SBJ/March 7-13, 2011/Opinion

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  • Cartoon: Spare a dime?

    Cartoon

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  • In case you missed it …

    Don Garber said recently that ESPN’s “SportsCenter” should cover MLS more. Garber told FanHouse, “I believe we have earned a lot more than we’ve been getting from ESPN. We’re not saying, ‘Cover us because you’re a partner of ours.’ We’re saying, ‘Cover us because people care about Major League Soccer and want more information.’” He noted decisions on “SportsCenter” are made not by soccer proponent John Skipper (ESPN’s executive vice president of content) but “by editorial guys who are looking at video, the coordinating producer, who’s making a decision.”

    Garber’s remarks reminded me of a conversation I had recently with someone in NASCAR, who complained about the placement and amount of NASCAR coverage on “SportsCenter” and pointed to the editorial and production team behind the show. As he said, “They’re not fans of NASCAR. Even the people ESPN put in charge of the programming of the sport are not really NASCAR fans. Face it, they are stick-and-ball fans, and that hurts us.”

    So some of these “editorial guys” and producers to whom these executives refer are possibly the most below-the-radar, influential people in sports television.

    Watch closely how Maple Leaf Sports & Entertainment continues to grow its business. I remember CEO Richard Peddie nearly 10 years ago saying the company “had run out of runway” in its traditional revenue streams of tickets and sponsorship. It has been forced to innovate, and one should note the early success of the company’s Real Sports Bar & Grill, which is adjacent to Air Canada Centre in Toronto and owned and operated by MLSE. It’s been filling the house since opening in June, touts the latest technology, and has drawn both young and old, men and women. MLSE is considering starting similar venues elsewhere in Canada and in the U.S., and while I’m not as interested in this as a trend in the themed restaurant business, which is littered with failure, I admire MLSE for improving a worn-out concept and developing a new and potentially lucrative revenue stream.

    We write frequently on the “mature” facilities environment in the U.S., but here’s one area that teams are mining: spring training facilities. Look at what the MLB Diamondbacks and Rockies collaborated on in Arizona with their Salt River Fields at Talking Stick complex, which has received raves from management, players and media. Look at the Orioles’ $31.2 million renovation of their spring home in Sarasota, Fla., where the ever-talented Janet Marie Smith breathed new life into a tired complex and has given it an identity and personality that fit the team. Next year, look for more innovation in Florida as the Red Sox open a mini-Fenway, followed in 2013 or ’14 by the Cubs’ $85 million project in Mesa, Ariz., with a Wrigleyville West development to follow. You can see where the market is heading in terms of improving the fan experience and generating new revenue.

    Sports continues to have a good story to tell, especially when you look at some of its competitors for hearts, minds and eyeballs. Exhibit A: The Oscars, in a bid to jump-start interest among younger demos, went with youthful hosts, Anne Hathaway and James Franco. It didn’t juice viewership, as the Oscars were down 9 percent from last year. One of the biggest TV events of the year, the Academy Awards averaged 37.9 million viewers, a solid number until you realize that nearly 75 million more viewers watched Super Bowl XLV, which averaged 111 million viewers. Exhibit B: We know the challenges surrounding the live-event business, and Live Nation reported some tough numbers last week: Ticket sales to concerts were off 10 percent, while arts and theater sales were down 12 percent. On the flip side, sports ticket sales were down only 1 percent.

    Abraham Madkour is executive editor of SportsBusiness Journal.

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  • Are team furloughs worth the pain?

    Daniel Kaplan’s recent SportsBusiness Journal article, “Jets prepared to begin furloughs,” [Feb. 21-27 issue] was shocking to me. According to the article, the New York Jets will begin furloughing employees if the NFL and the NFL Players Association do not reach a new collective-bargaining agreement. The terms are such that each of the team’s 158 employees must take one week of unpaid absence for each month the CBA is not signed.

    While I’ve never run a professional sports team, I have more than 16 years experience running marketing programs and customer care initiatives for top brands. When a product changes and the customer experience is impacted negatively (such as the NFL season changing), more staff is needed, not less. During a lockout, the Jets will now have fewer employees doing more work, and getting paid less.

