By Richard M. Franza, Ph.D. Guest Columnist

Hull College of Business Dean Rick Franza says businesses can learn from the pandemic’s impact on professional golf and baseball.

As an avid sports fan, like many of you, I eagerly anticipated the restart of professional sports since the pandemic-induced hiatus in mid-March.

For fans of the Professional Golf Association Tour and Major League Baseball, March 12 and 13 were dark days.

On March 12, the PGA Tour commenced the first round of the Players Championship – a tournament so big it often is called golf’s “fifth major” – with fans in attendance. Immediately following that first round, the Tour announced the remainder of the tournament would be played without spectators. However, the next morning (March 13), the tour canceled the remainder of the tournament and postponed the rest of its schedule indefinitely due to the pandemic.

Concurrently, on March 12, MLB canceled that day’s preseason games. The next day it suspended spring training indefinitely.

Fans had been without both sports until the PGA Tour resumed June 11 and MLB restarted play on July 23. While I am glad these sports have resumed from a personal standpoint, I have also noticed many lessons businesses can learn from these organizations.

While the PGA Tour is technically a nonprofit – in 2019 it contributed over $200 million in “profits” to charity (bringing its all-time charitable contributions to over $3 billion) – both the PGA Tour and MLB are businesses. MLB franchises are more traditional businesses, as team profits go to their ownership groups. Therefore, both entities are trying to increase their profitability while providing customers products that they value.

As such, both the PGA Tour and MLB have had their business models significantly impacted by the pandemic. Both have done several things companies can adopt and adapt to their businesses.

First and foremost, the PGA Tour and MLB have stressed the importance of the safety of its players and others who support the play of the game (e.g., caddies and rules officials for the PGA Tour; coaches and umpires for MLB). While neither the Tour nor MLB have developed a perfect system, both have worked diligently to put systems in place to protect players as much as possible.

The PGA Tour has created more of a bubble, with strict testing, controlled travel and limited places to stay. It also has a stipend program to incentivize players who test positive for the virus to follow protocols. MLB has developed a 113-page manual that covers required testing protocols, travel restrictions, what food players are allowed to eat, and how drills and workouts should be conducted.

So, the first thing a business can learn from the PGA Tour and MLB is to put systems in place to protect your workers, because if you do not have your workers, you have no product.

Despite all of their vigilance, both the PGA Tour and MLB have had issues with players and others testing positive for the virus. The PGA Tour is in the eighth week of its return to competition, while MLB is early in its second week.

The PGA Tour has demonstrated its ability to learn and adapt as time has gone on. It has done a better job of testing players so they can return to competition after recovering from the virus. It also has added safeguards, such as having previously infected players play either individually or grouped with others who also have recovered from the virus. Through almost eight weeks, the Tour has demonstrated it keeps learning and doing better.

MLB is going through its own crucible right now, with recent the outbreak in the Miami Marlins franchise. But the league appears to be acting prudently and also is learning from the experience.

So the lesson for businesses here is that although you might be well prepared, you need to be ready to learn and adapt during an unprecedented event.

The final two lessons businesses can take from the PGA Tour and MLB are related to the two things that effect the bottom line of any business: costs and revenues. Both the PGA Tour and MLB have learned they will need to reduce costs to survive this pandemic.

For example, PGA Tour Commissioner Jay Monahan is foregoing his salary indefinitely. His executive team has taken 25% pay cuts, and all other staff salaries have been frozen. MLB has eliminated it minor league season and reduced its draft from the usual 40 rounds to five to save on costs.

The lesson here is to reduce your costs as much as possible without sacrificing your primary product.

Revenues for both the PGA Tour and MLB are suffering without fans in attendance to buy tickets and concessions. The PGA Tour also is losing substantial revenue from the lack of corporate hospitality tents and the programs that typically occur the day before a tournament.

Both the PGA Tour and MLB have had to leverage the revenue sources still available to them and also be creative about developing new revenue sources.

Due to increased interest in televised sports during the months-long hiatus, more revenues can be generated through additional broadcasts and live-streaming of games. MLB has been especially creative in selling fans the opportunity to pay to put “cutout” figures of themselves in the stands. Both organizations have increased the amount of advertising at courses and stadiums that can be seen during broadcasts.

The lesson here is for business to “double down” on their existing revenue sources while being creative in developing new revenue sources.

While I am greatly relieved golf and baseball are back on the air for my entertainment purposes, I have also found the restart of these sports instructive for business.

I hope these lessons are helpful for your business to survive and thrive.

The writer is dean of the Hull College of Business at Augusta University.

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