SBD/Issue 248/NFL Season Preview

NFL Execs Discuss New League Partners, Non-Football Business

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 New York 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 Thursday's issue for part one of the roundtable.

Stevens Discusses Verizon's Prominent
Presence At New Meadowlands Stadium

Q: Mark, can you highlight what you think the partnerships with Verizon and Barclays bring to the league?

Waller: All our partners force us to raise our game, so when you bring in a new partner you just bring in a fresh perspective that forces you to sit back and re-evaluate what you’ve been doing. It’s not better or worse than the previous partner, it’s just a different perspective. They’ve got different business priorities. They’ve got a different focus than the previous incumbents, so they drive you in a different area and they force you to think about things that you hadn’t really thought about before. It’s no different than sitting down with 32 teams from a league perspective. We get pushed in lots of different directions, 32 different directions. That’s the beauty of our system. As a result you tend to raise your game. Verizon quite rightly is very focused on the extraordinary exclusive content that they’ve got. They’ve done an incredible job of taking that out to retail in the stores that I’ve been in and they’ve pushed very hard at the execution side of that. I think with Barclays we’ll see it, although it’s very early days yet.

Stevens: You’ll see an extension of that at our new stadium. Verizon, much like the other cornerstone partners, is doing things that aren’t typical in other stadiums. They’re taking a 25,000 square foot space in our plaza, about 80,000 square feet vertical space within the stadium itself, and then one of the four scoreboards in the bowl they’re branding with Verizon. But the 80,000 square feet of the interior space is something I’d liken to a permanent trade show. It is the ultimate product demonstration and product exhibit across everything that they do, and it will be unmistakable to any person who attends any event, whether it’s a concert or a football game. You’ll walk away fully understanding the breadth of the Verizon brand and their products and especially the NFL and the Jets and Giants applications. It will be that pronounced and that visible.

Rootes: We’ve been with Verizon since day one of the Texans -- since 2001, beginning of 2002. They’ve been an unbelievable partner. They absolutely get the power of the National Football League, the power of football in Texas. The activation programs that they put together for us throughout, win, lose or draw, they are there because they know how passionate the fans are for football. Now with the app -- they know there is this insatiable desire for fans to be connected with their team and they’re going to give it to them. So they’re all in football. I can’t be more excited, and to have them as a partner on the league level as well.

Stevens: It’s really one of the first things we have as a tool to communicate with people seven days a week. We have TV shows, radio and Internet which get good user levels, but now this application gives us something at a higher level.

Donovan Feels Chiefs Need To Add Resources
To Maximize Non-Football Business Revenues

Q: At the team level, I know Mark, you had a soccer game, a Manchester United game, and soccer events. How much of your time is spent on non-football business? Talk us through some of the opportunities of the non-football business. Soccer games, concerts, or other things that you are doing.

Donovan: It depends on the time of the year. It’s funny, you asked how much of your time is on non-football business. I would say 100% of my time is non-football business. It’s interesting because it’s a growing business for us. We’re probably understaffed right now in that area, though when you look at the returns on a soccer match, on a concert, on lacrosse, on other events from a venue standpoint, it’s pretty significant. That’s one of the areas where as we get organizationally structured correctly, that will be an area we’ll put more resources next to. If I had to answer the question, it’s less than 25 percent of my time. You get the phone call, “Hey, we’re thinking about going on tour. Would you guys be interested?” Or you’re making phone calls of certain types. “Are you guys going out? We want to host you.” Then it’s pretty intense for a period of time. For us, again from a venue standpoint, it’s just whether you’re having a game day production meeting, which we’re having tomorrow to talk about Friday night’s game, or are you having a game day production meeting to talk about Saturday’s concert? It’s the same resources, the same people, it’s just a different event. It’s something we’re trying to monetize.

Rootes: We get involved in things of that nature because as an organization we’re about three things: winning championships, creating memorable experiences for people, and doing great things for Houston. We think we have a pretty broad purpose in our community. It’s a big deal being the NFL team in Houston, Texas, so if we can bring other types of programming, facilitate it, enable it, we will. We’re not involved with the World Cup, which is potentially coming to the United States in 2022, but we’re going to work hard with the community to bring it in because that would be great for Houston to be on that international stage. That’s one of the things that endears you to your community -- that you’re more than just about yourself. You think more about the broader good of Houston, and that’s not only charitable involvement, things that we do that I know everybody around the table does as well and we do a lot of it ourselves, but bringing a variety of programming and enabling a variety of programming to serve the community more effectively.

