Why You Shouldn't Run Your Business Like the National Football League
You know you’re a stadium status brand when, to quote forensic pathologist Cyril Wecht in the movie Concussion, “You own a day of the week, the same day of the week the church used to own.”
With another Super Bowl Sunday now down in the history books and the NFL season over, a couple of lessons for entrepreneurs stand out from the brand that is the National Football League.
Lesson one is that despite its massive revenue, the NFL, as entrepreneurs might see it, should be viewed as a cautionary tale -- particularly so this year. NFL ratings, after all, were down 9 percent during the regular season and 6 percent during the playoffs.
According to a Civic Science survey of viewers reported by SportsBusiness Daily: “Of those who are watching less NFL, 52 percent say it’s because of reasons such as national anthem boycotts and concussion/player safety issues; 19 percent say the quality of the game and/or broadcast has declined.”
Because I don't want to be political, I won’t comment on the national anthem issue but instead focus on two more lessons that today's football has to teach.
Lesson: Don’t mistake profitability with a successful product.
The NFL has found a way to monetize just about everything, but it’s a detriment to the product it provides fans. In the last several years, the League hasn't anticipated changes in the market. Although its TV ratings are declining, it has doubled down on television broadcasting and is even considering moving to an 18-game season by removing two preseason games and adding two regular season games.
However, the NFL's ratings are down because it oversaturated the market with Thursday night games, which created a bad product since the coaches only had four days to prepare and the players even less to recover from the punishment their bodies took the previous Sunday. So the NFL's response is to now deliver a lesser bad product which will inevitably get worse.
The NFL’s internal customers, meanwhile, (meaning the athletes and coaches) are commenting that 18 games is too many weeks of punishment on the players’ bodies.
You're probably wondering, why even consider this? The answer is that the NFL has no incentive to have a great product, as it has no direct competition. What’s chipping away at its audience is indirect competition. Because of user-generated content, subscription video on-demand and gaming, people are watching less television than ever before. This applies especially to millennials, who are watching significantly less television than older viewers. Yet millennials are a growing population in this country -- and they have increasing spending power.
The takeaway: No matter how much you’d like to think “you’ve arrived,” constantly ask your internal and external customers what, exactly, is best for them. Do your employees have enough recovery time? Also ask what they want to consume, and how and how much. Millennials are the nation’s largest generation, which begs the question: Do you know how, and how much, millennials consume your product or service?
Lesson: Proactive beats reactive every time.
History has shown that the NFL doesn’t change its product, delivery or content until it angers a critical mass of the public. As a result, the public perception is that the League is greedy and uncaring. Three key scenarios illustrate this:
- For 73 yrs, the NFL was granted nonprofit status even while it was growing into a $13 billion dollar-a-year “nonprofit” business. That status ended in 2015 when the commissioner realized the public relations damage that was taking place due to the Lleague's tax-exempt status.
- The NFL denied evidence of long-term brain damage from concussions until the evidence was overwhelming and became public. Now the League is back-peddling in an attempt to appear to care about its past and current employees.
- The NFL has charged the armed forces for performance of the national anthem and color guard flag displays. (The $6.8 million dollar cost of this false patriotism is ultimately funded by tax-payers.)
Note: It was only after each of these issues created a public outcry that the NFL even attempted to do anything about them.
The takeaway: Most brands couldn’t withstand the amount of public criticism and negative press the NFL has absorbed. While the League is apparently too big to care, you can’t afford such hits to your own business. You can’t afford a lack of transparency or a lack of authenticity.
Changes based on making more money, not making a better product, are self-inflicted wounds that will destroy your brand equity to an extent you may never recover from.
We are all either a great example or a cautionary tale. It’s best to learn from the expensive mistakes other brands have made instead of repeating them yourself. So, learn from the NFL.
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