SBJ/Nov. 1, 2010/This Week's Issue

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  • AARP will try to crack cause-marketing code with Jeff Gordon sponsorship

    Cause marketers dipped their toe in NASCAR’s sponsorship pool in the past, but no one was willing to take the plunge into a seasonlong, multimillion-dollar deal. That all changed last week when the AARP announced its “Drive to End Hunger” campaign with Jeff Gordon.

    The AARP’s three-year deal with Hendrick Motorsports, which is valued at $10 million to $15 million a year, could open the door to other long-term, cause-marketing deals. If the deal works as planned, it could show philanthropic groups how to recoup an investment in NASCAR.

    The AARP is paying for the sponsorship. The nonprofit dedicated to supporting people over 50 plans to bundle the car with its media assets, which includes its magazine, website, radio and TV shows, and sell them to companies interested in both exposure and supporting the AARP Foundation and its Drive to End Hunger initiative.

    The AARP hopes to recoup the investment on the car with the partnership sales, secure donations and then contribute 100 percent of all subsequent funds raised to its foundation and hunger initiative. It also hopes companies offer value-in-kind promotion of its text-to-donate campaign to support the Drive to End Hunger effort.

    Sales will be managed by Kyle Lewis, AARP vice president of business development, and Andrew Campagnone, Wunderman vice president of motorsports, who helped put the deal together.

    The AARP plans to release the paint scheme for the car in late November or early December. It expects to have no problem recouping its investment in the car or collecting donations for its effort to end hunger. It plans to set a benchmark early next year for how much of every dollar it raises is directed to fighting hunger. It also will create a Drive to End Hunger website that discloses who gives funds to the campaign and how those funds are distributed.

    “People ask, ‘Why not feed people with the money [spent on the car]?’” Lewis said. “Well, as soon as we do that, we have to refill the kitty to continue feeding people. [The car] helps to keep that flow of funds full.”

    The AARP represents approximately 38 million members. Membership costs $16 annually, but the organization earns more on royalties from offering AARP-endorsed insurance to members through its subsidiary, AARP Services, than it does on membership dues. It also manages AARP-endorsed financial products. Its annual revenue exceeds $1 billion.

    NASCAR has seen the percent of its fan base 55 and older increase from 26 percent in 2005 to 32 percent in 2009, according to Scarborough Sports Marketing. AARP executives say the issue of hunger among seniors is most severe in the Southeast, making NASCAR a logical platform to promote its new initiative.

    Though the AARP could benefit from exposure on the car — AARP Foundation logos dominated a backdrop at a press conference at Hendrick Motorsports last week — the nonprofit said it is focused on its Drive to End Hunger campaign.

    “This campaign is about solving the issue of hunger in this country. Whether or not AARP gets more business, I think, is irrelevant in this issue,” said AARP Foundation President Jo Ann Jenkins. “We’re here to raise awareness around this issue of hunger in this country and raise funds.”

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  • At Series, competitive balance is the winner


    GETTY IMAGES
    “It’s fair to say I’m enjoying
    this [competitive balance]
    immensely.”

    Bud Selig
    MLB Commissioner

    MLB Commissioner Bud Selig looked out at the field from his suite at AT&T Park during Game 1 of the World Series on Wednesday night and was blunt about what he saw.

    “The Texas Rangers against the San Francisco Giants? This was simply not possible in the late ’90s,” he said.

    The matchup of two less-heralded teams, each from baseball’s so-called middle class, was far from the dream matchup for Fox Sports and sports marketers, amplified by a TV rating for Game 1 that was down 25 percent from 2009’s New York-Philadelphia opener. But Selig said such shorter-term worries were easily trumped by a larger, more powerful statement on baseball’s competitive balance that the Rangers-Giants matchup provides.

    The Rangers began the season with the league’s fourth-lowest payroll, at $55.3 million; the Giants were ninth-highest on Opening Day, at $98.6 million.

    The San Francisco-Texas pairing, marking the Rangers’ first World Series appearance and just the Giants’ fourth since moving from New York after the 1957 season, guarantees MLB’s ninth different champion since 2001. More recently, the last 12 World Series berths have been earned by 11 different teams. Both marks surpass those for the NFL, NBA and NHL.

    “We’ve never had competitive balance this good,” Selig said. “I’ve said so often, of course, that you have to give every club and their fans hope and faith. That clearly is happening now, more so than ever. It’s my job to be impartial, but it’s fair to say I’m enjoying this immensely.”


    GETTY IMAGES
    Chuck Greenberg

    Rangers owner Chuck Greenberg, for his part, doesn’t believe his club is really part of baseball’s middle or lower class. “We’ve been misrepresented both internally and externally,” he said. “The old Rangers are gone.” But beyond his stated intent to boost payroll, making a meaningful run this winter at retaining star free agent pitcher Cliff Lee and investing heavily in upgrading Rangers Ballpark, Greenberg echoed Selig’s sentiment on the industry’s current, more egalitarian landscape.

    “You absolutely have to be smart, thorough and agile about how you go about your business,” Greenberg said. “But we’re definitely seeing more and more success stories around the league. There’s clearly now more of a premium on how you execute on your decisions.”

    The Rangers-Giants matchup additionally will likely have positive ramifications on next year’s labor negotiations between the league and the MLB Players Association. While no one expects nearly the kind of collective-bargaining rancor now developing within the NFL and NBA, the current World Series helps amplify the notion that baseball’s current economic system is far from broken and that radical surgery is not needed. Rather, more sweeping changes will likely come from other areas, such as the First-Year Player Draft.

    “I really don’t want to talk about next year, but it’s clear our system has produced what we set out to produce,” Selig said. “You look out on this field, and it’s proof of that. We said in 2000 [with the Commissioner’s Blue Ribbon Panel on Baseball Economics] that we needed to change our economic structure. That was the objective, and we have done that.”

    Michael Weiner, MLBPA executive director, concurred. “There are a number of different ways you can define competitive balance,” Weiner said, “but overall, there’s no question the current state is strong. There is definitely a sense of satisfaction on the players’ front with regard to competitive balance.”



    GETTY IMAGES
    San Francisco-based StubHub is looking at a
    potential revenue record from this year’s Series.


    StubHub milestone: The Giants’ presence in the World Series served as another major boon for StubHub, which has its headquarters just a few blocks away from AT&T Park. The last Giants appearance in the World Series, in 2002, marked a key early milestone for the then-fledgling company, as online ticket reselling was just beginning to reach mainstream critical acceptance at that point.

    Fast forward to the present, and StubHub, recently celebrating its 10th anniversary, is now owned by eBay and stands as a bona fide part of the industry establishment and a key partner of MLB Advanced Media, as the league’s official fan-to-fan ticket marketplace. Combine those realities with fervent, pent-up demand for Giants’ World Series tickets, and company officials were eyeing a potential revenue record from this year’s Fall Classic.

    The average secondary price was hovering around $800 per ticket in San Francisco, with similarly high sales volume and pricing being seen for Games 3-5 of the series in Arlington, Texas.

    “Before knowing the length of the series, it’s probably too early to make a historic comparison. That being said, we’ve seen more volume and page views thus far than any other previous World Series,” said Ray Elias, StubHub senior director of marketing and a company veteran.

    StubHub’s presence at the initial San Francisco games included a sign on the outfield wall at AT&T Park and representatives working in the Giants box office to help with order fulfillment.


