A Texas friend of ours emailed today, wishing we still lived in Wisconsin. He said that getting Brett Favre updates every 5 minutes wasn't enough for him -- perhaps if we still lived in Wisconsin, we would have minute-by-minute updates. Well, according to the Milwaukee local news, Favre has left town -- probably for the foreseeable future.
I have to say that I was a cheesehead before we went to Wisconsin (I loved that thing where they jumped into the fans' seats when they scored a touchdown), and was even more of a fan while living there. My kids first encountered the Packers and St. Patrick's Day the first year there, so they still think there's something called St. Packer's Day where everyone wears their green Packers shirt to school so they don't get pinched. But, here's my prediction about Favre's revived career.
It will be bad. The Packers will trade him to a stinky team. This team will have a stinky offensive line. Favre will give the team one or two more wins and sell some tickets, but he won't have a great season. He'll have a stinky season. And he might get hurt because (you guessed it) his offensive line is stinky. I predict he will retire after one season, maybe two if he doesn't get hurt. (I hope the team recruits a star left tackle for their star quarterback.) Recall how stinky pro teams do when they draft Heisman trophy-winning quarterbacks and put them with their stinky team and their stinky offensive lines. It's bad. And everyone says, "I thought that quarterback was supposed to be good?" This is what happens.
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1. Posted by Randy on August 6, 2008 @ 16:20 | Permalink
Christine - where's the corporate governance analysis, to what extent is this an agency problem resulting from extreme shareholder weakness.
2. Posted by Christine Hurt on August 6, 2008 @ 21:21 | Permalink
Randy, I'm sensing in your comment that you think the Packers messed up here. Let's put that interesting question aside for the moment and assume that they did. That brings up the question of who owns the Packers. Technically, the shareholders do, but that's not really true. They can't sell their shares, and no one can own more than 200,000 of the almost 5 million shares. The shares don't go up or down in value because there is no resale value and no dividends. But, the shareholders get to vote on the board of directors. In most corporations, the only shareholders who really get to vote for directors are majority shareholders (which are zero) and acquiring majority shareholders (which there will never be). So it would be interesting to see how much power the shareholders have collectively to elect a board (or oust one). I'm not that familiar with the history, but I take it that the shareholders have never really bucked the management (like in most corporations).
So, what are the constraints on management under this structure? Like other managers -- their own stock price. CEOs want to make the stock price of their companies go up not only because of stock options and bonuses, etc., but because they want to expand their internal and external career options. So here, I would say the constraint is the management's desire to win, which might be a better constraint than noisy stock prices. So, if we think management has dealt with Favre in a way as to spite their own face and win fewer games, then we're really left with the fact that humans are irrational and sometimes don't act in their own best interest.
Now, back to the question of whether management made a bad choice not to put up with the "will he or won't he" Favre that gets worse every year. Let's assume the opposite. Say it's the fans who love Favre too much. Say the management who have seen him recover from weekly games for years now think it was time for him to retire. They probably have inside information, after all. If the GB Packers shareholders were too powerful, could they force the board to make a bad decision? In publicly-held corporations, would shareholders be in a better position to choose the CEO? I think I can see this question from both angles -- misguided management or misguided shareholders.
The bottom line is that I don't really think any other corporate structure has shareholder strength, so I don't see the shareholder weakness here as the determining factor. The Packer shares are symbolic and more akin to shares in a nonprofit that allow you the right to vote. Nonprofits are not my area, so I leave that analogy to others.
3. Posted by Paul on August 7, 2008 @ 7:05 | Permalink
Brett will wake up in three months, and say to himself, why am I playing for the Jets? He should've stayed retired.
4. Posted by Cliff on August 7, 2008 @ 8:33 | Permalink
"Brett will wake up in three months, and say to himself, why am I playing for the Jets? He should've stayed retired."
Na, what he should've done is swallowed his pride, taken back his starting job, won the superbowl, and then told Ted Thompson to stick it.
Thompson is a talented GM, but this was all about dominance, pure and simple. Thompson wanted his own team with his own players on the field, and as long as a "diva" like Farve was around and playing well Farve was a player with too much externally shared power for Thompson to handle.