SBJ/June 20 - 26, 2005/Other NewsPrint All
The ATP was to name former Walt Disney International president Etienne de Villiers its first non-executive chairman.
The move, planned for Sunday, is part of a shakeup at the top of the ATP, which is losing its 15-year chief executive Mark Miles, who will step down Sept. 1 and be replaced temporarily by current chief financial officer Philip Galloway until de Villiers finds a replacement.
The changes are designed to transform the CEO position into more of an operational role, leaving the chairman charged with strategy and vision.Etienne de Villiers brings a background in media and investing.
De Villiers’ first order of business will be to replace Miles. The position will have less authority than Miles had, however, because de Villiers, not the CEO, will have the vote on the ATP’s board.
“When you are losing someone of the quality and experience of Mark … and replace him with two people, you have to make certain you do not see eye to eye on everything,” de Villiers said. “You don’t want them to be of one mind, but want them to be compatible.”
With a background in media and investing, de Villiers admits he knows little about the insular, political world of tennis. But he is learning. Congratulated on his appointment, the South African replied that commiseration might be in order.
Whether insider or outsider, de Villiers will have trouble effecting change in a sport known for having too many cooks in the kitchen, said Bill Dennis, a tennis promoter.
“I don’t think rule by committee ever wins; that is why the NFL has a commissioner,” said Dennis, who in the 1990s ran the season-ending Grand Slam Cup, which competed against the ATP’s championship.
De Villiers will be based in London and plans to work on ATP matters three to four days a week. He said it was too early to comment on the fate of the ATP’s Ponte Vedra, Fla., headquarters, where Miles is based.
De Villiers learned about the job after being contacted by Richard Davies, head of ATP Properties. He was president of Walt Disney International from 1986 to 2000 and has been a consultant to Kirch Group on Formula One rights.
Whether it was bringing the first-ever indoor pro tennis tournament to South Florida to fill lost hockey dates, or hosting a campaign appearance by President George W. Bush just 36 hours after the Panthers' scheduled home opener at the Office Depot Center, the club used its control of the arena to diversify its business and find creative ways to stay connected with fans.
All of which is why Street & Smith¹s SportsBusiness Journal is naming the Florida Panthers as the first, and hopefully only, "Stanley Cup Champion of Business," presented for 2005 in lieu of any actual Stanley Cup presentation on the ice.
The Phoenix Coyotes were the other Stanley Cup finalist in our fantasy bracket, with the St. Louis Blues and Boston Bruins making it to the Conference Finals. Those franchises stood out among a large group of clubs that tried to make the best use of the lockout downtime. While the circumstances were less than ideal, the lockout was a chance for many clubs to trim fat, be creative and fortify their bond with fans through a variety of outreach methods. Nearly every NHL team engaged in some sort of activity unique to its market.
The organization spent the canceled season devoted to projects that will last well into the future, such as launching an entertainment magazine and creating the Sinatra Theatre, an end configuration of the arena that can be used for intimate shows and concerts.
By pumping more events into the Office Depot Center and selling against those assets, the Panthers kept more than 75 percent of their sponsorship dollars on the books, Yormark said, instead of simply pushing that revenue into another year as most clubs did. Preparing for a potential lockout as early as last June, the Panthers even added a handful of new sponsors during the downtime, such as Harley-Davidson, Norwegian Cruise Lines and Metro PCS.Yormark
Even without offering anything more than the NHL-mandated 2 percent interest, the club managed to hold on to 87.5 percent of money from season-ticket holders.
The Panthers were far from alone in their approach to the season that wasn’t. Nearly every NHL team held skating parties, sent their coaches to hockey clinics and offered season-ticket holders incentives to keep their money on account. Some even opened up their locker rooms for sponsor dinners or, in the case of the Toronto Maple Leafs, a movie night for kids.
For most clubs, the lockout spurred initiatives that will continue once play resumes.
“It’s really asked us to focus on reaching out to our community,” said Boston Bruins executive vice president Charlie Jacobs. “We’ve begun the process, and I don’t think it ends with the lockout. We’ll recast our brand in this market.”
10 Ideas We Liked Our Mehtodology
King took the time to personally sign every refund check written to season-ticket holders.
New York Islanders general manager Mike Milbury called each of the team’s season-ticket holders, just to let them vent and shoot the breeze.
If there’s a lasting lesson, it’s that seemingly little things like town-hall-style meetings with general managers or open skating sessions are enormously valuable means of staying connected with ticket-buying consumers. It won’t be easy to continue all of these efforts during a real season, but then again, nothing was easy during the lockout because most clubs laid off a significant number of employees.
Not playing for a year also gave clubs the chance, or an excuse, to be radical. The Phoenix Coyotes offered to double the number of tickets for every season-ticket holder, for free, if they left their money on account with the team. If a family had a pair of tickets before, next season they’ll have four, at no additional charge. Team President Doug Moss said 90 percent of season-ticket holders took the Coyotes up on the offer, though he would not disclose how many season-ticket holders the club has.
For a club that’s struggled to fill its arena as the Coyotes have, the lockout was a perfect opportunity to do something that will bring more bodies through the door next season while also appearing grateful to fans, as opposed to desperate for them.
“Let’s face it, I have a relatively small season-ticket base compared to other teams,” Moss said. “I have the inventory, so why not thank the people who’ve supported us the most?”
There were a few teams — really only a few — that pretty much shut down during the lockout. The Washington Capitals, who are at or near the bottom of the NHL team-revenue ladder, did little in the way of community relations or marketing. The New Jersey Devils, who are always strong on the ice but struggle to sell out their arena, also stood out for their inactivity.
But for every club that didn’t make the lockout a rallying point to reach out to fans, there were five that did.
Yormark said the lockout actually presented an opportunity for the Panthers, who struggled economically in recent years, to prove that they were a vibrant organization moving in the right direction.
“Now the credibility and viability of the franchise isn’t an issue,” he said. “If we could survive the work stoppage, we can survive anything.”
STANLEY CUP OF BUSINESS CHAMPION
• Creative ways to fill lost dates: Numerous concerts, including Neil Diamond, the Y100.7 FM Summer Splash featuring Gwen Stefani, and Luciano Pavarotti; the Mercedes-Benz Classic indoor tennis tournament and the Orange Bowl Basketball Classic, among other events.
• Community outreach: Distributed more than $100,000 to local charities, had several youth hockey initiatives, an adult hockey fantasy camp, a holiday party and free skate, among other efforts.
• Season-ticket holder incentives/programs: The “Lock In During Lockout” campaign retained 87.5 percent of season-ticket holders with incentives and benefits before Jan. 1 and more than 90 percent by the time the season was canceled; guaranteed price freeze for the next two seasons for those who renewed; held two free concerts, a showing of the movie “Miracle” and a Halloween event for season-ticket holders’ children to go suite-to-suite trick-or-treating.
• Other: The Panthers signed several new sponsors and sold out their suite inventory despite the lockout. The team also will open the Sinatra Theatre in October, formed its own catering company, installed new LED video boards, added in-arena amenities such as the Absolut On-Ice Bar and Cruzan Rum Shack, began producing Roving Signage Systems for other venues and generated revenue by offering its IT department for support of other businesses. The Panthers produced two new magazines: “Live on Stage,” promoting music at the Office Depot Center, and “Unrestricted,” a Florida sports magazine. The franchise had 10 lockout-related layoffs.
STANLEY CUP OF BUSINESS RUNNER-UP
• Creative ways to fill lost dates: The Coyotes said that more than half the scheduled NHL dates at Glendale Arena were filled with some sort of event, either a ticketed or non-ticketed event. Those include concerts such as Bette Midler, Rod Stewart, Prince, Kenny Chesney and Cher; family shows such as the circus; and sporting events such as Arizona Sting lacrosse games, boxing, rodeos and roller derby.
• Community outreach: The Coyotes staged an event called “99 Hours of Hockey” for which they invited youth hockey teams, adult hockey teams, season-ticket holders, suite holders, handicap “sled” hockey teams, police and fire department teams, and NHL alumni to play at Glendale Arena for free for 99 hours. The weeklong event culminated with a game between NHL alumni and an all-star police and fire team. The club held a town-hall meeting with fans, attended by general partner Wayne Gretzky, team owner Steve Ellman, general manager Mike Barnett and President Doug Moss. The Coyotes also sponsored a local junior hockey team.
