Competitive Advantage in Pro Sports
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Competitive Advantage and Pro Sports
In the world of sports it is not just all about who wins the championship, it is about who brings in the most money. Sports is a money making machine and the drive of the owners, agents, coaches and players is to win games and ultimate win championships that will make money. During the 2011 season, football experienced the first lock out and strike since the eighties and that cost both players and owners millions of dollars in lost revenue, not to mention the impact on the fans.
Concerning profitability in sports football is at the top of the game so to speak according to an article in Forbes, the NFL is the most profitable team sport and the average team is worth about $733 million. A large part of the success of the NFL and what gives them the bulk of the revenue is the national television contracts that are worth an estimated $17.6 million dollars over an eight-year span. Within the NFL the Dallas Cowboys are the reigning champions on top of the money food chain with its valuation even though they have not won a super bowl since 1996 (“NFL History – Super Bowl Winners,” 2011) and Dallas has proven the team does not need to win a championship to be the most profitable. In 2010 the Dallas Cowboys were valued at $1.85 billion as valued by Forbes magazines annual survey (“Cowboys most valuable NFL franchise,” 2011, para. 1). With $406 billion dollars in revenues it is hard to imagine that a team pulling in this kind of revenue is not going to the championship every year (“Cowboys most valuable NFL franchise,” 2011). So what is it about the Dallas Cowboys that makes this organization so special and how are they able to remain the wealthiest team in the richest sports league despite being able to boast of championships?
Dallas has several tangible assets that allow the organization to be able to retain the top billing for the last several years that include their owner Jerry Jones, their new supersize stadium just to name two. A large part of the success is because of the owner Jerry Jones reported to be worth an estimated $1.3 billion dollars looks for the opportunities that will make his team better. Jerry Jones philosophy could often cost him in the wallet but he believes that in the end it is worth it to have quality players on the field and to limit front office drama as the only owner/general manager in the league (MacMahon, 2012). Jones tenacity and desire to create something unsurpassed by other teams financially has him and the Dallas Cowboys sitting pretty. The next tangible asset that the Dallas Cowboys have is their new stadium that boast 80,000 seats, a four-sided video screen is the biggest existing in the world, retractable roof, and luxury suits and only cost $1.15 billion to build and one of the most architectural daring design allow fans to pack the house even if it is to watch the Dallas Cowboys lose, watch a soccer tournament or other events who can afford the luxury of playing in this venue. In 2010 according to Forbes.com the stadium earned approximately $439 million dollars. Although there is still a $200 million dollar debt on the stadium it is foreseeable that if Jones is able to find a naming rights partner for the stadium then some of that debt will diminish. Core competencies are resources and capabilities that serve as a source of competitive advantage for a firm over its rivals and the stadium is clearly that since it is owned by the team versus the majority of stadiums are owned by the cities in that they reside (Hitt, Ireland, & Hoskisson, 2009, p. 17).
Dallas Cowboys have also has some intangible assets like their partnering and corporate