MLS club alliance helps UCCS stand out A job in golf: ‘Why they came here’ What I Like: Deborah Stroman Overtime starts ‘pandemonium’ for ads Breaking Ground: Drawing Dead From the Field of Education Utah looks at getting back into Olympic mix Sidearm Sports to partner with Bleachr NFL sponsor sales begin in earnest Faces and Places
SBJ/March 7-13, 2011/FacilitiesPrint All
The Spectrum was the original hub for what is now sports company Comcast-Spectacor, whose roots go back 45 years. Now that the arena is gone — after multiple farewell games and concerts and about three months of actual demolition work — the site is being cleared for the next chapter in the Comcast-Spectacor story, a massive, 50,000-square-foot sports bar that will be the first piece of the Philly Live retail, dining and entertainment complex.
The building’s slow demise stands in contrast to Comcast-Spectacor’s quiet, steady ascent. The organization has long been a sports power in its home city, where it owns the Flyers, the 76ers and Wells Fargo Center, but in recent years it has extended its reach beyond Philadelphia through its five stand-alone firms tied to the facilities industry. It now touches virtually every aspect of the sports business.
“There is no company like it with respect to the combination of their base operation in Philadelphia and the expansion of that to arenas throughout the country, together with ticketing, food services and the like,” NBA Commissioner David Stern said.
James Robinson, managing director of Greater Philadelphia sports marketing agency Alliance Marketing Partners, who in his 25-year career has negotiated and activated $200 million in sponsorship and licensing deals, called Comcast-Spectacor “the most powerful company in sports, when you look at their total assets and the broadcasting power of Comcast.”
“But I think it is also a company largely misunderstood,” he said. “People don’t realize how multifaceted they really are.”Related content:
• Comcast-Spectacor startups and acquisitions
• Turnarounds turn into a specialty
• Comcast-Spectacor takes a pass on promoting
• Are the Flyers favored?
Comcast-Spectacor was formed in 1996 when Ed Snider sold 66 percent of Spectacor sports holdings to Philadelphia-based cable broadcaster Comcast but retained control of the operation as chairman. Since then it has grown through a series of acquisitions and startups tied to two common themes — an entrepreneurial spirit and the rock-solid relationships its key executives have developed over four decades.
Snider’s philosophy is simple, and it’s one that is echoed by every department head. “You hire good people, let them do their jobs and that’s how you really grow,” said Peter Luukko, Comcast-Spectacor’s president and chief operating officer, chairman of Global Spectrum and president of the Flyers.
Comcast-Spectacor’s deals now extend outside of Philadelphia and sports, like the naming-rights deal that Front Row Marketing Services did for this concert venue in Anaheim.
All told, Comcast-Spectacor’s business generates more than $4.5 billion annually in gross revenue, a figure that covers Flyers and Sixers income and operations at Wells Fargo Center. The number also reflects the total sales produced at every venue where Comcast-Spectacor’s facility services firms operate. It also includes all the money generated from every ticket, concession, sign, suite and club seat sold, plus the marketing of technologies supporting those systems.
What can’t be determined is how much revenue Comcast-Spectacor takes home at the close of business each day. The company is privately held, and its officials would not share net revenue figures.
Still, the top-line numbers show the depth of Comcast-Spectacor. In 11 years, Global Spectrum, its building management division, has become the industry’s second-largest facility operator behind SMG — a company that Snider helped create and then sold — with 97 accounts generating about $590 million annually in gross sales. In concessions, Ovations has grown from generating $5 million in 2000 to more than $200 million annually. Front Row’s premium seat and sponsorship sales generate $35 million a year, compared with $1.5 million when Comcast-Spectacor bought it 10 years ago.
Ticketing technology firm Paciolan, now wholly owned by Comcast-Spectacor, sells more than 100 million tickets every year through its deals with college arenas and stadiums, major and minor league sports facilities and other venues. With an average ticket price of $35, industry sources estimate Paciolan’s 501 accounts generate at least $3.5 billion in annual sales.