• Season-ticket holder incentives/programs: By leaving a 50 percent deposit on account toward the 2005-06 season, Coyotes season-ticket holders received double their number of paid seats for the entire season. So, if they had two seats and they pay the balance in full once the lockout ends, they will receive four season tickets. Fans also will have been paid 5 percent interest on the balance on their accounts.
• Other: The Coyotes reduced their staff by about 60, with approximately one-third of those coming through layoffs and the rest through attrition. In recent weeks, the club has started rehiring and adding employees, but staffing remains nowhere near pre-lockout levels.
• Creative ways to fill lost dates: TD Banknorth Garden self-promoted a Motley Crue concert, something a Bruins executive said the building (which is owned by the same parent company) would not have done if there had been no lockout. The venue also hosted an expanded slate of college hockey games.
• Community outreach: The “Black and Gold Give Back” program sent nearly 100 former or current Bruins and TD Banknorth Garden employees into the community as volunteers for local charities, wearing Bruins jerseys. Employees whose hours were affected by the lockout received hourly compensation from the team for their donated hours. The Boston Bruins Foundation raised money for charity through several events, including a “Hockey 101 for Everyone” class and a wine-tasting event. The team was involved in several youth hockey clinics and public appearances.
• Season-ticket holder incentives/programs: Paid 7.7 percent interest on mandatory 50 percent deposits. After May 1, the Bruins began paying 15 percent interest on money left on account, under condition that money be used only for future ticket purchases. That all helped retain 85 percent of season-ticket holders from 2003-04, actually higher than figures from previous years. The team had open skates for season-ticket holders at TD Banknorth Garden and free trips to see the Bruins’ minor league affiliate play in Providence, R.I. The club also had a lottery for season-ticket holders to attend the hall of fame induction party for Bruins legend Ray Bourque, and the coach, general manager and president met repeatedly with the “Season Ticket Holder” advisory board.
• Other: The Bruins had no layoffs but went to a three-day workweek during the lockout.
St. Louis Blues
• Creative ways to fill lost dates: The Savvis Center previously had signed an agreement to hold MISL St. Louis Steamers games in part because of the possibility of a hockey lockout, which resulted in 20 indoor soccer games this past season, the team’s first in the arena. The other replacement event was a welterweight title fight between hometown star Cory Spinks and Zab Judah, which set a boxing attendance record for an indoor arena of more than 22,000.
• Community outreach: The team held several new alumni hockey games for charity and organized “Cool Bars” events at local sports bars in conjunction with a series of “Classic Blues Games” that were televised on Fox Sports Net Midwest. The franchise maintained numerous charitable efforts and its youth and amateur hockey programs.
• Season-ticket holder incentives/programs: Offered 4 percent annual interest on the balance of a ticket-holder’s account, or 10 percent accrued annual interest on the balance to be paid in “Blues Bucks” for when play resumes.
• Other: The Blues have held roundtable discussions with fans during the lockout, and the team responded individually to hundreds of e-mails concerning the lockout. The Blues did lay off 25 employees, though, including 12 after the season was canceled.
• Creative ways to fill lost dates: The Flames, who control Pengrowth Saddledome, brought in several events to fill dark days in the arena, including “Stars on Ice” and concerts. The Western Hockey League Calgary Hitmen, a major junior team owned by the Flames, had the highest attendance average of any hockey team in North America, at more than 11,000 per game, up 40 percent from a year ago.
• Community outreach: The Flames continued all existing programs, making a seven-figure investment in community relations despite the lack of revenue due to the lockout. A club policy was instituted to at least attempt to fulfill all requests for appearances by team executives and coaches. Team President Ken King made more than 100 appearances. The “Reading. Give it a Shot” literacy program that had featured players continued with coaches. The team mascot, Harvey the Hound, also doubled his work load with local appearances.
• Season-ticket holder incentives/programs: The team offered various discounts and privileges to season-ticket holders, including discounts on the Hitmen and other events. Season-ticket holders were offered prime-plus-one interest rates, which netted to about 6 percent. A total of 83 percent of season-ticket holders kept some money on account, split about evenly between those who elected to leave a 10 percent deposit with the club and those who paid the entire amount. The team offered season-ticket holders extended interest for leaving money on account with the club after the season was canceled.
• Other: King personally signed all refund checks and included a handwritten note with each. All employees went to a three-day workweek at 60 percent salary when the lockout began; 10 were laid off and the rest returned to full-time status after the season was canceled.
• Creative ways to fill lost dates: Two replacement events were held at the RBC Center: a concert and a WWE wrestling program.
• Community outreach: In-school street-hockey clinics with 17 area middle and high schools; staff participated in a Build-A-Bear event with the Carolina Hurricanes Booster Club, with the bears donated to charity; maintained numerous charity programs; held a skating event at the RBC Center for a local Boys & Girls Club; and expanded the team’s literacy program among local grade schools.
• Season-ticket holder incentives/programs: The team offered six options for season-ticket holders to maintain their accounts, including earning interest on money kept with the club and future discounts; two season-ticket-holder skating nights; a trip to an American Hockey League game between the Lowell (Mass.) Lock Monsters and Norfolk (Va.) Admirals in December (Lowell is Carolina’s AHL affiliate); a town-hall meeting with Canes owner Peter Karmanos Jr. and NHL Commissioner Gary Bettman; and a Halloween haunted house at the RBC Center.
• Other: The Hurricanes held a Corporate Sponsor Summit, which brought sponsors together to share ideas, create exposure and cross-promotional opportunities, and offer feedback to the team. The Hurricanes did not attribute any staff cuts to the lockout.
• Creative ways to fill lost dates: Numerous concerts and sporting events were held at the Xcel Energy Center during the lost NHL months, including Toby Keith, the Boston Pops, Yanni and John Mellencamp. The arena also hosted several high school events and a game featuring the Houston Aeros (the Wild’s AHL affiliate) vs. the Grand Rapids (Mich.) Griffins.
• Community outreach: Held the Wild Fan Fair open house, numerous youth hockey clinics, open skates for youth hockey groups and visits to hospitals from coaches and staff.
• Season-ticket holder incentives/programs: For money left on account, the team offered 7 percent interest, an invitation to the team reception before next season, monthly $50 Xcel Energy Center gift cards and 10 free ticket vouchers to Minnesota Swarm lacrosse games; also offered a lunch with club President Doug Risebrough, fantasy hockey camps, a lockout survival kit and open skates.
• Other: The Wild had 20 lockout-related layoffs, with some employees going to three- and four-day workweeks and others working halftime.
New York Rangers
• Creative ways to fill lost dates: Several additional performances of the circus, an additional R. Kelly/Jay-Z concert, a November “night of the heavyweights” boxing card and the Jordan Classic high school basketball tournament, among others.
• Community outreach: The Rangers maintained usual community efforts, which include raising money for the Ronald McDonald House, the team’s annual toy drive, the Junior Rangers Youth Hockey program, an after-school program, golf and bowling outings for charity, and an Ice Hockey in Harlem event.
• Season-ticket holder incentives/programs: Several fan forums were held with franchise officials, a “Future Blue” event (which was televised on MSG Network) in which coach Tom Renney and others discussed the team’s future strategies, skating sessions at Madison Square Garden, a hockey clinic for the children of season-ticket holders, and a new Rangers Summer Fan Fest, among other events. Season-ticket holders were offered two free tickets to the April 30 James Toney-John Ruiz heavyweight championship fight at the Garden, as well as discounts to Hartford (Conn.) Wolf Pack games. The team also created a Season Subscriber Advisory Board to discuss benefits and ideas for season-ticket holders.
• Other: The Rangers created an NHL lockout survival kit, called “Blue Kits,” to help fans survive the lost hockey season. The team had no lockout-related layoffs.
FIRST-ROUND PLAYOFF TEAMS
Mighty Ducks of Anaheim
• Creative ways to fill lost dates: Two NLL Storm games; two shoots of NBC’s “The West Wing”; a tsunami relief concert featuring No Doubt; an AHL Cincinnati Mighty Ducks game; and an RV sale in the parking lot.
