Ham Sandwich CEO…in Real Life

“I always used to tell [Bill] Gates that a ham sandwich could run Coca-Cola. And it was a damn good thing, too, because we had a period there a couple of years ago where, if it hadn’t been that great of a business, it might not have survived.”  –attributed to Buffett*

Most of us are old enough to remember or at least have heard of the dreaded New Coke debacle.  That famous line about “If something isn’t broke, don’t fix it” stems from an angry phone call Buffett made to the Coke executives after having tasted his first New Coke.

It is rare to find current real-time examples of business executives performing so terribly, yet running a business so great, that it will have no material (or even immaterial) impact on the health of the business.  We now have one.

I speak of a business that is currently undergoing a crisis in management.  Yet, despite his seemingly ham sandwich-esque performance, I can say with 110% certainty that this business will suffer exactly ZERO long-term effects.  This business will in the next month, next year, next 10 years, sell more tickets, more advertising, and generate more profit than than it currently does.  I only wish this company was public.  Unfortunately, it is a private “non-profit.”  I speak of the NFL.

Whatever you think of the recent incidents involving various NFL players and/or the related actions of the NFL’s CEO, it truly doesn’t matter.  DirecTV is currently negotiating its NFL Ticket and I can guarantee the NFL is going to get paid substantially more on that contract than they were paid on the previous contract (pricing power).  In fact, that deal is so important to DirecTV that AT&T made it a condition of its acquisition of DirecTV–Get the deal done or we don’t want to buy you.

These businesses are very rare, yet they do come along.  In 2008, one came along, but I was steeped in some Graham/early-Buffett thinking.  I had begun reading more about Munger, but the scales had not completely fallen from my eyes.  I will save that story for another post.  Munger vs. Graham II….


If you have any comments or would like to get in touch, leave a comment or send me an email at matt@thesovagroup.com.  Munger recently commented on why he and Buffett became such good partners, “I think Einstein needed someone to talk to.”  If you are the next Buffett, I would be more than happy to be your Munger.




*There is some controversy regarding whether Buffett made this remark, but for our purposes, let’s just assume he thought it, or at least Munger did.


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