    Dynamic opportunity: Russ Stanley, Giants managing vice president, noted the demand for tickets on secondary markets for the San Francisco games and considered how dynamic pricing could play into that demand. The Giants, Stanley said, had a 7 percent increase in ticket revenue this year helped by dynamic pricing, which the team tested during the 2009 season before expanding throughout AT&T Park this year. The system allows single-game prices to float freely based on a wide range of supply and demand factors.

    Stanley is quick to admit that dynamic pricing comes with a variety of emotional and public relations hurdles beyond the raw mechanics of operating the program. Those issues are even harder to handle on a national basis, given that MLB controls ticketing policies for World Series games. Still, a thought for how the system could work for the World Series existed.

    “There is such a huge middle ground between face value [peaking at $300] and what the market is actually bearing on StubHub. It’s ridiculous,” Stanley said, referring in part to a pair of prime Dugout Club seats for Game 1 that sold for $6,112 each. “Our dynamic pricing, of course, works on a much slower sales cycle than the frenzy around the Series, and obviously more on lower-end tickets, but I’m interested in how, at some point, you can capture more of what’s happening in the market.”

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  • Auction of Naismith’s rules to fund foundation


    James Naismith put down the rules
    of “Basket Ball” on paper in 1891.

    James Naismith used to tell his family, “You can’t charge for my baby.” The creator of basketball insisted that they be caretakers of the game, not profiteers.

    Naismith’s grandson, Ian, has lived by those words for all of the time that he’s held the original rules of the game, type-written in 1891 on two pages of yellowed paper.

    But in order to fund his drive to be a caretaker for the game, Ian Naismith finds himself at a place where he must sell what’s thought to be the most prized piece of sports memorabilia associated with the founding of basketball — the 13 original precepts of basketball, or “Basket Ball” as it’s written at the top of the first page.

    Sotheby’s will auction off the documents on Dec. 10 and $2 million is expected to be the opening bid, Naismith said. He expects the bidding to go up to about $10 million, and he hopes more, but an appraisal Naismith paid for in 1997 put a value of $5 million on the rules.

    Proceeds from the sale will go to the Naismith International Basketball Foundation, the charity created in 1989 to honor the founder and support the Naismith Museum in his hometown of Almonte, Ontario. Ian Naismith said the foundation has been hammered by the recession and donations have dropped by 90 to 95 percent.

    “This is our chance to drive a stake in the ground and turn the tide of youth sports,” said Naismith, who has been harshly critical of those in charge of youth basketball. “But we’ve got to have funding to do it. My grandfather was an orphan at age 9 and the way we’ve looked at it, we’re always going to put his money back into programs that help kids. We need to advance the charity to the next level.”

    The original rules are in the hands of Sotheby’s now. Naismith, who grew up as a Texas rancher and walks with limp after a stroke two years ago, no longer carries them around in a steel briefcase to keep them secure.

    But he hopes to resume what he called the Sportsmanship Tour, where he visits schools and talks to youth groups, after the sale. “I’m not slowing down,” said Naismith, 72. “This is all to honor the legacy of Dr. Naismith.”

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  • BofA orders sponsorship group by discipline, not sport

    Editor's note: This story is revised from the print edition.

    Bank of America has restructured its sports sponsorship group, replacing a vertical structure in which employees were dedicated to specific properties like baseball with a horizontal structure in which employees will work in specific areas like activation.

    “The changes represent a move toward a platform-agnostic approach to organize the bank’s sponsorship work,” said Bank of America spokesman Joe Goode, who declined to comment on specific personnel changes.

    The change comes a month after the bank named Charles Greenstein as its new global sponsorship marketing executive. Greenstein replaced Ray Bednar, who held the position from 2006 until this summer.

    Under Bednar, the sponsorship division was divided into teams that worked on specific properties such as baseball, motorsports and the Olympics. Employees within those divisions handled everything from on-site activation to hospitality to promotions against their respective sports.

    Greenstein is opting for a more integrated system that will result in teams specializing in strategy, activation, hospitality and property management. Those teams will work across all of the bank’s sponsorships.

    Bank of America’s current portfolio includes MLB, NASCAR, the PGA Tour, nine MLB franchises, four NFL teams, 12 racetracks, the Bank of America Chicago Marathon, and the Peachtree Road Race and Atlanta Half Marathon.

    Under the new structure, Cindy Nguyen, a former regional sponsorship executive, will oversee strategic sponsorships marketing, a new role that will focus on developing strategies that fit the bank’s business initiatives. Those initiatives have shifted from being focused on the affinity credit card and debit card business toward cross-selling across areas ranging from wealth management to home loans to investment banking businesses.

    Rachel Gangel will lead the bank’s activation and hospitality group. She joins the sponsorship group from the bank’s enterprise strategy and execution marketing team. She will be supported by Brian Siegel, who will develop hospitality programs designed to offer one-on-one client interaction.

    Chris Traeger, former senior vice president of football sponsorships, will serve as the bank’s property management executive and will manage all external relationships.

    Bob Williamson will serve as the business support executive responsible for the return on investment of sponsorship. He joins the sponsorship group from the banks’ global marketing and corporate affairs division.

    Lance Ballard, who was a senior vice president, and Mike Hargrave, who worked on motorsports, are both pursuing other opportunities.

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  • Fox doesn’t think Cablevision dispute will sink Series ratings

    Fox’s dispute with Cablevision is not expected to hurt the network’s World Series ratings too much, according to several network and ad buying sources.

    But the loss of 3 million New York-area subscribers could make it difficult for the network to meet its World Series rating guarantee, which sources say is between a 12.0 and a 14.0 this year, depending on the advertiser. Last year, the Yankees-Phillies World Series, which went six games, averaged an 11.7 rating, according to The Nielsen Co.

    Fox’s local affiliates went dark on Cablevision’s New York-area systems Oct. 16. The two have been negotiating off and on during the ensuing two weeks, but at press time they did not appear to be close to a deal.

    Before the World Series started, Fox expected its dustup with Cablevision to result in a 3 percent ratings drop, sources said. If the Yankees had made the World Series, that ratings drop-off likely would have been as high as 5 percent.

    “There’s a knee-jerk expectation that if you pull 3 million homes out of the No. 1 market, it’s going to be a crippling impact to your rating,” one source said. “In the big picture of 116 million homes, it’s a marginal hit to have to take.”

    Fox sold its World Series ads before its channel went dark on Cablevision. It was commanding between $400,000 and $450,000 per 30-second spot, sources said.

    Should World Series ratings fail to hit the guarantee, Fox is expected to provide make-goods elsewhere on its schedule.

    “We’re in close contact with Fox,” said Jeremy Carey, U.S. director and media buyer for Optimum Sports. “We’re confident they’ll make sure all our deals are taken care of.”

    Fox also is expecting to see a ratings drop-off from the NFL due to the dispute. The one Giants game that Fox broadcast since Oct. 16 was about four-tenths of a ratings point lower than it would have been for its national rating. The game brought a 40 percent lower rating than the local Fox affiliate typically gets in the New York market.

    For any NFL window that doesn’t feature the Giants or Jets, Fox is expecting an impact of two-tenths of a national ratings point.

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  • Geico camping out at ISC racetracks

    International Speedway Corp. has signed a five-year, seven-track sponsorship deal with Geico.

    The agreement, which is valued in the low seven figures annually, gives Geico track signage, on-site activation rights and naming rights at ISC-owned campsites. The participating tracks are Daytona, Talladega, Chicagoland, Phoenix, Homestead, Watkins Glen and Darlington. Those tracks collectively have 40,000 campsites that host more than 160,000 visitors a year.

