IN THE UN, a small nation can participate in debating international issues with an “observer status.” This allows a nation’s representative (usually from a state with little influence on the issue at hand) to speak, but not vote.
The observer status is also attached to commentators and influencers who may not necessarily be neutral, or even knowledgeable on the subject at hand.
As all coaches know, especially after losing a crucial game in a series, the worst indictments of how the team played come from the sidelines, composed of fans and observers. All the “what if” scenarios are cooked up and served to the disheartened supporters of the team. Can calls for a coach’s replacement be far behind?
The fascination with spectator sports lies in an intimate understanding and love of the game, along with an appreciation of the fine points of strategy and execution. Sports commentators both cover the game and educate the viewer on the nuances of plays, complete with statistics and history.
Can business qualify as a spectator sport watched from the sidelines by observers?
In mergers and acquisitions, business can be likened to a competition. What about the announced entry of a yet unknown player in a duopoly? Like sports, certain conditions need to be present for the contest to be worth following, especially for the aficionados.
The prize being contested needs to be sizeable enough to merit coverage by the business media and analysts. The contenders in a business contest are identified as recognizable personalities. Who is buying the stock below the disclosure level?
Business differs from regular sports in its absence of referees who will call fouls or traveling, while the game is going on. It is analysts that, like sports commentators, evaluate moves after the decision — this dilutes the present owner’s position. Rules and strategy dictate corporate play, much like chess where referees have no role. Sometimes, the court (judicial in this case) is called upon to rule on issues of suspicious transactions or insider trading.
Analysts pass judgment of success not only in terms of getting the prize but also at how much (usually in terms of money and reputation) it took to beat the other contenders. But what if the prize is a poisoned cup? Or the amount paid was too much for the assets taken over. Here, “goodwill” or the hidden value of a company is invoked to fill the gap.
While in regular sports, a team may lose one game but gets to fight another, the business warrior can lose the round and be pushed out altogether from the playing field. In business, the image of being a winner opens doors for financing and alliances (which cost less). The loser in a business contest may be permanently ruined and take early retirement.
Spectator sports may find betting an exciting aspect of the game, with even rumors flying around that bettors affect the outcome of the contest with referees tilting to one side and certain players on the take being sacked for “lack of team spirit.” Even coaches get into the act of gaming plays with statements that the league prefers certain teams to be in the playoffs with the referees behaving to ensure this unproved allegation.
The best model for a contest made for spectators is the art auction. This is the perfect paradigm for pricing goods.
The man in the podium is like a performer who needs to keep the process lively and moving along at a frenzied pace. He starts with a starting price for an artwork. (This has been with the seller for five generations.) A few seconds of waiting elicits a first bid. The price goes higher and higher until there are no more paddles going up or little gestures that catch the auctioneer’s attention.
The auction combines economics and theater. Even without a paddle, one can be moved to applaud such an interesting performance.
Do observers contribute to improving the game through better analysis of the dynamics? Good analysis can lead to better judgment from investors and players who are part of the game.
Theodore Roosevelt belittled the role of the observer — “It is not the critic who counts but the man who is actually in the arena whose face is marred by dust and sweat and blood.” The observer does not change the game. He deals with hindsight and history and determines how a battle is remembered… or forgotten.
Tony Samson is chairman and CEO of TOUCH xda