The Challenges and Rewards of Working in Sports

The Challenges and Rewards of Working in Sports

Scott O’Neil is one of the most recognized executives in sports, having most recently spent eight years as CEO of Harris Blitzer Sports & Entertainment, home to the Philadelphia 76ers, New Jersey Devils, and leading esports organization Dignitas.

 

Scott also has served as president of Madison Square Garden Sports, and with more than 20 years of experience in the NBA, NHL and NFL, he has earned a reputation as a leader of leaders and is one of the most connected, dynamic and driven executives in the industry. He also is the author of Be Where Your Feet Are: Seven Principles to Keep You Present, Grounded and Thriving.

In his All Access interview with series host Jim Andrews—recorded just days before his departure from HBSE—Scott shared his perspective on meeting fans’ expectations, navigating through societal upheaval, the changing nature of revenue sources and serving the needs of the next generation. Below are edited highlights of the conversation.

Jim: The seventh principle of Be Where Your Feet Are is “Trust the Process.” Even being familiar with that idea for a few years now, a question occurred to me when I read that section of the book that I hadn’t thought of before: As a piece of business advice, taking the long-term view makes great sense. But because sports fans are so different than customers of any other business—literally fanatics—can sports organizations really live by the idea of being patient before seeing results, or is there simply too much pressure to win quickly?

Scott: To put it differently, I would say patience is the last great arbitrage in sports. We do have an incredible amount of pressure, particularly if you’re in a job like mine. You have a very active board that is very competitive and wants to win. You have very passionate fan bases who will take to social media like it was medieval times charging the hill with horses and swords. You have your family, your friends, your community. You have the league, the media, etc. There are a lot of constituents.

It really depends on what you want to achieve and how willing you are to do what’s necessary to get there. There are no shortcuts to the top, only to the middle. Or you can get lucky, but I’ve never thought that luck was much of a strategy to be honest with you.

We live in a 15-seconds-of-fame world. Insta-famous. TikTok famous. We are staring right at that tree and we are missing the forest. My good friend Henry Johnson, who runs Northern Trust, said to me the other day, “I overestimate what I can do in a day and underestimate what I can do in a year.” I think that’s pretty true of all of us. We should just look out on the horizon and say, “Here’s what I want to accomplish three, five, 10 or 20 years from now,” and dedicate time each day to writing a structured plan

around that. Without that, the best-case scenario is we stand on the treadmill and hope to stay in place.

I’m not advocating for everyone to conduct their own version of “Trust the Process.” You have to figure out what works in your market and your situation. Our situation at the 76ers was we had just done the Andrew Bynum trade, which was arguably the worst trade in history, where we gutted our picks and our young players. We had two first-round draft picks the next five years. We were a cap team with not much to look forward to. We were bottom of the barrel; bottom three in the league out of 30 in every business metric: season ticket base, season ticket revenue, attendance, sponsorship revenue, ratings, social media engagement, social media growth.

There are some teams that will be bad for a decade or 15 or 20 years. When I got to the Sixers, we hadn’t won 50 games since 2001. Obviously, we had a disappointment in the playoffs this year, but we were the number one seed in the East, we’ve been in the playoffs the last four years, and even though we haven’t gotten out of the second round yet, we have come a long way in eight years. Our best player is 26 years old. We have two global superstars, a world-class coach in Doc Rivers, Daryl Morey and Elton Brand are running basketball. It’s a machine now, but we didn’t snap our fingers and get here.

Will we win it all? There are 29 other teams that want to win. Our job is to set up an organization so that you’re in the conversation. If the chips fall your way, you get a chance to win it. I thought two years ago we could have won it. I thought this year the chips were in our favor and we could have one it. But that’s the basketball gods speaking.

Jim: That’s what’s so interesting about sports. Coke and Pepsi are going to battle for market share, but they can both win. In the NBA, only one out of 30 can win in any given year.

Scott: But you don’t have to win every year. We’re selling winning or hope. And hope for a better future is a wonderful thing to be selling.

Jim: We’ve seen some high-profile examples lately of what can happen when sports organizations forget to put fans first—most notably the Super League in European soccer. Were you shocked by what took place there?

Scott: There was a lot of clamoring on social media and I wonder if that was the vocal minority, or not. We have to get back to our roots of real research, real polling, and real focus groups to understand what fans are saying. So was I surprised? I don’t know. Was I intrigued by the idea? Very much so. Do I think a lot of value could be created? Absolutely. Does some of that value mean putting on some extraordinary events for these same fans who would love to watch Liverpool play Barca? Yes, it does.

Did they miss on positioning? For sure. Did they miss on marketing? Yes. Did they miss on a basic PR strategy? Of course. Could they have had an engaged social media strategy? Yes. Those are the basics of how you launch and roll out a program. Maybe

they had those things and they went south or sideways, or something leaked too soon. But I like creating value. I like big ideas. I like innovation and challenging the status quo.

Boxing and horse racing were the dominant sports in North America in the ‘50s and ‘60s. I look at the NHL and the changes they made coming out of the last lockout. I look at the NBA and we have the G League, a league in Africa, and league in China. You can stay with the status quo, but that’s rarely the right way to go.

