Guarding the Gate
February 24, 2012
More slowly than I would like, because it’s not a field in which I’ve had formal training or extensive practical experience, I’ve been learning about the world of startup companies and venture capitalists that discovered the sports world in the 1990s and have proliferated during the past decade.
Usually with their founder making the contact, many of these young companies have reached out to the MHSAA, hoping we will embrace and endorse or utilize their new product or service. Almost all owe their existence to the World Wide Web and to the passion of their founder, either for sports or for a concept they think solves some need of athletes, coaches or fans . . . or advertisers and sponsors.
And almost every one of these startups is looking for an exit; looking for a bigger fish to swallow them whole. And paying them handsomely for consuming the young guppy. A lucky few make what the industry calls the “Big Exit,” like a major network buying the startup for many millions of dollars.
We hear from many of these startups that the advertisers are clamoring for this or that they are promoting, but we usually see one of two things happen. Either the advertisers show so little interest that the startup fails, or what support the advertisers do provide goes to the venture capitalists and not to those providing the content.
As we screen the plethora of proposals to capitalize on high school sporting events in Michigan, we look for two kinds of assurances. First, that the suitor doesn’t have an exit strategy; and second, that the initiative will have direct benefit in terms of both money and message to those providing the content: i.e., schools.
Most of the initiatives we screen will assist schools with neither money nor message, and some of them would actually provide a message that is contrary to the mission of educational athletics.
So we’re guarding the gate, in both directions – controlling the entrance to the high school sports market in Michigan, as well as the escape of those who are in our market for a fast buck and quick exit, big or small.
Going to the Mat
October 4, 2016
Somewhere I heard a speaker say: “The most exciting thing in life is to be shot at ... and missed.”
In a real sense, I wouldn’t know; but metaphorically, that’s somewhat how we’ve felt after a federal district court judge tried unsuccessfully to cripple the Michigan High School Athletic Association in the aftermath of a lawsuit over the placement of sports seasons in Michigan.
Plaintiffs wanted the high school sports seasons for boys and girls to coincide and to mirror the seasons the National Collegiate Athletic Association established after our high school seasons were adopted. With the urging of its member schools, the MHSAA battled for nine years to attempt to retain a sports seasons schedule that allowed schools to use their resources (facilities, coaches and officials) in ways that they could demonstrate promoted higher participation rates by both genders.
Plaintiffs did not get all that they sought in the case, and neither did schools; but the judge ordered the MHSAA to pay $7.9 million, much more than the organization’s assets at that time.
But rather than being the death knell for the MHSAA, these events breathed exciting new life into the organization, the positive effects of which continue today.
The judgment – reduced significantly through negotiations, early payment incentives and insurance and paid off in 18 months – set in motion a review of internal operations that reduced expenditures by $600,000 over 12 months, while sponsorship and broadcast revenue grew by a combined $600,000 during those 12 months.
Eight years later, many of the operational savings continue, and non-tournament revenue is now more than double what it was in the first year following the judgment.
While complaints still come to us from students and citizens in local communities regarding the court-ordered changes for sports seasons, and participation has declined significantly in several of the affected sports – especially girls basketball, girls volleyball and boys tennis – the MHSAA office still continues to enjoy many efficiencies, as well as some euphoria, from the shot-at-but-missed experience.
This comes from the knowledge that we went to the mat for what our schools wanted, fought long and hard, paid a high cost, and came out of it with schools’ respect. In the aftermath, the MHSAA staff and Representative Council came together, and came through it stronger.