Thursday, September 10, 2009

Starting a Pro Sports League

CBS Sports wrote an article four years ago about what it takes to start a sports league from the ground up. Contributing was Rick Horrow, who calls himself "The Sports Professor" and is pretty much a professional sports law commentator.

The first paragraph celebrated three sports events: the Dew Action Sports Tour in Louisville, World Bowl XIII in Duesseldorf, Germany and ArenaBowl XIX in Las Vegas. Only the Dew Action Sports Tour - devoted to "action" or extreme sports - still exists. NFL Europa closed shop in 2007, and the Arena Football League gave up the ghost in 2009.

Despite the fact that the article might not have predictive weight, here are the four factors stated by Morrow:

1. The "niche" sport should have a substantial core of loyal and intense followers. Morrow's example was the Professional Bowlers Association.

2. The start-up league must attract a stable of emotionally and economically secure owners and investors committed for the long term. This time, the example was AVP Pro Beach Volleyball.

3. The long-term business blueprint should maximize television exposure (whether through rights fees or initial start-up investment). Morrow used the Arena Football League as his example.

4. The business plan must rely on a level of consistent support and growth from corporate America. The case studies used are those of the Professional Bull Riders Tour and the Bass Anglers Sportsman Society.

Without looking at how the WNBA fits in as a "niche" sport, let's look at the WNBA as it relates to the development of other major pro sports.

First, does the WNBA have a substantial core of loyal and intense followers? It all depends by what you want to call "substantial". I remember that Val Ackerman said at the foundation of the WNBA that she expected about 4,500 fans per game. I also remember that the goal for the Atlanta Dream when it was founded as a franchise was to have about 1,500 season holders.

We don't have a lot of numbers to look at - just those two, taken from two completely different time frames (1997 and 2008). The questions any sports league has to answer is:

a) how many season ticket holders are there per franchise, and
b) what is the rough mathematical relationship between STHs and regular attendees?

Historically, you would think that the WNBA does have a substantial core of loyal and intense followers - these should be the people who have been following girls high school basketball and women's college basketball. They've been following the sport for two decades. The major men's sports - baseball, basketball and football - all had fans who had been following the sport at an organized level for over two decades before those sports went pro.

On the other hand, you have to wonder how numerous the women's basketball fanbase is - high numbers for Tennessee and Connecticut women's basketball doesn't tell the story. Annemarie Ferrell's paper related the stories of women who watched men's college basketball but didn't watch women's college basketball. Among the many reasons given is that the last time these women watched the women's college game - twenty years earlier - the gyms were virtually deserted.

Women playing professional team sports is only a recent development. If the core isn't substantial enough - so to speak - is there a chance that the size of this core can grow? I feel that part of the reason of the demise of Arena Football was that the sport had no "core" - people were quite willing to attend it but the "core" of its fan base were fans who followed regular season football. There was no core of people who would forsake all other sports - if it came to that - to watch Arena Football. Does the WNBA have a group of people who would put their WNBA experience above following women's college sports if the financial crunch came?

Second, how economically secure are the owners and investors of the WNBA? I've mentioned the list of owners for the WNBA in the past. Some of the names on that list are billionaires. Some are multi-millionaires, or even "two-digit" multi-millionaires. Some come from fields (real estate) that have taken a hit in the Great Recession, others have seemingly secure sources of income.

For the WNBA, I think the more important question is that of the "emotionally secure" investors. How long have the owners of WNBA teams had their fortunes? How experienced are they as business managers? How likely are they to bail out at the first sign of trouble? I have my doubts about some of the WNBA owners - without naming names, I wonder if some of them really have the nerve - there's no nicer way to say it - to navigate the rough patches.

Part of that question comes from whether or not they expect profit, and if so, how much. Once again, I want to point to the Arena Football League and what I perceive as the emotional instability of its investors. I suspect that a lot of them were operating on razor-thin margins and were looking to get out at the first opportunity. However, the TV contract kept many owners satisfied enough and I'm sure many hoped that the proposed Platinum Equity deal would bail them out of their troubles. When that deal fell through, the league collapsed.

The third question is "television exposure". I think Morrow simplifies the matter greatly in the article - the question is "media exposure". The TV deal for the Arena Football League wasn't enough to save that league, and I doubt that the WNBA's TV deal is much better.

The WNBA has an advantage in having the patronship of NBA TV. Many critics claim that the NBA just props up the WNBA, but many overlook the biggest prop of all - cable television. No matter how far you are away from the WNBA, if you can get NBA TV you are guaranteed to see some of the games, even on weekdays.

On the other hand, the WNBA has the disadvantage of a hostile print media in many of its cities. Sports departments of major newspapers tend to be more conservative, and at least with the Atlanta Journal-Constitution, the attitude of the reporters (on their AJC-hosted blogs) to the Dream is that of outright scorn. If the reporters feel free to mock the WNBA, what do the editors think? This begs the question "can a sport survive without the partnership of print media?" The Dream and other WNBA teams are certainly trying to do this by embracing the "new media" of the Internet and Web 2.0 applications. Whether this is a successful strategy remains to be seen - there is a chance that the strategy could be successful, given falling newspaper circulation which might simply diminish the scornful voices.

Finally, we look at corporate sponsorship. The WNBA has made some big strides in this area with two teams - Phoenix and Los Angeles - selling jersey sponsorships and the Pacers/Fever entering a long-term deal with Kroger. The detractors claim that the selling of jersey space indicates desperation, but one person's desperation is another person's opportunity. The WNBA hasn't been around long enough to consider its jersey space sacred, and the majority of the WNBA's players plays overseas in the off-season where jersey sponsorship is a given. As far as the WNBA is concerned, not only is there no controversy, it's also a "no-brainer". Indeed, pro leagues are starting to look at selling sponsorship at least on their practice jerseys.

Will the WNBA end up like NFL Europa or the Arena Football League? I think that the WNBA has a few advantages - the existence of a core of followers (even an insubstantial one) and the willingness to seek corporate dollars by doing something different. However, the hostility of the print media is a definite disadvantage. If the WNBA can find solid - and emotionally stable - investors, then I would conclude that the WNBA has a brighter future than either of those two aforementioned entities.

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