Seminar Strategic Management & Sports Events Organizations http://cortoleo.free.fr/master/Venezia.ppt Lionel Maltese Maître de Conférences Paul Cézanne University (Aix-Marseille III) Affiliate Professor Euromed Marseille School of Management Strategic Planner French Tennis Events (Marseille, Paris, Roland Garros, Lyon, Toulouse)

Degree & Professional “course” Engineer Economist – Econometrics (Magistere 2001) DEA in Management Sciences – Strategy IAE Aix-en-Pce (2001) Doctorat (PHD) in Management Sciences – Strategy (2004) IAE Aix-en-Pce Academic Thesis in sport events context… « Maître de Conférences » Paul Cezanne University Strategy IUT-IAE (2004…) Affiliate Professor Euromed Marseille Strategy Sports & Events Management (2006…) Professional Consulting (Strategic Planner) & Event Organization (Entertainment management) Pampelonne Organisation (Open13, BNP Paribas Masters, Roland Garros, ATP, FFT, FFR, Occade Sport (GPTL-ASVEL), Team Lagardere…) (2001…)

Sports Organizations ? Production Actors Council Media Broadcast Sports goods & Equipments Production Sponsors Events Clubs Franchises Institutions Federations Actors Athletes agents Consulting Agencies Council

Club (or franchise) VS sport event Professional athletes management and control Clubs and Franchises : Contracts : transactions and salary Motivation : training, selection, financial premiums  Athlete = “asset” for the managers Events : Fees (ATP, PGA for instance) No control of sport performance by the managers  Dependency of the athletes (calendar for instance) and their professional associations (ATP, PGA, UCI…)

Main “goals” for this seminar ! Sports organizations [professional Events & Clubs] = management “stake” ? Proposition of a new Strategic Management Model for these organizations ! Understand & manage key factors of success (or failure) : sponsoring, public relations, reputation, physical (stadium) & local factors, managerial skills… Develop your professional skills on : strategic analysis & formulate Sport Organizations Business Plan (Development Plan) : STRATEGIC PLANNER for sport organizations

Focus on “Event Concept” In sports context, “event” is everywhere : National Championships (every week ! : NBA, MLB, NFL, NHL, LNF, Top 14, Premier League…) National and International Competitions (JO, World Cups…) One shot events (every year) : Roland Garros, Tour de France, ATP, PGA, Superbowl, Formula 1… exhibitions… …

For consumers : Entertainment & Event = “experiential service” Key questions Strategic Marketing : How to show the show ? How to sell, communicate, package this “experiential service” ? Who are our consumers : B to B, B to C, C to C… : working on communities (fans : difficult for an event !) Strategy : To perform and to develop sustainable performances on : sports measures, financial ratios, affluence – audience…

But… we need definitions (Covell an al., 2007) Organization : « Any group of people working together to achieve a common pupose or goals thant could not be attained by individuals working separately » Management : The coordination of human, material, technological, and financial resources needed for the organization ti achieve its goals. Responsibility for performance

But : what is performance for sports organizations ? Performance indicators (Pis) give us an evaluation process that can provide objective and meaningful performance feedback to aid future decision making. The methods of evaluation are both quantitative and qualitative but all the final results depend upon one or more manager’ interpretation The key for sport organizations : your stakeholder analysis.

Sport organizations – performance and stakeholders You can evaluate returns for : Média Athletes Sponsors Institutions Spectators Cities Suppliers Owner ….  Various PIs for different objectives and muliple stakeholders…

Managing an event ? Learning by Doing : “operational organization”  Self Made Men : (Jean-Marie Leblanc, Jean-François Caujolle, Gilles Moretton…) without academic formation (tacit knowledge and not explicit : see Julien & Vincent presentation…) Distinction between : Operational activities : press, ticketing, sports aspects, technical (stage manager) direction, volunteers or vacations management… Development (you !) : experts in : Marketing, Strategy, Finances, RH… THE FUTURE IN SPORTS ORGANIZATIONS (Jean-Michel Aulas, Jean-Claude Blanc, Patrice Clerc, Christian Prudhomme…) The twice but without sleeping…

Categorization of events Scale of impacts (attendance, media, profile, infrastructure, costs, benefits) High Low LOCAL MAJOR HALLMARK MEGA-EVENT Category of event

