Robbing Peter to pay Paul

During one of his talks to the students at the Sloan School of Management, during the early part of the decade, Michael Dell had a few words of wisdom to share when he was questioned by a student regarding Dell’s possible acquisitions of companies to enter a new product category – the PDA market if I remember right.

“To enter a new product category, you don’t have to acquire a company,” he’d said. “You guys are starting to sound like investment bankers! Buy this, buy that! Buy this, buy that! Just because you have $8.6 billion in cash doesn’t mean you should buy things! We have a saying in Texas, ‘Nobody ever went broke having too much cash’”.

Malcom Glazer probably knew what he was getting into when he bought out the shareholders of Manchester United, much to the disgust of their fans who were against the idea of an American businessman at the helm, on top of the debt close to a billion dollars that burdened the club during the takeover.

Over the last five seasons, the ticket prices at Old Trafford have increased by a whooping rate of 42%. The sale of their priced asset in Cristiano Ronaldo to the Spanish spendthrifts Real Madrid helped reduce the financial load by a staggering figure of £80 million, but that didn’t stop Mr. Glazer from reaching out to the club’s players for charity.

He is one among the many businessmen thrashing on the hook of impending ignominy after buying out large stakes at sporting clubs. Seth Godin had recently mentioned that he thought that it wasn’t an accident that corporations and governments have similar structures, where the men at the top have power, deniability and a lot of control. It’s the lattermost aspect of the issue that leads them into making self-aggrandizing decisions that give birth to such debacles.

Ask me, I’m a Liverpool FC fan and I hate anything that rhymes with Vicks, or is a brand that sells razors.

Equally mesmerizing is the wages some of these clubs pay their players, who probably aren’t worth what they get. I was following an episode of Football Focus on ESPN earlier this week, and I was quite shocked to find out that Bolton Wanderers paid £41 million to their players in wages. Their income to wage ratio is almost 1:1 – what they get go away as wages. You simply cannot run a business using this model, and Bolton, with due respect, are never the club they were once under Big Sam Allardyce.

When you look at cost structures, over-paying is far more devastating than under-paying your employees, or in some cases, not paying them at all.

Countering sport bias, which eventually boils down to public interest, and indifferent governance has been an uphill battle here in India. The state of the Indian hockey players has attracted an avalanche of attention even among men who garb themselves with a hint of sleek cosmopolitanism. The Indian cricket team’s gesture in reaction to the situation attracts a particularly raw nerve. Generosity apart, it shapes up a scenario where a young athlete would force himself to choose cricket over hockey for monetary gains.

Rahul Dravid, in his biography, speaks about the abilities of his friend from school, none other than Sandeep Somesh, a former member of the Indian National Hockey team. Sandeep, he says, would have excelled in cricket had he taken it up but instead chose hockey because of his passion. Today, any young Sandeep Somesh wouldn’t think twice about the direction in which he wants to head if he is gifted in an array of sports.

Even if he chooses to follow his passion, the society simply won’t stop itself from bludgeoning him with facts about financial security – because of incidents like these that spur up every now and then. Discrimination is learnt.

It isn’t all that encouraging either when he sees a cricketer promoting the Hockey World Cup in India, but that’s what the system has left us. Bir Bahadur, a former Indian footballer who had represented India in the 1966 Bangkok Games, relied on monthly pensions from Sunil Gavaskar’s trust to ease his financial burden. Dozens of other stories are well documented, but is this sending the right message through to the youngsters?

Surely, the system cannot continue to rob Peter to pay Paul forever. It cannot rely on micro-finance either, though trust me, when you compare the numbers between cricket and rest of the sports, it isn’t all that ghoulish to see the term micro here.

Cricketers of the yesteryears, days during which their calendars weren’t packed with cricket action, had jobs outside the game to supplement their income. This isn’t an uncommon trait among non-cricketers in India these days, men who are forced to work outside sport to supplement their incomes.

A compelling case for a change in system has been on the cards for a very long time, but the renewed focus on globalizing cricket, which, as a cricket fan, I must admit I’m cherishing, through Googlies and Google-ease, have taken the attention away from the dearth of problems elsewhere. Also predictable is the apparent imperviousness of leaving these issues in the hands of politicians with an affinity for sport.

As I continue to ponder over possible solutions for the extremities, from Manchester to New Delhi, I’m reminded of Seth Godin’s words once again: ‘Control might be the goal of a typical politician, but the future belongs to linchpins, individuals with leverage, people willing to make a difference and do work that matters. The linchpin sees that leadership can work without formal control and that flexible networks actually deliver more leverage, not less.’

Anyone up for a revolution?