• Community outreach: The usual community efforts were maintained, including a pediatric brain tumor initiative, an elementary school reading program, several events around the Mighty Ducks Care program and youth hockey clinics. The team held a winter wonderland party at the Arrowhead Pond, with 18 tons of snow trucked in.
• Season-ticket holder incentives/programs: Offered 5 percent interest for either a refund or leaving money on account; held 15 General Manager Breakfasts, a suite-holder golf tournament, a club-seat-holder golf clinic and two skate parties, among other events.
• Other: The team held three Cincinnati Mighty Ducks games in all (one of which directly replaced a lockout game), with incentives to season-ticket holders who purchased a three-game package for the minor league games. Anaheim had seven lockout-related layoffs.
• Creative ways to fill lost dates: Several private corporate events; have booked shows for the Rolling Stones and Elton John.
• Community outreach: The Thrashers maintained numerous charitable and educational efforts, including working with the Summer Rehab Games, the Make-A-Wish Foundation, the American Heart Association, Special Olympics, Read Across America and several local children’s hospitals. The organization raised $69,000 with its annual charity golf tournament.
• Season-ticket holder incentives/programs: Offered numerous monthly discounts and incentives, such as two complimentary Atlanta Hawks tickets each month, two-for-one Peach Bowl tickets, tickets to the AFL Georgia Force, free passes to Brunswick Bowling, the AutoShow in Motion at Turner Field, Champions on Ice and numerous other value-added incentives.
• Other: The Thrashers had no layoffs.
• Creative ways to fill lost dates: Four games featuring the Sabres’ AHL affiliate, the Rochester (N.Y.) Americans, two Legends of Hockey vs. Sabres alumni games and the inaugural Scotty Bowman Showcase consisting of two high school all-star hockey games, among other events.
• Community outreach: The team’s mascot, Sabretooth, tripled its number of appearances, with a heavy emphasis on schools and charitable organizations. A Hockey Legends Dinner was held in conjunction with an alumni game to raise money for Buffalo’s Women and Children’s Hospital, and HSBC Arena was the site of skating parties around Halloween and Christmas.
• Season-ticket holder incentives/programs: The Sabres reduced season-ticket prices by 12 to 28 percent for 2004-05, with the average season-ticket price of roughly $35 per game being the lowest in the NHL. Each season ticket required only a $50 deposit that was refundable with 2 percent interest during the lockout.
• Other: The Sabres were at the forefront of experimenting with two potential changes to the NHL product, installing light blue ice at HSBC Arena for two AHL games to see if the color shows up better on television, and testing larger nets to see if they would allow increased scoring. The Sabres had 25 lockout-related layoffs.
• Creative ways to fill lost dates: Seven replacement events included a third Harlem Globetrotters date, two “Get Motivated” seminars with keynote speaker Peter Lowe that each attracted sellout crowds of 15,000, and two Royal Lipizzaner Stallions performances in one day.
• Community outreach: The team held several town-hall meetings and maintained its community efforts, which included the Dallas Stars Foundation awarding grants for $85,000, a reading program that visited more than 27,000 kids, and team coaches participating in clinics and youth hockey league practices.
• Season-ticket holder incentives/programs: Offered three options: a full refund and the league-mandated 2 percent interest; 6 percent interest for money left on account; or a 15-game Texas Rangers ticket package (opponents included the Yankees and Red Sox) for those who deferred their money to 2005-06. The Stars also held early renewal for 2004-05 tickets that included a 5 percent discount on tickets with a guarantee that seat prices would not rise in 2005-06. In addition, fans were told in May that deposits to keep their seats for 2005-06 would not be asked for until August, with a voucher for four Rangers tickets included in the letter.
• Other: The Stars had 25 lockout-related layoffs and, in a unique move, upper management took pay cuts of 20 percent to 25 percent.
• Creative ways to fill lost dates: Suite holders were invited to play in “corporate” hockey games, playing alongside Canadiens legends.
• Community outreach: The club developed new mascots for its fan club, comic book-like characters called “The Fantastics” in lieu of actual player images. The Canadiens also expanded their “LRF” (Learn, Respect and Fun) grassroots program into a traveling tour around Quebec, something they had planned to do whether there was a lockout or not.
• Season-ticket holder incentives/programs: Hall of famer Jean Beliveau, general manager Bob Gainey and team President Pierre Boivin met repeatedly with season-ticket holders in discussion groups of 50 to 100. Season-ticket holders also were offered 5 percent interest for keeping their money on account, and the club said that more than 95 percent chose to do so.
• Other: The team had an undisclosed number of lockout-related layoffs.
New York Islanders
• Creative ways to fill lost dates: SMG operates Nassau Veterans Memorial Coliseum and booked an Indian “Bollywood” type event with singers, actors and comedians, the USA Gymnastics American Cup championships, a reggae concert; and two AHL Bridgeport (Conn.) Sound Tigers games.
• Community outreach: An alumni three-on-three tournament at which the Stanley Cup was present, and the team “utilized our coach, GM and alumni where appropriate.”
• Season-ticket holder incentives/programs: Season-ticket holders were comped for the two Bridgeport games at the Coliseum. General manager Mike Milbury personally called every season-ticket holder. The Islanders utilized sponsors for special events, such as Best Buy closing its doors on a Sunday night in December for a season-ticket-holder shopping evening in which Milbury, coach Steve Stirling, the team’s mascot and the Ice Girls were present and store discounts were offered.
• Other: The team had no layoffs.
• Creative ways to fill lost dates: SMG operates Mellon Arena.
• Community outreach: Several charitable efforts were conducted, including raising money for Pennsylvania flood victims, working with Toys for Tots and a coat drive. The Penguins held a unique “Hungry for Hockey?” photo contest on their Web site, sponsored a 40-plus-team high school hockey tournament and had several youth hockey efforts.
• Season-ticket holder incentives/programs: Offered 5 percent interest and “Penguins Cash” (10 percent of the amount on deposit) to those who left money on account. The team also informed fans of local minor league, college and high school hockey through its “Hungry for Hockey?” packages, had an open skate at Mellon Arena, gave out comp tickets to ECHL Wheeling (W.Va.) Nailers games and offered a bus trip to an AHL Wilkes-Barre/Scranton (Pa.) Penguins game.
• Other: The Penguins teamed with the University of Pittsburgh to create “Penguins University,” which offered seminars on leadership and other topics. Pittsburgh had no lockout-related layoffs, but the team did go to a four-day workweek after Sept. 15.
Tampa Bay Lightning
• Creative ways to fill lost dates: Events at the St. Pete Times Forum included a concert by Clint Black, three additional Disney on Ice shows and a WTA tournament, among others.
• Community outreach: Instituted the Pink Hat Project, in which the team is selling hats to benefit breast cancer research. The Lightning has sold 5,000 hats to date, raising $50,000. Tampa Bay maintained its usual community efforts, which included the team’s annual leukemia run, the Lightning Foundation benefiting several causes and several youth-focused programs.
• Season-ticket holder incentives/programs: The team donated 2 percent of all Lightning ticket commitments to area charities, held four Stanley Cup viewing parties and offered tickets to several arena events.
• Other: Tampa Bay had no layoffs.
MISSED THE PLAYOFFS
• Creative ways to fill lost dates: A radio station-sponsored concert that featured local bands, and a production of the opera “Carmina Burana.”
• Community outreach: Several local appearances by staff, coaches and the team’s mascot, Tommy Hawk; numerous youth hockey initiatives, including donations, clinics and a coaches clinic for 300 coaches; held a three-day holiday tournament that drew 20 teams from the Midwest; and held a “day of hockey” at the United Center, featuring a game between the Chicago Police and Fire departments, the 18th annual Blackhawk Cup High School Championship Game and a USHL game.
• Season-ticket holder incentives/programs: Asked for only 60 percent of the ticket price, with interest and other benefits applied; will maintain a 10 percent decrease in cost from 2003-04. Also held the annual season-ticket-holder party.
• Other: The Blackhawks had a handful of lockout-related layoffs.
• Creative ways to fill lost dates: None to speak of.
• Community outreach: Attended community fundraisers and participated in a leaguewide program visiting hospitals.
