Lids Becomes Colts' Local Retailer NHL Sponsors Expect Jersey Ads Browns Raise Season-Ticket Prices Woods Sporting MusclePharm Water Bottle Maryland Athletics Still Running Up Deficit NASCAR HOF Sponsors Revenue Plummets Seahawks Brand Still Has Room To Grow Pernetti Leaving NYC FC For IMG College NFL, USA Football Teaching Moms About Game's Safety Rogers Wins World Cup Of Hockey TV Rights
Upcoming Conferences and Events
SBD/September 9, 2010/NFL Season Preview
NFL Execs Discuss State Of Business, Improving Fan Experience
Published September 9, 2010
The message NFL execs want to send at the start of the season? It is no longer business as usual. The tight economy has forced more creative thinking and new approaches to selling tickets, premium seating and sponsorships. It has also forced teams and the league to take a hard look at the fan experience and what it will take to keep people coming back. Those are some of the issues discussed as SportsBusiness Journal/Daily held a roundtable discussion on Aug. 23 in our N.Y. offices with Cardinals President Michael Bidwill, Chiefs Exec VP & COO Mark Donovan, Jets Exec VP/Business Operations Matt Higgins, Texans President Jamey Rootes, Giants Senior VP & CMO Mike Stevens and NFL CMO Mark Waller. The majority of the interview runs in this week's SportsBusiness Journal. The following is additional content from the discussion; some responses have been edited for brevity. See tomorrow's issue for part two of the roundtable.
Q: What is the state of your business? How is the marketplace right now in late August 2010 before you go on to your season?
Rootes: Things are good. There’s a lot of enthusiasm for our team in the marketplace. Up to this season we’ve sold out every game and this year has gone better than previous years. Our season-ticket base is well in excess of 64,000. We’re almost sold out of all our games for this year, so from a ticketing perspective things are good. Suites and club seats are strong. We’re about sold through on the suite side except for our single-game inventory that we hold back and we’re marketing that. But the demand has been really good on a single-game basis. Our sponsorship will have growth again this year, so things are good.
Stevens: It’s been a busy year for us. I think you’re probably going to hear the same from Matt because it’s been such a big transformation from the old stadium to the new stadium -- one of those all-consuming life events for any organization. We’re a relatively small organization by NFL standards, so it’s been a multi-year process to build up and prepare from being a tenant in a building -- even though it had our name on it, we were still a tenant nonetheless -- to building a joint venture operating company between the two teams to run our own facility, finance our own facility, sell and manage our own facility. It’s been a real transformation to have internal services and to build up our sales force, build up our capability to manage something of that scale and at the same time build basically a brand new company with another NFL team as a joint venture partner, and then roll it out and take control of our own business for the first time, manage the customer experience, manage everything that happens, all the different touch points that we have as a business with our fanbase, but through that most important asset you have which is your stadium and your game-day experience. On the revenue side, as Jamey talked about, kind of fighting through the recession.
Donovan: It’s all about the stadium this year. The difference being that we’re a renovated stadium. We don’t really talk about renovation. We talk about it being a new stadium. Anybody who has been there, anybody who will be there, will see that it really is a new stadium. … We’re a very small market with a very big stadium. We are definitely being affected by the economy. The highlights for us are, as you should with a new stadium, our suite sales are very, very strong. It’s an interesting picture of the economy because our highest-end suite sales are sold out, our lowest-end suite prices are sold out. We’re doing a lot of innovative things and copying a lot of other teams' practices in what we do with the middle. Club seats have been a struggle for us. Part of that is because we didn’t really have a club before. People haven’t seen our club level, and when they get there we expect that to ramp up. Our hope is that, as the economy turns, they see that experience, and the team plays, and it all falls in line.
Bidwill: Our season-ticket base has been affected by the economy, the same with the suites and everything else, but we’ve continued to innovate and find ways to keep the stadium sold out. We’ve got 44 games that we’ve played there and kept it sold out. It looks like we’ll continue that through the whole season. … Phoenix is one of probably half a dozen communities around the country that is sort of the epicenter for the real estate and financial market challenges, so it’s really affected us over the last two years. We’ve lost about 300,000 jobs in Arizona, which is an enormous amount against our working population. Many of those folks have been fans and sponsors have shrunk, so we’ve had to become more innovative in terms of what we’re doing with our sponsors. We’ve had to look at ticket pricing. Much like in Kansas City, probably many of the clubs, our highest price and our best locations seem to go quickly as well as our low price. Then it’s always that middle price that you really try to add value to and make things more valuable to the consumer and to the fan.