Separately, New Era’s deals with 35 buildings generate $18 million in annual ticket sales.• • •
Those gross numbers have grown the past decade because of Comcast-Spectacor’s ability on the facilities side to make smart decisions without overextending itself.
What Comcast-Spectacor has accomplished is far more difficult than it looks, said Rich Krezwick, president of Devils Arena Entertainment at Prudential Center in Newark. Krezwick, a Philly native, got his start in the industry as the Spectrum’s bookkeeper in 1979 and said he “grew up together” with Luukko when both worked for SMG in the 1980s.
Comcast-Spectacor essentially “grew organically from nothing, and it sounds easy that you take it slow and operate with a steady hand, but none of that is easy,” Krezwick said. “It’s hard not to be impulsive in this business — it’s entertainment, you’re supposed to have a high pulse rate. But Ed Snider and [Luukko] have a steady approach to success that has worked time and time again. I love the complexion of the company and I love the culture that Peter has created.”
It is a culture where the five firms feed off of one another. Individually, they compete for deals in their respective disciplines, but depending on the public bid process and market needs, they team up on proposals to grow business together. In a few instances, all four lines of business — facility management, concessions, ticketing and marketing — converge within the same four walls.
But that is not always the case. When a facility isn’t hungry for the whole menu, Comcast-Spectacor is happy to let it order a la carte.
“The key for us is there are also many situations where they just want arena management and already have an existing ticketing agreement or food service agreement, and that’s fine,” Luukko said. “The idea is you provide services together where you can, and separately when it doesn’t make sense, so there’s no pressure to do it all. We don’t jam ourselves in, we compete. We have competed in our own [Global Spectrum-run] facilities on food and ticketing.”
In situations where just one Comcast-Spectacor entity operates in a building, it can make suggestions for bringing its sister firms into the market to help improve the bottom line. That’s what happened at AutoZone Park in Memphis, where Ovations has run concessions since the Class AAA ballpark opened in 2000. Two years ago, Ovations President Ken Young gave Global Spectrum the heads-up when the nonprofit group that owns the team and controls the stadium required a third-party firm to run the facility after defaulting on its payments to the park’s bondholders.
“Ovations told Global there was an opportunity and that they ought to look at it,” said John Pontius, treasurer for the Memphis Redbirds Foundation. “Global found us and one thing led to another.”
Young says he knows his company will sell more hot dogs and beer at a sports facility operated by Global Spectrum.
Young, with 39 years in the concessions business, recognizes the importance of arenas and stadiums filling the gaps between games with concerts, family shows and other events to help keep those buildings in the black.
For Ovations, 25 percent of its gross revenue is tied to Global-managed facilities, mostly in secondary markets and at its seven college accounts. The rest of Ovations’ business is independent of its sister company.
“The thing that appeals to me most having Global with us [is] I can usually count on that the events are going to be there,” Young said.
“Without [upsetting] my college clients, so often they don’t worry about booking the building,” he said. “We realize that basketball, whether it’s men’s or women’s, has first right, but if Global’s going into a building, they are going to try to maximize its use. I feel real good about my [income] projections when you have somebody like that operating the facility. They just don’t want to be a caretaker.”
Having a fellow Comcast-Spectacor unit in the building can open doors, but it doesn’t seal deals. Front Row, for example, did not win deals to sell advertising and premium seats at Cleveland State University’s Wolstein Center and Comcast Arena at Everett (Wash.), two venues where Global was selected as the operator, said Dick Sherwood, Front Row Marketing’s founder and president.• • •
Comcast-Spectacor’s origins date to 1966, the year Snider and Jerry Wolman founded the Flyers and formed Spectrum Arena Inc. to build a new arena. Wolman had also owned the Philadelphia Eagles and originally hired Snider as the NFL club’s treasurer and executive vice president. Their hockey partnership did not last long — news that the two had split over Wolman’s financial woes hit the papers on the same day in October 1967 as the Flyers’ first regular-season home game. Snider took over the Flyers and Wolman took over the Spectrum. In May 1968, six months later, Wolman was forced to put the arena under Chapter 11 bankruptcy protection. Snider then bought the Spectrum, also the Sixers’ home, out of bankruptcy in 1972.
