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Saturday, October 5, 2013
Washington Redskins: More Than A Name
The longtime nickname "Redskins" of Washington, DC's National Football League franchise has in recent years become the target of activists claiming the name is racist and derogatory towards Native Americans and should be changed. Now the President of the United States has opined that the team's "attachment" to the name "Redskins" is not enough to overcome the sentiments of many that such names are offensive.
One main problem: the name represents --- no, it is -- a brand. And that brand has value. More to my point, that brand came at a substantial cost: $750 million in the reported purchase price in 1999 by current owner Daniel Snyder.
Nickname and logo changes can have subtle and sometimes adverse effects on team valuation. When you are an 80-year-old franchise you have a fan attachment that translates strongly to attendance, merchandising and licensing revenues and so on. Daniel Snyder did not merely buy the right to operate an NFL team in our nation's capital; he bought a historic, established franchise with an equally established fan base.
The brand matters.
Should the forces asserting a group offense prevail, and the name is eventually changed, there is a real risk that the team's value will decline. Usually, teams change names for reasons related to wanting to enhance the value. Logos age and sometimes get outdated; sometimes management wants to revitalize the brand and a logo or name change may do the trick, especially if the brand is considered undervalued. There's actually precedent there: the National Basketball Association has had a few teams change names: the Washington Bullets became the Wizards in 1997 and the New Orleans Hornets just adopted the name Pelicans this summer. However, those name changes probably increased those team's values from fairly low baselines, so there is no ready analogy for use with the Redskins. (Another problem is that sports clubs, other than the Green Bay Packers and Boston Celtics, are private enterprises and are thus always hard to value except when "marked to market" when sold or refinanced.)
I can think of one collegiate sports program where the value may have declined since the change. The St. John's University (N.Y.) called its teams the "Redmen" and its college basketball program was among the very best in the nation in the 1980s (the heyday of Coach Lou Carneseca and players like Chris Mullin). In 1994, the University succumbed to the same pressure now being applied to the Redskins, and changed "Redmen" to "Red Storm." Arguably, neither the program (by any metric you pick) nor its profile in the Northeast / New York City metropolitan area has recovered to its prior heights.
But consider what would happen if the most indisputably iconic sports brands, teams like the Dallas Cowboys or the New York Yankees, were changed.
If the Cowboys became, say, the Dallas Texans (ironically, an unsuccessful predecessor to the Cowboys, lasting only the 1952 season), and changed their Big Blue Star to a "T," what would you think would happen to the value?
More to my point, how much of your money would you bet on the value even staying constant? Right, me neither.
Former President George W. Bush was a minority owner and managing partner of the Texas Rangers in the 1980s. Can you imagine Bush ever suggesting to an owner of a pro sports club -- or any private enterprise -- that they consider changing the brand name because some group of people (which likely includes just a few token Native Americans as "fronts" for the group) asserts that they are offended?
I ask: Who does Daniel Snyder go to for compensation for the name change? Will the government bail him out? Will any Native American "tribe" come to his aid? Or will Snyder get a condescending lecture on his duty to society to suffer hundreds of millions of dollars in evaporated value, quite possibly never to be regained, in the name of some sort of justice?
President Obama is out of bounds on this issue.