10 Things You Can Learn about Sports and Business from Moneyball
What the Ottawa Senators did Right to Make the Playoffs 12 out of 13 Years
Television’s Golden Age could be Ahead not Behind
I am an Aaron Sorkin fan from his days writing A Few Good Men, The American President and, of course, The West Wing, so it was with great anticipation when friends of mine and I gathered to hold a tailgate party in a local park on a cold fall evening before going to see the film based on the book of the same name written by Michael Lewis. The Book contains some favorite themes of mine—sports, business, role of the underdog, differentiated value and teamwork amongst others.
What I especially like about Sorkin’s work is his dialogue—fast paced, intelligent, real. But I felt that most of the glowing reviews I’d read about the movie were undeserved so here’s mine: this film production completely sucks. It lacks most of the elements that make any filmgoer care about a movie—sympathetic characters, story development, interesting subplots, adversity overcome, romance/love interest, delight, imagination, surprise, intimacy, character development, captivating storyline, climax…it’s relationships that matter to most people. Without the well-told romance between Rose DeWitt Bukater (played by Kate Winslet) and Jack Dawson (Leo Di Caprio) to drive the plot, James Cameron’s Titanic would have been a stinker as well as a sinker instead of being one of the top grossing films ever. Pretty much the only element that I think Moneyball had going for it was that a few scenes authentically capture the inner workings of the management layer of pro sports teams.
Billy Beane played by an underwhelming Brad Pitt is a loner who is hard to like. In fact, no one likes him except for his daughter which itself is a subplot that goes absolutely nowhere. And Peter Brand (played by Jonah Hill) is one of the least interesting characters to co-star in a major Hollywood film in quite awhile and that is saying a lot given the abysmal quality of most Hollywood productions lately.
I am having a hard time thinking of any recent Hollywood films that can come close to the writing, acting and directing seen in HBO series Game of Thrones, AMC’s Mad Men, Showtime’s Shameless or for that matter ABC’s LOST. Could it be that television’s golden era is ahead not behind? I think that is a real possibility especially as the Internet eats TV so made-for-TV serials will mutate to made-for-Internet ones. Television-land should be a more interesting place to work than Hollywood and I think Steve Jobs knew that before he passed away.
Your TV, once it’s equipped with a Siri-like AI, will transmute into an omnipresent media wall that will be a place you look to for entertainment, communication and help. It will be a workplace too. That is why Steve Jobs was rumored to have spoken from his deathbed ‘I have solved it’ or words to that effect. I’m quite sure this was his direction; it is also the direction I took in my new novel Quantum Entity, We Are All ONE (June 2012). You can read the Dedication and Foreword here: http://www.eqjournal.org/?p=3426.
Game of Thrones reportedly cost (see: June Thomas’ excellent article in Slate.com on the economics of these series, March 29, 2012) HBO between $50 and $60 million for Season One (10 episodes) and subsequent seasons are bound to cost more via wage creep as actors, directors, writers and others demand a bigger piece of the pie. Rumor has it that HBO plans to make 70 hours of the series (seven seasons) so its overall production budget could easily top half a billion dollars. Now writers, actors and directors tend to get better at their craft the more time they spend with a project and with their characters. Seven years is a long time in anyone’s career so it should come as no surprise that made-for-TV and (in the future) made-for-Internet series will be much better than most films released widely through traditional channels. As cablevision companies get disintermediated as the Internet devours TV, HBO’s audience and subscription base will increase vastly in size and they know that.
Director Bennett Miller lets loose the dogs of ageism—everyone over 50 in his film is either fat or ugly or preferably both. They are also universally stupid, obtuse, resistant to change, over-the-hill detritus getting in the way of progress. Newsflash Mr. Miller: I know many old 30-year olds. You only get old when you think you know everything and that can just as easily happen at 30 as at 60. As long as you are open to learning new things, you will NEVER GET OLD.
Having said this, here are ten lessons you can take from the film (and book) that are worthwhile for entrepreneurs (and sports entrepreneurs) to know:
1. You can take advantage of asymmetric information which Billy and Peter do admirably by substituting data for opinion on up and coming baseball players. However, this is not new. The Ottawa Senators had computers (laptops) and analysts on the floor of the NHL draft from their very first draft in 1991. This was to do analysis in close to real time of draft picks and potential trades. Pouring resources into drafting, data collection and analysis allowed the Sens to be in the playoffs 12 years out of 13, second only to the Detroit Red Wings. It became known as the ‘Ottawa model’ in the National League although Sam Pollock (with the Canadiens), Bill Torrey (with the Islanders) and Glen Sather (with the Oilers) were the real pioneers in the field albeit without assistance from modern computers.
