No. of Recommendations: 12
You may have heard of the Savannah Bananas, a professional baseball team. In my opinion, the owner of the team and the league, Jesse Cole, is one of the great business minds of our time. Right up there with Sam Walton, Jim Sinegal, and Walt Disney. Maybe a touch of Jeff Bezos, too. I’m not kidding and we’re still in the early stages.
The way the professional sports business model works is the teams and leagues make money from media rights (usually the main revenue source), tickets, concessions, merchandise, and sponsorships.
In the Banana league (now four teams up from two teams last year), there are no sponsorships. That is, no ads on jerseys or in the stadium. Concessions are free with the ticket (all you can eat hot dogs, hamburgers, drinks, etc.), there are no convenience fees on tickets or any additional fees on anything for that matter. Ticket prices are kept reasonable, such that a family of four can afford to go. There are some non-exclusive broadcast options on ESPN+ but all games are streamed for free without ads on Youtube as well. On top of that, in order attract top talent Banana league players are paid six figures. Compare with AAA baseball (one rung below the majors) whose players who are on food stamp wages.
To recap, the league makes almost no money from media rights and concessions, no money from sponsorships, and pays well above market rate for talent. How is this possible? Simple. The fans love it. They sell millions of all across the country. Every game is sold out and the merchandise flies off the shelves.
Cole grew up dreaming of playing the big leagues but an injury ended his playing career. So he got a job managing a college summer league team which is the absolute bottom rung of professional baseball. No one wants to watch college summer league baseball, so he had to come up with zany promotions and other ideas to make the game more fun for fans, like the players doing choreographed dances, stuff like that. He bought a team from the league for not very much because again, no one cares about college summer baseball. His team is winning championships. But Cole notices fans are still leaving before the end of games. Not only that, he finds himself getting bored during games, and he’s the manager.
So Cole comes up with a list of everything that is boring about baseball and creates a new set of rules that fixes all the problems. For example, it is a strike if the batter leaves the box. Batters can steal first. Bunting is illegal. No one may approach the mound. Games are always decided in the 9th inning, but a new inning cannot start after two hours. The games are short and action packed.
The Bananas have a pitcher who literally throws fireballs. One player pitches and hits on stilts. The players do backflip catches and behind the back throws. The owner wears a yellow tuxedo.
While the rules are unconventional and the atmosphere playful, the games are real. The level of competition is high, and several Bananas players have advanced to the majors. Cole kept going down the list of everything that was wrong with the fan experience and fixed it. Concessions are rip off, so he made them free. Ads suck, so he got rid sponsorships. Everyone hates ticket convenience fees, so he got rid of them. Everyone hates BS fees like shipping and handling, so he got rid of all those too. It is annoying to have to sign up for yet another streaming service just to watch your team, so everything is broadcast ad free on YouTube. They have a non-exclusive media agreement with ESPN, but the Bananas produce the feed.
At first blush, this makes no sense from a business standpoint. But it is amazing from a fan standpoint. Cole and his wife own the Bananas outright. They have no investors and no debt. They don’t have to do anything they don’t want to do. He believes if you create a great fan experience you don't have to worry about any of the other stuff.
I believe and predict Cole is in the early stages of creating a sports empire. The Bananas have one stadium and four teams. He hasn’t mentioned any expansion plans that I’m aware of. But I don’t see any reason they couldn’t have a dozen or even two dozen stadiums and teams. The only thing is he wants to completely control the fan experience, just like Walt Disney. If something isn’t 100% fan friendly he won’t do it. So I think any expansion will be gradual and on his own terms, but I believe it will be huge. And I think the same fan-first model could be applied to other sports as well.
I think the NBA is ripe for makeover. For instance, load management means you might not even get to see the star players in a game you attend, and seeing the star players is the whole point. Load management makes sense from a team standpoint but it sucks from a fan standpoint. The draft and salary cap need a makeover too.
No. of Recommendations: 4
Sounds familiar to a certain extent:
https://en.wikipedia.org/wiki/Harlem_GlobetrottersThe Harlem Globetrotters are an American exhibition basketball team. They combine athleticism, theater, entertainment, and comedy in their style of play. Over the years, they have played more than 26,000 exhibition games in 124 countries and territories, mostly against deliberately ineffective opponents, such as the Washington Generals.
Jeff
No. of Recommendations: 1
I believe and predict Cole is in the early stages of creating a sports empire. The Bananas have one stadium and four teams. He hasn’t mentioned any expansion plans that I’m aware of. But I don’t see any reason they couldn’t have a dozen or even two dozen stadiums and teams. The only thing is he wants to completely control the fan experience, just like Walt Disney. If something isn’t 100% fan friendly he won’t do it. So I think any expansion will be gradual and on his own terms, but I believe it will be huge. And I think the same fan-first model could be applied to other sports as well.
They have a good product for sure, but I question the sustainability of it over the long term. No doubt he Cole will make some money in the next few years, he might even sell the company for a nice profit - but this is just a newer version of the Harlen Globetrotters, it has a shelf life.
tecmo
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No. of Recommendations: 1
They have a good product for sure, but I question the sustainability of it over the long term. No doubt he Cole will make some money in the next few years, he might even sell the company for a nice profit - but this is just a newer version of the Harlen Globetrotters, it has a shelf life.
You could well be correct, but I think there are a couple of key differences. The Harlen Globetrotters started off as a serious, competitive basketball team that transitioned into a exhibition format where the Globetrotters (almost) always won against the hapless Washington Generals. That format was huge for a long time, but has dwindled mightily in recent decades. After all, you could see even better stunts in actual competition in the NBA.
The Bananas also play an exhibition format, but the games are competitive. Each of the four teams have a different show and could win any given game. Given, the stakes are low. Next season, the league will expand to six teams in playoff format. So in theory there will be a real incentive to win games. Could be short lived, but the Harlem Globetrotters were huge for a long time, so the ceiling is pretty high.
No. of Recommendations: 1
The idea seems crazy at first glance. But when you mentioned Walt Disney wanting to control the total experience, I was reminded of why Disneyland has service tunnels under it: Walt saw a costumed cast member walking through a different land and found it jarring. So he had the tunnels (and the concealed access doors) set up so that cast members and other things could come and go without being in the wrong place.
Once I thought of it that way, suddenly the idea for managing a positive fan experience made a lot of sense.
