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SBD/June 7, 2012/Events and AttractionsPrint All
Ticketing technology, premium seat revamps and special events play key roles in providing teams with incremental income, according to a panel discussing future revenue opportunities at the SBD/SBJ Sports Facilities & Franchises conference.
SEATS AT A PREMIUM: The three-year, $1B transformation of Madison Square Garden will add three premium clubs to the arena, something it has never had before, said MSG Exec VP/Revenue Performance Greg Economou. The second phase of offseason construction, demolishing the entire upper bowl, started a few weeks ago after the Rangers bowed out of the Stanley Cup Playoffs. The project has created 28 "major transformational assets, 22 of which we have sold already, all found money," Economou said. "It's been an extraordinary run to date, and after this phase, from top to bottom, when we add these amenities, it's going to take on a much different feel. We joke that's like throwing a dinner party every night while you're reconstructing your kitchen."
GLOBAL GARDEN: Moving forward, international companies will play a key role for new activation at the upgraded Garden, in part due to MSG's marketing of Knicks G Jeremy Lin. "We started to figure out how to tell the story ... we went on a few forays, we hit China, Europe and Russia, talking to companies we felt we could identify with that will be spending money in the U.S. in the near future to explain their brands," Economou said. "Obviously, our priorities changed, the Asian sector became a super high priority. We did some deals with Chinese-based companies right away, which was more of an emotional reaction. For us, it's taking this gateway into the media capital, fashion, advertising and overlay that with incredible relevance with Jeremy and the Asian business community, it starts to take shape. I think there's going to be a lot of momentum in that space."
LET ME UPGRADE YOU: The Magic are trying to figure out how to continue to generate more revenue through the use of technology at Amway Center, the team's two-year-old arena. Digital menu boards have produced food per caps rivaling larger markets in Chicago, N.Y. and L.A., said Magic Exec VP/Business Development Charlie Freeman. "The one that we are really interested in is yield management," he said. "How do you take the technology with upgrades and apply that to your arenas? We've been talking to Ticketmaster and other firms, so that a few days out prior to a game, during the game, how do you get that emotional purchase of upgrading that inventory? I saw that in Orlando [Tuesday] when I checked into the airport, $45 to upgrade to first class. There's a market there to take advantage and increase your yields that we have to get to from a technology perspective. You have to be able to push the offer to the consumer so they can make an emotional buy. You will get a feel, with all the dynamic pricing teams are doing, for the inventory you have to fill. We have to get to that model at some point."
Schiller says booking acts like the Avett Brothers
at Turner Field has paid off for the Braves
POWER OF PAPERLESS: The Nationals' test of paperless ticketing this season has enabled the team to track its customers' spending in real time from the moment they enter the ballpark. The team provides its fans with an option to use smart cards as their season ticket and to pay for food and retail concessions after loading credit onto the cards. In turn, the Nationals can provide their fans with special offers and discounts as part of a larger loyalty program. Fortress, the tech vendor, works with dozens of European soccer teams in addition to the MLS Red Bulls. The technology provides the Nationals with a "360-degree view" of their fans, said team COO Andy Feffer. In Europe, those "e-cash" transactions have proven to generate three times the revenue compared with spending cash for concessions, Feffer said. "We will utilize this across the board for all season-ticket holders next year, it won't be an option. The incentive to use this is tied to the loyalty points that you get by using the card ... for additional tickets, parking and experiences."
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Dynamic ticket pricing brings additional revenue, but still requires a deft touch with regard to public relations and customer management. That was one of the key points in a discussion of dynamic pricing at the SBD/SBJ Sports Facilities & Franchises conference in Miami featuring MLB Giants Managing VP/Ticket Sales & Services Russ Stanley and Cubs VP/Tickets Sales & Service Colin Faulkner. Not only are season-ticket prices honored as a floor to maintain price integrity for core customers, but both clubs are seeking to avoid overly training fans to be strictly price sensitive. "It's a constant balancing act," Stanley said. "There are a number of things we’re always trying to balance, including our (AT&T Park) sellout streak and revenue maximization."
LOOKING UP: For the Giants, dynamic pricing generated a 7% incremental boost in ticket revenue in '10, an 8% boost last year, and potentially a similar increase this season. The Cubs, in their first year of dynamic pricing, are also seeing incremental revenue gains in the '12 season's early going. And in Chicago, particularly, the additional revenue is plowed back into the club's efforts to bolster the on-field product and to make badly needed repairs to Wrigley Field.
SECONDARY SOURCES: Perhaps surprisingly, both Stanley and Faulkner said the rise of dynamic pricing has had no corrosive effects on the secondary market. In both S.F. and Chicago, the secondary market continued to grow in scale at double-digit annual percentages. Nearly 1 million Giants tickets traded hands on resale markets, nearly a third of their overall attendance. Faulkner said some high-end premiums on resale pricing have decreased in the wake of dynamic pricing, but has been more than made up in increased volume.
