WHAT’S IN A GAME? PART I
How knowing the type of game you’re really playing can inform your vision and values, and shape the overall perception of your success.
PART I: YOU GUYS STINK!
One of the most fascinating things about the business of professional sports is that a club can fail so spectacularly relative to its competition, sometimes even for decades, and still maintain itself as a profitable and valuable enterprise.
The New York Knicks of the NBA have not won a league title since 1973 and, in this century, have become something of a punchline, at a time when the league is living through its “jazz age” of global popularity. Yet, despite their folly on the court, when Forbes released their list of 2022 NBA team values last month, the Knicks stood tall at #2, worth a mouth-watering $6.1 billion, behind only the reigning champion Golden State Warriors.
Of course, this is largely a feature of how the leagues, especially in North America, have organized themselves over the back half of the 20th century, with ownership groups working together in a closed, and mostly socialized, monopoly that puts the overall success and popularity of the league ahead of its individual franchises and athletes. Failing spectacularly on the field doesn’t necessarily condemn a team to permanent obscurity because leagues are good at enforcing parity, or “competitive balance” as they might call it. They’re also really good at forcing uniformity in things like pricing, salaries, fan experiences, even uniform and apparel design, all for the good of the league. There is revenue sharing, luxury tax redistribution, and even a salary cap (in every major N. American league, except MLB)–hallmarks that make these professional sports leagues, at the enterprise level, look more like economic cooperatives rather than the competitive battleground that plays out on the field.
Although these powerful league ownership groups (cartels?) have over time learned to shape (rig?) this system in their favor, there have been plenty of bankruptcies, labor disputes, and other such speed bumps along the way. One example was the infamous Major League Baseball players strike in August 1994–a maneuver which canceled the remainder of the season, including the World Series, after 114 games. This was a setback from which it took baseball years to rebound. One team in particular, the Montreal Expos, never recovered.
The Expos were on the verge of their first-ever division title when the MLB players decided to walk out in 1994. By the time play resumed the following season, already known for their frugal management, the team had initiated a “fire sale” of their best players as part of an effort to cut payroll and balance their books. Interest in the club declined significantly in the following years and so did its stadium attendance. Things went so sideways that in 2001 major league baseball owners voted to contract the Expos (and the Minnesota Twins) from the league altogether—in a delicious twist of irony the measure only failed the required unanimous vote because both the Expos and Twins, by league charter, were able to dissent to their own expulsion. By 2002 Major League Baseball itself assumed ownership of the Expos. And on April 4, 2005 the artists formerly known as the Montreal Expos played their first-ever game as the Washington Nationals visiting the Phillies at Citizen’s Bank Park in Philadelphia. What’s more, on October 30th 2019, not yet 15 years after arriving in our nation’s capital as a damaged and unwanted orphan on the verge of implosion, the Nationals won the World Series in 7 games over the Houston Astros. At the start of the 2022 baseball season in April, Forbes, who also publishes an annual franchise valuation for MLB, valued the Nationals at $2 billion, ranked #12 in the sport.
So, how does a business entity like the Nationals, née Expos, within the space of 20 years, transform itself out of the depths of financial ruin, on the precipice of total dissolution, and into a world champion club with an enterprise valuation in the top half of its peers? And really what, if anything, can we learn from this turnaround?
First, the atmosphere described above cannot be ignored–Major League Baseball operates like a cartel holding a firm grip on the monopoly of professional baseball in America and allowing one of their properties to collapse would not have been good for business. Cooperation is great, but baseball is entertainment, and MLB certainly doesn’t retain a monopoly on stuff to watch, so there’s more. Prior to the strike of ‘94 and their eventual collapse, baseball in Montreal flourished–they had just three losing seasons between 1979-1994 and failed to draw a million fans to Olympic Stadium just once in that same period. But the market dried up. If the club was to be resurrected, it would have to be elsewhere. The rich baseball history in Washington, DC, among other economic factors, made the move palatable for league owners. Finally, Nationals Park, the club’s permanent home, built in partnership with the District of Columbia’s sports and entertainment authority, opened its doors in 2008, after the club spent its first 3 seasons in DC playing at RFK stadium, the former home of the Washington Commanders. Their new fans had a home.
The Nationals’ unlikely redemption story had very little, if anything at all, to do with their performance on the field. Like any organization, sometimes your product is good, sometimes it isn’t. Some years people buy what you’re selling, other years they don’t. The most important thing that happened to the Montreal Expos is that they were able to continue to exist. With the help and support of their peers, their introduction to a new audience, and development of a brand-new, state-of-the-art fan experience, the Washington Nationals played baseball, and they never lost the will, or the resources, to continue to play the game.