The Spectrum is history, but only after the company saluted it with a string of ceremonies and farewell games.
“Our building became very successful with two teams, all these concerts and all the other events, and people [from other teams] kept coming to visit us to say, ‘Well, how do you do this, how do you do that?’” Snider said. “Finally it occurred to me, we are giving all this information away for free, why don’t we own a management business? At that point I started Spectacor Management … the successor of all this is SMG, which we started.”
In 1977, separate from the Flyers and the Spectrum, Snider formed SMG with partners Aramark and the Pritzker family, owners of the Hyatt hotel chain. SMG, a pioneer in the business of privately managing public facilities, grew over the years to a firm that now operates about 200 buildings worldwide. Luukko started at SMG in 1985 and soon became general manager of the Los Angeles Memorial Coliseum and Sports Arena and vice president of the company’s Western region.
Eight years later, Snider turned to Luukko to become president of the Spectrum and expand Snider’s holdings apart from his investment in SMG. “Ed came to me and said, ‘I can tell you’re an entrepreneur and I need you to be one’ … which was great advice,” Luukko said.
Construction of CoreStates Center, now Wells Fargo Center, started in 1994 and it opened in 1996.
The terms of the merger had Comcast headquarters in downtown Philadelphia taking financial control of Comcast-Spectacor with Snider’s group at the sports complex maintaining total control of the operation.
Together, they also launched Comcast SportsNet with some of the same television executives that founded Snider’s old Prism, one of the country’s first pay-per-view sports channels in the 1980s.
In 1997, with his plate full in Philadelphia, Snider parted ways with SMG. Comcast-Spectacor sold its one-third share back to SMG and signed a two-year noncompete clause that prohibited it from bidding against its former partners for building management deals.
Nobody except maybe Luukko thought they would get end up back in the game of operating arenas and stadiums outside Philadelphia.
“We had our hands full taking on the Sixers and building the arena, and we had two arenas to book and the new sports network,” Luukko said. “Once we got our hands around all that, with the teams heading in the right direction and the network doing well, we figured our growth was limited in Philly. Owning two pro teams in one city is enough [and] we certainly knew building management back from the Spectrum and SMG.”
In January 2000, soon after its noncompete expired, Comcast-Spectacor announced it had formed Global Spectrum after acquiring a small facility management firm, Globe Facility Services. Globe’s co-founder, Mich Sauers, knew Snider and Luukko from his days working at the Spectrum and SMG and had called up Luukko one day after Globe signed a deal to run a new arena in Trenton, N.J., not far from Philadelphia. Their conversation steered toward joining forces to develop a larger company to compete against SMG and other firms.
Comcast-Spectacor’s resources, talent and knowledge of the industry were keys to making the deal. “All those things made it an easy decision for me,” Sauers said.
NEW ERA TICKETS
Comcast-Spectacor launched New Era Tickets to compete more fully in the market.
“We thought it would be important for us to make these companies self-sufficient so they would have the latitude to pursue situations individually,” Luukko said. “What you’re doing is creating more value with four separate companies as opposed to one.”• • •
Ticketing was key, Luukko said. Eight to 10 years ago, the advent of selling tickets over the Internet made it more cost effective to invest in the infrastructure required to run a ticketing system. Most important, Comcast-Spectacor officials had difficulty accessing Flyers and Sixers customer data kept by Ticketmaster. It was that “disconnect” between the two parties over who controls that valuable information that ultimately drove the decision to form New Era, Luukko said.
The addition of Paciolan increased business exponentially for Comcast-Spectacor. It had bought a minority share in Paciolan in 2003, the same year it launched New Era Tickets. Five years later, Paciolan sold its business to Ticketmaster. Comcast-Spectacor maintained its interest in Paciolan, creating an odd pairing with two ticket firms becoming co-owners of a third competitor.
That changed in dramatic fashion in January 2010. Comcast-Spectacor gained full ownership of Paciolan after Ticketmaster was forced to relinquish its primary share under terms the Department of Justice set up to approve the Ticketmaster-Live Nation merger.