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Sabres Owner Terry Pegula was featured in a one-on-one interview during the SBD/SBJ Sports Facilities & Franchises conference and said he purposely lowered his public profile during the '11-12 hockey season to lessen pressure on his players. After Pegula purchased the team in February '11, he boldly stated, "Starting today, the Buffalo Sabres' reason for existence will be to win the Stanley Cup." That remains the case, buttressed in part by a recent, multi-million dollar improvement to the Sabres' locker room and training facilities at First Niagara Center. The former oil-and-gas exec acknowledged that sports team ownership has been an adjustment. "I definitely made a decision to step back a bit this past season," Pegula said. "At the same time, you can't be an absentee owner. So it's been about finding a balance."
SUPER MODELS: A lifelong hockey fan, Pegula said he talks to team GM Darcy Regier at least three times a day to discuss player personnel, and noted that he wants to model the Sabres in part after the Red Wings, Patriots and Steelers. "Those teams are very steady, very consistent, don't overreact and are absolutely committed to excellence," Pegula said.
- On the Sabres' turbulent '11-12 season, in which G Ryan Miller and D Tyler Myers suffered injuries and the team failed to make the playoffs: "There's an adage that you should win despite injuries. But guess what? You don't. Health is an absolutely critical factor in determining your success."
- On the NHL's oft-debated presence in non-traditional markets, such as in the Southeast and Southwest: "I'm a big believer in building and growing the league in the Sun Belt areas."
- On spending on players: "I don't make decisions based foremost on money. The first thing, the main thing we look at, is what the player's contributions are, and what his gifts are. I've never made a decision about money. It may seem hard to believe, but it's true."
- On NHL Commissioner Gary Bettman: "He's a tough negotiator. A very smart guy. He's become a friend."
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From the challenge of building generations of fans to the challenges of working in harmony with other Florida franchises, today's opening panel at the SBD/SBJ Sports Facilities & Franchises conference featured a lively discussion among top execs of four of Florida's pro teams. With seven teams in the state joining the four major leagues in the last 25 years, the execs said that trying to establish themselves to generations of fans is one of their biggest challenges. Marlins President David Samson, whose team played its first game in '93, said, “We’re a little jealous of the Dolphins. They’ve been around longer, so they’ve been able to establish a much bigger tradition down here in Miami.” He added, “When you talk about trying to build a multi-generational team and affinity to your brand, it takes a longer time. None of us will be in these chairs by the time our franchises are really embedded in Miami.”
MAGIC GATHERING FANS: The Magic debuted in '89, and team CEO Alex Martins said, “The joke in our marketplace is that nobody is really from Orlando. The first decade when we would have games, particularly against Boston or New York or L.A., there would be more of their fans in our building than our fans. The kids that came to games that first decade with their parents as a five- or six-year-old are just now coming into the marketplace, coming out of college, getting their first job and becoming season-ticket holders or partial season-ticket holders. We’re really just starting to get the core of our fan base to grow.” Martins: “It’s going to take our franchise ... 40 or 50 years before we truly have that multi-generational fan.”
Dee says Miami's pro franchises have good
relationships with each other
YOU'VE GOT A FRIEND: The relationship between the Marlins, Dolphins and Heat appears to be one of mutual respect. Samson did not mention the NHL Panthers by name, but said, “The three ‘Miami’ teams work very well together.” Dee added, “I can’t speak for anyone else in this market, but we will not go to a sponsor and say, ‘The Marlins are this, the Marlins are that, don’t do business with them.’ That doesn’t make us look good.” Dee noted that he goes to Heat and Marlins games and said, “It’s far better to have that kind of relationship than it is to have one that is contentious or acrimonious, and I’m glad to say that (the Dolphins, Marlins and Heat) want that kind of relationship.”
- Heat President of Business Operations Eric Woolworth, on the biggest challenge facing the team: “Miami has a reputation of being a big-event town. The challenge then becomes how can you make every game a big event, and what are you doing at your games to differentiate the experience from what people are having at home to make it compelling, to make people really want to come.”
- Samson, on having two major arenas, BankAtlantic Center and AmericanAirlines Arena, in the South Florida market: “The decision to build two arenas was a major moment in the sports landscape of Miami. Even to this day, it has impacted our market in terms of other events and the competition that takes place. It’s an extra layer of competition that really is not necessary.”
- Martins, on what he considers competition: “If we’re only worried about competing with each other, we’re going to get beat. We’re really not competing against each other in terms of sports franchises. We’re competing for people’s time with everything else, whether it’s going out to dinner and going to the movies or staying home and watching TV.”
- Dee, on the public perception of Dolphins Owner Stephen Ross: “The guy bought this franchise to win a Super Bowl championship. Some of the things that have happened (unfortunately have) sent the wrong message, and we’re trying to correct that.”
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