For Love of the Game

“Big Deals Roar Back as Spirits Rebound,” blared a front page headline in last week’s Wall Street Journal.

Hot damn!

We’re barely three months into 2011, but the paper said that already “companies around the world have announced $784.1 billion worth of deals.”  We’re told “a change in psyche” is pushing corporations to acquire and merge.  But then the Journal adds, “All this has happened while evidence mounts that mergers often fail.” 

Well, since I have a Ph.D. in psychology (honestly), plus three decades of experience in M&A, let me put those comments onto the couch and give you my professional opinion.

Deal-making is the fastest game in town.  And that helps explain why some executives choose to play—they inhale risk . . . they’re stoked by the challenge . . . they’re seduced by the high stakes and intense dynamics of doing deals.  They love the game.

Makes me think of the 1999 movie starring Kevin Costner as Billy Chapel.  Forty-year-old Billy is an aging pitcher for the Detroit Tigers, an out-of-contention team with a 63-97 record.  They’re playing their next to last game of the season against the New York Yankees, who can clinch the league pennant with a win.  Tigers owner Gary Wheeler has just told Billy that he sold the team, and the new owners’ first move will be to end Billy’s 19-year run by trading him to the San Francisco Giants.

Billy’s fine career has left him with a wounded arm, and he’s lost in memories as he throws, not realizing he’s pitching a perfect game until the bottom of the eighth inning.  Before the Tigers take the field for the bottom of the ninth, he autographs a baseball for Wheeler, the last one he’ll ever sign for his long-time boss and friend.  After his signature, he writes on the ball that he will be retiring, “for love of the game.”  Then Billy walks to the mound for the ninth inning, a defining moment for his team, baseball, and himself.

He finishes a perfect game.  The Detroit Tigers win.  But the movie bombed at the box office.  Roger Ebert’s review slammed For Love of the Game, giving it a measly 1½ stars out of 4.  With an estimated budget of $50 million, it had worldwide revenue of only $46 million.  Much like mergers, movies so often fail.

Frankly, I loved the movie.  But then I also love M&A . . . just like those executives who do deals because they love the game.