Marketing, Sports, and Negotiations.

It’s hard to believe it was eight years ago when Nike’s John “Cap” Capriotti delivered one of the most informative presentations I’ve ever heard at any Annual Meeting. Cap speculated that the total platform – referring to the total marketing dollars spent on track and field on athletes, meets, and other events – might be valued at $160 million split between athletes, events, and federations (please remember this number is dated and may not be accurate now).  According to Cap, it wasn’t really important how you allocated those dollars amongst the athletes, events, and federations as it was zero sum game – a loss in one category would be offset by gain in another.   The platform was only worth $160 million.  Changes to the size of the platform could only occur in situations of real growth.

Sports apparel companies are the primary sponsor for track and field athletes in the United States.  Assuming we are in a zero sum game as Cap referenced in his presentation, that means an increase in support to the federation must have a corresponding decrease from either events or athletes or the sport just grew substantially in the US.  That’s why I find it both exciting and disturbing when USATF signs a significant deal with the primary sponsor of over 50% of the athletes.  In the best case scenario the value of track and field in the United States just doubled.  In the worst case scenario for athletes USATF successfully positioned themselves as a more attractive, more investable asset than any individual athlete.  In a zero sum game that means you’ll  see significant reductions in the average contract value and gross number of sponsorships for athletes or a drop in the investment in meets.   If that does happen, that’s a real paradigm shift in the sponsorship model that reflects the ambitions of the federation.  It will have a direct impact on the profession of track and field from the athletes to the agents and to the independent meets outside nationals, olympic trials, other national team events.

It’s too early to tell if it will be a net positive or negative.  Right now, we don’t know what the long term strategic vision is for USATF.   While we are not the NFL, NHL, NBA or MLB, those leagues do believe in sharing the long-term growth plans even when that information is used against them during collective bargaining.  The respective stakeholders of those leagues may fight for bigger pieces of the pie from time to time, but they appear more concerned with growing the size of the pie.   That’s why billionaire owners will eventually concede to reasonable requests from players even if they kick and scream along the way.  But, we aren’t the NFL, NHL, NBA or MLB.  And we certainly don’t have all the information to make an informed decision.  We are different.

We are more akin to golf and tennis and their models should offer us significant guidance going forward.  Those models showed how when athletes decide to work together, they can build a united profession out of a bunch of independent contractors.  Their respective tours were created when athletes agreed to a code of conduct and qualifications program that allowed the marketing side to license a professional tour of events.  These are separate entities from their respective federations, because what’s best for the federation is not always best for the athletes and the tour.  There are too many conflicts of interest to combine the profession with the amateur.  Those conflicts already exist today, hence why USATF offers athletes a commercial contract to sign prior to acceptance to any team.  Those contracts are presented in a “take it or leave it basis” without any one or collective of athletes being allowed to negotiate any terms on that contract.  So, of course, that contract will reflect the best possible terms for USATF to advance its own mission at all costs.  That’s not capitalism.  That’s imperialism.  And the problem with imperialistic regimes is they tend to favor expansionism and exploitation.  The federation knows that most of the time the athlete has to compete in the major championship in order to maximize earnings (or for to make any money at all).  Kind of reads like a quote from “The Art of War.”

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