Jim: You wrote Be Where Your Feet Are in large part during a time of great upheaval, between a global pandemic, polarizing politics and a reckoning with racism and other social justice issues. Sports, as you point out, has a great power to bring people together, and organizations like HBSE and its teams are forces for good in your communities. But in today’s world, any time a team or an athlete uses their voice, there are going to be those who don’t like it. You write very eloquently about how the organization has taken a stand and why, and I’m wondering what the response has been from sponsors, who generally want to stay at arm’s length from anything even slightly controversial.

Scott: Overwhelmingly positive. I don’t know if that’s because of our framing—we have a wonderful marketing team and they package things very well—or it’s the fear that’s running through corporate America, or the basic facts that values like equality are inalienable rights.

We wholeheartedly believe that we have a special opportunity and platform for social change and we’re going to stand on the right side of history every time. The question about sponsors is interesting. The way we thought about it—and which seemed to resonate—is that for some of our marketing partners that didn’t have activation in the black and brown communities, or hadn’t yet done a great job in D&I, or were looking for platforms to grow and expand, we’re safe and easy. We’re creative, we have the trust of our communities in the Philadelphia and Newark areas. We are a very diverse organization; 34 percent of our organization are people of color. So we speak from the heart and with truth in creating platforms to create opportunities for our partners to work side by side with us to drive change and make things better.

That part was pretty simple and easy. We didn’t get blowback from partners. It was more of a situation where they were reaching out to us and asking for help.

And because of our reputation for being a very diverse and inclusive organization, which we are very proud of—I had a lot of candid conversations with friends and others who are running companies all over the world. And they would ask, “Should I hire a Chief Diversity Officer. My response was, “You’re the Chief Diversity Officer.” To drive diversity in an organization, the CEO has to stand up and say, “I need half the file of candidates for a position to be diverse,” or “Don’t hire another white male for this position.”

I don’t say that at all to disparage the position; I love the position. We have a wonderful Chief Diversity and Impact Officer named David Gould, who knows more about D&I in his pinky than I do in my whole body and who I rely on quite a bit. But for white men who are running companies, we have a special opportunity. And for those of us in sports, what a gift to have everything at our fingertips that we need to drive real, meaningful change.

Jim: The major pieces of the revenue “pie” for pro sports leagues and teams are media rights, tickets, licensed products and sponsorship, with media accounting for the lion’s share. With the changes in viewing habits, the move to streaming, OTT/DTC, etc., do you see the size of those pieces, i.e., the share of the total, changing significantly in the next five to ten years?

Scott: The most interesting change will be what will happen with the regional sports networks over time. Some have called them “melting ice cubes” and while that may be a little aggressive, it’s the term I keep hearing. That’s forcing organizations like ours to become better marketers. This is not an industry where we have been elite marketers by today’s standards. We’re extraordinary brand marketers, but we haven’t been growth marketers. I’ve begun to see a shift where we put more resources toward content and data and begin to build our own DTC models and machines. That will shift all kinds of revenue streams.

The other interesting part is the traditional sponsorship bucket and the content sponsorship bucket are somewhat collapsing and being pulled apart because we are selling differently. We are maxing out on the traditional sponsorship elements. And when you talk about creating platforms that drive change, a lot of those are driven by media and social media platforms.

Jim: You discuss your admiration for and affinity with Millennials and Gen Z. I’m curious to know what the response is from young adults to the seven principles in Be Where Your Feet Are, and separately, whether you agree with the conventional wisdom that “sports has a Gen Z problem” in terms of attracting and keeping them as fans.

Scott: I’ve been talking about these principles for at least the eight years I’ve been here, so lots of young employees have heard “Be Where Your Feet Are,” “Assume Positive Intent,” What’s Most Important,” “Trust the Process,” “Fail Forward,” etc. and it’s a language that seems to resonate with them.

I speak Gen Z. I love this group. You have to be transparent. You have to be accessible. You have to provide an opportunity. You have to stand for something. You have to be authentic. If you’re not any of those things, this group will walk out the door and find another job.

That puts a lot of stress and pressure on organizations, but it also provides some accountability and opportunity. We’ve done very well with that group. We’re very much into developing the whole self—mind, body and soul on the personal side—and we do

professional development as well. So we put an inordinate amount of resources into developing people, which really seems to resonate with this group.

We are the ones with the problem, not those in Gen Z. We have a very traditional view and in many ways we are stuck in cement or walking uphill dragging a piano. We in this business have to get out of our own way. We have to understand what the trends are, how people consume media. Why they are interested and why they are not interested. We have to allocate resources so that we can grow the next generations of these businesses, or we will be boxing and horse racing, and I don’t want to be boxing or horse racing. (By the way, I love boxing and horse racing, but that’s a story for another day.)

I do truly believe that live content will hold the keys to whatever kingdom we want to open. But if we think we can show it the same or do it the same, or be the same, or act the same, or sell the same, or present the same, we’ve got another thing coming.

The industry has an opportunity to reimagine and recreate and rediscover what it means to capture that new generation. You see the NHL and the NBA and others getting into esports a little bit, getting heavy on TikTok and some of these other new platforms, so we’ve got a toe in the water.

It will be interesting when Gen Z gets older and controls the spending power in households. That’s when it’s going to get real. We’ve got a lot of work to do to be ready for that time.

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