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SBJ/August 1 - 7, 2005/SBJ In Depth
Published August 1, 2005
The executive heading NASCAR’s Hall of Fame project speaks reverently of Cooperstown, N.Y., the idyllic mountain village that is home to the Baseball Hall of Fame. He bows to the historic connections that link the NBA to Springfield, Mass., and the NFL to Canton, Ohio.
Visitors look at a Dennis Eckersley display at the Baseball Hall of Fame, which expects to have about 350,000 paying customers this year.
But, given the rare opportunity to select, rather than inherit, the locale that will host its museum, the stock car sanctioning body will break from the others, choosing from among five cities that range in size from medium to large. Idyllic villages and quaint, one stop-sign towns need not apply.
“The other [sports museums] are in some challenging locations,” said Mark Dyer, vice president of licensing for NASCAR, who is leading what he calls the “mother of all non-traditional licensing projects.” “We found that we really needed to avoid some of those challenges and apply today’s expertise in architecture and marketing and really be very careful about what we’re getting into.”
Five cities have emerged as potential hosts to the NASCAR Hall of Fame: Charlotte; Atlanta; Daytona Beach, Fla.; Kansas City, Kan.; and Richmond, Va. NASCAR executives will visit all five in August and expect to make a selection later this year.
Properly fed and cared for, a hall of fame can be a valuable piece of a sport’s marketing portfolio, a way to connect deeply to its most loyal fans: those who will take a day, or perhaps an entire vacation, to visit a place that pays homage to their passion.
But sports halls are not the open-court layup that they might appear to be. As identifiable as the Pro Football Hall of Fame is to sports fans, it drew only 181,153 paying customers last year. Six times that many people attend NFL games each Sunday during the season.
The more popular of the sports halls are baseball’s, which benefits from a fan base that reveres the game’s past, and hockey’s, which is the only one located in a major city. The baseball hall is on pace to draw about 350,000 paying customers to Cooperstown this year. The Hockey Hall of Fame, in Toronto, draws at about the same rate.
That puts them on par with the National Postal Museum in Washington, which last year drew 353,000 visitors.
Fans like to talk about traveling to sports halls the way beachgoers like to talk about buying island property. Getting them to put their money behind their mouths, in either case, is difficult.
“It’s a challenge,” said Jack Peter, senior vice president and COO of the World Golf Hall of Fame. “You have to market it and keep it fresh. You have to have it open seven days a week. It forces you to be very clever with your strategic partnerships, to work to develop licensing agreements, finding sponsor money, and really overturning every stone to see what’s available outside the strict attendance numbers.”
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“Our job is not only to draw people to Cooperstown, but to reach out to people across America from Cooperstown,” said Dale Petroskey, president of the Baseball Hall of Fame. “That’s a very different mind-set for us that we’ve taken on in the last couple of years.”
When the PGA Tour, LPGA and other golf organizations joined to create a new World Golf Hall of Fame, which would replace a PGA of America-only hall that was floundering at its Pinehurst, N.C., site, they considered the capital of U.S. tourism, Orlando. But they opted instead for a spot off I-95 in St. Augustine, near Jacksonville.
Induction ceremonies boost crowds at the Pro Football Hall of Fame, yet the attraction still welcomes fewer than 200,000 paid visitors each year.
“The plus of being sited in a large metro area is that there’s already a large number of tourists moving through the area,” Peter said. “The downside of that is that there’s a tremendous amount of competition. Arguably, not everyone who goes to Orlando plays golf.”
Not everyone in Charlotte, Atlanta, Daytona Beach, Kansas City or Richmond follows NASCAR. But those cities do all host NASCAR Nextel Cup events that attract crowds of 75,000 to 200,000. Those race dates should give NASCAR’s hall a fertile fan base, at least at its start.
Still, those who operate or interact with other sports halls respond skeptically when told of the numbers that cities have presented to NASCAR. Charlotte projects annual attendance of 400,000 — which, by the way, would instantly make stock car racing’s hall the most popular in the nation. Atlanta projects 1 million visitors a year.
