SBJ/20100802/This Week's News
49ers bring in Legends for premium space consulting; could partner for suite sales
Published August 2, 2010
The San Francisco 49ers, looking for guidance on pricing and positioning premium seats at their proposed stadium, are turning to an unlikely source: a subsidiary of a longtime rival, the Dallas Cowboys.
Since February, Legends Hospitality Management, a firm co-owned by the Cowboys, has been consulting with the 49ers to develop suites and club seats for their proposed $937 million facility in Santa Clara.
“They are helping us brainstorm a lot of different things to help us figure out the strategy around pricing for premium seating,” said Paraag Marathe, the 49ers’ vice president of football operations. “They have exceeded our expectations, and we are very pleased to be working with them.”
Legends Hospitality Management, a joint venture involving the Cowboys, the New York Yankees and two private equity firms, has a premium sales division that includes executives initially responsible for selling Cowboys Stadium’s 300-plus suites and 15,000 club seats.
After Cowboys Stadium opened in 2009, Legends and its 40-person marketing staff shifted its focus to help other teams develop stadiums in the pro and college ranks. The 49ers are Legends’ first major league client in premium sales.
The deal contains an option for Legends to partner with the 49ers’ sales team to sell suites and the club seats connected to the Stadium Builders License program the team established in 2007 to help pay for construction.
The 49ers are responsible for paying more than $800 million in project costs, with the city of Santa Clara providing $114 million after voters approved using public money to pay for the stadium.
That $800-plus million, which includes $330 million from the sale of SBLs and naming rights to pay for construction, is no small chunk of money to raise in a still shaky economy. So the 49ers turned to the same sales team in Dallas that led a seat license program that generated an unprecedented $300 million in upfront cash, which helped Cowboys owner Jerry Jones pay for his $1.2 billion palace.
The 49ers had discussions with several firms specializing in marketing premium seats before hiring Legends. Keeping in mind the challenge ahead, 49ers officials had no qualms hiring a firm co-owned by an NFL competitor, Marathe said.
“A lot of the other companies that are out there in this space have either worked for or have direct experience with other clubs as well,” he said.
The Cowboys’ Joneses and the Yorks, who own the 49ers, have known each other for several years and have a good relationship, according to Legends CEO Mike Rawlings.
“The Yorks are great leaders and they want to do exciting things like the Cowboys did,” Rawlings said. “They expect us to be very innovative with this being a big project for the 49ers and California.”
Al Guido, Legends’ vice president of sales, who previously served as the Cowboys’ sales manager, is the group’s point man in the Bay Area with support from two Legends sales representatives.
Sources familiar with the deal say Legends would not have agreed to work with the 49ers if they were not allowed to sell premium seats and share in that revenue stream.
“Assuming that we do use Legends, it would be a partnership as opposed to them coming in and taking it all over,” Marathe said.