Wednesday, July 15, 2009

The Five Rules for League Survival

In 1981, William "Bill" Haarlow, retired vice president of AT&T, proposed to restructure the then-still-surviving Women's Professional Basketball League (WBL). In 1981, the league was in trouble and he proposed to become the new commissioner of the WBL. In his proposal, he stated five rules which he thought the WBL had failed to follow - rules which impeded its chances for survival.

The rules are all direct quotes from Haarlow and come from "Mad Seasons: The Story of the First Women's Professional Basketball League".

1. A commitment to strong centralized league leadership is required. League leaders must not be intimidated from bold action. There must be a clearly defined #1 executive or executive committee who has power and room to maneuver and the leadership must provide realistic and continual reappraisal of long term growth objectives and strategy.

2. Markets must be selected based on potential. There must be a determination of the criteria that is most likely to influence the league's appeal and the economics of a franchise, i. e. size and growth of market, degree of saturation by other sports, target audience, operating cost, and previous experience with an attitude toward other leagues or teams. The league must avoid expanding into new markets at the expense of the talent pool.

3. There must be a commitment of balanced ownership resources. The league must balance the urgency to close a franchise sale against the commitment by new owners of capital to team and market development. Women's basketball has to confront building primary demand which is a costly marketing proposition that requires knowledgeable and well-funded programs. There should be a five-year building plan and owners with the same perspective and building power should be attracted.

4. The league must build and sustain the support as a dynamic entertainment medium. There must be an evaluation of alternative formats and rules to make the sport appealing to the widest range of potential patrons and viewers. For a new sport, the live experience is critical to building viewership for ultimate video revenue.

5. Non-gate sources of revenue should be built. A commitment must be made to professional league headquarters marketing services, video strategy and negotiation, licensing and advertiser-sponsor development. This function must be undertaken gradually as the sport develops and grows.

His proposal to become commissioner was rejected. Marhsall Geller, the owner of the San Francisco Pioneers, thought that a new commissioner was a cosmetic solution to a league whose very survival was almost day-to-day. Geller might have been right. In September 1981, Dallas Diamonds president Dave Almstead made the public statement that the league was finished. The league still had some life in it, but he was essentially right - the 1980-81 season was the final season of the WBL.

However, Haarlow's rules were not bad rules. Has the WNBA managed to avoid the pitfalls identified by Haarlow? Let's look at the reign of WNBA president Donna Orender in particular. Orender became WNBA president in 2005.

Is Orender a strong president with freedom to move around? I believe that the answer is "yes". If there are owner/president clashes, I've not heard of them so far. (With one exception, stated later.) Granted, the open secret of the WNBA is that NBA Commissioner David Stern provides finanical support, and one would assume, guidance. However, Orender and Stern appear to be on the same page. No one has accused David Stern of being hemmed in by owners who are too independent and contentious, and the problem doesn't seem to exist in the WNBA.

How have markets been assigned? In only two instances in Orender's career has she been in charge of opening up new territory for the WNBA: the Chicago Sky in 2006 and the Atlanta Dream in 2008.

Chicago was the third-largest media market in the United States and the largest American inland market. Chicago, however, had a slight problem with saturation from other sports. The Cubs, White Sox, Bears and Bulls were all big in Chicago, and it would be hard for a WNBA franchise to draw attention away from "big name" sports. However, Chicago had hosted an American Basketball League franchise - the Condors - which appeared to be fairly solvent in the brief number of games it played in the 1998-99 season. Clearly, there was some interest in women's college basketball in Chicago.

As for Atlanta, Atlanta was a major cable programming center and was the 7th (or 8th) largest media market in the United States. Atlanta, too, once had an ABL franchise - the Atlanta Glory - but that franchise folded at the end of the 1997-98 season. The University of Georgia had a great women's basketball team, but even that team was smothered by the popularity of University of Georgia men's sports - even successful pro teams like the Atlanta Braves had trouble filling seats sometimes, but never the Bulldogs. One person stated that Georgia sports was "(Bulldogs) football, spring football, football recruiting, and the Gymdogs". (The U of G gymnastics team.) In terms of professional sports, however, loyalties to pro teams were much weaker in Atlanta than they were in Chicago.