“We’re taking a very sober view of financial projections and attendance projections,” Dyer said. “Nobody is going to win this thing by blue-skying the projections. They’re going to win it by us being convinced that they have the best overall chance for long-term success.”
Something new to offer
Paramount in the discussion of “long-term success” is the realization that today’s museums must be dynamic in order to remain attractive to visitors. Halls filled with relics under glass no longer suffice. Interactivity is essential. Visitors expect a different experience each time they go back.
Revising that experience costs money.
“We’re going to be very careful in working with the host city on the financial structure of this thing to make sure that we keep some money in reserve and give the facility a sound future,” Dyer said.
Similarly to other sports museums, the NASCAR hall will operate as an independent, nonprofit organization, though it will differ slightly from the others in that it will be licensed by NASCAR and carry the sanctioning body’s logo.
Though the leagues do not own or operate the museums, they are so intimately connected to them that visitors consider them to be intertwined. No sport gets more mileage out of that connection than baseball.
The Baseball of Fame has taken its Baseball as America exhibit to several museums.
It’s great for the marketing of any game, so long as visitors come away feeling good about the experience.
When the Basketball Hall of Fame became something of an eyesore in the mid-1990s, the NBA floated the possibility that it might relocate its artifacts to a town willing to build a state-of-the-art facility. After much hand-wringing and teeth-gnashing, Springfield came up with the money for a $109 million riverfront redevelopment project that included a $35.7 million structure for the hall, with $25 million coming from the state and $11 million coming from private sources, most of it provided by the NBA. The building opened in 2002.
“We recognize that how the game is portrayed in Springfield is a reflection on the NBA, whether we want it to be or not,” said Russ Granik, deputy commissioner of the NBA, who in 2003 also became chairman of the board of the Basketball Hall of Fame. “Any hall of fame that we’re affiliated with, that enshrines people that have been with the NBA, we want that to be a first-class institution.”
Keeping the museums relevant and accommodating growth typically require more money than the facilities can bring in, no matter how efficiently they operate.
Since opening in two buildings in 1963, the Football Hall of Fame has undergone four expansions or renovations that cost $602,000, $1.2 million, $9.2 million and $1.68 million. The Tennis Hall of Fame, opened in Newport, R.I., in 1954, underwent a $7.5 million renovation in 1997. The Hockey Hall of Fame’s relocation to a new building in Toronto cost $27 million in 1993. It recently spent another $5 million on improvements.
The baseball hall wrapped up a three-year, $20 million renovation with a rededication ceremony on Friday. It is the museum’s seventh renovation and the third since 1989. The World Golf Hall of Fame, which opened in 1998, already has undergone its first renovation at a cost of about $2.5 million.
“Not only sports museums, but museums in general, have a responsibility to keep the experience fresh for the visitor,” said Peter, of the World Golf Hall of Fame, “because, ultimately, you want them to come back.”
The NBA found that the basketball hall not only needed retooling, but a larger space that could accommodate exhibits that were interactive and allow for more events. The old hall wasn’t even large enough to host inductions, which had to be held at a nearby civic center.
“Our building was nicely done and it had the right number of display cases, but it was very much from a different era,” said Granik. “It’s now very interactive and fun in addition to being educational. That’s where museums have gone and will continue to go.”
Expanding and retooling typically requires money from sources outside of the hall’s regular revenue streams. Documents filed by the nonprofit organizations that run the sports halls reveal that admissions fees generate less than half of what is spent to keep the doors open each year.
The busiest of the U.S.-based halls, those honoring basketball and baseball, reported admissions receipts of $2.19 million and $2.1 million, respectively, in 2003, the most recent year for which filings were available. The pro football hall reported $1.33 million in admissions that year.
In that same year, basketball reported $4.5 million in expenses, not including depreciation. Football reported expenses of about $3.3 million, outside of depreciation. Baseball spent $8.3 million outside of depreciation, including $1 million to refurbish exhibits.