• Season-ticket holder incentives/programs: Offered the league-mandated 2 percent interest for refunds, with an option of 5 percent interest in “Pepsi Center Bucks” that can be used for purchases with the team or at the arena. The club said most season-ticket holders selected the second option.
• Other: The Avalanche had no layoffs.
Columbus Blue Jackets
• Creative ways to fill lost dates: Among the events held for the first time or first time between September and April were the circus, the Ohio Hockey Classic college tournament and a game between the Syracuse (N.Y.) Crunch (Columbus’ AHL affiliate) and the Cleveland Barons that drew 13,102.
• Community outreach: Community programs were maintained: The Columbus Blue Jackets Foundation awarded $140,000 in grants, an educational program visited 50 elementary schools, youth hockey clinics were conducted, and broadcasters and coaches were booked at roughly 50 speaking engagements. One new program was a Fantasy Hockey Camp for 60 adults.
• Season-ticket holder incentives/programs: Offered a monthly refund with 3 percent interest for money on account, or a credit to the account plus 6 percent interest and a Blue Jackets Dividend Certificate worth between $100 and $300 for merchandise or concessions.
• Other: The Blue Jackets had no layoffs.
Detroit Red Wings
• Creative ways to fill lost dates: The ice at Joe Louis Arena was kept down all year, allowing for youth hockey tournaments and rentals to civic and corporate groups. This included the “Fantasy 4 x 4” program, where any group could take on a team of Red Wings alumni and coaches in four-on-four hockey for $1,350. The Red Wings alums were undefeated in 17 games. The funds were used to cover building operating expenses.
• Community outreach: The Red Wings continued to supply their normal annual lot of about 2,500 player autographs to local charities, tapping into a reserve of autographs and retired players. The club also held a Red Wings DVD premiere party in November.
• Season-ticket holder incentives/programs: The club held an open house for season-ticket holders in December, and season-ticket holders received complimentary tickets to a Detroit Tigers game. The Red Wings did not ask season-ticket holders to leave money on account.
• Other: The Red Wings had no layoffs.
• Creative ways to fill lost dates: The club has not brought in any specific new events to the Rexall Place, but it welcomed a new AHL club, the Road Runners, who filled 40-plus dates.
• Community outreach: Much of the club’s marketing and community relations activity centered on the Road Runners, who are owned by the Oilers. The club averaged about 8,800 per game in attendance, third in the AHL. The Oilers expanded the geographical scope of clinics and charity appearances by coaches and alumni. In addition, this year marked the debut of the “Fanboni,” a Zamboni refitted with a comfortable seating area that carries up to 10 people, giving rides at games and on city streets.
• Season-ticket holder incentives/programs: Season-ticket holders were given prime-plus-one interest rates for keeping their money on account with the club through April 1. At that point, the interest went up to 7 percent. A team official said that fewer than 2 percent of season-ticket holders took all their money back. Season-ticket holders were given the first option to buy season tickets to the Road Runners. About 4,000 Road Runners season tickets were sold to Oilers season-ticket holders.
• Other: The Oilers had a handful of lockout-related layoffs. Edmonton also recently applied to the AHL to suspend operations of the Road Runners, saying in a release: “If the NHL restarts some time this fall as hoped, the Road Runners may represent a significant distraction to Edmonton and area hockey fans.”
Los Angeles Kings
• Creative ways to fill lost dates: The Staples Center was active on more than 20 dates originally scheduled for hockey, including concerts, ice shows, a boxing event and various film shoots. The arena also brought in the AHL-affiliate Manchester (N.H.) Monarchs to play a game.
• Community outreach: The club’s primary layoffs came in its community relations department, so there was limited activity in this area. The Kings’ coaches and broadcasters took part in instructional clinics in the Los Angeles area.
• Season-ticket holder incentives/programs: Asked season-ticket holders only for $100 deposits per seat and no additional money; offered free tickets to Monarchs game; produced a special yearbook called “LA Kings A to Z” that featured every player ever to wear a Kings uniform, and sent the book free to all season-ticket holders; offered free tickets to the Feb. 19 Bernard Hopkins-Howard Eastman fight.
• Other: The Kings and parent company Anschutz Entertainment Group had a handful of lockout-related layoffs.
• Creative ways to fill lost dates: The Predators do not schedule events for Gaylord Entertainment Center.
• Community outreach: The team maintained its community efforts, which included the Predators Foundation awarding grants of $53,000, more than 500 hours of community service to St. Luke’s Community House by Predators staff and a day with Habitat for Humanity, as well as hosting 12 area high schools for a series of games and an average of two youth hockey clinics a week throughout the lockout.
• Season-ticket holder incentives/programs: All season-ticket holders renewing for 2005-06 will receive an engraved puck on the new Predators Wall of Fame, a customized jersey and interest on money left on account. The team also hosted a town-hall meeting with owner Craig Leipold and created the Season Ticketholder Training Camp in which coaches walked fans through game-day preparation, had a question-and-answer session and then an open skate at the arena.
• Other: The team hosted a “Dinner with the Coaches” event in the locker room with sponsors in December. The Predators had about a dozen layoffs because of the lockout.
New Jersey Devils
• Creative ways to fill lost dates: The Devils do not control Continental Airlines Arena.
• Community outreach: Last summer, a group of Devils alumni visited various chambers of commerce and civic organizations throughout New Jersey.
• Season-ticket holder incentives/programs: Offered season-ticket holders extended interest for leaving money on account with the club after the season was canceled (the Devils would not disclose the interest rate); more than 60 percent have left money with the team.
• Other: The Devils had no layoffs.
• Creative ways to fill lost dates: No revenue-generating events other than three youth hockey tournaments; also offered ice time to various youth teams.
• Community outreach: The Senators used the down time to focus on two major construction projects: a $20 million four-ice pad arena near the Corel Centre, and Roger’s House, a pediatric care home for up to eight children and at least two families. The Senators staged their annual Hockey Day in the Capital with 1,000 youth players, and the team’s educational programs reached more than 75,000 area students.
• Season-ticket holder incentives/programs: Season-ticket holders were offered free public skating and a chance to meet the Senators’ general manager, team president and coach. The club also offered to freeze ticket prices for two years with a 5 percent price rebate for the 2005-06 season to season-ticket holders who left at least 10 percent of their money on account. Those who left the entire amount received 7.5 percent interest.
• Other: The Senators had an unspecified number of layoffs, which including attrition amounted to a reduction of more than 35 employees. The team rehired everyone in May.
• Creative ways to fill lost dates: Several AHL Philadelphia Phantoms games were held at the Wachovia Center, including the first two games of the season and the playoffs. Moving the opening games allowed for the conversion of the Wachovia Spectrum into the “largest interactive haunted Halloween adventure park.” The team held numerous other events, including concerts by U2 and Kenny Chesney.
• Community outreach: Began a school assembly program that reached 13,000 kids, held several youth hockey initiatives and coaching clinics, and made regular hospital visits, among other charitable efforts.
• Season-ticket holder incentives/programs: The team would not release any season-ticket holder incentives or programs.
• Other: The Flyers had no layoffs.
San Jose Sharks
• Creative ways to fill lost dates: Hosted minor league games for AHL affiliate Cleveland Barons; tickets were free for season-ticket holders and $5 for others.
• Community outreach: Used mascot SJ Sharkie as the face of the franchise during the lockout. Sharkie has been all over Silicon Valley, attending 318 events, from the downtown San Jose Christmas tree lighting to his “main gig,” the “Reading is Cool” literacy program sponsored by the club. General manager Doug Wilson sent out an e-mail questionnaire seeking fan feedback on things like whether the NHL should employ a shoot-out.
• Season-ticket holder incentives/programs: Offered 7 percent interest to season-ticket holders after the season was canceled, on condition that the fans leave the money on account for future purchases; sent season-ticket holders a lockout survival kit with items that included a chocolate hockey puck; gave free ice time to season-ticket holders.
• Other: The Sharks had a couple dozen layoffs related to the lockout.
Toronto Maple Leafs
• Creative ways to fill lost dates: The club held two open skates for fans and staged numerous events for corporate partners at the Air Canada Centre, including hockey scrimmages.