    The multitrack deal is the first in the insurance category for ISC in two to three years. Its last partner with insurance category rights was AAA, and Coleman was the last partner to hold naming rights at ISC campsites, ISC chief marketer Daryl Wolfe said.

    “We’re proud to strike such an innovative partnership,” Wolfe said. “They’re a huge brand, a huge advertiser and a huge spender.”

    The deal is expected to help Geico as the insurer looks to increase insurance sales for recreational vehicles, all-terrain vehicles, boats and other powersports products. It will look to promote those offerings by telling NASCAR fans that Geico can save them money on more than just car insurance, said Eric Vaden of Geico motorcycle and powersports marketing.

    “Being at track and within the campgrounds provides an atmosphere where we can connect on a grassroots level,” Vaden said. “This is a great fit for Geico and ISC because our presence will be informative and fun.”

    Geico already is involved in NASCAR as the primary sponsor on the No. 13 Sprint Cup Toyota driven by Casey Mears.

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  • Knicks sell out full-season tickets


    NEW YORK KNICKS
    A wall mural outside Madison Square Garden shows
    off the team’s new campaign.

    The New York Knicks have sold out their full-season-ticket inventory at Madison Square Garden for the first time in nearly a decade, cashing in on its free agency flirtation with LeBron James and the signing of all-star Amar’e Stoudemire.

    When the NBA season began last week, the Knicks had sold more than 4,000 new full-season tickets and had a season-ticket renewal rate of 92 percent, team officials said. With an average full-season-ticket price of $131 a game, unchanged from last year, the team has increased season-ticket revenue by about $21.5 million. The team is also beginning a season-ticket waiting list, which vanished after years of futility on the court.

    The Knicks last made the playoffs in 2004 and haven’t won a postseason game since 2001. The team has had nine consecutive losing seasons, and the last time it sold out its season-ticket inventory was during the 2001-02 season.

    “There is fan engagement with the team again,” said MSG Sports President Scott O’Neil.

    The Knicks refused to disclose their total number of full-season tickets sold, but last summer the team had about 10,000 full-season tickets, so with a renewal rate of more than 92 percent and the 4,000 new fulls, the Knicks have about 13,000 full-season tickets in the 19,763-seat Garden.

    Neither NBA nor Knicks officials would disclose the specific league rankings, but the Knicks rank among the top five in the 30-team league in new full-season-ticket sales and in new revenue.

    The increase in ticket sales comes as the team rolls out a new ad campaign with the tag line “You. Us. We. Now,” which is designed to raise the profile of the team’s players. The campaign features most of the Knicks players.

    “We are putting the focus back on the players,” said Howard Jacobs, executive vice president of marketing and ticket sales for the Knicks.

    The campaign will run on the MSG Network along with a heavy digital strategy. A local print and outdoor buy is included. The KMco and CO: agencies collaborated with the Knicks on the campaign.

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  • Letters on UNC investigation stir up agents

    News that an employee of Drew Rosenhaus, one of the most powerful agents in the NFL, had been named in a document related to an NCAA investigation grabbed headlines and created a buzz in the agent community.

    But the exact nature of what the employee, Michael Katz, was alleged to have done, let alone whether it rises to the level of triggering NFL Players Association discipline, is unclear.

    In documents released to the press Oct. 22 by the University of North Carolina, Katz, the director of marketing and client services at Rosenhaus Sports, was one of three people named in letters that UNC sent to the NCAA. Those letters provided some information about UNC’s investigation of allegations that its student athletes received extra benefits from agents and others in violation of NCAA rules.

    The letters contain two sentences regarding Katz and wristbands allowing entry to a pool party, but redactions made before UNC released the documents make it hard to determine much about the allegations.


    ICON SMI
    Drew Rosenhaus said his
    employee did not provide
    benefits to college players.

    For example, one of the letters states, “Additionally (blank) received from (blank) teammate, a wristband to attend a pool party. (Blank) Unbeknownst to (blank) had obtained the wristband from Michael Katz, a known sports agency employee.”

    Rosenhaus strongly defended Katz. “At no time did my employee provide any benefits to any college players,” Rosenhaus said. “I have talked to my employee and he has assured me that the allegations are false.”

    One source told SportsBusiness Journal the actual allegation is that Katz directed one college player where to get a wristband to gain entry into the pool area of the Fontainebleau hotel in Miami Beach on the Sunday of this year’s Memorial Day weekend, rather than giving the player the wristband. Katz denied that he did even that, this source said. Attempts to verify this account with other sources were unsuccessful.

    The 19 pages of UNC documents name two other people who the school says provided benefits. According to the letters, Todd Stewart, a person tied to financial advisers, paid for hotel rooms, and Chris Hawkins, a former UNC athlete, was involved in a number of activities, including acting as a middleman for agents and financial advisers. The letters also say unnamed financial advisers provided meals.

    Attempts to contact Stewart and Hawkins for comment were unsuccessful.

    Rosenhaus represents between 100 and 150 NFL players, many of whom have close friendships with him. He is, however, disliked by many agents and several of them told SportsBusiness Journal that they wanted the NFLPA to investigate Rosenhaus.

    The NFLPA would not comment on whether it was investigating the allegation.

    The NFLPA rules hold agents responsible for the acts of their employees and prohibit agents from providing inducements to players to sign them as clients, among other things.

    But the due process rights afforded agents under NFLPA rules and those afforded student athletes under NCAA rules are vastly different. Under NCAA rules, only the university, not the athlete, is allowed to appeal NCAA discipline. Under NFLPA rules, agents have a number of rights, including the ability to appeal any proposed punishment before an arbitrator. NFLPA discipline can range from a letter of reprimand to decertification.

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  • NBA clubs may need OK for ticketing deals

    The NBA is discussing a plan that would require league approval of its teams’ deals with outside ticketing companies, a departure from its current hands-off approach, as the league looks to maximize the value of future ticketing agreements.

    NBA teams currently are free to strike their own local ticketing deals in the primary and secondary markets, but the league believes that a more centralized structure could help give its teams increased scale and traffic to drive the value of new deals.

    The issue was an agenda item during the recent NBA board of governors meeting in New York, but no formal action was taken nor timetable set. The league is expected to ask teams for their primary ticketing sales contracts as it begins gathering data on their various agreements.

    “It is about increasing the scale and leverage,” said NBA Deputy Commissioner Adam Silver. “We are exploring the issue and we want to be able to give teams other options.”

    The NBA has no leaguewide deal with an outside primary ticketing vendor and is in renewal talks with Ticketmaster for its secondary ticketing partnership.





    While the league oversees much of its
    teams’ business practices, it never has
    had full control over specific team
    ticketing deals.

    NBA teams are free to make their own outside ticketing deals, and the agreements typically include a lump-sum fee paid by the ticket vendor for rights to sell the team’s inventory. Team sponsorships can also be packaged within the deals.

    Teams increasingly are running their secondary ticketing operations on their websites through outside vendors. These deals typically include an up-front marketing fee, but also can include a data-share agreement with the teams.

    “A bunch of teams have [their own] captive secondary exchanges, but most don’t attract the traffic or sales of places like StubHub, so it becomes more of a value-add for fans,” said Jesse Lawrence, chief executive officer of TiqIQ, which aggregates ticket listings of various sports sites.

    Exerting control over which outside ticketing vendors teams do business with would not only improve financial terms of a total deal but could also mirror a more centralized model the NFL is adopting.