Those numbers make it clear that sports museums can’t remain viable and current based on ticket sales alone. Additional money must come in from areas outside admission — such as sponsorship, merchandise sales and donations.
“On an annual basis, outside of the infusions you need to build it and to improve it, there’s no reason why a hall can’t support itself,” Granik said. “But you have to look to new revenue sources. Sponsorship will have to be an increasing revenue source for the halls.”
Baseball’s hall generated about $4 million in 2003, including $923,246 from merchandise sales, $649,747 in dues from its membership program and $833,824 from royalties. In what should serve as a lesson for others, it generated nearly that much — $3.2 million — with its touring museum exhibit, Baseball as America. Hall executives said that figure was deceptively high because it included an additional payment from sponsor Ernst & Young. On an annual basis, the exhibit generated about $1.5 million a year.
That would stand as a handsome take for any hall. So would the proceeds from an endowment campaign that the baseball hall recently launched. Donors can participate in the endowment with a gift of $1 million, paid over five years. Thus far, the hall has engaged five donors: San Diego Padres owner John Moores, former Dodgers owner Peter O’Malley, former Astros owner John McMullen, hall Chairwoman Jane Forbes Clark and Detroit philanthropist Jack Krasula.
NASCAR is considering an endowment program for its hall. The basketball and tennis halls are among others that created endowments.
“Every great museum in the country has an endowment,” Petroskey said. “It’s a great way to protect ourselves during down times and throw off 5 percent a year in interest so that we can do the programs that we’d like to do.”
The next growth area for the baseball hall, Petroskey said, is through the Web. The baseball hall is working to expand programming offered on its Web site, developing content such as webcasts of visiting hall of famers and weekly chats that could be offered as benefits to people who sign up for membership.
The baseball hall also is discussing an expanded relationship with MLB Advanced Media that would make the hall’s site a part of mlb.com.
Getting up to speed
Dyer says NASCAR knows that, for the $100 million or so that the sanctioning body wants a community to commit to build a stock car racing hall, it will have to be more theme park than museum.
Halls know they have to keep exhibits fresh and make frequent changes to keep guests returning. The Hockey Hall of Fame recently completed $5 million in improvements.
As in all sports halls, there will be busts or plaques honoring the inductees. And there will be racing relics. Just as baseball has its no-hit balls and home run bats, NASCAR will have the checkered flag from each Daytona 500, helmets and suits worn by famed drivers and cars that trace the history of the sport.
But there also will be areas that invite fans to raise their voices and get their hands dirty, replete with the latest generation of simulators that give them an idea of what it’s like to strap in behind the wheel.
“There will be a hall of fame piece, but the entire place isn’t going to be a bunch of plaques or helmets presented behind glass,” Dyer said. “It’s going to be an entertainment attraction. It has to be. Otherwise, you wouldn’t spend this much money.”
Peter, who runs golf’s hall of fame, cautions NASCAR to tread lightly on whizbang gadgets and thrill rides, which have notoriously short shelf lives. The golf hall includes a simulator that allows visitors to break out a wood or an iron and hit into screens that replicate 40 of the world’s great courses. Other exhibits remain blissfully low-tech.
“You need to be careful about how much technology you put in front of people,” Peter said. “You don’t want to confuse them and you don’t want to have to chase technology. It’s too expensive. We have just enough video technology and touch screens to keep people engaged and interested.”
Dyer said he learned that lesson during a brief stay in the roller-coaster business in Las Vegas. Entertainment attractions draw best when they are newest and become obsolete more quickly than you expect them to. NASCAR says it hopes to counter that by developing at least one new exhibit each year, as well as building events that will attract repeat visitors.
“You can’t just plan for Opening Day and then leave it that way,” Dyer said. “You plan for the 10th birthday. If the city is still smiling and you’re still happy and you’re inviting each other out for dinner, then you’ve really done something. We’re not inheriting this, we’re creating it. So shame on us if we don’t get it right.”