    How much money will this furlough tactic save anyhow?

    Back-of-the-napkin math: With 158 employees earning $100,000 each (which is likely high), and then one-52nd of that for an unpaid week, the Jets will save about $300,000 per week.

    What about the hard costs (money) and soft costs (man hours) of such a tactic?

    Marketing communications: The team will need to send communications to ticket buyers outlining how refunds work, what scheduling changes are, etc. If a direct mail and e-mail communication needs to be developed and distributed, a staff of account people, creatives, Web folks and a production team will be needed, at minimum. Anything with a schedule will need to be modified and reprinted.

    Call center: Thousands of fans will be calling customer care asking what is happening. A training manager will need to develop frequently asked questions and answers to all these questions, and the call center will need to be trained and ramped up substantially.

    Ticket sales: This group will need to provide refunds or credits to ticket buyers, reissue tickets, etc. Those in premium sales will need to find clever ways to make good with top clients.

    Sales: Reps who sold space on stadium signage and in game-day programs, negotiated with TV and radio networks, and created partnerships with soft drink and sneaker companies will need to manage clients wanting money back. Sales reps will be spending their days mending relationships and providing assurances to clients that all is well (which it won’t be). When sales start up again, it will be even tougher, because clients will expect better deals due to reduced viewership.

    Information technology: The IT staff will spend most of their days updating systems to work based on the above requirements.

    Human resources: Those working at a professional sports team do so for the excitement, prestige and passion, not the money. If they receive pay reductions, it is inevitable that a percentage will seek better paying jobs. HR will then need to go through the time-consuming process of replacing employees who left, interviewing candidates to hire the right people. Plus, there will be countless unproductive hours spent by employees bantering about their unpaid vacations. This will hurt morale that HR will need to mend.

    All of this work described will need to be done with less staff (those furloughed, plus those who left).
    Meanwhile, the team is saving money in player salaries. Football players aren’t paid during a lockout or for unplayed games. So, if the players are not paid, doesn’t the team have more money to pay their front office staff?

    Since the New York Jets pay about $3.6 million per game in base salary to players on their roster, wouldn’t it make sense to take the savings and pay the furloughed 158 front-office staffers their $300,000 a week and let them work? This amounts to 8.3 percent of the money saved on one game of athlete salary. The team can use the remaining $3.3 million to pay for resources discussed above. To me, it is shocking that any team would take its year-round staffers who are now going to be working even harder, with fewer hours, and reduce their pay. I just don’t get it.

    But then again, I’m just a marketing guy. 

    Brett Rudy
    Wakefield, Mass.
    Rudy is the co-founder and marketing director for Charity Hop Sports Marketing & Consulting.

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  • Anatomy of a bowl game: How a partnership flourished

    Fried
    The Military Bowl presented by Northrop Grumman (formerly the EagleBank Bowl) successfully completed its third year of operations with almost 40,000 fans attending on Dec. 29 at historic RFK Stadium in Washington, D.C., and considerable momentum for future event building, including a week of Military Bowl festivities that is becoming firmly rooted in the regional sports arena.

    Military bowl
    ICON SMI
    Sponsorship by Northrop Grumman of the 2010 Military Bowl benefited the USO, military families.
    The goal remains to establish a foundation that minimizes the potentially dramatic effect of variables outside the organizers’ control. Many of these variables aligned favorably for the 2010 Military Bowl, with the involvement of Northrop Grumman as title sponsor; the USO as the charitable beneficiary; the team selections (Maryland and East Carolina) in early December; the Maryland head coaching drama that transpired the week of the game and was chronicled in the media; and the weather. The game-day temperature of over 40 degrees supplemented strong pre-event ticket sales with a steady stream of game-day walk-ups.

    There are myriad legal and commercial considerations associated with the creation, operation and growth of an NCAA college football bowl game, including NCAA compliance; partnering with the local government through its convention and sports authority; unique sponsorship and broadcast arrangements; NCAA conference agreements covering multiple years; the intrinsic organizational and execution aspects attendant to a multimillion-dollar annual sports promotion; and nonprofit/tax-exempt status considerations.