    The NFL is in its third year of a centralized secondary ticketing program called NFL Ticket Exchange provided by Ticketmaster. As NFL team deals expire, they are required to participate in the NFL Ticket Exchange, and the league expects to have 31 of its 32 teams exclusively in the program by 2012. The Ticket Exchange deal means that fans buying a ticket on the secondary market do so through the Ticket Exchange site, allowing the league to package the deal to Ticketmaster on a large scale while also collecting data on fans using the exchange.

    “From a fan standpoint, it allows you to provide one-stop shopping, and you can look at improvements through new technology,” said Neil Glat, NFL senior vice president for corporate development. “And while we haven’t really had a lot of issues, you want to be able to authenticate tickets. We wanted to play a more active role there, and the [Ticket Exchange] business has been growing for us at 30 percent a year.”

    Major League Baseball, through its Advanced Media company, has a league-level secondary ticketing deal with StubHub. The company serves as the official online ticket reseller of MLB.com and MLB’s 30 clubs.

    The NBA oversees much of its teams’ business practices but never has had full control over specific team ticketing deals.

    “We are a ‘state’s rights’ league and we are not looking into a team’s business, but we are trying to support our teams and help them,” Silver said.

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  • NBA enjoys the benefits of sharing

    A few years into the life of the NBA’s team marketing division, its leader, Bernie Mullin, was presenting data at a league meeting. For the first time, his group had asked the teams for the financial details of all their sponsorships. Anheuser-Busch knew how much it paid to sponsor each of its NBA teams. Now, the teams would know, too.

    When it came time to put the data up on a screen for all to see, NBA Commissioner David Stern rose from his seat and stopped the presentation. Two teams had refused to disclose information, Stern explained.

    He demanded that they leave the room.

    So was born the story that best illustrates why the NBA has succeeded where others have fallen short, convincing franchises that compete on the floor to compare notes on business matters.

    Born 10 years ago out of an assignment handed to a college professor on sabbatical, the NBA’s team marketing and business operations division — now known widely as TMBO — took flight at the insistence of Stern, armed with the clout to overcome vast initial resistance.


    NBAE / GETTY IMAGES
    Early on, the league visited Detroit to see what
    was driving the team’s ticket sales.

    “David’s edict on this was pretty simple: If you share you shall receive. And if you don’t you won’t,” said Scott O’Neil, president of Madison Square Garden Sports, who succeeded Mullin as senior vice president in charge of TMBO, running it from 2004 to 2008. “This doesn’t happen without David Stern’s commitment. They saw that and gave us a chance.

    “It was tough at first. But at some point we went from ‘What are you doing here?’ to ‘How come you’re not coming back sooner.’”

    It happened, O’Neil said, because TMBO delivered results, arming teams with data and tactics that helped them improve their business. There were misses to be sure: Recommendations on ticket prices or game presentation that turned out to be wrong for some markets; bad matches between team and league staff. But, for the most part, teams have seen the benefit of an information warehouse that dwarfs any other in sports.

    While the model of having teams share information and lean on a league for advice has worked for the NBA, it hasn’t been a system adopted by most other leagues. Only MLS has implemented a model that goes nearly as far as the NBA’s, and even it has pulled back in recent years (see related stories, Page 35).



    Early suspicions

    In the early days, many franchises viewed TMBO with suspicion. Here was the league sending staff members to review each franchise’s business operations, collecting data so they could be compared and ranked.

    It didn’t help that TMBO’s predecessor, the team services department, was best known for its prickly enforcement of league business rules, like policing conflicts between team and league sponsors and fining teams when their halftime shows ran long.

    The roots of TMBO trace back to an assignment Stern gave to Bill Sutton, a University of Massachusetts sports marketing professor who was working for the league while on sabbatical. Stern asked Sutton to review research done by the teams and compare it to data collected by the league, searching for ways they might consolidate.

    When the project took months, rather than weeks, Stern wanted to know why. Sutton explained that most teams were suspicious of his requests and some refused to share data, even after he told them he was asking at the behest of the commissioner.

    “To them, team services was the group that came in and measured how long your halftime was and how loud it was and then fined you,” said Sutton, who now co-chairs the sport management program at the University of Central Florida. “This wasn’t a department that they thought they could look to for help.”

    That began to change in April 2000, when the league hired Mullin, a colleague of Sutton’s at UMass. Stern challenged him to build the project out into a McKinsey-styled consulting arm. Sutton would work with him. TMBO not only would collect data, but also offer analysis. Each team would be assigned an account representative, who would come to know its people, its operation, its market and its history.

    The tactics that worked best — from staff size and structure, to game presentation, to ways to execute a promotion — would get the label “best practice,” a moniker that has become synonymous with TMBO.

    Initially, participation beyond the sharing of data was voluntary. A team that wanted an assessment could request one. TMBO would visit, help create a plan and implement it. The group lived by two primary rules: If TMBO offered an idea that worked, it would be the team that got credit for it; and if a team underperformed, TMBO would make sure the commissioner knew.

    “It was tough love,” Sutton said. “But it was love.”

    Mullin remembers one owner, whose team ranked low in most categories, approaching him after a presentation one year and asking what he could do to improve. Knowing Stern would back him, Mullin was frank. He told him to spend more to hire staff.

    “God bless the owner, that’s what he did and it worked,” said Mullin, who left TMBO in 2004 to run the Atlanta Hawks and Thrashers and now owns an Atlanta-based consulting firm, The Aspire Group. “It was unlike anything going on in the business at that time and we were faced with some holdouts. As people saw the value of the information that was shared back, those resistances went away rather quickly. We proved the value of the resource.”



    No magic formula

    When O’Neil went to work for TMBO in 2001, his first visit was to the Detroit Pistons. He phoned the team’s president, Tom Wilson, to arrange the dates.

    “Are you coming out here to fine me?” Wilson asked.

    “No,” O’Neil told him. “I’m coming out to learn how you do business so well.”

    When O’Neil arrived, he found a sales staff of about 50, with 20 of them working in what now is commonly known as inside sales, pitching season tickets over the phone. The Pistons paid them low hourly wages, along with commissions, and told them if they succeeded they would advance. The ROI on their pay was about 10 to 1, O’Neil said.


    SHANA WITTENWYLER

    “It was unlike anything going
    on in the business at that time
    and we were faced with some
    holdouts. As people saw the
    value of the information that
    was shared back, those
    resistances went away rather
    quickly. We proved the value
    of the resource.”
    Bernie Mullin
    Former TMBO Director

    “If I were another team,” he thought, “this is something I’d want to know about.”

    As a longtime team operator, Wilson understood that desire for knowledge might be outweighed by the fear of someone peering into their business and finding flaws.

    “If the league has my numbers and they show the owners my numbers and they’re not good, I’m going to get hammered,” Wilson said, “because I’m 18th and I’ve been telling our owner that I’m three. So there was trepidation in those days. Just human nature. Slowly but surely, that went away as people saw the benefits.

    “I think TMBO changed everything in the NBA for the better. I really do.”

    Typically, Wilson and others said, teams welcome TMBO’s help. But at times a fully revved team services model can create tension, or even resentment. Tactics that work well in many markets can fall flat in those that need the help most.

    In seven years as president of business operations for the Memphis Grizzlies, Andy Dolich saw the franchise start off as a darling and then stumble. Dolich’s résumé also includes stints as executive vice president of the Oakland A’s and chief operating officer of the San Francisco 49ers. He admired and appreciated TMBO, and says other leagues would do well to follow the NBA’s lead.

    Still, he knows the frustration that struggling teams feel when they’re searching for answers, and those coming from the league don’t seem to apply to their woebegone team.

