Lessons on winning, in sports and business

Running a professional sports franchise isn’t all that different from running a large company: In sports, as in business, teams must make money to survive.

But owners of sports franchises face one expectation that most Fortune 500 CEOs don’t: Besides posting profits, they’ve got to win championships, too.

The best sports franchises—the New York Yankees and New England Patriots, Pittsburgh Steelers and Detroit Pistons—find a way, somehow, to do both. But according to a panel of sports owners who spoke at the Wharton Economic Summit, which took place earlier this month at the Pennsylvania Convention Center, that’s no easy task.

Winning in big-league sports, they said, takes a whole lot of effort, a lot of patience, a little bit of luck, and the willingness to make tough decisions in tough times—even at the risk of angering your customers.

“Your people have got to be in this to win,” explained Jeffery Lurie, owner of the Philadelphia Eagles. “And it’s not a popularity race. The fans want you to win, but you can’t engage in a popularity contest, or you’ll end up in last place every year.”

Lurie was joined on the panel, one of many featured at the two-day Wharton event, by Cincinnati Reds owner Robert Castellini, New York Nets co-owner Gary Lieberman and Mark B. Fisher, founder of MBF Clearing Corp., who has recruited successful athletes to work on Wall Street. Their discussion was moderated by Kenneth Shropshire, director of the Wharton Sports Business Initiative.

Shropshire opened by asking members of the panel, all of whom got into sports after making their names in other industries, how working in sports is different than the traditional business world.

Castellini was quick to reply. The media spotlight, he said, is something that new owners often aren’t prepared for. He certainly wasn’t.

“This is high-profile stuff,” he said. “If you’re a Fortune 500 CEO, maybe you’re used to a bit of that, but I had always worked at a privately held company. So when I first started with the Reds a few years ago, I actually went to charm school [to deal with the media]. Because one slip of a lip, and you’ve put your franchise in trouble.”

Lurie, who in his time as Eagles owner has overseen several controversial decisions—the signing and, later, suspension of the divisive Terrell Owens, for example—said the media pressure on sports executives can be difficult to ignore.

But he said that successful franchises don’t let media criticism, or fan sentiment, alter their decision-making.

“The key, I think, is that you surround yourself with people who can make the smart but unpopular decisions,” Lurie said. “In my own experience, our very unpopular decisions are historically our best decisions.”

Later, the owners addressed the much-discussed notion of “team chemistry”—the idea that even a monumentally talented team can fail if teammates don’t gel just the right way. The owners agreed: Chemistry counts.

Few teams have won championships without having the right mix in the clubhouse, Castellini said.

“You’ve got to have chemistry,” he said. “And here’s where managerial style comes in. You’ve got to have a manager who can pick out one or two players who are going to be the leaders in the clubhouse, who can help you manage 25 highly individualistic people. I’m not going to say they’re prima donnas … but they have a high opinion of themselves.”

“Football is such a team game,” Lurie added. “You need a mix of leaders, of followers, of people who react well under stress. Like a family, you need a mix of personalities interacting in a way that makes the other better. You need players who can make the rest of the players on the team better, and maximize their talents. But there are plenty of players out there who have talent but also diminish the talent of those around them.”

The Eagles take team chemistry so seriously, Lurie added, that by the time the NFL Draft takes place this weekend, Eagles executives will have investigated, with exacting scrutiny, the background of most all of the players available. The Eagles will even go as far, Lurie said, to find out how the players treated the janitorial staff at their old high schools.
By draft day, the team will have marked more than a quarter of the available players with an asterisk—a mark that means the player in question will not, under any circumstances, be a Philadelphia Eagle.

“We’ll pass on talented players if there’s any chance [of trouble],” Lurie said.

Originally published on April 26, 2007