• Community outreach: The club held a movie night for children in the Maple Leafs dressing room, complete with popcorn. It staged numerous development clinics and sponsored a “Fitness Challenge.” Team sponsors were invited to a private skating party.
• Season-ticket holder incentives/programs: The Maple Leafs have a long waiting list for season tickets so they did not offer incentives to leave money on account. Instead, all season-ticket holders were asked to pay the full amount for the 2004-05 season and then received interest of 4.75 percent. The team also held a season-ticket-holder hockey tournament.
• Other: The Maple Leafs had no lockout-related layoffs.
• Creative ways to fill lost dates: U2 rented General Motors Place for three weeks from February to March to construct, rehearse and prepare for their Vertigo 2005 World Tour. The group also held two concerts and shot a video there. Other events included a nationally televised tsunami relief concert and a day of youth hockey games.
• Community outreach: Focused on grassroots hockey programs, holding youth clinics (including the annual Canucks Female Jamboree), as well as the team’s charitable efforts with Canuck Place Children’s Hospice and the Canucks Family Education Centre. Held the inaugural “Scary Skate” during Halloween and a ceremonial Christmas lighting at Canuck Place.
• Season-ticket holder incentives/programs: Refunds of the league-mandated 2 percent for all games processed within 10 business days of the official announcement; a two-year price freeze for season-ticket holders who kept their deposit on account; season-ticket holders received a Canucks DVD, and numerous free skates were offered at GM Place.
• Other: The Canucks did not have any lockout-related layoffs, but about 10 employees did take voluntary buyout packages, and the franchise momentarily went to a four-day workweek when the lockout began.
• Creative ways to fill lost dates: The Capitals do not control the MCI Center.
• Community outreach: The club’s community relations specialist took another job and was not replaced, so the club did not undertake any new initiatives during the lockout.
• Season-ticket holder incentives/programs: Fans who left their money on account received 3 percent interest and an “Ice Your Price” guarantee, promising no price increases for at least two seasons. In April, the team announced that it has reduced season-ticket prices by 11 percent for next season, starting as low as $14 per game. No special events have been held for season-ticket holders yet, but they will be invited to an “ice-breaking” ceremony at the club’s new practice facility this summer, and owner Ted Leonsis plans to hold a meeting with season-ticket holders in the future.
• Other: The Capitals had no layoffs.
Bob Horowitz, who headed U.S. operations for TWI, the television arm of sports marketing and management giant IMG, has left to start an entertainment production company.
Horowitz, who had been with IMG since 1997 and was promoted to head U.S. operations a year and a half ago, will continue to work with IMG on five television projects, said TWI Chief Executive Officer Bill Sinrich, who is based in London. Horowitz left June 1.
Sinrich said the company is looking for a replacement for Horowitz and will likely hire from outside the company. “We hope to be in a position to make an announcement by the end of the summer,” he said.
“Bob decided he wanted to go off on his own and do his own production agency,” Sinrich said. He called the departure “very friendly and amicable.”
Horowitz, reached last week, said he has formed Juma Entertainment, a production company based in Doylestown, Pa., that will specialize in non-scripted television programs, specials and reality shows.
“I leave TWI with mixed emotions, as I have the utmost respect for the content and jewels available under the IMG umbrella,” Horowitz said. “While it was a tough discussion, I saw and wanted the challenge to grow a new production entity. … The ongoing relationship with TWI on numerous projects enables me to continue and finish that which I started with the many friends at the company.”
Sinrich said Horowitz’s departure was not related to financier Ted Forstmann’s acquisition of IMG last year.
Horowitz was first hired as senior vice president of programming and sales to replace Sean McManus, who left to become president of CBS Sports. He was promoted to head U.S. operations after IMG founder Mark McCormack died in May 2003.
Hockey agent and former NHL marketer Bryant McBride is selling his Vision Sports Entertainment Partners to The Active Network in a mid-seven-figure equity and cash deal. The Active Network offers applications and marketing services for participatory sports.
McBride will serve as group vice president of team and youth sports, and Vision will become a wholly owned subsidiary of Active. The future of McBride’s athlete representation business, which included NHL players like Jason Allison of the Los Angeles Kings and Byron Dafoe of the Atlanta Thrashers, is unclear.
In three years, Waltham, Mass.-based Vision has carved out an impressive niche in the youth sports market, building a client roster that includes Kraft’s Capri Sun beverage and Upper Deck for Little League Baseball and Pop Warner Football activation, Choice Hotels for Little League Baseball, LPGA and other national governing bodies, The Hartford with the NCAA, Sunkist for Little League Baseball, Bryant Heating and Cooling for Little League Baseball and U.S. Youth Soccer, and Masterfoods’ Snickers brand for Little League Baseball and U.S. Youth Soccer.
McBride saw retail activation as a key growth area. “There are 52 million participants in youth sports driving billions in purchases,” he said. “We’ll help them connect at the store level.”
San Diego-based Active, which handles the online registration business for participatory sports, has achieved impressive growth in the past few years. It ranked No. 99 on Inc. magazine’s ranking of the fastest-growing private businesses in 2004, with four-year average annual sales growth of almost 284 percent, and rumors of an IPO remain rampant even after it pulled back from an initial earlier filing.
“We’re looking at Vision as becoming our marketing engine for youth sports,” said Matt Landa, president of Active.
Active’s investors include Ticketmaster President and CEO John Pleasants and Lance Armstrong.
The NBA has been increasingly aggressive in building its overseas business, but now comes perhaps its most ambitious plan to date: pursuing a joint venture with the Chinese Basketball Association that would make the organizations partners in arena development throughout China.Last year’s China Games pitted the Kings against the Rockets in Shanghai and Beijing.
“We aren’t necessarily looking to rebrand the CBA,” said NBA Entertainment President Adam Silver, who recently returned from China, where he discussed the venture with CBA officials, “but we’ll help construct arenas with CBA teams as anchor tenants.”
Silver did not say whether the proposed venture would eventually lead to an NBA-run league in China, what, if any, U.S. companies would be involved in any arena deals, or other specifics.
“The strategy is to build a [Chinese] league that is in the best position to draw fans, sponsors [and] television partners,” Silver said.
Industry experts, however, expect long-term NBA plans will call for rebranding.
“The NBA has made significant progress in China and they are far out ahead of any other league in the United States,” said Rick Dudley, president and CEO of Octagon, which recently completed a study of the sports marketplace in China. “Perhaps the NBA will use local vehicles like Chinese leagues, but I think that ultimately it’s the NBA brand that they are looking to establish.”
The NBA’s efforts to partner financially with the CBA come after the success of last year’s China Games, which saw the Sacramento Kings and the Yao Ming-led Houston Rockets play preseason games in Shanghai and Beijing. NBA Commissioner David Stern said last week that the league plans to return to China for additional preseason games in 2006.
While the NBA is looking to expand in China, the 14-team CBA is trying to transform itself into an elite international league. The CBA currently allows two American players per franchise and is trying to improve its product, but most cities lack quality facilities.
Silver said the venture under discussion could include renovations to current facilities. He did not disclose any involvement with current NBA partners, but given the strong blue-chip corporate participation in last year’s China Games, it’s likely the NBA would look to include its partners for future deals in China.
The NBA isn’t the only sports property looking to expand into China, particularly in advance of the 2008 Beijing Summer Games. The ATP is holding its Masters Cup tournament in Shanghai for the next three years, and the NFL wants to play a preseason game in China, but the NBA is the established leader among properties in developing its China business efforts.
Separate from the possible facilities venture, the NBA is looking to handle game production aspects of the basketball competition of the 2008 Olympics, as it did during the 2004 Games in Athens.
“The NBA is exploding in China and there is the likelihood that there will be more CBA teams in the future,” said Bruce O’Neil, president of the United States Basketball Academy, which has been retained by the CBA to help run its player draft. “Currently, most of the CBA facilities vary in size between 6,000 and 15,000 seats and by our standards are very basic. They are not up to the standards that you’d see in any major college in America.”
O’Neil said the newest CBA facility, an 8,000-seat venue, was built in Beijing in 2002. Most of the arenas now are owned by Chinese companies that own the franchises, with most built about a decade ago.