The federal government’s decision provided a windfall for Comcast-Spectacor, considering Paciolan’s dominance in the major college market. Of Paciolan’s 104 college deals, all are Division I level in basketball and 71 are Football Bowl Subdivision programs. Paciolan and New Era combine to sell more than 200 million tickets a year, positioning Comcast-Spectacor’s two subsidiaries as the sports industry’s second-largest ticketing providers behind Ticketmaster.
For Paciolan, whose business model gives teams and facilities the freedom to brand their in-house ticketing systems using Paciolan’s technology, moving to Comcast-Spectacor has resulted in greater client retention, said Dave Butler, Paciolan’s president and CEO. When Ticketmaster owned Paciolan, its strategy was to move Paciolan clients over to Ticketmaster’s core platforms, Butler said.
“One of the beauties of Comcast-Spectacor is that each of the entities gets to operate as an entrepreneurial business and not lose that market focus that has made us all successful, yet we all get to leverage the strength of [corporate] overall,” he said. “Candidly, the proof of the pudding is in how well things are going for us under the Comcast-Spectacor umbrella. We have brought in three new clients in the last two months and renewed 40 clients in the last 11 months. I think it’s the best of both worlds.”
Philadelphia Union officials would agree. The MLS club spoke with other operators before hiring Global Spectrum, Ovations and New Era Tickets. Officials assured the Union their new stadium would rank second to none for delivering a world-class experience, said Nick Sakiewicz, the team’s CEO.
“Our fan surveys were off the charts in terms of customer satisfaction,” he said. “They knocked it out of the park.”
Sakiewicz, a former AEG executive, would not identify who else the Union spoke to about running PPL Park. Presumably, those talks included AEG, a company whose owner, Phil Anschutz, was a founding investor in MLS. On its own, AEG Facilities has grown quickly in its first three years of operation by leveraging AEG Live, its event promotions division, to guarantee concert dates in return for big league arena booking and marketing deals. In other cities, AEG invests millions in exchange for contracts extending beyond the normal five to 10 years.
The business models for Global Spectrum, SMG and AEG Facilities vary widely, making room in the industry for all three companies, said Krezwick, who was formerly with AEG Facilities’ East Coast operation. Global and SMG for the most part focus on secondary markets.
“AEG is a content-producing company with terrific marketing and sales capabilities,” Krezwick said. “On the SMG side, you have a very good operator with a long history. In the middle, you have a very good realistic choice in Global Spectrum that offers a lot of what both companies offer and an all-in-one solution by offering food, ticketing and management services.”• • •
What does the future hold for Comcast-Spectacor? In Philadelphia, more upgrades to Wells Fargo Center. Brisbin Brook Beynon, the Toronto architect designing Madison Square Garden’s $800 million renovation, is studying a reconfiguration to the Philly arena’s club seats and new standing-room areas in the corners of the upper deck supported by trendy bars and concessions stands. There is no timetable for when those improvements will begin, Luukko said.
Elsewhere, Global Spectrum, Ovations, New Era and Front Row continue to develop new business. Global has a signed three-year contract to manage and book events at Southern Cal’s Galen Center, a few miles down Figueroa Street from AEG’s Staples Center. The school was Paciolan’s first account 30 years ago, and those longtime ties, coupled with inroads made by John Page, Global Spectrum’s chief operating officer and a former USC offensive tackle, helped secure that deal, Butler said.
Internationally, Global Spectrum is working with business partners to develop new arenas in France and China that it will operate, Sauers said. In Scottsdale, Ariz., Ovations is in the first few weeks of operating food and retail concessions for a new spring training ballpark shared by the Arizona Diamondbacks and Colorado Rockies. Paciolan continues to renew its college deals, the latest one at the University of Kansas, an extension announced in mid-February.
To expand further, Luukko said, Comcast-Spectacor could return to minor league hockey, a space it left when it sold the American Hockey League’s Philadelphia Phantoms in 2009. The club, the Flyers’ top affiliate, played most home games at the Spectrum before relocating to the Glens Falls (N.Y.) Civic Center.