Categorization of events Local or community events : Local consumers (Beach events, Corrida, Snowboard & Surf contest, ATP International Series Tournaments, National Events…) Major events : Media interest (coverage & benefits) and capability of attracting significant visitor numbers (Formula 1, Master Series ATP, PGA…)

Categorization of events Hallmark events : identified with the spirit or ethos of a town, city or region (synonymous with the name of the place) & very traditional (Wimbledon is the best example, 24H du Man, Paris Dakar, Masters Evian…) Mega events : so large that they affect whole economics and reverberate in the global media (Olympic Games, FIFA World Cup, IAAF World Championships, Superbowl, March Madness, NBA, MLB, NHL Finals…)

Stakeholders in sport organizations Private sponsors Public sponsors Sport institutions Event / Club Organisation Athletes Suppliers Spectators Media

Now before studying strategic analytic tools : So sport organizations are in the “eye” of important actors “stakeholders” : Our strategic problematic is : How to control external environment (stakeholders) and how to be independent to perform, to develop and maintain ? Now before studying strategic analytic tools : What is Strategy ? What are the more “sensemaking” approaches to analyze a sports organizations and their stakeholders ?

Main Strategic Approaches (Saias & Métais, 2001) POSITIONING MOVEMENT Resource-Based View RBV Permanent Transformation S.W.O.T 5 Forces Competitive Advantage STRATEGIC « FIT » STRATEGIC « INTENT » Michael Porter & Co Gary Hamel and C. K Prahalad & Co

FIT What business are we in ? S-C-P : Structure Conduct Performance The structure of the industry will dictate the conduct of firms and thereby their performance (most popular : SWOT or “five-forces” model (Porter, 1979)). The big illustration is the 5 Forces Model (Porter, 1979).

Porter’s Five Forces (Industry) Barriers to Entry Bargaining Power of Customers Bargaining Power of Suppliers Competitors Substitutes

What are we able to make with what we have ? INTENT What are we able to make with what we have ? RBV (Resource-Based-View, Wernerfelt, 1984, Barney, 1991, Grant, 1991) : certain assets (resources and capabilities) with certain characteristics will lead to sustainable competitive advantage. Strategy dictated by unique resources and capabilities of the firm (what can the firm do best?)

Concepts definitions Resources : stocks of available factors that are owned or controlled by the firm (Amit and Schoemaker, 1993) Capabilities : a firm’s capacity to deploy resources, usually in combination, using organizational processes, to effect a desired end” (Amit and Schoemaker, 1993) Dynamic capabilities : capacity of the organization to renew competences to be in line with the changing business environment (Teece and al., 1997). Asset = resource + capability

Non-Substitutability Resource Based-View : VRIO model (Barney, 1991) Value Rareness Resources & capacities Lead to Sustained Competitive Advantage Organization Inimitability Non-Substitutability

VRIO Properties Is the resource or capability… Implications Valuable Rare Difficult to imitate Difficult to substitute Organizational Implications Neutralize threats and exploit opportunities Not many firms possess Physically unique Path dependency Causal ambiguity Social complexity No equivalent strategic resources or capabilities Productive exploitation by the organization

FIT : Soccer metaphor The strategy (tactical) is a function of the external environment (rival teams : opportunities - threats). The trainer has a tactic adapted to the adversary and the players (resources) adapt to this positioning (diagram of play).

Intent : Soccer metaphor The head coach "visionary" (or manager) has resources (players) and sets up a strategy (tactical) starting from these forces and weaknesses (resources), in order to face to certain opportunities or threats of the environment (air play, speed, physical engagement) 

So What ? How can we “implement” that ? It’s very theoretical ! Your and my job : to be able to construct a business plan (development) with a “specific RBV analysis” (your “sensemaking background”), and furthermore : Persuade and control our stakeholders Maintain our performance To be “ready” for new opportunities and threats because of very instable sports environment… Managing resources & capabilities = core competency of a “modern” CEO in sport organizations (Jean-Claude Blanc…and you !)

