Expert Views on the value of a Business Plan

I first looked at the views of Andrea Cockerton, an independent pitch expert and advisor in the United Kingdom. She is an expert in venture funding and business critical ideas. Andrea has help over 350 entrepreneurs in her career. She has also helped large companies. Andrea also co-founded a successful business herself in 2009 called Brick Handbag.

Andrea says it is very important to ask for money from banks and investors before the money runs out. She says the biggest mistake an entrepreneur can make is going to the investor too late in the funding stage. Andrea gives three important components that you must have in your business plan pitch. First, she says you must target a growing market that needs your product or service. Second, she says your team needs to be talented and able to execute the business plan. Third, Andrea says that your product or service needs to be groundbreaking. I will consider using all three of Andréa’s ideas in my business plan, but the one I will definitely use is making sure a surround myself with a talented team that can execute my business plan.

The second expert I looked at is film industry expert Kathleen Kennedy. Kennedy is one of the most successful film producers in the history of the business. She has produced films such as ET and Jurassic Park, both blockbusters. She worked her way up the ladder after attending San Diego State University. She was Steven Spielberg’s production assistant. Kathleen Kennedy is now the co-chair person for Lucasfilm. Kennedy says the keys to success are surrounding yourself with nice, talented, balanced people with various interests in your industry. She also says you have to work hard, have tenacity and strong values. Kathleen Kennedy’s keys to success are very good. I will approach my business plan and business with tenacity and hard work.

How Much Is Enough? Part II

In June before the 2014 NFL season I posted a blog titled, “How Much Is Enough”. It was about the outrageous salaries being paid to NFL Players, especially quarterbacks. The post mainly talks about the contract extension that San Francisco 49er quarterback Colin Kaepernick received. Kaepernick received a 6-year contract extension worth $126 million. The contract averages $21 million a year, and $61 million of that is guaranteed. This contract made him the highest paid NFL player at any position.

Now let take a look at the latest NFL player contract news. Free agency is about to start in a couple of days, and the biggest name in this year’s free agent pool is Ndamukong Suh. He is probably the best defensive lineman in the NFL. Drafted by the Detroit Lions in 2010, Suh is now an unrestricted free agent and has been courted by a few teams. It is now being reported that Suh will sign with the Miami Dolphins on the first day of free agency. Ndamukong Suh’s new contract will be a 6-year deal worth $114 million, with $60 million guaranteed. The contract will average $19 million a year. As you can see from the numbers, this contract is very similar to Colin Kaepernick’s contract. This contract makes Suh one of the highest paid players in the NFL. This contract does make Ndamukong Suh the highest paid non-quarterback in the NFL.

In part one of this post I asked three questions. Here are the three questions I have and I’m sure many others will too. Is any NFL player worth this kind of money, can they lead their teams to a Super Bowl, and how much money is enough? Let me say that I am a Miami Dolphins fan, and I’m ecstatic that we’re going to sign Ndamukong Suh, but the money is crazy, so I still ask the question, how much is enough?

PED's and Sponsorships

The UFC has made headlines lately with several fighters testing positive for PED’s. This does not look good for the UFC or any sport. On January 6^th three days after he defeated Daniel Cormier at UFC 182 news that Jon Jones had a positive test for cocaine metabolites broke. After Anderson Silva defeated Nick Diaz on January 31^st at UFC 183 it was announced that he failed a test for anabolic steroids. January was a big month for the UFC; it had four major events that were very successful. Unfortunately it will be remembered as a month when two of the UFC's biggest stars and best pound-for-pound fighters of all time, both failed drug tests. Jones, the UFC light heavyweight champion was allowed to fight because his test was considered out of competition and cocaine is only prohibited in competition by the World Anti-Doping Agency code. The Nevada Athletic Commission could not discipline Jones, but he was fined $25,000 by the UFC for violating the organization's code of conduct.

This not only puts a black eye on the sport, but it has a monetary affect as well in terms of sponsorships and endorsements. Major corporations will start to pull away and terminate sponsor deals if they feel the sports organization doesn’t have control over their athletes, and if they feel the athletes they are sponsoring are violating moral clauses. Nike dropped Jon Jones after they found out about his positive test. Fortunate for him the UFC had just signed a partnership deal with Reebok to dress all UFC fighters in Reebok fighting gear, which will also include their coaches and corner people. Reebok has starting signing individual fighters to endorsement deals, and Jon Jones was their first followed by women’s bantamweight champion, Ronda Rousey.