    The first two years of the EagleBank Bowl generated crowds of 29,000 in 2008 (Wake Forest defeated Navy) and 24,000 in 2009 (UCLA defeated Temple). The cumulative mid-six-figure two-year net loss associated with these games, and some extraordinary challenges associated with the bowl formation, were offset substantially by the 2010 Military Bowl. An initial draft independent report prepared by the Greater Washington Sports Alliance, a public-private nonprofit entity, quantifies the 2010 bowl game’s economic impact for Washington, D.C., in excess of $11.3 million, an increase of 61 percent from the 2009 bowl game, and taxes generated from the event exceeded $1 million, more than double the amount from the year before.

    Hosting a Washington, D.C.-based bowl game was the vision of Marie Rudolph and Sean Metcalf, two local businesspeople. As with most sporting events, the sponsors and corresponding dollars are necessary to implement the vision. Enter the D.C. government and EagleBank, a regional community bank. Both organizations were supportive of generating economic development for the community. This event has particular relevance for the Washington Convention and Sports Authority, as hotel occupancy is customarily at reduced levels during the Christmas to New Year’s Day time frame. The survey data included within the economic impact report reflects that 66 percent of the fans attending the 2010 game traveled from outside the metropolitan area, meaningfully increasing hotel occupancy and revenue for attendant tourism activities.

    In the summer of 2010, we approached Northrop Grumman to serve as title sponsor for the bowl game. Northrop was a secondary sponsor for our 2008 bowl game and had a positive experience. Not only did EagleBank agree to the request that we solicit a national-level sponsor for the bowl game, it was a meaningful presenting sponsor and the bowl game’s official bank.

    We were already in advanced discussions with the USO, an organization that Northrop has a long-standing relationship with based on their overlapping support of our troops and the military community. Shortly after becoming its chief executive officer, Wes Bush announced that Northrop was moving its corporate headquarters to the Washington, D.C., region.

    Our view was that Northrop would receive significant exposure that accompanies a major corporate relocation while becoming further integrated within the area communities. While the relocation aspects were relevant, Northrop insisted that this bowl be about our troops and the efforts of the USO, including Northrop receiving only a supporting position in the branding of the game.

    The passionate and contagious support from Northrop employee volunteers and benefactors purchasing tickets for our active, retired and wounded troops was vital to the success of the 2010 event. Contributions by Northrop employees and the general public through militarybowl.org, the official site of the bowl game, exceeded $34,000, enabling additional members of the military and their families to enjoy the event. This underscored the importance of selecting a benefiting partner with interests that are aligned with the title sponsor.

    Consistent with any major sports promotion is to expect the unexpected. We experienced our own moments of organized chaos in essentially undertaking the marketing and promotion of the 2010 game in three months. (Our kickoff press conference announcing the renamed bowl game, title sponsor and charitable beneficiary was held on Sept. 26; the game was on Dec. 29). In fact, fan experience feedback is already being implemented as we simultaneously complete the bowl recap and commence planning for the 2011 event, featuring the U.S. Naval Academy against an ACC team.

    The favorable response from Northrop, the USO and all participants remains a high priority. The USO continued its branding initiatives through a distinctive public-awareness vehicle (including prominent signage on the field), and Northrop was able to continue its support of the military community and provide an extraordinary atmosphere for its employees and their families to enjoy. Hospitality is a noteworthy aspect of any sponsored sports event, and the unique attributes of hosting a sponsor’s clients outdoors in winter as opposed to a hotel ballroom, and tailgating in mustard-stained outerwear as opposed to sipping cocktails in formal attire, was well-received.

    The goal is for the Military Bowl and the week of festivities to be the event, with other variables less significant in creating a favorable financial outcome and distinctive entertainment atmosphere. Today, however, the team selection is the most important variable, both from a school travel perspective and the regional alumni and fan base.

    Nevertheless, throughout these initial stages, we believe the Washington, D.C., community is starting to embrace a bowl game, and we are fortunate to be adding to economic development within our communities while providing, in a small way, our appreciation for the men and women who risk their lives to provide security for our families. �0;0;8;

    Jeffrey S. Fried (jfried@friedco.com) is chairman of the Military Bowl presented by Northrop Grumman.

