SBD/Issue 34/Franchises

MLB Giants Owners' Tech Backgrounds Help At Gate, On Field

Neukom Using Technology To
Boost Fans' Ballpark Experience

The MLB Giants, “backed by owners from Microsoft Corp., Cisco Systems Inc., Yahoo! Inc. and Intel Corp., are bringing Silicon Valley knowhow to bear as they take on” the Rangers in the World Series, according to Satariano & Gloster of BLOOMBERG NEWS. The team is “increasingly using technology to hone players' skills and draw more fans” under the direction of Managing General Partner Bill Neukom, a former Microsoft General Counsel. The Giants “use motion-sensor suits to help evaluate throwing and hitting mechanics and a specially outfitted pitching machine that shoots different-colored balls at more than 100 miles per hour to help batters.” The team also is the “first to use software that sets ticket prices based on supply and demand, similar to airlines or hotels.” AT&T Park was the “first to offer Wi-Fi Internet service to fans” in '04, and Neukom said that the Giants are now “exploring ways to distribute content on mobile devices and social networks.” He said, “The point is to be restless about where technology can help us on the baseball side and on the business side.” Giants investors include former Intel Chair and Apple Dir Arthur Rock; Yahoo BOD member Arthur Kern and the company's former President, Jeff Mallett; Cisco Media Solutions Group Senior VP & GM Dan Scheinman; and venture capitalist Paul Wythes. Giants President & COO Larry Baer said the team reaching the World Series is worth “several millions of dollars” in additional revenue. About 4,000 “new season ticket applications have been received by the club since the beginning of September.” Baer: “The real benefit is 2011, where you can drive season tickets, where you can drive sponsorships, where we can drive pricing” (BLOOMBERG NEWS, 10/28).

STAR TREATMENT: In N.Y., Michael Schmidt notes the Giants "have kept the door open" for former LF Barry Bonds and have "repeatedly brought him back to the stadium for ceremonies celebrating the team's history." Neukom: "It's a conscious thing. It's certainly something I spent a lot of time thinking about and talking about to people in the front office. He is a huge part of the Giants' history, and he is adored by the fans here. And his accomplishments speak for themselves." Neukom acknowledged that "some people within baseball were probably not enthused that Bonds was a continuing presence" at AT&T Park. Neukom: "It's a fine line we walk. Nothing has been proven, and the sensible and fair thing is to continue to recognize him for all he has accomplished, but we are not trying to do anything that is thumbing our noses at the federal government or Major League Baseball" (N.Y. TIMES, 10/28).

ROOM TO GROW: BLOOMBERG NEWS' Gloster & Flinn reported the Giants are hoping to spur a "transformation of the mostly neglected area behind AT&T Park," which is "leased by the Giants from the Port of San Francisco on a year-to-year basis." Baer "looks at the parking lots and decrepit docks sitting just beyond the right-field wall and envisions a cultural, residential and retail complex." Baer said that the area "may be the site of a concert hall, or a sports arena that might seek to lure" the Warriors to S.F. "as part of an 'activated, multifaceted place for people to work and live in the city.'" S.F. Planning Department Dir John Rahaim said that "some plans for development near the ballpark have stalled because of the economy," but he added that "building a sports center across from AT&T Park could work." Rahaim: "There are good synergies to having an arena there, if it's done right. It's important to have it be part of a mixed-use thing and not just an arena" (BLOOMBERG NEWS, 10/27).

PAYMENT PLAN: The Giants last year were the first MLB team to institute dynamic pricing for single-game tickets, and Baer said the concept "really works for the fans." Baer: "We were concerned about it, but the reality is 75% of the games, the prices are actually at or below the fixed pricing. It's the other 25% where it can go pretty high. The other thing is, you get people in seats at lower prices and you can sell them concessions. An empty seat can't buy a beer, can't buy a hot dog, can't park a car. ... We think it's about an 8-9% factor in terms of revenue by being dynamically priced versus being statically priced" ("The Call," CNBC, 10/27).

CAN YOU HEAR ME NOW? USA TODAY’s Gabe Lacques notes AT&T Park is “a few miles up the road from Apple’s headquarters, and that might be part of the problem” with fans getting a strong network connection in the area. Giants fan Thom Hicks said that fans’ “love affairs with their iPhone bogs down the vaunted AT&T network and prevents him from engaging in the frivolities he’s come to enjoy from his mobile device.” Hicks: “My sports app won’t come up on my iPhone” (USA TODAY, 10/28).

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