By DAVID MOON, Moon Capital Management
I am proud of East Tennessee State University for abandoning its football
That's a hard thing for me to say. I like football. I even like
football players; I used to be one. My wife was a majorette at ETSU.
A lot of lives ' both adult and students - will be disrupted as a result
of this decision.
But the folks who run ETSU had a business decision to make and they made
it. Football loses a million dollars a year at ETSU and the school simply
could not afford to continue to subsidize this recreational and mildly popular
spectator activity with funds from its academic programs.
It is a lesson we could all use in business: make the logical decision, not
necessarily the one that pleases the most people or makes you feel good.
Businesses discontinue operations, terminate employees and close plants all
the time. A company like General Electric can move 3,000 jobs from one
continent to another, as easily as moving pieces on a chess set. Yes,
those chess pieces are people and all of the decisions are difficult.
Lives are disrupted. Like ETSU, however, General Electric often has to
disrupt lives to serve its mission.
Sometimes you have to prune a tree for it to reach its healthy
potential. If your resources are limited, sometimes you have to ignore a
tree completely, and allow it to die, just to have the time and energy to
concentrate on your more important ' or profitable ' vegetation.
(By the way, lest the anti-football crowd gets too excited, at the University
of Tennessee, football is not only self sustaining, it subsidizes almost every
other men's and women's sport, in addition to some of the university's academic
When a local restaurant closes, what is the real news story? Should we
concentrate on the lost jobs and empty retail space? Or is the bigger
story the two new restaurants and one existing restaurant that thrive,
successfully taking food dollars from the failed business? Lightening
strikes cause more forest fires than arsonists. It is nature's way of
clearing the way for new vegetation. Big animals eat smaller ones.
Just as in nature, food chains exist in business ' including college
football. Yes, college football is a business. More people want to
fish, go to the library and shop at Wal-Mart than want to attend ETSU football
games. It is a product line the university can no longer afford to offer,
despite the severed longstanding emotional ties.
There are plenty of things businesses (and universities) can do to make
people feel better. Some of these decisions would be lauded by many.
Corporations could double everyone's compensation. No jobs might ever be
eliminated. Factories could always operate at full capacity.
Negative performance reviews could be outlawed. Free lunches, daycare and
health club memberships could be mandated. But if these decisions were at
the expense of the survivability of an organization or the fulfillment of its
mission, it would be no different than subsidizing football at the expense of
David Moon is president of Moon Capital Management, a
Knoxville-based investment management firm. This article
originally appeared in the News Sentinel (Knoxville, TN).