Posts Tagged ‘NBA’

LeBron James co-creates

Thursday, July 15th, 2010

I always love it when someone like LeBron James creatively bends the rules of a traditional marketing-run organization like the National Basketball Association.  The place is full of league-centric rules aimed at packaging the experience of the fan around its self-defined view of “the brand,” using a ’60s view of marketing management where logos and TV ads are viewed as more important than the creation of an authentic fan experience. Those of you who want your kids to emulate the behavior of NBA stars at home, please raise your hand.

The same “I’m in charge of your experience” philosophy applies to the relationship the NBA has with its players. The player’s experience is regimented by rules such as the salary cap – a team’s payroll shall not exceed $58 million for the 2010-2011 season – and the interaction between players, agents, and teams – players shall not negotiate with soon-to-be free agents before July 1. These rules proceed from a league-first paradigm where the league defines acceptable behavior and players are passive recipients of an employment product defined by the NBA.

Fortunately, LeBron James just exploded all of that. LeBron may not have been authorized by the NBA to negotiate with any team as a free agent until July 1, but he had the right to talk with two of his fellow players, Chris Bosh and Dwyane Wade, also free agents. Together, they decided they would co-create the terms of their future employment. They built a group package, defining the length of the contract (6 years for all three of them), how much each of them would be paid ($14 million to $14.5 million per year per player the first year, with a gradual increase every year after that). They intentionally lowered their collective salary by about $50 million over the length of the contract, to allow their new team to put a couple more players on the court (I’m a soccer guy, but I understand a basketball team has five players) and still stay within the salary cap. In the end, the Miami Heat turned out to be the winner, as many people discovered in an extravaganza show on ESPN a week ago.

The new James-Bosh-Wade collective has the two crucial ingredients of co-creation. It produces a better experience for the individuals involved, since they now stand a great chance of winning the NBA championship in the next six years. It also saves the Miami Heat a bunch since the three players have left money on the table for the chance of playing together, not to mention the fact that the American Airlines Arena in Miami should be full from here on. (In case you’re worried about LeBron going homeless on such a meager pittance, the money he makes from endorsements with Nike, Sprite, Glacéau, Bubblicious, Upper Deck, McDonald’s, and State Farm Insurance dwarfs his salary as a working stiff.)

The evolution of recruiting from a one-way, company-centric process to a two-way co-creative interaction where recruits engage with future employers on their own terms, often as part of a group, is a global phenomenon. One of the most innovative companies when it comes to recruiting is the Indian call center company 24/7 Customer, which allows young people in Bangalore to come and interview as a group. The firm even allows the groups to staff and manage themselves as a unit within the firm if they get hired. 24/7 Customer has devised this group recruiting process to find talent in the highly competitive IT industry in India.

Employers beware. From LeBron James to the call centers of Bangalore, madmen recruits are increasingly in charge of the recruiting asylum.

The power of fan democracy

Sunday, July 26th, 2009

The true test of a man’s allegiance is when he watches a soccer game opposing his country of birth (France in my case) to his country of adoption (the US). The pragmatist in me knows France is more likely to win because of its gloried soccer history. But my heart as an educator goes to the US because I love coaching kids around Boston soccer fields on week-ends on the use of the offside trap or other arcane details of the beautiful game. In the end, none of my France vs. US dilemma matters, though. I just wish I were Spanish.

Spanish soccer rules the world. FC Barcelona just won the (European) Champions League in May. The Spanish national soccer team claimed the European championship last year. The squad just went through 35 undefeated games (the US, of all nations, beat them at the Confederation Cup in South Africa last month), and is a favorite for the World Cup next year. The gravitational pull of Spanish soccer toward talent is exemplified by the recent transfer of Christiano Ronaldo, the Portuguese star, from Manchester United to Real Madrid for $ 130 million, and the signing-up of Brazilian star Kaka from AC Milan by the same Real Madrid for a paltry $ 92 million. Of course, the old rivalry between Barcelona and Madrid is partly responsible for the financial madness (think Yankees vs. Red Sox, with a dictatorship thrown in at some point). But the secret weapon of Spanish football (to call it by its real name) is in the way Spanish clubs engage their fans. More specifically, it lies in the participative governance the leading Spanish clubs have established.

FC Barcelona, for example, is run as a member-share club with over 150,000 members. The fan-elected Board of Directors meets regularly with the Social Commission and Supporters Clubs Advisory Council (34 delegates from various Supporter’s Clubs) to propagate the club’s history and social commitments. FC Barcelona has a deep relationship of the club with the Catalan region (this is also why they have no logos on their jerseys). It is not allowed to be sold. The motto is “more than a club”. Real Madrid has a similar governance structure, with periodic challenges mounted by fans toward management. This transparency of governance is what produces fan engagement which, in turn, fosters success on the pitch.

The Anglo-Saxon model of US and UK sports clubs relies on private ownership by rich people. It turns out these people know how to spend money, but are less adept at engaging fans (why would they share their toy?). They generally have a product-centric view of sport where the star is the product (think Kobe Brian in basketball or Derek Jeeter in Baseball), and the experience of the fan secondary. The productization of the NBA, for example, is unmistakable, with the tight control it exerts on its brand, logo, and merchandising (you rapidly get sued if you interfere with any of them). This is a last century view of marketing. Sports management should be about kids trying to emulate their favorite players and becoming involved, not about packaging stars for consumption at the All-Star game. Finding a way to involve fans will be the major challenge facing sports leagues in these trying times. The future of sports management lies in co-creation with fans.

There are a few enlightened exceptions to this general failure to engage fans in the US, such as the community-owned Greenbay Packers in football (that “other” football). There are emerging signs in the UK of a move toward co-creation-friendly forms of governance, such as the fan-based initiative proposing an alternative structure for Liverpool FC.

There is even an entirely co-created club in the English minor league (Ebbsfleet). But by and large, UK fans get to sing, while Spanish fans get to vote.

O.K., I’ve got to go now. My kid’s soccer team is playing this afternoon and the coach doesn’t give him enough playing time. It’s time to vote the bum out of office.