The business relationship between the NBA and the CBA has been evolving over the past few years. After the China Games last fall, Reebok entered into a licensing agreement with the NBA that gives the company the rights to the Chinese market. In April, the NBA and CBA reached a deal to televise the CBA’s best-of-five-game championship series on NBA TV using feeds from Chinese broadcasters.
Until the China Games, the NBA’s exposure was limited mainly to broadcast. The NBA has 20 television, radio and online distribution deals in China.
In a move that would protect the ability of the next LeBron James to enter the NBA straight from high school, the National Basketball Players Association has proposed a system in which teams could draft high school players but only in the first 14 slots, or lottery picks, in the NBA draft.
High school players who are not among the first 14 chosen in the first round would then be subject to a 19-year-old age limit, under the unions proposal for a new collective-bargaining agreement. The current agreement expires June 30.
NBA Commissioner David Stern last week expressed concern that the unions proposal would not solve the problem of NBA general managers and scouts in high school gyms, a situation he said has fueled teenagers unrealistic expectations that they can go to the NBA rather than to college. We would rather negotiate over the age limit itself rather than splitting the class, Stern said at a news conference last week.
Stern acknowledged, however, that the league, which originally pushed for a minimum age of 20, has moved to a 19-year-old age limit as a compromise.
Under the current labor agreement, all players can enter the draft after their 18th birthday. NBPA Executive Director Billy Hunter has said publicly that the players are opposed to any age limit.
Although both sides have moved in negotiations from their original positions on the age issue, it is not clear how they can bridge the gap between them. The NBA halted negotiations June 1; it was not clear at press time whether they had scheduled another session.
The push for an age restriction coincides with the biggest explosion of basketball prowess in U.S. high schools in decades, said Sonny Vaccaro, grassroots basketball consultant to Reebok, and confidante and mentor to many high school and NBA stars.
The kids coming out of high school in the next three years have the most amount of talent I have seen in 41 years, Vaccaro said. Vaccaro projects about 40 current freshmen, sophomores and juniors in high school as first-round NBA draft picks.
Vaccaro would not compare these players with Cleveland Cavaliers star James, but he said that unlike two years ago, when James came out of high school, there are now numerous players with precocious talent, not just one standout. Two players who are already getting a ton of press are Greg Oden, a junior at Lawrence North High School in Indianapolis, and O.J. Mayo, a sophomore at Cincinnati North College Hill High School.
With all due respect, in my opinion, Greg Oden would be the No. 1 pick this year, next year and the year after that, Vaccaro said. O.J. Mayo, and others in his [school year] class, will be the No. 1, 2, 3, 4 and 5 picks, Vaccaro said.
Vaccaro supports the unions proposal of allowing high school players to be drafted in the first 14 slots. It is an honorable solution to a touchy problem.
Madden, shown talking with Peyton Manning, will move to Sunday night.
John Madden has signed a six-year deal to join NBC Sports as an NFL game analyst for the inaugural 2006 season of NBC’s Sunday night football coverage. The deal is worth $4 million annually, down $1 million from Madden’s current deal with ABC, according to the Houston Chronicle.
The Sprint Cup Series?
The NASCAR Nextel Cup Series will become the Sprint Cup Series in 2006, following the completion of the merger between Sprint and Nextel, Knight Ridder reported. The combined company will likely keep Nextel’s predominantly black-and-yellow color scheme in its marketing, including in the Cup Series.
Offer made for Penguins
William Del Biaggio III heads a group of West Coast investors that has negotiated a letter of intent to acquire a controlling interest in the Pittsburgh Penguins. Penguins owner Mario Lemieux will hold onto a reduced share of the franchise, the Pittsburgh Post-Gazette reported.Bivens
The LPGA named Carolyn Vesper Bivens commissioner-elect, replacing outgoing Commissioner Ty Votaw. Bivens is president and chief operating officer of Initiative Media North America and previously spent 18 years with USA Today. She will assume the position next month.
AEG makes office moves
Anschutz Entertainment Group promoted Nick Sakiewicz, president and general manager of Major League Soccer’s MetroStars, to AEG Soccer New York/New Jersey president. MLS Earthquakes President and GM Alexi Lalas will take over the same roles with the MetroStars.
For these and other stories, visit our sister publication SportsBusiness Daily at www.sportsbusinessjournal.com.
The Green Bay Packers earned a record $25 million in their most recent fiscal year, but the club warned that the league’s problems in reaching a labor deal with its union could leave the publicly owned franchise on slippery financial footing.
While a newly renovated Lambeau Field continues to pad the bottom line of the team in the league’s smallest market, club executives said there is almost too much attention focused on crafting an internal revenue-sharing plan among the teams and not enough on collective-bargaining negotiations.
“We don’t know if it will be worked out,” John Jones, the Packers’ chief operating officer, said of the labor talks. “It feels to us that revenue sharing has gotten a lot of media attention, maybe more than it deserves. We believe we will solve that revenue-sharing issue. But we will have some very difficult negotiations with the players association.”
As a result of this uncertainty, the Packers planned to announce Sunday the creation of the Packers Franchise Preservation Fund, essentially a renamed corporate reserve fund. The difference is the new fund will not be used for operations but would be ready in the event of a major disturbance such as a labor dispute.
“We don’t have a deep-pocketed owner,” unlike most NFL teams, Jones said.
The fund at the close of fiscal 2005, which ended March 31, contained $97.7 million, up nearly $13 million from last year’s corporate reserve fund.
Total Packers revenue topped $200 million, a 12 percent increase, boosted by a major surge in local revenue. The newly renovated Lambeau Field opened in 2003, and has helped keep the Packers the 10th-highest team in the NFL in revenue for three years in a row.
Local revenue rose 12.7 percent to $89 million, with the increase in concessions, merchandising and sponsorships.
The club’s share of national money from league TV contracts rose to $84 million, a $3 million increase. But “other” NFL revenue, which encompasses leaguewide licensing and sponsorship income, almost doubled to $14.5 million.
Driven by new deals with companies such as Sirius Satellite Radio and Gatorade, the NFL’s business ventures division has been surging.
The Packers’ increase, if translated to the other 31 teams, means the league’s non-TV businesses distributed $464 million, up from $233.6 million the year before.
The Packers’ profit from operations was $33.4 million, up from $29 million the year before. The 2004 fiscal-year figure included an expansion-fee payment from the Houston Texans, after tax, of $2.1 million, but the most recent year does not.
The Packers are the only NFL team to disclose its financials. The team is owned by more than 106,000 individual shareholders, most of them fans. The club does not list on an exchange, however.
The league bans public ownership of its teams, but the Packers, who have been public since the 1920s, were exempt from the rule.
The Indy Racing League and its television partners continue to reap the benefits of “Danica Mania.”
Danica Patrick, the 23-year-old rookie who has quickly become the league’s most recognizable driver, has had a major effect on both ratings and attendance since dominating headlines during the buildup to last month’s Indy 500.Patrick has gone from IRL rookie to larger-than-life personality in a matter of weeks.
That would come on the heels of another record-breaking performance June 11 at Texas Motor Speedway. The Bombardier Learjet 500k, broadcast on ESPN, garnered a 1.0 rating, the highest-rated IRL race in ESPN history. Prior to that, ESPN’s previous highest-rated IRL telecast was 2004’s season-opening race from Homestead-Miami Speedway, which averaged a 0.9.
Despite being a record, the 1.0 equates to only about 880,000 households, a number more familiar to the NHL than to NASCAR, the IRL’s biggest competitor. But thanks largely to the prerace promotion around Patrick, who finished 13th, it was a 150 percent increase from last year’s 0.4.
Last month’s Indy 500 on ABC drew a 6.5 rating, a 59 percent increase over last year’s 4.1 and the first time since 2001 that the race drew more households than NASCAR’s Coca-Cola 600.
Texas Motor Speedway President Eddie Gossage wouldn’t comment on race attendance, but it has been estimated that 102,000 people attended, an increase of some 8,000 from last year.
In addition to hanging a giant, 20-by-40-foot mural of Patrick on a 10-story sign along I-35, the racetrack increased its advertising budget to capitalize on her success. On top of its initial $1 million media spend, TMS placed $100,000 of Patrick-specific ads with local print and radio outlets.
