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SBJ/November 10 - 16, 2003/FinancePrint All
A small technology company launched last year by sports consultant Marc Ganis hopes to be in the vanguard of bringing cashless transactions to sports stadiums and arenas.
On Sunday, the St. Louis Rams became one of the first professional sports teams in the United States to introduce a "smart card," a preloaded cash card to buy merchandise and concessions within the Edward Jones Dome. The card also will provide buying patterns that the Rams and their concessionaire can use to manage inventory.
The Rams contracted with Ganis' company, Facility Acceptance Network, which assumes all the financial risk in St. Louis, for the remainder of the season. Including Sunday's game, the Rams had four remaining regular-season home games this year."Smart cards" offer convenience to fans, no risk to Rams.
The Rams have no financial risk, said Bob Wallace, the Rams' executive vice president. The team has a two-year option to continue with the card after this season, Wallace said.
Facility Acceptance makes its money, Ganis said, by the interest-rate float on the cash, card sponsorships and potentially incremental concession sales. The last point is not part of the Rams' deal, but may be part of future contracts.
"I expect by next season to see at least a dozen NFL stadiums using the card," said Ganis, who also has talked with the National Tennis Center about employing the card during the U.S. Open.
The Open employed a debit card for the first time this year, said the NTC's managing director, Danny Zausner, but would consider Ganis' smart-card system for next year.
Facility Acceptance has spent a few hundred thousand dollars already and does not expect to recoup that money with the Rams.
The New England Patriots use a similar card on their club-seat level this season, but the Rams will have it available for use throughout their stadium. At the 24 permanent concession stands, one line will be just for patrons who buy the card, which is available in $25 and $50 increments.
The convenience of fans breezing through concession lines is the main attraction for the Rams, Wallace said. The 125 concession kiosks also will accept the card, but there will be no express line.
For only the second time in league history, NFL owners next month will formally gather outside their normal rotation of meetings in order to discuss the looming expiration of the league's commercial business model.
The 32 team owners can attend meetings Dec. 4 in Denver and/or Dec. 11 in Atlanta. No votes will occur at these regional congregations, which are instead designed to begin to build a consensus for how the league's commercial businesses will operate after March.
The only other time the team owners met outside their regularly scheduled sequence of meetings was two years ago, to debate divisional realignment.
Now the commercial and merchandise business, or NFL Trust, as it is called, is the new spark for the extraordinary assemblies.
"Unlike all the other decisions the NFL makes, this does not lend itself to a committee, where a committee gets together, makes a recommendation and the other owners vote on it," said sports consultant Marc Ganis, who is close to several teams.
At the Chicago meetings last month, the owners made slim progress on reaching a consensus on how the 40-year-old Trust should be continued. With the next owners meetings scheduled for late March, when the Trust expires, the owners essentially needed more time together.
The NFL's success has been in part a result of selling sponsorship and media commercial rights on a collective basis and dividing the proceeds evenly.
But over the last few years the league has allowed teams to sell once off-limit sponsorship categories, and now the question is whether that trend will continue with the Trust renewal.
Some clubs are worried that the growing revenue disparity between teams in new and older stadiums could be exacerbated if additional sponsorship rights, particularly sideline deals, are granted to the individual clubs.
Also, clubs in low-density markets would like to lift the prohibition against teams promoting outside a 75-mile radius.
The league expects to vote to continue the Trust in some form in late March and early April at its annual meeting in Palm Beach, Fla.
Ganis pointed out that the NFL requires a unanimous vote to renew the Trust, though individual teams theoretically could opt out. It also is unclear if the Trust would be renewed for another 20-year term, or for a different period of time.