The UFC will implement a new drug testing policy that will take affect on July 1, 2015. In conjunction with local athletic commissions will subject all main events and championship-bout fighters to enhanced, out-of-competition drug testing. The UFC also announced that it would conduct random, out-of-competition tests for all the fighters on the roster, which currently totals 96 fighters regardless of whether those athletes have scheduled fights. UFC President Dana White said, "If you are using PED’s, you're going to get caught”.

Beast Mode

What is Marshawn Lynch going to do, retire or come back and play in 2015? That is the question the Seattle Seahawks and Seahawk fans want to know. Seahawks general manager John Schneider said that retirement is a possibility for Lynch. If he decides he wants to play in 2015, the Seahawks are willing to renegotiate his contract. Schneider said Lynch needs to find out where he’s at so the team can go forward with negotiations on a new contract. Schneider also said that Lynch knows he won’t be playing at the same numbers if he comes back. Marshawn Lynch is scheduled to make $5 million in base salary for 2015, plus a $2 million roster bonus. It has been rumored that the contract extension the Seahawks would be offering would be more than $10 million for the 2015 season. 

 One of the reasons some say Marshawn Lynch would be considering retirement would be is “Beast Mode” clothing line. BeastModeOnline has been a big success for Marshawn Lynch. His line of hats recently sold out. It is the same hat he was wearing during Super Bowl Media Day when he said, “I’m just here so I won’t get fined,” 29 times. Lynch is not a big fan of speaking to the media, and his eight-word statement during Super Bowl Media Day came from a move last November by the NFL to fine him $100,000 for repeatedly ignoring NFL rules requiring players to talk to the media. He was also fined for wearing his hat, which is not an NFL license product. If the Seahawks would have won their 2 consecutive Super Bowl, some say Marshawn Lynch would have retired for sure because that would have made his brand more valuable and powerful.

Lynch was denied the chance to score game-winning touchdown, and lost an extraordinary opportunity to cash in on that achievement. By calling for a pass instead of a run from the 1-yard line, and not handing the ball to his Beast, Seahawks coach Pete Carroll not only cost the team a second straight Super Bowl championship; he also set Lynch up to tackle two pressing financial matters this offseason, continue to play or retire. NFL experts say that was one of the most boneheaded decisions in NFL history.   

Industry Liabilities

There are many controversial issues in sports today with the most talked about being domestic violence, performance enhancing drugs and gay athletes. These issues were the leading stories for most of 2014. While a little of the sizzle has gone away from these stories, but rest assured they will resurface soon.

First lets take a look at the Michael Sam issue of being the first openly gay player in the NFL. Michael Sam announced to the world that he was gay during his last year in college and before entering the 2014 NFL draft. So the main topic of discussion would be how the other players in the locker room would accept him. There was also the question of was his draft status hurt by him announcing he was gay. Sam was the defensive player of the year in the SEC, but was drafted in the 7^th round. Most agree he being gay hurt his draft status. As far as a legal issue, Michael Sam could not be denied playing in the NFL because of his sexual orientation. My opinion is that if the athlete no matter if its Michael Sam or any other athlete can perform on the field and perform to the level of the competition, they should be allowed to play. 

Another recent controversial issue was the Ray Rice domestic violence situation. The domestic violence incident with him punching and knocking his then fiancé out was the lead story on every news outlet. Domestic violence is a very serious issue topic in sports and this country today. The country was outraged by the video of him dragging the limp body of his fiancé out of a hotel elevator. Rice was suspended for 2 games and then suspended indefinitely after more video was released. Rice appealed the second suspension and won. My opinion is that the sports leagues must develop new domestic violence policies and make sure the players understand them and know the consequences for violating them. The leagues need to also have some type of counseling in place for athletes who have domestic violence problems. 