Categorizing resources Barney (1991) : 3 Physical capital : technology, plants, equipment, geographical localization… Human capital : formation, experience, networks - relationships… Organizational capital : formal structure, control, routines, process, coordination systems… Grant (1991) : 6 financial, physical, human, technological, organizational, reputation. Wernerfelt (1989) : 3 Fixed assets : plants, equipment… “Blueprints” : patent, brand, reputation Teamwork “effects” : routines, habits, experience…

Sport events & clubs : assets identification Players & coach (clubs only) Partnership (sponsoring, partners) Reputation (event, sport, players) Relational (Social capital, relational networks, Public Relations) Physical (infrastructures, stadium, territory) Organizational Capabilities (Core competences, event driven know how, project management)) Sport Event & Clubs Financial resources « Profit centres » Ticketting Contracts (sponsoring, Public Relations) & Players (clubs only) TV rights Merchandising Institutions (public subsidies) Renown History Sport performance Affluence, audience

RBV first model for a sport organization Partnership Resources Concepts RBV first model for a sport organization Partnership Resources Reputational Resources Resources portfolio PROPERTIES ? Players Coach (club only) Relational Resources Physical Resources Core Competencies, Capabilities Organizational team, Managers Performance, Sucess Sport Success Financial Sucess Public Sucess Long Term

Success case Open13 1993---2008 www.open13.org “Familial professional “bricolage” from Marseille” VIDEO

Relational competencies Organizational capabilities Open13 Corporate Reputation Sport Reputation Reputational Resources Partnership Resources Relational Resources Physical Resources Relational competencies CEO celebrity Opportunism Organizational capabilities

Cascade of assets Learning Organizational Capabilities Relational Resources « Axes » Learning Organizational Capabilities Partnership Resources Reputational Resources Physical resources Stock of resources Dynamic Capabilities « Bricolage  »

Partnership resources Sponsoring : brand image, image transfer, notoriety, visibility, target specificity, TV… Examples : BNP Paribas, Louis Vuitton, Rollex, Peugeot, Indesit, Adidas, Nike, Fedex, Coca-Cola, Philips, Renault, Mercedes… Public Relations : Business relations, Employee relation, Government relations… Examples of RP events : PGA tour, America’s Cup, ATP tournaments (Open13, GPTL, RG…)..

Definition Provision of assistance either financial or in kind to an activity by a commercial organization for the purpose of achieving commercial objective (Meenaghan, 1983) Sponsorship involves two main activities (Cornwell and Maignan, 1998) : exchange between a sponsor and a sponsoree whereby the latter receives a remuneration (cash or in-kind contribution) and the former obtains the right to associate itself with the activity sponsored marketing of the association by the sponsor

Sponsor support : financial or not Firm, non profit organization, institution… SPONSORED Entity : individual, group, oragnization, event… Area : sports, arts, environment.. Benefits for the sponsor : achieve communication objectives Media Sponsor target Sponsored Target PUBLIC

Strategic approaches for sponsorship Passion approach : passion of a CEO (“The dancer of the President”) : RLD (Adidas – Om), Serge Kampf (Cap Gemini – BO) Opportunistic approach : link between a sponsorship project and a firm CEO (Sodexho / Cities – Thomson / Canal +…) Strategic approach : sponsorship integration with the global strategic communication or marketing strategy of a firm (banks, sport brands… )

Implementation by the event organizer Targeting – Activation – Faithfulness - Innovation Knowledge about the sponsors activities (strategy – marketing – finance – human resources) Event = pool of communication and marketing tools => “Fit” with sponsors needs Do not implement a communication tool if you’re not able to evaluate or control it… Be careful to overflowing effects !

Communicate about your sponsors loyalty (faithful) Implementation by the event organizer Targeting – Activation – Faithfulness - Innovation Activation : Participative actions for the sponsors and their target (best example : NBA All Star Game Importance of the HOSPITALITY (B to B and B to C) (best example : PR “Village”) Communicate about your sponsors loyalty (faithful) If you can (very rare) : using your sponsorship evaluation about efficiency in your event ! Innovation : NTIC – Buzz Marketing – Technological innovation (MSL for instance & HD for TV broadcast)

Summary : being “sensemaking” ! Understand the sponsor needs (your customer !) : Targeting for your sponsor (sponsor day for instance) Linking your media planning with the communication strategy of your sponsors Selecting the media No concurrency between the brands… Being aware for new activations…. Making you sponsor dependant and not the contrary Using strategic FIT for your sponsor but You must be a “visionary” (strategic INTENT)

Event communication (sponoring resources) Event or Club Partneship Resources VRIO Linkage among resources Sponsor Event communication (sponoring resources)

Relational Resources Event Manager’s Social Capital (Christian Bîmes & Jean-Claude Blanc, Patrice Clerc & Jean-Marie Leblanc …) Relational and business networks : GPTL (Marie Roussille (Occade) in Lyon), Pampelonne (Jean-François Caujolle)

Public Relations (PR) ? Public Relations is a management function which tabulates public attitudes, defines the policies, procedures and interest of an organization followed by executing a program of action to earn public understanding and acceptance. " (Edward Bernays) According to Michel Crozier (1957) : Public Relations is a set of processes used by managers to gain external publics’ sympathy and goodwill.