Waller: Our main focus at the moment is trying to help and support these guys in what they’re doing, particularly at the front end of the business. If you look at things like in-stadium experience -- that’s clearly a key to ticket sales -- so we’re trying hard to lend our help and support to things like deploying RedZone in stadiums, helping build some of the technology access points. That’s a key league-wide feature. … At the sponsorship level, I think the guys are happy with the Verizon deal. That’s a huge deal for us. I think there’s a great excitement around the way that Coors is going to execute this year, even though A-B are going to come in afterwards. I think that again has been a good deal all around, and I think we found a good solution on the banking category. We wrestled hard with that one and I think we came up with a deal with Barclays which is good at the league level, but allows the clubs to do what they need to do at a local level.
Higgins: We are heading toward sellout. Fortunately, we made the decision we needed to make a couple of months ago and lowered our prices. We had a kind of Jesus meeting and said, “At these prices, are we going to sell out? Marketing can only do so much. The sales guys can only do so much.” We said we’ll sell out in a couple of years if this trend line continues with these tickets, so we re-priced 18,000 and we’re going to be sold out by opening day. We don’t have any blackout risk. We’ve taken care of that issue. Club seats are a little more difficult.
Q: All your business partners are asking about labor, so I’m interested in what you are telling them. What can you tell them? What are you doing with them?
Waller: I think the question has been incredibly clear and I think ownership has been incredibly clear. The goal is to play football. That’s what we’re all working for; that’s what the players are working for; that’s what the league is working for; that’s what all of us want. It’s hard to imagine with all of that effort and focus that we don’t get it solved. That’s the conversation. That’s the conversation we have with every single supplier whether it’s a sponsor, a broadcast partner, a club, a player. That’s the goal. Generally speaking, if you look back at our track record, we have a history as clubs and a league of delivering our goals.
Q: Dolphins Owner Stephen Ross bought the formerly named Kangaroo TV. The league somewhat got behind this initiative and gave him a platform at the annual meeting and there was the announcement that he hoped to have over half the teams using Fan Vision. Are any of your teams planning to use Fan Vision this year?
Higgins: We’re giving it to club seat holders to further differentiate the experience from the rest of the bowl, so we’re giving out one for every two seats.
Bidwill: We’re doing something very similar. We’re focusing on the club seats, getting them extended. We’re into our fifth season, so the sooner you get those folks extended, we’re adding it as part of the benefit package in terms of folks with three or more years, it’s really going to enhance what we can do across the board. It can enhance that in-stadium experience and make it better for the fans who are there, being part of the 12th man. I think this is going to be a real positive for us, and I think it’s a piece of technology that will be here for several years. There’s probably going to be something five years down the line that’s much different that we’ll all be putting bets on, although we don’t bet in our league.
Rootes: Risks, take risks.
Bidwill: In any case, Fan Vision is something I think our fans are going to like a lot, especially when we’re looking at things like the RedZone and everything else that you can add as a new platform.
Q: How many of them are you actually using?
Bidwill: Several thousand for the clubs, and then they’re going to be on sale for the other fans.
Higgins: Steve (Ross) was very passionate and made a convincing case to use it, and we were all locked in at first because we wanted to be the clever team that came up with a solution. We explored it and wanted to create it, but the truth is the technology doesn’t exist there to push out video. It is the right solution for the time being. Something else will probably emerge down the road, but right now it’s really the only way to get video replays in the hand. The device is sort of cumbersome, but I think the experience will be worth it.
Q: Mark, how many teams are actually going to use Fan Vision?
Waller: I don’t know. Our job is not to scorecard. Our job is to provide the infrastructure and the options and teams will either go: “Yes, that’s a good idea. We’ll buy into it." Or go: “No, actually we’ve got a different idea that we’re looking into and we’ll buy into that.” So I don’t know what the number is. But where is the revenue going to come from? It’s going to come from innovating around the game-day experience. It’s going to come from the offseason. We have 180 million fans and come February we turn the product off. Not many businesses do that. They find a way to say, “Hey, what are we going to do for those 180 million fans for the other six months of the year when we’re not playing football?” It’s going to come from youth. You guys are, I think you said, setting up a kids’ area in your stadium. We’re looking at a deal with Nickelodeon to bring an animated idea, which in itself is kind of small, but if it’s successful it will be huge.
I think Jamey hit on it. Our job has to be to get ideas out there and test them. Some will be brilliant, some will fail, and hopefully if we put enough out there we’ll constantly be raising the bar. I think we didn’t give Steve a platform of support. What we gave Steve was the opportunity to tell his 31 co-owners about a fan service idea that he feels very strongly about. I don’t know how many have ended up taking it, but those who have taken it I’m sure will push it very hard, and those that haven’t will find an alternative.
Bidwill: I think the fans are going to like it a lot, but like anything new you’ve got to work through some of the issues, technology issues, infrastructure issues and the timing of getting this product out.
Higgins: I don’t think any team has solved this issue. When you create an app or any kind of service platform that’s meant for everybody to be using at the same time, the user experience is so bad that you defeat their expectations and you do more harm than good.
Please see tomorrow's issue of THE DAILY for Part Two of the roundtable discussion.