    “No matter what level of proactivity you’re getting from TMBO, it’s pretty difficult to sit in the market I was in and be told, ‘Look at what Boston is doing,’” said Dolich, now a consultant based in Los Altos, Calif. “That’s great. But we’re not Boston. I would put our business group [in Memphis] up against a lot of others. And, yes, I appreciate that you’re going to help me. But TMBO can’t change a market. They can change marketing, but they can’t change a market.

    “Team services, purely exemplified in its most positive form with TMBO, is nothing but great for a league. But magic wands? Incredible lanterns you can rub? Thank you, but no. That we can do without.”



    Expanded focus

    TMBO operates much as it was initially envisioned, as a consulting division that assigns account representatives to work with each team and compiles data so teams can see how they compare to others. Practices that work best are outlined in detail and shared via a TMBO intranet site. The top-performing teams are honored each year at a league marketing symposium.

    Over time, TMBO’s purview expanded. After focusing on tickets for the first few years, it expanded to track sponsorships, analyze game presentation, study brands and suggest ways to better manage interaction with customers. In the last two years, under Chris Granger as senior vice president, TMBO’s focus has been on analytics that allow teams to act on information more quickly.

    What began with Mullin, Sutton and a few carryovers from the previous setup has grown to 15 account managers sharing responsibility for 58 teams across the NBA, WNBA and NBA Development League.

    “I can’t tell you the phenomenal resource they’ve been,” said Pete Guelli, executive vice president and chief sales and marketing officer of the Charlotte Bobcats, who joined the team last year after 11 years with the Buffalo Bills. “They warehouse best practices and analytics like nobody. Chris Granger has been available to us 24/7. Aaron Ryan [a TMBO account manager] has basically lived down here for the last year when we’ve needed him.

    “They’ve provided a level of comfort that we were doing things the right way, and also another set of eyes on our business that I don’t think is available to teams in most leagues.”

    Now running both the New York Knicks and Rangers, O’Neil can contrast the way the NBA and NHL interact with those who market the teams. He has made road trips with the Rangers to Montreal, Toronto, Vancouver and Chicago to better familiarize himself with the way those teams operate. He need not make those sort of fact-finding trips on behalf of the Knicks.

    “We’re an extra resource,” Granger said. “We’re there to track down data for you. To say, ‘We saw three other teams do the same thing and this isn’t going to work.’

    “We all believe that 30 of us are smarter than any one of us can be by ourself.”

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  • News Briefs


    NBAE / GETTY IMAGES
    The Prudential Center gets the nod as MSG undergoes
    renovations.

    Super Bowl ads sold out
    Fox has sold the last of the commercials for its telecast of Super Bowl XLV from Cowboys Stadium. A few spots typically remain up until the weekend of the game, but this year sales have moved quickly.


    NBA draft going to Jersey
    The NBA will hold the 2011 NBA draft at Prudential Center, moving the event from Madison Square Garden for the first time since 2001 while the Manhattan arena undergoes renovations.


    Wizards name to stay
    Washington Wizards owner Ted Leonsis said he decided not to change the team’s name, possibly back to the Bullets, citing all the other priorities he faces as the team’s new owner.


    Helios creates European unit
    Helios Partners is creating Helios Partners Europe, a new unit that will be headed by partner Chris Renner, who relocated to Paris from Beijing. The unit will focus on sponsorship sales, sponsorship consulting, property consulting and other areas.


    Names in the news
    CBS Sports’ longtime PR chief LeslieAnne Wade is stepping down to start her own media strategy and PR firm, called Wade Media Management. … Harvey Schiller, former Turner Sports and YankeeNets executive, will join the global search firm Odgers Berndtson as vice chairman and president of the sports, media and entertainment practice.

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  • NFL Network picks up AFL option

    The NFL Network has renewed its deal to broadcast Arena Football League games during the 2011 season, which begins in early March.

    According to multiple sources familiar with the deal, NFL Network picked up its option with the AFL after airing the games last season.

    It is expected that the NFL Network will air the AFL live on Friday nights from 8 to 11 p.m. ET, the same format as last year. The one-year deal also includes the AFL postseason and the ArenaBowl championship.

    The AFL has not yet released its 2011 schedule, but a source said the season will be moved up three weeks to begin on March 11, while ending with the ArenaBowl on Aug. 5.

    Terms call for the AFL to sell advertising inventory around the broadcasts, with the league and NFL Network splitting all revenue.

    The league has spent its offseason expanding into bigger markets, a strategy that appealed to the NFL Network. The league will grow to 18 teams in 2011, up from 15 last season. The league has added new franchises in Kansas City, Philadelphia, Pittsburgh and San Jose, while relocating its Bossier City team to New Orleans.

    The Oklahoma City franchise will not play in 2011.

    AFL Commissioner Jerry Kurz did not return calls for comment.

    Staff writer John Ourand contributed to this report.

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  • NFL pools $900M for labor fight

    The NFL is building a nearly $900 million lockout pool financed from the savings the league reaped by not paying non-health care benefits to players this year as well as from revenue the league is holding back from the teams, financial and football sources said last week.

    The money, $28 million from each of the 32 clubs, is in addition to reserves the league has saved that are sufficient to pay for two years of interest on roughly $1 billion of stadium debt that flows through the league, the sources said.

    The NFL’s TV contracts also require payments to the league even if there are no games played next year. The union is contesting that move, though an independent mediator delayed his decision from this month to January. The league ultimately would pay back, with interest, the money to the media companies.

    The collective-bargaining agreement expires March 3, and a potential lockout at that point could stretch into next season.

    One banking source who attended the league’s annual bank meeting in Dallas last week, where the league briefed its lenders on the financial contingency planning, said the NFL was flexing its financial muscle, though not as overtly as when the NHL several years ago outwardly required $10 million letters of credit from each of its teams as labor talks intensified with the NHL Players’ Association. In the NFL’s case, the league is in part holding back money due the clubs, rather than, as the NHL did, require teams to actively dip into their own pockets.

    “We are not going to comment on specifics of what we discuss with our bankers,” NFL spokesman Greg Aiello wrote in an e-mail. “But if the question is whether we have planned for all financial contingencies, the answer is that of course we have, as we have stated many times. Our goal and No. 1 priority, however, remain the same: Reaching an agreement as soon as possible that is fair to the players, clubs and fans.”

    The NFL recently told owners that they could lose $1 billion by next September because companies and fans would be unwilling to invest in the league because of the labor uncertainty. That figure doesn’t account for cost savings the league would enjoy from not paying players, or reflect money saved this year without a salary cap or floor.

    The nearly $900 million the NFL is planning for is spread between two pools of money. The first is the $10 million each of the 32 clubs saved in March when the teams did not have to pay non-health care benefits, such as life insurance or pension-plan payments. Under terms of the CBA, the team’s obligations to pay these benefits ceased with the expiration of the salary cap in March. The league instructed the teams to hold onto that money and not spend it, the sources said, though it’s unclear if the money is held together in one account or individually at the 32 clubs.

    The league also is in the process of holding back $18 million per club from pooled revenue that otherwise would have been paid out to them. This $576 million total, plus the $320 million, will serve as the main lockout funding for the league.

    The NFL also has built interest reserves, the sources said, sufficient to pay two years of debt from the G3 program, the NFL financing program that granted money to stadium construction.

    Part of the league’s point in putting together such substantial lockout funds is to send a message to the players union, said Bill Gould, the former chairman of the National Labor Relations Board and a Stanford University professor. Because NFL players have such short careers, players could be nervous if the league appeared to be preparing for a long work stoppage.