PR for events managers Press-relations : control & development Events creation during your event Political PR « People » exploitation (dedicated person in your organization) Construction and management of relational networks inside and outside your event Forging an « iron cage » for your event network : be carefull about the balance between quantitative and qualitative interpersonal relationships

Interpersonal “ties” efficiency (Granovetter, 1973) “The Strength of Weak Ties”, 4 criteria : Relation duration Emotional intensity Intimacy Services reciprocity between stakeholders

Physical (territorial) Resources Stadium : Wimbledon, Roland Garros, Madison Quare Garden… Territory : Tour de France, F1, Rally & Tennis (Monte Carlo), 24 H du Man, Stade Toulousain, Pau-Orthez, Derby de la Meije… Infrastructures : training camps and conditions…

Reputational Resources Event legend and history : JO, America’s Cup, Le Tour de France, Roland Garros, Wimbledon… Corporate Reputation : FFT, Amaury, IMG, Octagon… SUPERBOWL VIDEO

Réputation ?

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Shareholders performance Stakeholders Performance Understanding the Meaning of Performance ? Athletes Performance Shareholders performance Brand Exploitation ? Event Reputation  Performance Event Internal Measure P.A.P.E.R Test PR Efficiency (Partners) Sponsoring Efficiency (Partners) Institutional Performance Media Performance Stakeholders Performance

Reputation = key resource ? Non-Substitutability Value Rareness REPUTATION => Sustained Competitive Advantage Organization Inimitability Non-Substitutability

Reputation = key asset but difficult to control Media exposition Being Good or Being Known (Business School cases !) Notoriety / Reputation Actors Reputation (athletes, coach, Managers) : differences between local & major / hallmark & mega events

Expressive organizations ? Services Hospitality : B to C – B to B In the context of Entertainment and sport : organizations (clubs & events) are expressive Sports organizations compete based on their ability to express who they are and what they stand for. Emotional and symbolic expressiveness is becoming part of the experience of doing business… Expressiveness : strategy must serve all stakeholders and that means employees as well as customers, shareholders, creditors, suppliers, local or special communities, and the media. Product Sport competition Experience Entertainment Expressiveness implementation : Very difficult !

Linking Identity, Reputation and Expressive Organization (club or event) Brand

Identity (Fombrun, 1996) Corporate identity describes the set of values and principles employees (and players) managers associate with a company. Corporate identity derives from a company’s experiences since its founding, its cumulative record of successes and failures : very important for sports organizations !

Reputation (Fombrun, 1996) “Reputation” is the general estimation in which one is held by the public (American Heritage Dictionary’s) A corporate reputation represents the “net” affective or emotional reaction – good or bad, weak or strong – of customers, investors, employees, and the general public to the company’s name.

What’s in a name ? Sports organizations names are very strategic : Cities Objects, animals, groups, symbols, features : Colts – Bulls – Celtics – Patriots - Indians… Sponsors : BNP Paribas, H Cup , Evian Masters, Andros Trophy… Moreover : in a market society like ours, it’s clear that names – and the reputations we associate with them – have economic value : Michael Jordan : continued to bring in top endorsement income from companies like Nike, Hanes, General Mills and Quaker Oaks (estimated $ 13 million a year) Jack Nicklaus, Arnold palmer (golf), Joe Montana, Wayne Gretzky, Andre Agassi, Zinedine Zidane…

Reputation and media Difficulty to control inside de Communication Mix (TV, Radio, Internet, Press, posting) ! For sports organizations : you can develop your own information for the public : official website (very important !) and sometimes own press (production) or TV

Linking Identity – Name – Image – Reputation (Fombrun, 1996) Corporate Identity Names Self-Presentations Customer Image Investor Image Employee Image Community Image Corporate Reputation

Brand construction and control in a very expressive organization… Club or Event Brand Place, City, Country Public, Fans, Communities Athletes brand Sponsors brand

Brand construction is difficult in this context… But : Reputation construction and control can stimulate and develop your commercial brand !