2. You are either all-in (body, mind and soul/heart, brain and gut) or you are nowhere.
3. If you do not have an optimistic, unreasoning BELIEF that you are right, you will fail because you will leave your path too soon. Glen Sather told me the best trades he ever did were the ones he didn’t do. One year after the Oilers won the President’s Trophy (as the top team in the League), they got beat out in the playoffs and that summer fans and media were calling for him to get rid of key players. ‘Gretzky’s a bum.’ ‘Messier is useless.’ Instead, he did nothing at all. The next year, the Oilers won their first Stanley Cup going 16 and 2 in the process.
4. You need buy-in by everyone in your organization and teamwork—not just players and managers, everyone from top execs to ticket, beer and merchandise sellers…
5. You have to hate losing more than you like winning.
6. In most team sports, more money is not necessarily more likely to produce great results. In the NHL, you need to feel like the guy next to you and across the dressing room from you is your brother otherwise there is no way you can last the daily grind of two months, four rounds and up to 28 bruising, intense games. Top revenue teams like the Toronto Maple Leafs and New York Rangers do not dominate the NHL. Even in baseball, money by itself is not going to produce a World Series champ. The same is true in business—VC funded enterprises are not necessarily more successful than self-capitalized ones. In fact, they are almost surely less likely to survive since the latter spend most of their time getting close early and often to their customers. Ever heard of a business with fast growing revenues failing?
7. When I was with the Sens, we looked closely at $$$ spent per point produced and benchmarked ourselves against other NHL teams this way. Ottawa was consistently at or near the top by this measure of efficiency. This is your tooth to tail ratio. In most businesses, functions like administration and accounting are tail, sales are teeth. Having more teeth and less tail is usually a good thing. We had all of our employees spend some time in ticket sales so when someone in the media or a fan said: ‘Why not just give Alexei another million?’ our people had some idea how hard it was to sell another $1,000,000 in tickets, merchandise and beer. Often big money teams will have a lot of dough invested in tail, not so much in teeth (i.e., player development/ticket sales/sponsorship deals.) The real core competencies of any sports biz are: product on the field/ice/court/pitch and relationships with your fans and corporate supporters. That’s it, that’s all. Bill Wirtz from the Chicago Blackhawks told me that and he was right.
8. You have to be tough sometimes. You do have to fire people from time to time—better for them and better for your organization. There’s no way around it. You also have to have rules of behavior for your organization and that includes players. When you get a lot of young people together with a lot of money, stuff happens so a code of conduct and an expectation that everyone will live up to it is very important, even more so now in the age of Twitter. When I was coaching 10 and 11 year olds (competitive soccer) years ago, we had two simple rules—when the coach is talking, you’re not and if you don’t practice, you don’t play. Our two best players didn’t like practicing so I benched them. Their parents went ballistic even taking their complaints to our soccer association board, thankfully to no avail. Eventually it got so bad I had to ask them to withdraw from the team, i.e., I fired our two best players. Nevertheless, that year we went to the finals before losing by one golden goal—a great scissor kick by our opponent’s star striker. That team had character and felt about each other the way a band of brothers would. Our leader on the field was one of the most wonderful 11-year olds I have ever known, special in every way. He died that winter in a horrible skiing accident—he was racing, helmet and all, but went off course and hit a tree. Over 500 people went to his funeral; he touched so many lives at such a young age.
9. Don’t judge a book by its cover. Just because someone looks like a player doesn’t make him one. One investor I know only invests in firms run by CEOs who are 6 feet or less or run by women on the theory that those CEOs had a much harder struggle to get there than someone who is a tall white male.
10. Teams take on the character of their owners—passionate owner? You’ll have a passionate team. Analytical one? Same thing. Absentee owner? This can be a problem since you need at the center of each bee hive, one heart/one brain pumping out instructions and setting all the horses in their traces so the chariot can wing around the arena at warp speed.
One other thing that I think the book and film captured accurately—Billy Beane could not watch his own team (Oakland As) play. I get that. I have a tough time watching the Sens play especially in the playoffs. I have discussed this with a few close women friends, one of whom told me, “I know what the problem is! You’re not the Founder of the Sens, you’re their mother!”
Your emotional investment is so huge that when bad things happen to your team (your child), it’s personal. And if it isn’t, well, it won’t matter anyway cuz your team will suck.