    “They want to put the fear of god in the union,” Gould said.

    The NFL Players Association is building its own war chest, an amount that’s now in excess of $200 million. Total assets for the union, which includes the value of the group’s building, stood at $311 million as of March 31, according to the NFLPA’s annual report.

    The union is also advising players to save part of their salaries.

    “We have been attempting to tell players and other business partners that the league has been preparing for a lockout for a long time now, so it is no surprise they are doing this,” said George Atallah, NFLPA assistant executive director of external affairs, of the NFL’s lockout funds. “It is disingenuous for them to be preparing for a lockout on one hand and to blame the lockout for any financial woes on the other hand.”

    Several NFL owners and executives last month expressed hope that the collective-bargaining agreement could be renewed before expiring in March, though privately, most labor and league sources do not share that sentiment. As of late last week, no new collective-bargaining sessions were scheduled, with the two sides seemingly far apart.

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  • North Carolina is third school to use StubHub-Paciolan alliance

    StubHub has signed a multiyear deal with the University of North Carolina to be an official sponsor of its athletic program, a key expansion of StubHub’s ticketing partnership with Paciolan.

    Electronic secondary ticketing will be integrated directly into UNC’s primary ticketing for men’s basketball beginning this season and then for football starting with the 2011 season.

    UNC is the third school to blend Paciolan’s primary ticketing with StubHub’s reselling, following Florida State and Purdue, who both launched the pairing for football this year. Those schools, like UNC, are Paciolan clients that added the StubHub service to their ticket offerings.


    GETTY IMAGES
    Secondary ticketing will
    be integrated into UNC
    basketball ticketing this
    season.

    The StubHub-Paciolan alliance was announced in August, adding an online-resale component to Paciolan’s primary ticketing systems. The deal continued StubHub’s aggressive march of the past two years into the college market. The pairing also allows StubHub to do more business in the last 48 hours before any game, when ticket listings are often discontinued and overnight ticket delivery models no longer work. Instead, the alliance is predicated on electronic, barcode-based ticket delivery.

    The UNC deal furthers that push for StubHub by bringing one of college basketball’s premier programs into the fold.

    “Chapel Hill is a market and a program that we very specifically targeted and believe is poised to deliver very substantial growth for us,” said Danielle Maged, StubHub head of partnerships and business development. “It works for us geographically, works for us given that they’re in the ACC and that’s a big play for us now too, and, of course, it works because of who UNC is.”

    Financial terms were not disclosed, but StubHub will receive a mix of online and offline assets, including venue signs, radio spots, and presence on Tarheelblue.com. The pact was struck with the aid of Learfield Sports, which owns and manages the multimedia rights for UNC.

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  • Post-NCAA penalties may be new sticking point

    What began as a combined effort by multiple sports organizations to stem the problem of agents paying college players could end up as another source of tension in the NFL labor talks. Last week, the league and the NFL Players Association were at odds over whether NFL players could be punished for what they did in college.

    The proposal arose out of talks among the NFL, NFLPA and NCAA about the problem of agents paying players, but now could potentially be an issue at the bargaining table. The NFL collective-bargaining agreement expires March 3.

    The proposal was first reported by ESPN early last week, in a story that quoted sources as saying that punishing NFL players was being talked about in “collaborative discussions” involving the NCAA, the union, the league and the American Football Coaches Association.


    DOUGLAS JOHNSON
    “The NFL has no power to
    promulgate any new rule
    regarding player discipline
    without first bargaining over it
    with the NFLPA. Moreover, any
    such rule would violate the
    terms of the existing CBA.”
    Jeffrey Kessler
    NFLPA Outside Counsel

    The union objected to that, issuing a statement saying, “The NFLPA is opposed to any penalty being imposed upon a player in the NFL for conduct relating to the receipt of benefits in violation of NCAA rules while the player was in college.”

    The NFL said that, although the league did not come up with the idea of disciplining NFL players for what they did in college, the proposal was still in play.

    “It’s in the process of being discussed and considered,” said Greg Aiello, NFL senior vice president of public relations, in an e-mail. Whether the NFL needed the NFLPA’s agreement to impose the new penalty for NFL players was “under review,” he added.

    The NFLPA strongly disagreed that the league could begin penalizing players in such cases.

    “The NFL has no power to promulgate any new rule regarding player discipline without first bargaining over it with the NFLPA,” wrote Jeffrey Kessler, outside attorney for the NFLPA, in an e-mail. “Moreover, any such rule would violate the terms of the existing CBA and therefore could not be unilaterally decreed by the league.”

    The NFL had no comment on Kessler’s remark.

    The NCAA declined to confirm or deny whether it was responsible for proposing new punishments for NFL players for acts they committed in college. “This is a joint effort among all groups,” NCAA spokeswoman Stacey Osburn said in an e-mail. “The development of any post-NCAA penalty — such as a potential financial penalty — will be considered by the NFL and NFLPA and those groups will agree upon what is appropriate.”

    Meanwhile, there is a division among people in the sports industry who represent athletes and defend their rights over whether the NFLPA should be involved with the NCAA’s efforts to enforce its rules in the first place.

    A number of NFL agents support the NCAA’s crackdown, saying privately and publicly that they cannot compete with rival agents who break rules. NFL agents Rick Smith, Jimmy Sexton and Fletcher Smith, as well as NFLPA lawyer Arthur McAfee, are part of the group meeting with the NCAA.

    But earlier this year, the NFLPA drew criticism publicly and privately from others for allowing the NCAA to send out a letter to more than 20 NFLPA-certified agents telling the agents that the union required them to meet with NCAA investigators. The letter, a copy of which was obtained by SportsBusiness Journal, was copied to Richard Berthelsen, the general counsel of the NFLPA.

    Some said the NFLPA’s inclusion in the letter was against the union’s stated mission of protecting athletes’ rights. The NCAA has been sued by current and former student athletes challenging its rules on grounds including violation of antitrust laws.

    George Atallah, NFLPA assistant executive director of external affairs, said, “We only cooperate with the NCAA where there is an overlap of rules and regulations.” The NFLPA regulations prohibit agents from providing inducements to players in order to sign them as clients and from engaging in actions that cause college football players to be declared ineligible to play NCAA football.

    Not all of the agent community is on the same page when it comes to punishing players for violating NCAA rules. One, who declined to speak on the record, said he wanted to do something about “players with their hands out,” industry-speak for college players who ask agents for money and other things.

    Most NFL agents interviewed for this story wanted other agents to be punished for violating NFLPA guidelines regarding the NCAA. But some of them questioned whether the proposal to punish NFL players would accomplish that. Most agents requested anonymity for fear of reprisals from the NFLPA or the NCAA.

    But Peter Schaffer, one prominent NFL agent who was willing to speak publicly, said a regulation that would impose punishment on NFL players could prevent them from providing information about NCAA violations. “If you are going to fine the players, it is not going to act as a inducement; it is going to act as a deterrent,” he said. “And we want players to come forward.”

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  • Share and Share Alike?

    Major League Baseball does not operate a dedicated team services division. Rather, data on local market business initiatives is regularly shared on a department-by-department basis, with executives in public relations, sponsorship, marketing and other areas meeting with individual club representatives.

    In addition to that locally oriented contact, the league every two to three years holds a series of industry meetings with team officials to discuss business issues in detail over several days. The next such session is slated for this month in Orlando.

