Fixing the Game: Bubbles, Crashes, and What Capitalism Can Learn from the NFL
By Roger L. Martin
Harvard Business Press, 2011
When asked, “What keeps you up nights?” the late Steve Jobs responded, “Shareholder meetings.” Although Jobs seemed to delight in signaling to his owners that they didn’t much matter, Jobs’ reply indicates a much more consequential customer-centric focus. By 2010 that focus made Apple the second most valuable company in the world. While there are other customer-centric companies—Johnson & Johnson and Procter & Gamble are in Apple’s league—the list of enterprises that put the customer ahead of earnings is shockingly short.
What does Apple’s customer-first attitude have to do with the success of the National Football League (the gold standard in sports marketing)? Roger L. Martin’s Fixing the Game says it’s all about making customers, the fans, number one and letting the earnings follow. The purpose of any league office—the NBA, NCAA, NASCAR, PGA, the International Olympic Committee, and of course, Major League Baseball—is marketing: developing the game and guaranteeing its integrity (the first “P” of marketing) and then promoting the sport (another “P”).
Martin describes how the NFL constantly makes incremental improvements to professional football, all guided by what the fans seem to want most, not the team owners, not the officials, and not the players.
By contrast, Major League Baseball seems to be run for the benefit of the owners and the players. At the insistence of the player’s union there is no salary cap and the league makes little attempt at parity.
What is the result? Today, the NFL is easily the favorite of sports fans. An average regular season NFL game earns higher TV ratings than the World Series. The NFL’s broadcast agreement of $4 billion per year dwarf’s MLB’s $670 million.
However, besides customer concentricity, what else can American capitalism learn from the NFL? The answer is complicated and consumes 90 percent of Martin’s book. Simply put, American capitalists must no longer be allowed to manipulate stock market expectations for personal gain.
Martin goes on to explain how today’s hedge fund managers manipulate market expectations through collusive “short attacks” on wounded stock issues, selling heavy in the morning and buying back by mid-afternoon. In the process, these fund managers extract vast amounts of wealth from retail share traders—widows and orphans—without creating anything of value for anyone. It is simply a reallocation of market wealth. Martin places the financial collapse of 2008 squarely on such abuse of the securities expectations market.
Martin seems to want to write a book on how to recover from this collapse, but perhaps needed an angle to get it published in a world flooded with market meltdown tomes. Curiously, a version of Martin’s book with a new title is in circulation: Fixing the Game: How Runaway Expectations Broke the Economy, and How to Get Back to Reality. Under either title, what the reader gets in Fixing the Game is deeply thoughtful business commentary with an excellent marketing case study to boot, namely the NFL.