Corporate Reputations can be measured and managed Reputation management The Reputation Quotient

Reputation management (Fombrun, 1996) Visibility REPUTATION Authenticity Transparency Consistency Distinctiveness

The expressiveness quotient (Fombrun and Van Riel, 2004) Communicates Appropriately with Everyone… Carries out Visible Stakeholder Initiatives… Participates in Worthy Social Initiatives… Visible Is Recognizably Different... Makes a Distinctive Promise… Stands out… Distinctive Expressiveness Quotient Walks the Talk… Is Identifiable in its Communications… Conveys a Consistent Message… Consistent States Its Beliefs Openly… Discloses Information in a Timely Fashion… Shows Responsiveness to all Stakeholders… Transparent Is Credible and Sincere in Its Communications… Is Honest… Is Appealing to deal with… Authentic The expressiveness quotient (Fombrun and Van Riel, 2004)

Reputation management in action ! You have to Create Protect Repair your reputation Indeed bad reputation can affect brand development… (OM)

But don’t forget your resources reputation ! Sponsors Brand PR and CEO celebrity Local or cultural identity Hospitality (stadium) Your history ! “Being Known” => not always “Being Good” (Stade Français or NY Knicks cases…)

Reputations are magnets : they help a company attract resources (Fombrun and Van Riel, 2004) Employees Make jobs more attractive & motivate hard work Customers Encourages repeat purchase & builds market share Investors Lowers capital costs & attracts next investment REPUTATION Media Journalists Generates more favorable Press coverage Financial Analysts Affects content of coverage And recommendations

Measure : reputation Quotient (6 dimensions and 20 attributes) (Fombrun and Van Riel, 2004) 7-pt scale 7 = describes very well 1=oes not describe well Social Responsibility Supports Good Causes Environmental Responsibility Community Responsibility Emotional Appeal Feel good about Admire and Respect Trust Products & Services High Quality Innovative Value for money Stands Behind Vision & Leadership Market Opportunities Excellent Leadership Clear Vision for the future REPUTATION Financial Performance Record of profitability Low Risk investment Growth Prospects Outperforms Competitors Workplace Environment Good Place to work Good employees Rewards Employees Fairly

Transfer in the context of sports organizations 7-pt scale 7 = describes very well 1=oes not describe well Social Responsibility Supports Good Causes (Ethic) Environmental Responsibility Community Responsibility (fans) Emotional Appeal Admire and Respect sport & athletes Passion & hedonism Comsumer experience Products & Services High Quality of sport show & experience Innovative Value for money (tickets) Hospitality Vision & Leadership Market Opportunities Excellent Leadership Clear Vision for the future CEO celebrity REPUTATION Financial Performance Record of profitability Low Risk investment Growth Prospects Outperforms Competitors Media returns - affluence Stakeholders performance Workplace Environment Good Place to work Good employees Volunteers management

Mega Event

Remarks… Communication : fit with the actuality ? Merchandising and memory ? Identity and Reputation : places – french inheritance The athlete is known because of the event Difficulty to target : popular event “Caravane” : sponsoring unicity Event director : charisma and celebrity : Jean-Marie Leblanc  Christian Prudhomme

Questions ? Answers ? How do you manage an exceptional (mega) event ? Development ? Innovation ? Answers ? You have to maintain your level ! Reputation management (creation – protection (doping) – repair) : pivotal resource ! If you can : transform your event reputation into a brand + External control (sponsors – media – institutions – communities…)

Reputation  Brand Roland Garros

Be visible Be authentic Etre consistent Etre distinctive 5 principles Reputation Management For Roland Garros Be visible Media choice (F2-3) Stadium evolution Be authentic Traditional identity History respect (museum) Etre consistent Sport advantage Sponsors control (colors on the court) Etre distinctive Sport exception : Grand Slam Clay courts Physical impacts Etre transparent Communication (ex players) FFT is an association (now difficulty with Christian Bîmes)

Physical Resources Partner Resources Relational Resources Corporate Reputation Reputational Resources Sport Reputation Protection Exploitation Learning Forecasting Organisational Capabilities

Cascade of assets Learning Organizational Capabilities Reputational Resources « axes » Learning Organizational Capabilities Partnership Resources Physical Resources Relational Resources Stock of resources Dynamic Capabilities « Bricolage  »

Jean-Claude Blanc : resources management strategist… TV Rights €32 million Public Relations €31 million Sponoring €25.5 million Ticketting €21 million Equilibrium « Resource-Based » (2001-2006) No Resources Dependency + External control of the environment = rents optimization (most important in France)