We’ve all had that one professional athlete we looked up to as a child: Michael Jordon, Serena Williams and the list of iconic figures goes on. But professional sports organizations can act similarly. That is, professional sports organizations can act as corporate role models to other organizations, at least when it comes to their B2B payments practices, said Max Eliscu, CEO of B2B payments and invoicing firm Viewpost.
Considering the sheer size and value of a supply chain surrounding a professional sports organization, managing exceptional supplier payment practices is no easy feat.
Last month, Viewpost announced that NBA team the Orlando Magic had signed on as a new client; Eliscu recently told PYMNTS how that deal demonstrates the approach that professional sports organizations across the board should take to B2B payments.
“When you’re dealing with professional sports, you’re dealing with an organization that sees itself as the benchmark for service,” he explained. “While their product is a professional sports franchise, they are hyper-hyper-focused on delivering an exceptional experience to its customer base — both its business customers and its consumer customers.”
Certainly, sports fans — the consumers — may be the first that come to mind when it comes to the clients of a professional sports team. But, the executive explained, these franchises exist within a large web of suppliers and are themselves suppliers to organizations.
On the AP side, these teams procure equipment, uniforms, travel services, entertainment and services at their venues — all to service the fans and to ensure athletes stay at the top of their game. On the AR side, pro sports teams sell things like box seats, advertising space and other services to fellow corporations.
“Most people think of the customers of a sports franchise as the people in the stands, and it certainly is that, but there are a lot of businesses that buy, too,” Eliscu noted.
Like any organization, pro sports teams, like the Orlando Magic, face their own struggles in the B2B payments, AR and AP areas. The CEO pointed to things like paper invoices and manual data entry as struggles that plague companies large and small, and that includes professional sports franchises. Part of the problem, he said, is that corporations of this size don’t necessarily have the most complex supply chains, but those supply chains are so populated that the volume of paper and data coming in can be overwhelming.
“It’s simply lots and lots of companies that produce paper, and the receipt of that paper, the recognition internally of who did the buying, and the confirmation that that product was received, and then the entering of that information into the accounting system — and, ultimately, the creation of the payment and delivery of the payment — all of that is normal course,” Eliscu said. “Every business has those issues. These processes are overwhelmingly manual for everyone on Earth, for companies of all sizes.”
In that regard, sports franchises aren’t that different from other companies that Viewpost services.
But for teams like the Orlando Magic, pro sports teams as B2B organizations are some of the most visible to the public — and some of the most wealthy. The average value of an NBA team hit $1.25 billion last year, according to Forbes, and they are working with other wealthy business partners, like Nike and Coca-Cola.
For organizations of that size, Eliscu said, relationships with vendors can go downhill.
“We see some industries who see their vendors as commodities,” he said. “Maintaining relationships with their vendors that are highly focused on service quality and are relationship-based just doesn’t exist. It’s really about: ‘Provide me the lowest price consistently, and I will continue to buy from you.’”
This type of buyer-supplier relationship sees a corporation leveraging its size and power over its vendors, which are often SMEs. Many times, it can cause delayed and late supplier payments.
“But we don’t see that same thing in the sports industry,” the executive continued. “We see companies that are really focused on getting absolutely the best product they can from their vendors at a reasonable price and are dedicated to paying vendors on time — and, in some cases, faster.”
Professional sports organizations are some of the largest users of features like dynamic discounting, he added. But there is also a rise in the instance of these franchises paying their vendors faster than they need to with a sense of responsibility for the broader business community. The Orlando Magic, Eliscu stated, is one of those firms.
“They’re committed to their vendors. They recognize that they have the luxury of access to liquidity that many vendors — oftentimes who are small companies — don’t have access to,” he said. “Being a consumer of supplies from all types of vendors, it’s important for the Magic to help vendors, knowing they still struggle in many ways to access adequate bank financing.”
The Orlando Magic is just one example of a professional sports organization that will offer to pay a vendor as soon as an invoice has been processed and approved because it understands its small suppliers need the cash, he continued. And it demonstrates ways professional sports organizations can act as role models to other corporates.
“It’s a terrific demonstration of corporate citizenship that’s good for the Magic,” he said, “and good for their vendors and for the underlying community.”