    “There is a constant dialogue between our office and the clubs that happens within all our departments,” said Matt Bourne, MLB vice president of business public relations and a longtime NBA employee before joining baseball in 2008. “It’s really an ongoing thing for us. But there is a starting premise that each individual club knows their own local market best.”

    Ticketing is also a more unified component within baseball than in many other sports. MLB Advanced Media owns Tickets.com, which provides primary ticketing services for 13 of the 30 teams. MLBAM also holds a leaguewide deal with StubHub for secondary ticketing.




    The PGA Tour’s best practices website
    has been up and running five years.

    The PGA Tour created a best practices website five years ago that was born out of the tour’s reorganization of its tournament business affairs division. The site is broken down into different areas of emphasis: sales and marketing; operations and tournament guests; players and caddies; media and TV; and charity.

    At each PGA Tour event, a member of the tour’s staff walks the grounds and takes hundreds of photos. Those photos are then posted with text on the website, a password-protected destination for tournament directors to find the ideas that work each week — and some that don’t.

    Each quarter, Donna Fiedorowicz, senior vice president of tournament business affairs, and her team follow up with a best practices conference call with tournament directors to get more feedback.



    NASCAR teams aren’t franchises, and they don’t receive direct financial support from the sanctioning body. They are independent operators, but they do receive marketing support from NASCAR.

    In 2007, the sanctioning body created an industry services division. The eight-member team, which is managed by Jill Gregory in Charlotte, shares marketing best practices and research with track promoters and teams.

    The group develops annual sales and marketing materials, designs presentation templates and videos, and communicates opportunities around the Chase for the NASCAR Sprint Cup, Victory Lap and other programs.
    NASCAR makes much of the research it does in the sport available on a special website (nascarpartners.com) that is accessible for teams, track promoters and sponsors. Information such as ratings, attendance, business-to-business tips and licensing ideas are posted on the site.

    In addition to those efforts, NASCAR plans to develop an industry roundtable to gather ideas for strengthening operations, and it’s begun hosting town hall meetings where owners and top team executives can share best practices and discuss the sport.

    The efforts build on NASCAR’s history of funneling sponsorship leads to teams, which is one of the most overt ways it has helped teams in the past.

    “NASCAR does help,” said Rick Hendrick, owner of Hendrick Motorsports. “They do step up and have people that are coming into the sport that they can introduce to teams.”




    MLS club services focuses
    primarily on filling seats.
    Heading up Major League Soccer’s club services division is Paul Mott, the former president of the New Orleans Hornets who worked with the NBA’s TMBO operations from 2001-05.

    Under Mott’s guidance, MLS club services has grown from a staff of three to seven full-time employees and one part time. Club services focuses primarily on creating ticketing strategies for each team, and hands out advice on marketing and sponsorship, as well as general business operations. According to MLS, information is disseminated freely through the service to owners and club presidents alike.

    “If a club is anticipating making the playoffs, we might help them create a marketing strategy in August,” Mott said. “Leagues and clubs have very different ideas of how to solve problems. We strive to solve those problems with the solution that gets the best result for the club.”

    Mott also helped launch the MLS National Sales Center in May. Mott believes the center, which is located in Blaine, Minn., will become the league’s go-to resource for staffing. It offers a 45-day course that teaches proper ticket sales techniques and marketing strategies to individuals who hope to work in the league. The center has graduated two classes.

    “It’s become the training program for people who want to sell soccer,” Mott said.



    The NHL has a centralized model offering various support across league departments such as marketing, financial and ticketing.

    The league ramped up its club consulting and services division in 2007-08, under the direction of Ed Horne, then-senior executive vice president, using a model similar to the NBA’s TMBO.

    Horne left the NHL in 2009 and in an ensuing period of restructuring, the league dissolved the club consulting and services division, folding its duties and staff into other existing units. At its high-water mark, the division employed 12 staffers; now the remnants include a small ticketing department.

    Some league officials felt the club consulting and services division created confusion with other league units, requiring too many resources, and was never fully adopted by the teams. But there remain supporters of the division who wished the league had allowed it more time to reach its stride.




    The NFL shares best practices on
    sponsorship, ticketing and fan
    engagement.
    What was NFL team services is now club business development, and as the name suggests, it is more focused on revenue generation.

    More recently the league has beefed up the department, with executives like two former MSGers: Brian Lafemina as vice president of club business development, and Bobby Gallo as director of club business development and corporate development.

    The department shares best practices on sponsorship, ticketing and fan engagement, and has been counseling teams on what to do with fans and sponsors in case of a work stoppage.

    The unit reports to Neil Glat, senior vice president for corporate development, who said the group has worked with clubs to develop better fan engagement practices and packaging of tickets.

    Said Glat: “Sometimes, just attaching food or a T-shirt to a section will add more value to a ticket than ever, and sometimes you just need to reach out to a season or club-seat holder and do something like send a note on their birthday. The small things count.”

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  • Toronto’s Chairman’s Suite is latest NHL arena project offering luxury for less

    Maple Leaf Sports & Entertainment brought construction crews into Toronto’s Air Canada Centre in June to tear down the walls to 12 of the arena’s 40 platinum lounges. The demolition created a 4,100-square-foot luxury space, called the Chairman’s Suite, which officials hoped would provide more flexible buying opportunities for the club’s high-end customers.

    The final bill for construction was $2.25 million, but officials think the decision paid off. While MLSE struggled to sell nearly a quarter of the 10-person platinum lounges last year, the 120-person Chairman’s Suite has sold out for the next two seasons.

    “This was about tailoring our product to what the market was demanding, and it was clear that 40 platinum suites was too many,” said Tom Anselmi, executive vice president and chief operating officer of MLSE. “There is no doubt the premium-seating business has been impacted by the economy. Corporate Canada has been avoiding conspicuous consumption, and we are in the conspicuous consumption business.”



    MAPLE LEAF SPORTS & ENTERTAINMENT
    The 120-person Chairman’s Suite at Air Canada
    Centre has already sold out. A two-ticket package
    costs $93,000 a season.

    The Chairman’s Suite provides a similar luxury experience to the platinum lounges, which range in price from $430,000 to $455,000 annually and carry multiyear commitments. A two-ticket package for the Chairman’s Suite costs $93,000 a season and requires a two-year commitment. It includes club-level seats to all home games for the Maple Leafs and Raptors, as well as all concerts. Inside, the club features dining tables, flat-screen televisions and a la carte dining. Tickets are available in packages of two, four or six.

    The Chairman’s Suite is the latest NHL luxury project aimed at providing more flexible purchasing options for high-end consumers who are looking to spend less. In 2006, Boston’s TD Garden spent $3.4 million to knock down 10 luxury boxes and create the Heineken Boardroom space for its premium clients (see related story, Page 19). Regular luxury boxes at TD Garden run in the $90,000 to $250,000 a year range, however a yearlong subscription to the Boardroom costs only $17,000. Boardroom members are then charged a separate ticket fee for each game they attend. Food and beverage is included in the fee, and the facility brought on Heineken as a title sponsor of the room in 2007. In 2007, TD Garden sold 75 two-person memberships to the Boardroom and this year the room is sold out at 125.

    In 2008, Chicago’s United Center converted 18 midlevel suites to create the 10,800-square-foot Harris Club. Tickets for the Harris Club range from $15,000 to $17,000 and include all Blackhawks and Bulls games, compared with the arena’s exclusive Super Suites, which sell for $12,250 to $17,000 per game.

