SBD/May 9, 2013/Franchises

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  • Double Switch: Nats Reverse Rainout Ticket Exchange Policy Following Fan Backlash

    Recent rainouts and high attendance numbers led to the Nats' change

    After "overwhelming reaction on social media and their box office phones, the Nationals reversed the unpopular ticket policy they announced after Tuesday night’s rainout and now will allow fans to exchange unused tickets from Tuesday for any future ticket of equal or lesser value, subject to availability," according to Adam Kilgore of the WASHINGTON POST. Nationals COO Andrew Feffer said, "We heard our fans. I think it’s always important from a customer service standpoint to listen. We responded quickly and decisively. We said, if our fans want that option for a future game, if it’s that important to them, we certainly want to provide that." The Nationals in previous seasons had "always allowed fans to exchange tickets from postponed games." But with attendance this season up 30%, the Nationals "changed their policy." Feffer said, "Certainly our intention from the very beginning was to ensure our fans had the best seats and the seats that they had purchased. What we had found last year with a lot of our fans who were coming for future game exchanges, a lot of them were disappointed their same seats or same sections weren’t available as attendance had grown. It had always been our intention to make sure, as attendance grew this year, that that would be less of an issue." Kilgore notes the Nationals "chalked up the experience as a learning experience." Feffer: "From a brand perspective and customer service perspective, nothing is more important -- the fan experience is what defines the brand, the team. ... It’s a nice problem to have. We haven’t talked about what happens when you have high-capacity crowds every night at Nationals Park. That hasn’t been an issue up until last year" (WASHINGTON POST, 5/9). In DC, Mike Harris writes, "Good for the Nats for realizing their error and remembering that respect for the fans who fit Nationals games into their schedules should be their foremost priority." While team execs "do deserve applause for making the right call, the fact that anyone in the organization thought going away from the policy was a good idea does remain a little disturbing" (WASHINGTON TIMES, 5/9).

    ROLLING BACK THE RED CARPET: In DC, Thomas Heath notes until the Nationals "started winning last year, the team’s Red Carpet Rewards program was one of the few bright spots for its season ticket holders." Those fans "earned thousands of points that could be redeemed for seats all around the ballpark, or even access to the Lexus President’s Club." But with "no preseason notice, the Nationals front office for the 2013 season significantly diluted the Red Carpet Rewards program, and the number of points needed to buy extra benefits increased dramatically." A game against the Phillies on May 25, for example, "costs 1,000 Red Carpet points for a field MVP or club seat, which is 10 times what it cost last year." The Nationals also "shortened the window in which tickets can be redeemed ahead of time to one month; last year points could be used to buy a ticket for any game in the season." Nationals fans are "crying foul." The program was "particularly loved by fans who would buy tickets for a full season and use points to buy extras for friends and family or better seats to watch some games up close." The outcry is "a problem that many teams in baseball would envy." Feffer said that the team has "expanded the options available to rewards members to include autographed merchandise, meeting players, viewing batting practice -- even throwing out the first pitch -- as a way to create value for season ticket holders." He added, "It’s not like we said, ‘Okay, you can’t buy President’s Club seats or Diamond Club seats or dugout box.' Those are still available. They just cost more points to get because there are fewer of them" (WASHINGTON POST, 5/9).

    Print | Tags: Franchises, Washington Nationals, MLB
  • NBA Pushing Ranadivé Group Bidding For Kings To Deposit 100% Of Offer Into Escrow

    The NBA is "encouraging" the Sacramento group bidding to buy the Kings to put 100% of its $341M purchase offer "into an escrow account in hopes of persuading the Maloof family, which owns the team, to sign a deal with the local group," according to a source cited by Bizjak, Lillis & Kasler of the SACRAMENTO BEE. The source said that NBA officials are "suggesting" the group make the move to "prove it has the wherewithal to sign what has been described as a backup offer to purchase the team" behind the Chris Hansen-Steve Ballmer group out of Seattle. The Maloofs have "expressed concerns privately about the financing" of the Sacramento group, which is being led by Warriors Vice Chair Vivek Ranadivé. Sources said that Ranadivé's group already has put 50% of its team purchase offer "into an escrow account." A source said putting the entire amount down would help "alleviate the Maloofs' concern, and greatly increase the likelihood a deal could get done." The competing Seattle group reportedly has placed 100% of its $357M offer "into an escrow account" (SACRAMENTO BEE, 5/9).