Another issue that has been big in sports, but not just in 2014 is performance enhancing drugs or PED’s for short. Most of the major sports leagues have implemented new policies and testing procedures for PED’s. Most of these new policies have very serious punishments for violations of these policies. My opinion is that the use of PED’s is cheating and have no place in sports. I think the testing should be better, the punishments more severe and repeat offenders should be barred from there prospected sports for at least 2 years.

Fan Loyalty & Engagement

Today everyone has some type of rewards or loyalty program. Whether it’s a retail store or a sports an entertainment business, companies want to reward loyal fans and customers. Just think about it, every time you step up to the cashier or check out counter to pay for something, the first thing they ask you is do you have a rewards card. If you don’t have it with you they’ll ask for your phone number or email to access your information. These reward and loyalty programs reward fans and customers with special rewards, discounts and other opportunities they otherwise wouldn’t have access to if they weren’t enrolled in these programs.

Fan loyalty and engagement is important to sports organizations because they are an incentive for fans to continue to support their favorite teams and buy merchandise and for doing this they are rewarded with something special. Revenue generation is affected because fans attend events. Purchasing tickets and buying merchandise generates revenue.

More and more sports organizations are coming up with loyalty and rewards programs for their fans. NASCAR, one of the leading sports organizations in the world has a rewards program called RacePoints. Fans enrolled in the program have the ability to earn points when they purchase qualifying products and services. Points are tracked and redeemed online for NASCAR apparel, merchandise, collectables and NASCAR experiences. The UFC (Ultimate Fighting Championship) just launched a new rewards program called UFC Rewards. UFC says it is a way of thanking the best fans in the world. As a UFC Rewards member you can earn limited edition collectables and exclusive experiences. Reward members earn points by buying pay-per-view events, subscribing to UFC Fight Pass, reading UFC Rewards Emails, attending live UFC events, and connecting with the UFC through social media. The Buffalo Sabres have taken their new fan loyalty program mobile with an application that can be downloaded for free through the Apple App Store or the Google Play Store. Sabres fans earn points by scanning codes on tickets, merchandise and concessions. Fans from the UFC, NASCAR and the Buffalo Sabres are responding well to these programs. Enrollment numbers are steadily increasing.  

How can a sports organization engage fans before, during and post game that can increase fan attendance? First, they must engage all fans, not just the season ticket holders. Second, they must offer fans a community. This would allow fans to get to know each other. Third, engage fans during the off-season. Just because the season ends, fan loyalty doesn’t.

To steal or not to steal, that is the question?

You can’t watch the news, go on the Internet or view any type of social media today without seeing some college or professional athlete in some kind of trouble. When does it stop? I wonder if these athletes are seeing the same thing I’m seeing. You would think they would use better judgment when they constantly see other athletes getting in trouble. Whether you’re a college or professional athlete, poor judgment can cost you money, sometimes millions of dollars.

 Lets look at the latest example of poor judgment by a professional athlete. After rushing for 52 yards, included a big 38-yard run and a key tackle on a kickoff that help the Dallas Cowboys to a 30-23 win over the Super Bowl champion Seattle Seahawks, running back Joseph Randle is arrested the following day for shoplifting. He was released on bond after being charged with a Class B misdemeanor theft of $50 to $500 in Frisco Texas. Randle is accused of stealing a pack of Polo underwear and a bottle of Gucci Guilty Black cologne; the two items came to a total value of $123.50. What’s so odd about the situation is that Randle had just purchased an item at the cologne counter.

Now let’s look at how not only is this situation embarrassing, but ridiculous and stupid. Joseph Randle was a fifth round draft pick in 2013 and has a base salary this year of $495,000 which breaks down to $29,500 per game. This leads me to my next question. Why in the hell is he stealing underwear and cologne? It’s not that he can’t afford the items. So what is it? Do you think he did it just to see if he could get away with it? Is Joseph Randle just a common thief? Athletes continue to put themselves in bad situations that are clearly avoidable. Professional teams do character and background checks and some psychological testing, but I think more may be needed. What do you think?  Deeper mental and psychological testing may be needed before professional teams invest some much time and money in these players. As of today the NFL has not disciplined Joseph Randle in any way, but the Dallas Cowboys fined him $29,500, which is equal to one game check. I know the teams and the leagues are tired of being embarrassed. Please feel free to comment.