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  • Humility, focus critical for team personnel amid labor turmoil

    Yocom
    With the NFL, NBA and MLB collective-bargaining agreements all expiring this year, the battle lines between owners and players are clearly being drawn. While the focus is primarily on potential work stoppages and lost viewing opportunities, my thoughts have turned to the people most affected by such impasses: the people who make their livelihoods working for these teams.

    All three professional leagues are sophisticated businesses headed by smart people in their respective league offices. They’ve been dispensing best practices guidance to their teams to help them navigate an event like a work stoppage, but ultimately it will be these separate entities that map out their business plan as it relates to the employees.

    As the industry is starting to be hit with reductions in force, furloughing of employees (one week off per month with no pay, anyone?), and the potential loss of revenue that will dramatically affect remaining employees’ compensation, I’m not going to rail against the establishment and lecture about the battle between “billionaires and millionaires.” Instead, in an industry where egos run amok not only on the playing field and in the owner’s box, but also in the front office, I think this is a great chance for those who could potentially be affected to step back and reflect.

    My perspective comes from spending the last decade at Game Face as a recruiter specializing in filling positions for the business operations of major league sports teams. We traffic in information, much of it confidential, and have a unique opportunity to view the world through the eyes of those already in the industry as well as those trying to break into sports.

    Taking tickets
    MITCHELL REIBEL
    The potential for lost revenue from a work stoppage or reduction in force could have a dramatic impact on sports team and game-day personnel.
    For those who may be facing the loss of a job to a potential work stoppage, or who are trying to land their first jobs in sports, here is some professional advice:

    1. Remember where you came from.
    Unless you got your job because a family member owns the team, there was a time when you were trying to break into the industry. I suspect there were people who were helpful to that cause and others who weren’t. When I was pledging a fraternity in college, I remember a small but notable faction already belonging to the fraternity that felt like they paid their dues and because of that were going to make becoming a member of the fraternity difficult for everyone else. You never know when you will need others in your career, and we all know people who, if they came to us in the same situation, we would gladly help, as well as those we wouldn’t.

    2. Be humble.
    No matter your station in life, if you ever work for a professional sports team, remember that you are replaceable. There is always a line of people waiting to take your job. It took a lot of perseverance, self-confidence and dues-paying to get where you are today. That accomplishment doesn’t have to be colored by hubris and ego. At some point, you won’t have the business card and team logo behind (or in front of) you. What do you want to be known for then?

    3. Focus on the job you have, not the job you want.
    We’ve seen many people in the industry become so focused on ascending to the position of their dreams that they don’t focus on the position they have. Just like anything else you do without your complete attention, performance suffers. Ultimately, not gaining the promotions or added responsibility you want becomes a self-fulfilling prophecy. Ambition isn’t a bad thing, but it must be tempered with what we like to refer to as “professional patience.” There will be defining moments in your career when you will have to make some hard decisions, such as leaving your current team to continue your career growth. Rush those decisions, and risk falling out of favor with the industry — and one of the hardest things outside of getting your first job in the industry is trying to get back into the industry.

    4. If you don’t reinvent yourself, someone else will.
    As the Greek philosopher Heraclitus said, “The only constant is change.” That’s as accurate now as when he said it, some 2,500 years ago. A key part of life is the ability to adapt to the circumstances around you. Professionally, change can take many forms, including new initiatives, a new budget cycle, different leadership or different responsibilities. You may be responsible for creating the change or the one who has to respond or react. Either way, that can be a difficult proposition for those who have a hard time breaking out of their comfort zone or who like to do things the same way. As I like to say to my kids, “You are either part of the problem or part of the solution.” The application of this to the workplace translates into being coachable, nimble in response, listening to understand, possessing a positive attitude, being a team player and communicating clearly.

    Unless you are the architect of the change, there may be times when you won’t philosophically be in agreement with the kind of change coming down the pipe. If that’s the case, you may need to swallow hard and put your head down. The alternative is to look for another organization that more closely matches your ideology. And for those who have gone through that, we know that is no easy accomplishment.

    Here’s hoping cooler heads will prevail with this year’s CBA talks and there will be labor peace. Whether that happens or not, take advantage of this opportunity for introspection and self-awareness.

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