“We wanted to be careful not to ignore the other guys,” Gossage said, “but you don’t get offered an opportunity like this very often.”
To promote this weekend’s race, Richmond International has distributed a Patrick poster to 65 Virginia Fas Mart stores, a track partner that also sells tickets to various racing events. Giant fliers tout this weekend’s event as Patrick’s first trip to the raceway.
Like the Texas racetrack, Richmond included Patrick in last-minute advertising. But instead of entirely new creative, the Virginia track tweaked its ads to include Patrick, at an additional cost that Becherer described as “minimal.” The radio, print and TV campaign is running in Richmond, Washington, Baltimore and Norfolk, Va.
The track revamped its Web site, and Keith Green, director of public relations, sent out Patrick-specific press kits to media in nearby cities such as Philadelphia; Pittsburgh; Charlotte; and Winston-Salem, N.C.
The message: RIR is the closest opportunity for Eastern fans to see Patrick — and the rest of the IRL, too, of course.
NBA writer John Lombardo offers news and notes from the NBA Finals:McCombs, out of the NFL, said he’s already “getting the urge” to return to pro sports.
Fresh off his sale of the Minnesota Vikings, McCombs said recently he may buy back into professional sports.
“I’m getting the urge,” McCombs said while sitting courtside in his hometown, San Antonio, before Game 1 of the Finals, adding that he’d prefer to buy into the NBA. “We’ll see.”
McCombs, 77, is no stranger to the NBA. He owned the San Antonio Spurs before selling in 1993 to the ownership group that has come to be led now by Peter Holt. McCombs also has the cash: He bought the Vikings in 1998 for $246 million and sold for $600 million in a deal just closed.
The Bucks are a franchise in play. Owner Herb Kohl has said he’d sell the team if he could find the right buyer who’s willing to keep the franchise in Milwaukee. McCombs also could look to Orlando, where frustration mounts for Magic owner Rich DeVos over the team’s facility needs.
SPONSOR BIZ SHACKLED BY LABOR MATTER: With the prospects of a lockout growing larger with each passing day — the current collective-bargaining agreement expires in 10 days — the doom and gloom extends to the league’s sponsorship business. League officials declined to comment, but the NBA’s corporate agreements with Anheuser-Busch, Southwest Airlines, Verizon, American Express and MBNA are all up for renewal this summer. Suffice to say, it’s enough for alarm.
“There are a fair number [of league sponsors up for renewal] and we are very concerned,” said Adam Silver, president of NBA Entertainment. “We are having discussions [with sponsors] over the possibility of a lockout.”
It’s not just retaining current sponsors that is causing concern for Silver. It’s trying to land new deals, as well.
“We are focusing on getting a cohesive message with our teams,” Silver said. “But the CBA has consumed us. It’s putting everything on hold.”
CHANGE COMING WITH POSTSEASON AWARDS?: Major League Baseball hands out its annual awards after postseason play, fueling interest in the game long after the World Series. The NHL showcases its awards with a slick gala held after the Stanley Cup Finals. The NBA, meanwhile, has traditionally named its award winners during the playoffs — but that could be changing, league officials said.
“It’s something we are talking about doing,” Silver said of changing how the league’s end-of-season awards are presented.
The problem for the league is that it likes to present its awards in front of hometown fans. That, however, makes for a decentralized process that loses some national punch. For example, this year’s MVP, Phoenix guard Steve Nash, was given his award on May 8, when interest was in the Suns’ playoff run.
“It’s a balancing act,” said Gregg Winik, senior vice president of NBA Entertainment.
The league’s media partners were not available for comment about their interest in airing an NHL-type awards show.
GETTING OUT FRONT: The NBA’s television ratings suffered this season, but the league did set a record for attendance. So what’s the strategy to keep the gate growing?
Sell earlier than ever, according to Scott O’Neil, senior vice president of the NBA’s team marketing services department.
“Teams used to sell tickets after the season. Now, they are beginning the selling season in January or February,” O’Neil said while in San Antonio.
One change for next season is that teams will hire fewer sales representatives. Over the past few years, teams have doubled the size of their sales staffs, from roughly 12 employees per team to 24 employees as teams increased their focus on telemarketing and group-sales efforts.
“Teams are now properly staffed,” O’Neil said.
O’Neil’s got some hiring of his own to do. He has yet to fill two key vacancies in the league’s team-services department, created when Paul Mott left to take the job as president of the New Orleans Hornets and Lou DePaoli left to become executive vice president and chief marketing officer of the Atlanta Hawks. O’Neil did not give a timetable to fill the openings.
It’s 10 a.m. before Game 1 of the NBA Finals, and Russ Bookbinder is so relaxed in his office it may as well be a mid-August offseason morning for the San Antonio Spurs’ executive vice president of business operations.
The serenity is bred out of familiarity. The Spurs have been in the NBA Finals three times since 1999, twice in the past three seasons. Their success both on and off the court has made the team a model for other pro sports franchises: The winning and the profits result even though San Antonio is the league’s third-smallest market by population, lacks a large corporate base and ranks No. 186 nationwide among markets in per capita income ($27,380).
“We’ve been profitable since we’ve moved into the SBC Center,” Bookbinder said, though he declined to disclose amounts. “We are a consistent franchise and we are the only game in town, but that can be a double-edged sword because we get all the attention.”
Under the straight-ahead style of Bookbinder and owner Peter Holt, the Spurs have tied themselves closely to the local community, smartly using choirboy players like Tim Duncan and the retired David Robinson to burnish the team’s image. Even Spurs coach Gregg Popovich seems tailor-made for San Antonio, a no-nonsense Air Force Academy graduate plying his trade in a city that’s home to five military bases.
“We aggressively market to the military, and it’s a major part of what we are about,” said Bruce Guthrie, Spurs vice president of marketing. “We have programs that sell group tickets at all the bases, and we have a program with the Air Force that brings [in] trainees who come to the city from all over the country.”
That military connection is just one of the reasons Robinson, a graduate of the U.S. Naval Academy, was so embraced during his 14-season career with the Spurs before retiring in 2003.
Other players were not as well received.
“The biggest mistake we’ve made as a franchise was bringing in Dennis Rodman,” Bookbinder said while arranging seat locations for various VIPs due in for the first game.
Rodman arrived in San Antonio for the 1993-94 season, and what became a tumultuous stint in Texas ended in 1995, when he was traded to Chicago. That started the Bulls’ run to three more NBA titles, but also marked a transition for the Spurs.
Holt, who joined the team’s ownership group in 1996 and was named chairman later that same year, witnessed a 3-15 start to the 1996-97 season that led to the December firing of coach Bob Hill and the naming of then-general manager Popovich as his successor. The coaching change couldn’t head off what became an injury-riddled season. The Spurs finished the year with a 20-62 record, though that did position them well for the 1997 draft lottery.
Good timing. The Spurs’ number came up first, giving San Antonio claim to use the draft’s top pick on Tim Duncan. An instant star, Duncan gave San Antonio its successor to Robinson as the face of the franchise.Who the fans are
A look at the fan base of the Spurs and that of their NBA Finals competitor, Detroit, according to data compiled by Scarborough Research in polling between February 2004 and January 2005.Spurs fansPistons fans Gender Men54.0%53.1% Women46.0%46.9% Age 18-3431.7%32.7% 35-5439.9%42.0% 55+28.3%25.3% Ethnicity Hispanic origin49.3%3.4% African-American9.1%25.8% Annual HH income Less than $35,00035.6%18.9% $35,000-$50,00023.8%19.1% $50,000+40.6%62.1% Market value of owned home $200K+9.2%31.2% Note: Statistical anomalies due to rounding Source: Scarborough Research 2005
While the Spurs were stocking their roster with today’s talent, they did so keeping an eye on the bottom line. Their payroll consistently has been in the middle of the league. This season’s $56 million outlay is about the same as their Finals competitor, Detroit.
Holt, meanwhile, began working to secure a new arena for the Spurs almost immediately after being named chairman. A years-long effort got its final push in June 1999 when the franchise won its first NBA title. Five months later, voters approved a referendum enabling construction of what’s become SBC Center.