    Print | Tags: Sacramento Kings, Franchises
  • Manchester United Stock Price Declines After Alex Ferguson's Retirement Announcement

    Some sponsors are worried about ManU's success after Ferguson's retirement

    The "sudden announcement" yesterday that EPL club Manchester United manager Alex Ferguson will retire at the end of the season has "shaken its shares on the New York Stock Exchange, to say nothing of its effect around the sporting world," according to Rob Hughes of the N.Y. TIMES. The decline "reflects how much of a business sports has become, and how much Ferguson has meant to United’s dominant position in the global game." The "reality is that soccer is more than any business." Its "power, which crosses borders and cultures, derives from its essence on the field, and that is where, undoubtedly, Ferguson has been monstrously successful among his peers." Hughes: "Certainly, the business, now owned by the Glazer Family in Florida is global. Surely, one man is not the whole reason for its global popularity." But without Ferguson, ManU's future "resembles the situation" in the years following the departure of former manager Matt Busby in '69 (N.Y. TIMES, 5/9). CNN.com's Alanna Petroff wrote ManU's "winning team, brand and management are considered to be key reasons behind the company's impressive share price performance." However, uncertainty "now hangs over the stock." London-based City Index Group Chief Market Strategist Joshua Raymond said, "Replacing Alex Ferguson is a monumental task and one that shareholders will watch with great interest and nervous uncertainty" (CNN.com, 5/8). At presstime, shares of ManU were trading at $18.43, down 0.07% from the close of business yesterday (THE DAILY).

    GAUGING THE IMPACT: BUSINESS STANDARD's Peter Thal Larsen wrote Ferguson's retirement "should worry" ManU fans and investors as much as it "delights long-suffering rivals." His 26-year run "has gone hand-in-hand" with the club's "impressive financial rise." Ferguson's departure "will reveal how much of that value depends on the manager" (BUSINESS-STANDARD.com, 5/8). REUTERS' Keith Weir noted ManU itself "set out in plain language the importance" of Ferguson when it went public on the NYSE last year. With CEO David Gill "also stepping down this summer, it's suddenly all change at the club." ManU Exec Vice Chair Ed Woodward "will take over many of Gill's duties and work with the new manager on player signings" (REUTERS, 5/8). The GUARDIAN's David Conn wrote ManU can "have all the revenue streams, global sponsors and 'digital followers' possible, yet what might seem a licence to print money flows from success on the pitch and one person, the team manager, is still utterly central to that" (GUARDIAN.co.uk, 5/8).

    PAYING TRIBUTE: MARKETING magazine's John Reynolds reported ManU sponsors Aon and Thomas Cook are among those "preparing to pay tributes to" Ferguson. Former club sponsor Umbro, which was the club’s kit manufacturer from '92-'02, took to Twitter, Facebook and Instagram yesterday to "ask fans to choose their favourite club shirt over the period." Sharp Electronics, the club’s shirt sponsor from '82-'00, "paid tribute by wishing Ferguson 'Happy retirement' on Twitter." Meanwhile, some sponsorship experts believe Ferguson’s retirement will "prompt concern among some of the club’s sponsors, particularly those that have recently signed a deal or are about to renew an existing deal." IMG Consulting Int'l Managing Dir Rob Mason said, "It will be a worry for sponsors. Manchester United is the best-supported club in the country and there will be a worry as to whether this success will be continued under the new manager. Ferguson has been a fundamental reason for the success of the club and you are now taking that away" (MARKETINGMAGAZINE.co.uk, 5/8).

    Print | Tags: Franchises, Soccer
  • Haslam's Ownership Of Browns Threatened By Lawsuits, Potential Cash Flow Problems

    Haslam's future with the Browns could be jeopardized by Pilot Flying J issues

    Several team officials are saying that they "believe it may be extremely difficult" for Browns Owner Jimmy Haslam III to keep the Browns "because he may be ensnared by a myriad of lawsuits and legal actions that could drain his finances and prevent him from keeping the club," according to Mike Freeman of CBSSPORTS.com. An official said of the legal situation with Haslam's Pilot Flying J, "This is more worrisome than people know." Sources said that they are "concerned about the long-term viability of the Browns under Haslam's control and believe it may be only a matter of time before Haslam is forced to sell the Browns." If Haslam can win the lawsuits, then "his future as Browns owner is more on solid footing." But if there are "massive financial settlements or legal losses, it would prove problematic for Haslam." The NFL also is "concerned what the FBI investigation will do to Haslam's cash flow" (CBSSPORTS.com, 5/8). ESPN.com's Jamison Hensley wrote Haslam, "to his credit," has not "gone into hiding." He has "repeatedly stepped in front of cameras and said all of the right things." However, the situation "goes beyond whether Haslam is proven guilty in the federal investigation." When it "comes to owning an NFL team, you need the resources to do it." Haslam, who has "owned the Browns for nine months, continues to talk about the bright future of the team, albeit with tempered expectations." But whether Haslam will be part of the Browns' future "remains to be seen" (ESPN.com, 5/8).

