SBD/July 31, 2014/Franchises

Lites: Stars Seeing Ticket Sales Uptick, Revamping Merchandising Operation



Lites (l) stressed the importance of reaching out to Dallas' business community
The Stars took a significant step forward in ’13-14, making the playoffs for the first time since Owner Tom Gaglardi bought the team out of bankruptcy in ’11. The team followed up that milestone by adding veteran scorers Jason Spezza and Ales Hemsky to its young core. With the hope that the team will carry its on-ice momentum into ’14-15, the front office, led by President & CEO Jim Lites, is working to put the team’s business operations in a position to follow suit. Lites admitted the team likely is not in a position to turn a profit this season, but said that the goal is climbing closer. Lites: “Once we can sell the lower arena of the AmericanAirlines Center out on a season-ticket basis at fair prices, we’re going to be well on our way to being profitable on an annual basis.” Lites said that the team is 80% of the way to selling out the arena's lower bowl on a nightly basis. The team has a full season-ticket base of 9,000 heading into this season, up from 6,000 when Gaglardi took over. Lites added that the goal is to finish ’14-15 with that number reaching an “aggressive” figure of 12,000. He also noted that the team has sold more new season-ticket packages this offseason than any NHL franchise except for the Avalanche, which he attributed to the team's strong performance last season.

A CERTAIN SHADE OF GREEN: A major focus for the Stars this offseason has been revamping the team’s merchandising operations. Lites expressed frustration with the club’s performance in this area in ’13-14, saying that the team underbought following the unveiling of its rebranded “victory green” color scheme, leaving potential jersey sales on the table. This was one reason Lites opted to end the team’s relationship with Gameday Merchandising and bring that part of the club’s operation in-house. This summer the team has taken control of inventory and resale through a unique relationship with Legends. Stars VP/Business Development Dan Stuchal, who is overseeing the partnership, said that the team is able to leverage Legends' buying power, but unlike other third-party merchandise relationship, the Stars will purchase and own all of the inventory. Legends hired a rep to serve as the team's Dir of Merchandising and work out of Stars HQs. Stuchal added that the team has made an effort to improve its retail infrastructure in the arena, renovating the main fan store and implementing a new point-of-sale system. In addition, the team has taken steps to grow its presence in brick-and-mortar locations outside the AmericanAirlines Center. In partnership with the Mavericks, the Stars on Sept. 1 are opening a 3,000-square-foot team store in Victory Plaza, which is located in front of the arena. In addition, the Stars have formed an advertising partnership with sports apparel chain Rally House, which becomes the official locker room store of the club. The company is renting the space for its newest store from the Stars in the team’s HQs in Frisco, and will dedicate 1,000-1,500 square feet of that location to Stars and NHL gear. It will make a similar inventory commitment in each of its six Dallas-area locations. Lites touted the team's expanded selection of merchandise -- with a focus on women's, children's and golf apparel -- and anticipates the team’s merchandise sales tripling in the next two years compared with its ’11 levels.

BRAND CONNECTIONS: Another area of the franchise’s business getting a boost from the team’s recent success is sponsorship dollars. Gaglardi said that the team’s corporate sponsorship revenue has increased 40% since ’11. He cited the desire of large, locally based corporations -- most recently 7-Eleven and Frito-Lay -- to align with the Stars as the key factor behind the rise. Lites: “I told Tom Gaglardi it was important to reach out to the business community to reenergize this franchise; find business that like sports, have what I would consider to be truly unique individuals leading them." He noted 7-Eleven Chair Joe DePinto and Frito-Lay CEO Tom Greco are the type of execs "that are sports-minded, and we were able to convince to spend some of their local dollars with the Dallas Stars.” The Stars’ sponsorship offerings include radio and TV exposure, online advertising, couponing opportunities and in-arena signage, as well as in-store player appearances. Lites said that the team is finding ways to incorporate its corporate partners into the team's initiatives focused on growing hockey and figure skating participation in the area. Lites said that the Stars own and operate most of Dallas' ice rinks under the Dr Pepper StarCenters moniker, and that Gaglardi has invested significant resources in the rinks and a program that provides introductory players with equipment. Lites believes investments like these from the Gaglardi has the team headed in the right direction. "He’s energized the fan base here and certainly the hockey base in Dallas, and certainly our staff, which is thrilled to be doing what we’re doing," Lites said.
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