The United States Hockey League, a junior amateur league in the Midwest, is one possibility, Luukko said. His son Nick plays for the USHL’s team in Dubuque, Iowa, where his father travels to see him in action.
“We think that’s a great product and is only going to grow,” Luukko said.
Comcast-Spectacor may also dive further into technology beyond what FanOne Marketing now provides teams with its CRM platforms, maybe working with Comcast itself to develop new applications for mobile devices to improve their interaction with fans, Luukko said.
Whatever it is, Comcast-Spectacor will continue its methodical approach to build all lines of business for the long term, with Luukko most likely taking over for Snider as Comcast-Spectacor’s CEO after the 78-year-old boss announces his retirement. Snider has yet to say when he will step down, but when the time comes he plans to recommend that Luukko take the reins (Comcast officials will make the final decision). With that, the culture of independence they both developed for success in the sports facilities industry would continue uninterrupted.
“We’re not an organization that rolls up businesses through acquisitions only to look for an exit strategy,” Luukko said. “We’ve become a very big company, but we still have that entrepreneurial spirit of a great mom-and-pop business.”
COMCAST-SPECTACOR expanded from its Philadelphia base through a string of acquisitions and startups
■ Breaks into ticketing, forming New Era Tickets, a firm headed by Fred Maglione, the Sixers’ former director of sales and marketing. Also buys a piece of Paciolan, of which it gained full ownership in 2010.
Snider: "I think people say that because I created the Flyers and it's like my baby."
Snider owns both teams and Luukko is president of the Flyers and oversees the Sixers. The Flyers’ recent success on and off the ice and the Sixers’ struggles to win games before half-capacity crowds at Wells Fargo Center perpetuate the notion that they are hockey guys.
But it’s simply not true, according to Snider.
“I care about both teams,” Snider said. “I think people say that because I created the Flyers and it’s like my baby. That doesn’t mean I don’t the want the Sixers to win just as much as I want the Flyers to win. It just means everyone associates me with hockey. It’s understandable when people say it, but they don’t really know. I know, they don’t know.”
On top of that, hockey is Luukko’s favorite sport and he plays early morning pickup games on the Wells Fargo Center ice with employees and Flyers sponsors. Plus, his teenage son Nick was drafted by the Flyers in 2010, plays junior hockey in Iowa and earned a scholarship to play at the college level this fall at Vermont.
“Listen, Ed gave birth to the Flyers and mortgaged his house to get the franchise, so it has to have a special place for him,” Luukko said. “Frankly, I spend more time with [the Sixers] when things aren’t as good as they are right now.”
Things are getting better for the Sixers under new team President Rod Thorn, and Snider has done his part to get fans in the arena. This season, the club has given away 48,000 free upper-deck tickets to local schools, the same thing the Flyers did early in their existence, said Lara Price, the Sixers’ senior vice president of business operations.
Don’t tell Rich Krezwick that Snider doesn’t care about the Sixers. Krezwick, now president of Devils Arena Entertainment in Newark, used to host Snider and Luukko for Sixers-Celtics games when Krezwick operated the Boston arena.
“They sat 10th-row center, reacting passionately in front of 19,000 Celtics fans,” Krezwick said. “That takes courage.
“It’s the old cliché: Do you have a favorite child? No, you love each one differently.”
Global Spectrum helped the owners of the Memphis Redbirds restore financial order.
In Memphis, the nonprofit group that owns the Class AAA Redbirds and AutoZone Park and ran the stadium hired Global Spectrum in July 2009 to manage the facility after defaulting on its obligation to pay off the bonds sold to finance construction.
“We built the park first class and spent a ton of money and incurred a lot of debt,” said John Pontius, treasurer of the Memphis Redbirds Foundation. “Then, after the newness wore off and the attendance dropped a little bit, the business model would not support that level of debt.”
Halfway through Global’s three-year contract, foundation officials think they can dig out of their hole on the $72 million park. Private equity firm Fundamental Advisors bought the outstanding bonds last fall, a move that could serve as a bridge to sell the team, Pontius said.
Global Spectrum did its part to restore financial order by doing things as simple as improving the quality and timeliness of the park’s accounting records and determining which facility upgrades could be made without piling too much onto the park’s existing debt.
