” of compensation: Salaries are flat at lower levels of sports organizations and then shoot up. In short, a newly minted M.B.A. can earn more on Wall Street than Park Avenue, where the big leagues have their headquarters. “It’s an issue,” Prof. Shropshire says.
Consultants like Ms. Filippell, however, say the pay gap for M.B.A.-level jobs in and out of sports narrows as professionals climb the ladder. And leagues say they are adjusting. “We’ve changed our approach to compensation and benefits,” MLB’s Ms. Lewis says. “We have relocation packages now.”
No matter the pay, sports will always have this going for it: The prospect of working as a GM can sound much sexier than working for GM. The NFL this year tapped Korn/Ferry to manage the search for a new commissioner. Who got the job? Roger Goodell, who joined the league as a 23-year-old public-relations intern in 1982.
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Originally posted September 19, 2006