    Print | Tags: Franchises, NFL, Cleveland Browns
  • Indians Will Need Multiple Years Of Playoff Contention To Rebuild Season-Ticket Base

    Indians season tickets have dropped by nearly 20,000 over the last decade

    The Indians rank “last in the majors” in attendance so far this season with fewer than 15,000 fans attending per game, and it likely will take "three to five years of serious contention and frequent appearances” in the postseason to significantly change the downward trend, according to Bud Shaw of the Cleveland PLAIN DEALER. The team's season-ticket base has “slipped by nearly 20,000 over the last decade,” and that cannot be "rebuilt in one winter” despite the additions of manager Terry Francona, CF Michael Bourn, 1B Mark Reynolds and RF Nick Swisher. It likely “wouldn't be a good bet over two winters.” The Indians need “consecutive playoff appearances, and perhaps another World Series appearance, at the very least to move the needle.” Comparisons between the "relatively blind allegiance awarded the Browns versus the tepid following of the Indians" are "moot now." Shaw: "This is a football town, which is not the same as saying it's a terrible baseball town" (CLEVELAND.com, 5/8).

    NOTHING TO SEE HERE: NBC’s Brian Williams noted the Marlins are "so bad in light of a meager payroll and a 10-24 record, they are closing down the upper deck of their stadium, Marlins Park, at least for a few upcoming games because so few people are coming to the games and the empty seats look so bad." The Marlins are claiming the "closure will make for a better fan experience.” The team is averaging around 17,000 fans per game in the second-year stadium, and Williams said, "If you build it, be prepared to shut down the upper deck if the fans don't show up" (“Nightly News,” NBC, 5/8).

    Print | Tags: Franchises, Cleveland Indians, Miami Marlins
  • Study Indicates Louisville Lacks Corporate Support Necessary For An NBA Franchise

    There is "doubt on the viability of an NBA franchise in Louisville" due to a "lack of big companies to buy luxury suites, the proximity of the Indiana Pacers’ home court and competition from college basketball in the area," according to a Greater Louisville Inc. study cited by Chris Otts of the Louisville COURIER-JOURNAL. The study said a Louisville NBA team "would likely need a disproportionately higher level of support per company given the relative lack of corporate depth available." In citing Louisville’s proximity to Indianapolis, the report noted, “No two existing NBA markets with less than 3.5 million residents are located within a five hour drive of one another.” The study concludes that rather than "generate additional corporate spending on sports and entertainment, an NBA team would likely reallocate spending away from current attractions." The summary notes that Louisville compared to the seven smallest NBA markets "outranks only New Orleans in terms of companies" -- defined as those with at least $5M in sales with a presence within 50 miles -- per suites available for big league or college sports. Among "nine 'potential relocation markets' for the NBA, Louisville outranks only Pittsburgh in the same comparison of big companies per suite." The summary noted that Louisville has 165,000 households with at least $75,000 in income within a 60-minute drive of the 22,090-seat KFC Yum! Center -- representing "more than three cities that have NBA franchises, New Orleans, Memphis and Oklahoma City." GLI VP/Public Affairs & Communications Carmen Hickerson added the Univ. of Louisville’s perks as the arena’s anchor tenant, including scheduling priority and a cut of arena revenue, would “likely need to be addressed” if it were to share the building (Louisville COURIER-JOURNAL, 5/7).

    Print | Tags: Franchises, NBA
  • Franchise Notes

    Liberty Media President & CEO Greg Maffei yesterday said the Braves have turned out to be a “better investment than we might have originally anticipated." He added that the Braves’ success “contributes to making the team ‘the last thing we’ll divest.’” Maffei, when asked to explain some of the positive factors of the Braves investment, said that "changes to some of the team's TV rights arrangements are positive, and that the team's value continues to increase" (HOLLYWOODREPORTER.com, 5/8).

    DULL BLADES: In Buffalo, Jerry Sullivan notes interim Sabres coach Ron Rolston was named permanent coach on Tuesday, and he is “the perfect choice” because he is “no threat” to GM Darcy Regier. Rolston is “not well-connected” and is “indebted to Regier for handing him a head job without glowing credentials.” Naming Rolston coach “ensures the team’s insular nature.” There can be “no critical outside voice, no competing hockey vision.” By making Rolston “the prince of the realm, Regier attaches the crown more securely to his own head.” It is a “predictably uninspired move by a tough-talking outfit whose actions come off as strictly small time” (BUFFALO NEWS, 5/9).

    SCALING UP: In Denver, Adrian Dater cites a source as saying that Avalanche Exec Advisor Joe Sakic “soon is expected to take on a larger role in the team's front office.” The former Avalanche captain “previously expressed ambitions to be more involved in the hockey operations side of the business, and a vacancy in the front office recently came about when Eric Lacroix resigned” as Dir of Hockey Operations. Sakic has “served as an executive adviser with the Avs the past two seasons." It is “unclear what Sakic's new job title will be” (DENVER POST, 5/9).

    Print | Tags: Franchises
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