“When you operate in financial distress, you take a lot of shortcuts,” Pontius said. “They helped us rationalize some of the steps we were taking and brought credibility to what was otherwise a contentious relationship between the foundation and the bondholders.”
Comcast-Spectacor rolls up its sleeves and goes to work on most aspects of running sports facilities. One area where it lets someone else do the heavy lifting is providing content.
The company takes a pass on spending large sums of money to buy the concert tours and family shows that help keep its arenas and stadiums busy and profitable between games. It prefers to leave that business — and the risk that goes along with it — to the specialists, national promoters such as Live Nation, AEG Live and Feld Entertainment, plus the smaller regional firms that bring those events to the secondary and college markets where Global Spectrum and its sister companies have carved out their niche.
“Our feeling is that we have a great working relationship with Live Nation and AEG when it comes to the shows, and we don’t feel it’s necessary for us just to be bidding up tours against the people we work closely with,” said Peter Luukko, Comcast-Spectacor’s president and chief operating officer. “Our idea was to be ‘Switzerland’ and be neutral and work with everybody, and it’s been successful that way.”
Global Spectrum does work with its clients to determine whether it makes sense for the building owner to share in the risk to buy an event, whether it is a concert or a home show at a convention center, said John Page, Global’s chief operating officer.
“We are not looking to be a promoter per se, but we do want to control our own destiny,” Page said.
In an aggressive push to compete for recruits with the league’s 15 other members and the strong college baseball programs in Florida, the Tampa institution has invested $33.5 million to build new venues this year for football, basketball, baseball, softball and soccer.
The new baseball and softball stadiums opened the final weekend in February to rave reviews from donors and former USF players, said Bill McGillis, South Florida’s senior associate athletic director. Construction costs were $6 million and $4.2 million, respectively.
JASON ROBERTS / USF
A new $4.2 million softball stadium is among the USF sports facilities making their debut.
In addition, each ballpark has two hospitality pavilions at concourse level that can hold up to 75 people. The baseball facility has about 1,600 chairback seats between the dugouts and a capacity of 3,211. The softball venue is about half that size and has 800 chairback seats.
Capturion Network, a scoreboard maker near Hattiesburg, Miss., produced the video screens for each facility at a combined cost of about $800,000, McGillis said. Both boards have the flexibility to be used for movie nights on campus.
The football practice facility was to open last Thursday for the first day of spring drills. There are three full fields, two with grass surfaces and one laid down with FieldTurf. A fourth, 50-yard FieldTurf surface is designed for pro day combine-style activities.
The soccer stadium will open in April. The team benches form the first row of the facility’s 2,000 permanent seats, a design similar to some of the new Major League Soccer facilities where fans can reach out and touch the players, McGillis said.
A $9.5 million basketball practice facility will open in May or June with separate gyms for the men’s and women’s programs.
The athletic department is waiting for the school’s board of trustees and the state’s board of governors to approve financing this month for a $35 million upgrade of the 30-year-old Sun Dome.
The arena renovation includes building an event-level club for students only on the facility’s west end, a design element USF officials think is unique in college hoops. The 2,500-square-foot space would be open for pregame, halftime and postgame and most likely be alcohol-free, McGillis said.
Men’s basketball attendance averaged about 5,000 last season, and that included about 500 students. The club is part of an effort to improve student attendance and help set the tone for the entire building, McGillis said.
Favorable market conditions for labor and material prices drove South Florida’s decision to build the five facilities at the same time.
“If we had done this 24 months earlier or later, it could have added another 25 percent in costs,” McGillis said.
Populous is the design architect for all USF projects.
KING CONNECTION: The renovation of Ed Smith Stadium in Sarasota, Fla., spring home of the Baltimore Orioles, provided the first opportunity for developer Janet Marie Smith and architect David Schwarz to work together on a project, but it wasn’t the first time their paths have crossed.
They met on “Larry King Live” on CNN in the early 1990s. Schwarz had completed work on The Ballpark at Arlington, now Rangers Ballpark. Smith had overseen the planning of Oriole Park at Camden Yards in Baltimore. King had both on his program to talk about trends in ballpark development.