Looking at either city, one could hardly claim that Orender has chosen poor locations for the expansion of the WNBA. Over-expansion has not been an issue, with the size of the league staying between 13 and 14 teams during her term.

In terms of ownership, there have been several changes including the Storm, Sparks, and Comets. If any mistakes were made in Orender's management of the WNBA, granting Hilton Koch the ownership of the Houston Comets would have to be the most prominent. Koch was already claiming finanical problems in his first year, and my understanding is that Koch and the league clashed over financing. His tenure proved to be such a financial disaster that the Comets were forced to fold. Koch's tenure was the last major ownership change in the WNBA - William Davidson of the Shock passed away but his family now own the franchise - and time will tell if Orender can not only find owners, but find owners with both the money and the patience to build a league and make the five-year investment mentioned by Haarlow.

In terms of the live experience, clearly, the league has done the best that it can. Arenas are professional and clean, and there are lots of in-game entertainments, activities and diversions. As for rule changes that might make the game more exciting, the WNBA is loathe to experiment. Rules, such as say, forbidding the coach to stop game action with a timeout (in international play, timeouts must be reported to the scorers table and only come into effect with a stoppage of play), have simply not been considered.

Why the WNBA has not experimented with rule changes that might make the game more exciting is uncertain. It could be that the WNBA is already wary enough from the bashing of the sports media, some of whom act more like sexist louts than the Gatekeepers of the Fourth Estate. Significant rules changes might inadvertantly support the argument from ignorance that the WNBA is not "real basketball". Furthermore, fans might want the WNBA to mirror the NBA's rules or international rules as clearly as possible - even thought this might adversely affect the quality of the game - in the belief that adherence to conventional rules give the WNBA gravitas.

As for sponsorship and alternative forms of revenue, the WNBA has made galloping strides in 2009 - partly out of necessity. In order to find a source of revenue, the WNBA has sold the naming rights to jerseys in Phoenix and Los Angeles, and a third team might follow. The WNBA has embraced social media and now broadcasts over 95 percent of their games on the internet. Increased web hits correlate with the potential of attracting advertisers.

My conclusion is that if one is looking at Haarlow's guidelines, one can argue that President Orender and the WNBA are doing things right. If the WNBA falters like the WBL faltered, it will not be because of poor management.


Q McCall said...

Very nice post.

I was just thinking of these type of issues the other day when I read this article about new United Football League:

The strategy seems sound: find new markets, build in major markets. It seems like its future would be best as a minor league...

But anyway, it's interesting to think about what it takes to establish a league. Might be a good time to check in on WPS as well...

One thing UFL and WPS are doing is starting small and keep operating costs down...and I also wonder about revenue sharing structures across various leagues and how well they work out...

pilight said...

I think the league has failed badly on #1, and as long as it's beholden to the NBA that kind of leadership won't be possible. Stern has made it clear that there's a very limited amount of autonomy in being president (note: not commissioner) of the WNBA.

pt said...

Q, I've read the UFL article which was interesting. They appear to be doing a lot of things right and keeping their ambitions fairly low. The alliance with the Versus network is particularly interesting - in the old days, networks attached themselves to leagues; now we might be shifting in the opposite direction where networks might actually start leagues for programming purposes.

I wonder if Haarlow might have come up with a new set of rules if he had written this in 2009. I doubt it, because a lot of nascent leagues screw up getting even the basics right.

pilight, a quick question: How do you (or any other commenter) feel that Stern has impeded Orender's scope of freedom? Places where the two don't see eye to eye are almost impossible to find in the press. Or is Stern the person who is really in charge of the WNBA and Orender just a figurehead?