Vice Chairman, Global Sector Leader, Sports
Derek Jeter is going to find out fast that winning a world championship is a lot harder as an owner than it was as a player.
Jeter, who won five world titles as shortstop of the New York Yankees, is part of a group that’s paying $1.2 billion to purchase the Miami Marlins. After the deal goes through, as expected, in the fall, Jeter will run the team’s baseball and business operations.
But while buying sports teams has become something of a passion project for many of the nation’s superrich, they haven’t had much success actually building winners. Indeed, only two of the 36 NBA, NHL, NFL and Major League Baseball teams that have changed hands over the last decade have won a title in their respective sport.
Experts say owners don’t lack the desire to win, but their teams may lack the people, both on and off the field, to build a sustainable winning franchise. “The sports industry is a laggard when it comes to either the leagues or teams taking responsibility for the development of the next generation of leadership,” says Jed Hughes, Korn Ferry vice chairman and the firm’s global sector leader for sports.
Hughes, Senior Associate Garrick Yu and Associate Andrew Montag are authors of a new report “The winning team: how to succeed as a new owner.” The authors spoke with 13 team owners and culled common insights from their work with more than 25 different ownership groups. The goal, Hughes says, is to create a blueprint for new sports owners about how they can create a team filled with leaders who, in turn, can build a sustainable winning franchise.
There are five critical steps for new owners, Hughes says. The first step is a complete round of due diligence, including identifying what you want to keep about the existing organization (and what you want to discard), and determining who are the key constituents, both internally and externally.
After due diligence, new owners must get everyone from the owner down through the business and coaching ranks to buy into the same strategies and agree on the same values. This can be a big challenge, says Clark Hunt, who runs franchises in both the NFL and Major League Soccer. “You have to have a group of leaders who are willing to put their self-interests second or third to the success of the team,” Hunt says in the report.
Owners can help align all of the team’s leaders through, among several tactics, constant communication, consistent decision making, and utilizing data to drive improvements. New owners also have to establish a cultural identity, the foundation on which a team grounds its philosophy, direction, and decision making. That comes directly from the owner, Hughes says.
Getting the right talent for the sports- and business-sides of the team goes without saying, but just because those roles are obvious doesn’t mean that they are easy to execute. The executives who have the skills to run a team’s operations may be great fits for one franchise but a disaster at another depending on the culture each new owner establishes.
Finally, new owners have to figure out quickly how they’re going to be innovative. Sports teams may now have a tight grip on fans and media companies, but it’s not permanent. In the report, multiple owners emphasize the necessity of keeping fans engaged before, during and after the actual games.
The blueprint, of course, can’t guarantee a new owner a championship, but Hughes says following it can help teams do a better job at finding talent, both on and off the field. That, in turn, will lead to winning.