“We’ve been around each other for more than 15 years,” Schwarz said.
Don Muret can be reached at email@example.com. Follow him on Twitter @breakground.
The total compensation of International Speedway Corp. CEO Lesa France Kennedy increased 21.8 percent to $937,356 in 2010, even as the company reported a 19.3 percent decline in net income, excluding discontinued operations, during the same period.
Roger VanDerSnick, ISC’s former executive vice president and chief operating officer, earned the highest compensation at ISC in 2010. His $1,019,906 compensation nearly doubled the $539,760 he earned the previous year. He left the company last August during a restructuring.
ISC Chairman Jim France earned a total compensation of $489,383. ISC President John Saunders earned a total compensation of $811,321.
ISC reported net income for the year ending Nov. 30, 2010, excluding discontinued operations, was approximately $73.2 million, or $1.52 per share. That was down from $90.7 million, or $1.86 per share, for fiscal year 2009. Its share price dropped from $27.55 to $23.69 for the year. It was trading at $27.93 midday Thursday last week.
Greg Estes, who manages the Intrepid All Cap Fund that returned 19 percent over the past year, recently told
TheStreet.com that he expects NASCAR to make a comeback and is investing in ISC and Speedway Motorsports Inc.
“The sport itself has been through a cyclical bottoming out, and we look for an improvement in admission at various races,” Estes said.
International Speedway Corp. this week will become the first motorsports operator to allow fans to use PayPal to buy tickets.
The company is incorporating a new feature into its track websites that enables fans to buy tickets using eBay’s online payment company. It also is adding an instant-messaging feature that allows fans to chat online with an ISC customer service representative.
Both elements are part of an effort by ISC to make ticket buying more flexible and easy for customers. ISC owns 12 tracks that host Sprint Cup Series races.
“We found the complexity around the [ticket] offerings we have for new fans is much more difficult than if you’re buying tickets for a baseball, basketball or football game,” said Craig Neeb, ISC’s chief information officer. “We wanted to add the ability via chat to reach one of our customer service agents to help with transactions.”
The partnership with PayPal was developed over the last 60 days. The idea for working with the company came from ISC Chief Executive Lesa France Kennedy, who used the service last year for some online holiday shopping. She asked the ISC staff if the service could be used to buy race tickets. ISC was able to integrate PayPal into its purchase process relatively quickly because it’s one of the few sports enterprises that still manages its own ticket sales rather than relying on Ticketmaster or another outside party.
Fans who visit ISC track sites as of next week will see PayPal as a payment option alongside Visa, MasterCard and other payment offerings. PayPal allows customers to make secure money transfers through the Internet from their bank account or credit card. It doesn’t cost the user anything to use the service, but PayPal will receive a small percentage of the ticket sale from ISC.
ISC also rolled out a pilot live chat program on its ticket sales site ahead of the Daytona 500.
ISC first rolled out a pilot, chat program on its ticket sales site ahead of the Daytona 500. It offered live chats with visitors starting Feb. 1 and completed 1,500 chats over the course of the month. It converted more than 10 percent of those sales immediately.
Neeb said he expects the chat function to help ISC convert more visitors into ticket buyers. He also anticipates that the company will be able to improve its site and ticket offerings by analyzing the questions visitors ask. “It’s another avenue to get consumer insight,” Neeb said.
Though ISC has managed its own ticket operations for years, Neeb said the company has begun talking with ticket providers about taking over ticket operations in the future. Ticketmaster and Outbox Enterprises, a joint venture launched by AEG, are two of the biggest ticket providers. Neeb said that ISC is more comfortable with the idea of partnering with one of those companies today because they offer more control over communication with ticket buyers and information about ticket buyers.
“What we’ve seen in the last 10 years we’ve been on our own system is a transformation in a lot of the ticket providers’ new technology,” Neeb said. “If there is a partner who can offer the same base level service we’re providing today, we’re up for looking at that. It’s a change in that we’ll have a partner, but not in terms of who owns the customer or how the customer is treated.”