    “The motivation was simple: The manner in which people buy suites and entertain clients has changed dramatically in recent years, and we felt it was important to adjust with the times,” said Terry Savarise, senior vice president of operations at the United Center. “Our fans — including our corporate clients — have expressed a desire for more flexible and smaller options, and we wanted to provide those within the structure of our existing arena.”

    Brad Lott, vice president of sales and marketing for the Tampa Bay Lightning, said the club built the 40-person Frank Crum Club and CCM Club rooms in 2008 and 2009, respectively, after seeing the success of the 140-person Brick Wall Club. All three spaces are available for single-game booking and are booked through mid-December.

    “Some companies couldn’t commit for a full year,” Lott said, “they would rather do four or five big events.”

    MLSE debuted the Chairman’s Suite on Sept. 20 with a small opening party. Anselmi said the facility has not sold naming rights to the room, however it is looking for a potential high-end partner. With the addition of the Chairman’s Suite and the Real Sports Bar and Grill, which is adjacent to Air Canada Centre and opened in July, Anselmi said the organization has given consumers the full spectrum of hospitality options.

    “It’s a great place to watch the game,” Anselmi said. “This is about maximizing yield and repositioning inventory for changes in the market.”

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  • Toyota expanding loyalty program at tracks


    VELOCITY SPORTS & ENTERTAINMENT
    Toyota owners enjoy a little extra attention at New
    Hampshire this year.

    Two years ago, Toyota sponsorship executives and its motorsports agency, Velocity Sports & Entertainment, looked to bring one of the company’s most tested activation elements to NASCAR by offering Toyota owners preferred parking at races. Logistical issues made such an offer impossible, leading to the creation of the Toyota Owners Hospitality program.

    The alternative customer-loyalty program, which offers free food and an area to relax for Toyota owners who show a car key, has been such a major success that Toyota plans to expand it to 15 NASCAR races and add five NHRA races in 2011, said Ed Laukes, Toyota’s corporate motorsports manager.

    Through 11 races this year, Toyota has played host to an average of 1,500 guests, gathered information from an average of 615 guests who opt in for future communication and identified an average of 270 people who plan to buy a vehicle within the next year.

    Toyota of Bristol, Tenn., executives said they sold three Toyota Tundras to customers who mentioned the program when they bought their trucks, and Laukes believes that offering existing customers a positive brand experience will foster additional sales and increase brand loyalty in the future.

    2010 TOYOTA
    OWNERS
    HOSPITALITY
    MARKETS



    Bristol, Tenn.

    Charlotte

    Chicago

    Kansas City

    New Hampshire

    Phoenix

    Richmond, VA.

    Sonoma, Calif.

    Texas

    Watkins Glen, N.Y.

    “We’re a simple company and we appreciate people who are loyal,” Laukes said. “Doing things like this sets us apart from other manufacturers. We want people walking by with any non-Toyota brand — Chevrolet, Ford, Dodge — to look over and say, ‘Wow, they do something really special.’”

    Toyota will offer owner hospitality centers at Texas Motor Speedway this weekend and Phoenix International Raceway on Nov. 14.

    The company tested the program in 2009 in Bristol. It decided this year to triple the program to 13 events because of the promise the program showed in the first year and in part because of the need to reconnect with Toyota owners following this year’s recall, Laukes said.

    “In spite of everything they went through and we all went through, they just keep giving back,” said Scott Farrell, service manager at Toyota of Bristol. “We hear about it constantly from customers. The customers are just in love with it.”

    The program builds on a rewards offering that Toyota’s Lexus brand developed in Atlanta. The brand partnered with the Braves there to offer free parking to Lexus owners. It subsequently made similar offers to Lexus owners attending Florida Panthers games, the U.S. Open in New York and other events.

    Looking ahead to next year, Toyota and Velocity Sports & Entertainment, which helped develop and implement the program, are concentrating on increasing in-market communication about the program. The company hung posters in dealerships and sent e-mail blasts out to customers in dealer databases. It also placed ads on track websites and inserted information into ticket packs sent to fans.

    But Laukes believes it can do more.

    “Our expectations were higher than where we are [in terms of guests], so the biggest thing we need to work on is getting the communication out there and letting them know it’s here,” Laukes said. He added that next year Toyota will rent a plane and have it fly over racetracks with aerial ads promoting the owner hospitality tent.

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  • UNLV doc will lead off HBO Sports’ schedule


    GETTY IMAGES

    Controversial coach Jerry
    Tarkanian led the Runnin’
    Rebels program.

    HBO Sports is deep in production for its first documentary of 2011: a warts-and-all look at the UNLV Runnin’ Rebels basketball team that was a powerhouse from the 1970s through the early 1990s.

    The documentary will debut in March, on the eve of the 2011 NCAA men’s basketball tournament, which will be carried for the first time by HBO’s corporate sisters, TNT, TBS and truTV.

    HBO executives say they frequently time college basketball documentaries before the tournament, like “Battle for Tobacco Road” in 2009 and “The UCLA Dynasty” in 2007.

    The UNLV documentary will feature interviews with the team’s controversial coach, Jerry Tarkanian, and some of its better known players, like Larry Johnson, Greg Anthony and Stacey Augmon.

    HBO Sports President Ross Greenburg approved production of the documentary because of the number of characters involved and a dramatic story arc that culminated in 1990 and 1991, when UNLV played Duke in the Final Four, winning one and losing one.

    “Duke was America’s team at the time and was going up against a team of rebels, who were actually called the Runnin’ Rebels,” Greenburg said. “These kinds of arcs are what we look for in a story.”

    After producing three documentaries in 2010 — ending with “Lombardi” on Dec. 11 — HBO Sports plans to produce four documentaries in 2011, one per quarter. Greenburg would not disclose the subjects of the other episodes.

    With ESPN’s “30 for 30” series drawing attention over the past year, Greenburg remarked that the bar for sports documentaries has been raised. Still, he said the hype surrounding “30 for 30” serves to help HBO with its sports efforts.

    “The attention ESPN is getting for ‘30 for 30’ increases the appetite for sports documentaries,” Greenburg said. “Viewers are still going to come back to HBO because they know it’s going to be high-quality television.”

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  • Versus’ first 3-D game will be Ducks football

    Versus will produce its first 3-D telecast Nov. 13 when Oregon plays Cal.

    The Comcast-owned network is wrapping up negotiations with all the major distributors and expects to have agreements in place with the ones that offer 3-D, such as Comcast, DirecTV, Verizon and AT&T. As with other 3-D telecasts, Versus will produce two games simultaneously: One will be the game production that goes to Versus’ standard definition and HD channels. The other will be the 3-D telecast that will have its own cameras, production truck, directors and talent.

    “We’ve had our eye on 3-D technology since it came out,” said Marc Fein, Versus’ executive vice president of programming, production and business operations. “If done properly, it can be a cool thing and really enhance the viewer experience.”

    This will be Versus’ only 3-D telecast of the year. Fein said the network expects to roll out more productions next year, but he did not identify the properties that were most likely to get the enhanced treatment. Versus has deals with the NHL, PBR, IRL and UFC.

    Network executives identified the Oregon-Cal game as the target for the 3-D debut because college football generally rates well for the network and Oregon, which was atop the AP’s college football poll at deadline, has a strong team, leading to interest in the game.

    Plus, with the Pac-10’s media rights coming up next year, it’s in Versus’ interest to curry favor with the conference. A combined Comcast-NBC is expected to bid on those rights.

    Versus obtained this game through a sublicense from Fox.

    Versus executives plan to monitor message boards and Twitter to gauge reaction to the 3-D telecast. The network also plans to have a viewing station set up at the game.

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