San Antonio is home to just five Fortune 500 companies, so Spurs officials were forced to give careful consideration to the nature of the city’s corporate base in planning the team’s move from the massive, sterile Alamodome. The result: The Spurs built smaller, more-affordable loge boxes for the new arena.
The Spurs also adjusted their marketing to fans when they made their facility change. San Antonio is the ninth-biggest city in the country but ranks only No. 37 for the size of its demographic market area. That means the number of potential fans the Spurs can reach in their immediate market area is less than the base available to other teams, who have larger DMAs.
When the franchise played in the Alamodome, which could seat up to 36,000 fans, the team sold itself heavily on a regional basis, opening a sales office in Austin (90 miles north of San Antonio) and marketing the team throughout South Texas. When the team moved into the smaller SBC Center, it closed the Austin office.
“We just don’t have the inventory,” Guthrie said.
According to Guthrie, only 10 percent of the team’s fan base now comes from outside the San Antonio area. That’s half of what it was when the Spurs played in the Alamodome.
How the team markets to its fans in San Antonio’s heavily Hispanic market is notable, too. There are few giveaways and promotions courting the Hispanic market.
“For us, every night is ‘Fiesta Night,’” Guthrie said. “We don’t want to insult our fan base. It goes back to being good citizens.”
Together, the business elements provide a template for other small-market teams.
“Every team has three-year plans and five-year plans, and then they change them every five minutes, but the Spurs are consistent in what they do,” said Andy Dolich, Memphis Grizzlies president of business operations. “To show what is possible in our market, it’s great to have a poster child like San Antonio.”
“It flows from ownership, and Holt gets it,” said New Orleans Hornets President Paul Mott, who was assigned to the Spurs when he previously worked for the league’s team-marketing department. “They integrate well across all departments.”
Before the Spurs moved into the SBC Center, the franchise posted operating losses in the mid-1990s between $3 million and $4 million annually, losses that Holt publicly paraded to build support for a new arena.
“But we never leveraged it,” Bookbinder said. “We never said we’d move if we didn’t get a new arena, and that built loyalty.”
A half-hour hour before tip-off of Game 1, the good-citizen Spurs executives walked the arena floor, greeting longtime fans and former investors like Red McCombs and his family like long-lost cousins. Soon, the NBA’s hype machine would take over, with a pregame performance by Will Smith and singing of the national anthem by Canadian-born pop star Alanis Morissette.
If anything was going to worry Bookbinder on this day, it was that.
“You wouldn’t believe the phone calls and e-mails I get if we screw it up,” Bookbinder said, alluding to the military-inspired patriotism of San Antonio fans. “We’re kind of like the Green Bay Packers in a way: People here take a real stake in the franchise.”
Wimbledon beginsLocation: LondonTV: NBC, ESPN2
LIMAs Licensing 2005 International event begins
Location: New York City
NBA draft early entry eligibility withdrawal deadline
Texas League All-Star Game
Location: Frisco, Texas
Midwest League All-Star Game
Location: Peoria, Ill.
Opening Day for New York-Penn League, Northwest League, Appalachian League and Pioneer League
U.S. Womens Open (golf) begins
Location: Cherry Hills Village, Colo.
TV: ESPN2, NBC
PGA Tour Barclays Classic begins
Location: Harrison, N.Y.
TV: USA, ABC
Nationwide Tour Northeast Pennsylvania Classic begins
Location: Scranton, Pa.
European Tour Open de France begins
TV: The Golf Channel
Champions Tour Bank of America Championship begins
Location: Concord, Mass.
TV: The Golf Channel
NASCAR Craftsman Truck Series Toyota Tundra Milwaukee 200
Location: West Allis, Wis.
TV: Speed Channel
Sears Craftsman NHRA Nationals begin
Location: St. Louis
IHRA Western RV Rocky Mountain Nationals begin
Opening Day for Gulf Coast League
Gravity Games competitions begin (continue in July)
Location: Woodward, Pa.
IAAM Senior Executive Symposium begins
Location: Ithaca, N.Y.
OT 10 Awards ceremony
2005 Sports Illustrated For Kids No Limits Tour begins (first of 10 stops)
Location: Springfield, Mass.
NASCAR Busch Series SBC 250
Location: West Allis, Wis.
IRL SunTrust Indy Challenge
Location: Richmond, Va.
NASCAR Nextel Cup Series Dodge/Save Mart 350
Location: Sonoma, Calif.
Champ Car U.S. Bank Presents the Grand Prix of Cleveland
USA Baseball Collegiate National Team trials
Events are subject to change. Information about upcoming events can be sent to email@example.com or via fax to (704) 973-1401, attn: Ryan Baucom.
Three questions with Peter Hearl, president, Pizza Hut
What is your rationale and objective here?
Hearl: We’re big believers in being part of the community. We position ourselves as the family pizza people, and the opportunity to tie in with a sport like soccer and into a growth area in Frisco was sort of a harmonic convergence for us.
Title sponsorships are all about branding; is that something Pizza Hut really needs?
Hearl: We’re just hoping Pizza Hut Park becomes known as a place associated with fun and entertainment, and the enormous amount of youth soccer that will be played there should help us. These things are always tough to measure, but it just feels right. Our target is families with kids, and this should hit that dead on.
The word around the industry relative to Pizza Hut and sports marketing for quite a while has been “no NASCAR, no building titles.” What changed?
Hearl: There were unique opportunities. NASCAR is still growing and its appeal is enormous; our research shows a lot of moms are fans. Likewise, something like Pizza Hut Park may only come along once in a lifetime. It’s not a single stadium — it is something local that will involve kids, men, women, being involved in the whole complex, not just with MLS, with all kinds of soccer. That was important to us, and it is in a high-growth area in north Dallas. We’re looking for 1.4 million spectators or participants to go through the facility each year. If every one bought just one pizza …
Zygmunt “Zygi” Wilf borrowed $190 million to finance the purchase of the Minnesota Vikings, which he formally acquired last week.
The $600 million purchase price includes $125 million of assumed debt that the club had previously borrowed, meaning of the $475 million of equity that was necessary, Wilf borrowed 40 percent.
Sumitomo Mitsui Bank Corp. and Citigroup lent the New Jersey commercial real estate mogul the new cash, and the two banks plan to syndicate the loan later this summer. Lead banks frequently slice up loans and sell the pieces to other financial institutions, a process called syndication, in an effort to minimize risk.Wilf went to Sumitomo Mitsui and Citigroup.
The original $125 million of debt is secured by the team, and the new loan is secured by the limited partners’ interests in the club.
In addition to Wilf, the new ownership group includes his brother Mark, his cousin Leonard and two other East Coast developers, Alan Landis and David Mandelbaum. Also in the group is Reggie Fowler, the Arizona businessman who originally led the group until he was unable to come up with the cash to close the deal.
Wilf shifted into the lead role early last month, leaving little time to close against an early June deadline set in the contract Fowler signed with outgoing owner Red McCombs.
“Our challenge once the group was changed was we had 30 days to close the deal,” said Marty Klepper, partner with Skadden, Arps, Slate, Meagher & Flom, which counseled Wilf. “That is an extremely short period; you usually need 90 days. We closed it in 20 days after the NFL approval.”
For his part, a harried Wilf, speaking the day the deal closed, declined to comment on the financing and said he was still being brought up to speed on the major issues confronting the league, such as revenue sharing.
If the revenue disparity question is not settled, it could lead to a problem reaching a new labor deal.
But an NFL owner for just a few hours, Wilf gave this prediction: “I am not expecting a labor disturbance.”
Tennis magazine for the third straight year will transform part of New York’s Grand Central Terminal into a Wimbledon-themed interactive experience for three days during the Grand Slam tournament.The Tennis Magazine Wimbledon Experience in New York will run from June 28-30.
British Airways, the official airline of Wimbledon, will have flight attendants available to let any of the estimated 250,000 daily Grand Central commuters test the airline’s business class flat-bed seats. Rolex, the official timekeeper of Wimbledon, will again sponsor a fast-serve competition.
Hayes Clement, Tennis magazine’s director of marketing, would not disclose terms of the sponsorships but said they included multipage buys in the magazine from both sponsors.
The event is free and open to the public all three days from 7 a.m. to 6 p.m.
Wimbledon play begins this week.