Stevens: It’s such a huge area for us. We have a dedicated resource and that’s their sole purpose: large and small events, concerts, college football, soccer, lacrosse, festivals, the state fair, it’s a department unto itself. There’s probably not been a day since we’ve been open in the middle of spring where there’s not some sort of corporate, non-game day event taking place. Business meetings, sales meetings. Our spaces, our catering capabilities, the communications infrastructure we have is amazing and given our geographic location it’s become a hefty, high traffic business for us. It doesn’t impact us, but we’ve had to set up a resource for that because it’s a very desirable location for events.

Higgins: We built our new practice facility as a combined hospitality space. We went into it with a P&L about how we were going to use the facility. We saw an opportunity there because of the premium experience. Hold your closing meeting of your private equity firm. Or a law firm looking for a spectacular space to close a deal. We built out a space for that and we’ve been focusing more on events. We’ll do about 1 million dollars in business there, which for a new revenue stream is great. I think it’s capped logistically because there’s only so many times you can take over the building, and it’s very coach-dependent about how flexible they will be to let you use their team meeting room. I don’t spend a ton of time on it, but there is a dedicated staff person who builds up that business, and like (Stevens) said, we have a whole staff who focuses on the stadium.

Higgins Says Fans Are Now Demanding
A Better In-Stadium Experience

Q: Let’s go around the room with some real quick questions and answers. In the last five years, you’ve seen the at-stadium NFL fan change in what way? Are they younger? More female? More ethnically diverse? How have you seen the fanbase change in the NFL?

Higgins: I’d say more demanding of a better experience.

Rootes: Our group is aging. When you maintain your base over time and renew at a very high percentage, they wind up getting a little older. But the important part of that is this notion of friction. As they continue to age, and certainly they’ll be replaced, but we’ve got to make sure that this is as convenient an experience as possible so that it doesn’t become a pain to go to a Texans’ game.

Stevens: We’re multi-generational, so we’re going on the third and fourth generation for the most part. So it’s serving the previous generation while they’re passing the baton to the younger generation. Making sure we can handle the needs of both is, I think, our unique challenge.

Donovan: I think we’re more like the NFL. The NFL’s fanbase is the U.S. population demographically. We’re seeing that as the demographics change in the U.S., they change in our building. We’re doing a lot more with Hispanic radio, we’re doing a lot more to try to address different demographics.

Bidwill: I’d agree with Mark’s comment. With ours too. I’d say ours are also more knowledgeable. It seems like they’ve got more information and it’s based on things that we’re doing. And I think they have higher expectations for what they expect out of the team and out of their experience of the stadium.

Waller: More diverse, more listened to, more demanding. Ultimately more satisfied.

Rootes Admires Disney's Ability To Elevate
Ordinary Experience Into Something Special

Q: The organization, not your own, the team or organization outside of football that you admire the most?

Bidwill: Disney. Great brand, they’re financially successful, everybody’s got a great story about their experiences with them. They provide terrific customer service.

Stevens: Apple. I have a 10-year-old boy and a 12-year-old boy and I have just seen how that brand has made themselves relevant to people’s lifestyles with iTunes and the range of services they have. It’s incredible. It’s a passion, it’s not a consumption play. They really understand how to connect with people.

Rootes: I’m in a Disney mode. Walt Disney, in the theme park business, there was an award given to him, and the Harvard Architectural Review said Disneyland was the best example of great modern architecture. Why? They elevated something that’s so pedestrian, a theme park, and brought it to a level in its performance for people to such a height that it became something different. It wasn’t a theme park any more. It was Disneyland. The challenge for us is taking our sporting experience to something that is at a new level. That’s the challenge that we see and we’d love to be able to replicate that type of success.

Donovan: Disney as well. From a sports perspective, it’s really easy to say the Yankees and Manchester United because of what they do and how they do it, but we look a lot at smaller market, really successful long-term franchises, like the St. Louis Cardinals. That’s a little market, but they own that town. The Minnesota Twins, what they just did to their stadium, and the different things they did in that area that we can learn from. You look at the similar sort of paths -- they built a new stadium, we’ve frankly built a new stadium at the same time. What are they doing in that little market to make it bigger and better? We’re trying to learn from that and beyond the NFL.

Higgins: Johnson & Johnson.

Waller: I’m with Mike. Aside from our partners, Apple would definitely be up there. Brazil’s done a pretty good job getting the Olympics and the World Cup back to back. That’s not a bad achievement.

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