SBJ/April 4-10, 2011/Colleges

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  • Fiesta plans to expand board, increase oversight

    The BCS was looking at removing the Fiesta Bowl from the national championship rotation after an independent report showed financial improprieties within the bowl's operations.
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    The Fiesta Bowl plans to expand its board of directors and executive committee, and impose more rules on the college football game’s operations, in response to the ousting of CEO John Junker after an independent report showed excessive spending and alleged illegal reimbursements.

    Fiesta Bowl Chairman Duane Woods said the current board has 27 seats, including five executive committee members who have a more active role in oversight. He said that executive panel likely will be expanded to 12 members.

    “We need a larger executive committee,” Woods said.

    He said those additions would include people from outside the Fiesta Bowl organization, and he is talking to local CFOs and compliance executives about joining the panel.

    Woods also said the Fiesta Bowl is adopting new bylaws and governance rules to help avoid some of the expense excesses incurred by Junker and other bowl executives. Those included $33,000 spent on Junker’s 50th birthday party in Pebble Beach, Calif., as well as allocations for bowl executives’ cars and cable bills, and schmoozing of Arizona politicians and their families.

    “We need a lot more oversight,” he said.

    In the wake of the report’s release last week, the Bowl Championship Series was looking at dropping the Glendale, Ariz., game from its rotation. In addition, along with the bowl committee’s firing of Junker, two Fiesta Bowl executives — COO Natalie Wisneski and Jay Fields, vice president for marketing — resigned amid fallout from the report, according to a bowl spokesperson.

    Woods said the bowl committee is leaning toward hiring outsiders to the Phoenix area but is open to hiring Phoenix-area candidates if they are the best fit.

    Observers noted the possibility of the bowl hiring executives with experience cleaning up college sports programs or someone recognizable to intercollegiate athletics, particularly for a leadership position.

    “If they can get somebody from a major sports league, NCAA or some other successful business, sports, entertainment operation, this could be an amazing opportunity for the right executive,” said Jeff Hecht, CEO of Jeff Hecht Public Relations in Phoenix and former executive for the Phoenix Coyotes and Winnipeg Jets.

    Ray Artigue, president of the Artigue Agency and a former Phoenix Suns executive, said the ideal Fiesta Bowl candidate will be able to do short-term damage control and turn around the bowl’s tarnished image while also, for the long term, have fundraising skills and business acumen.

    “It’s going to be job on top of a job,” he said. While the NCAA and BCS might like an outsider, someone new would have a learning curve on the other aspects of the position, Artigue said.

    Local business and political circles mentioned familiar sports business names among the possibilities, including former Arizona Diamondbacks and Phoenix Suns owner Jerry Colangelo.

    “The Fiesta Bowl is a very valuable asset for the community that has a great economic impact and great exposure,” Colangelo said. “We need to protect it.”
    Colangelo said the Fiesta Bowl had not contacted him about the now-vacant CEO job, and he’s not particularly interested in the position.

    “A few people have already come to me asking for my support for them,” Colangelo said. “The body is still warm, and people are already all over it. There are a lot of interested people.”

    He added that the scandal rocking the Fiesta Bowl didn’t come as a surprise to him. Colangelo, now chairman of USA Basketball, said he had “been aware of issues that have been percolating” pertaining to the bowl. “I didn’t know all the details, but the speculation was out there,” he said.

    Meanwhile, Frito-Lay wasn’t saying much last week about its naming-rights association with the bowl game. The Tostitos Fiesta Bowl has been played under that name since 1996.

    “Frito-Lay is surprised and disappointed to learn the findings of the Fiesta Bowl’s internal investigation,” the Dallas-based subsidiary of PepsiCo said in a statement. “We are pleased that the Fiesta Bowl is taking concrete action to address the findings of its report, and expect it to move quickly to implement its announced reforms. We are being updated regularly by the Fiesta Bowl organization and will be evaluating the situation as it progresses.”

    Frito-Lay spokesman Chris Kuechenmeister said the company did not have any further comment.

    Woods said the bowl committee is being candid with BCS, Frito-Lay and other sponsors about what happened and steps being taken to improve oversight.

    Mike Sunnucks and Lynn Ducey write for the Phoenix Business Journal, an affiliated publication. Phoenix Business Journal staff writer Adam Kress contributed to this report.

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  • PrestoSports: Official Web partner of Cinderella

    Butler and Virginia Commonwealth wore the slippers to the Final Four, but it was their website partner, little-known PrestoSports, that was the real Cinderella.

    With a modest operation of 22 employees based in Rockville, Md., the small tech firm seldom competes against the giants in the college website industry, CBSSports.com College Network and NeuLion, which own the digital rights to most of the BCS schools. Instead, Presto has been happy to collect the rights to NCAA Division II and III schools, as well as a growing list of midmajors like Butler, VCU, Harvard and Yale, by offering a more cost-efficient option.

    Through its diligence, Presto’s client list has grown to more than 270 schools in the U.S. and Canada, many of which you’ve never heard of.

    It’s the relationships with Butler and VCU, though, that gave Presto a seat at the Final Four table with the big boys.

    “It gives us a chance to show what we can do with a lot more visibility,” said Serge Knystautas, 38, Presto’s CEO and founder. “Hopefully, all the midmajors and the big boys say, ‘Hey, these are great-looking websites and maybe I don’t have to pay that much for it. … It’s a chance for us to show what this rag-tag group can do.”

    Knystautas, a programmer by trade, started PrestoSports in 2005 after doing a series of projects for the Eastern College Athletic Conference. While the big schools had vibrant websites, he saw that the smaller schools didn’t have a similar outlet to publicize their sports.

    Presto found its mark in Division II and III and gradually has moved into Division I with the likes of Kent State, Santa Clara and Furman, which occasionally has put them in competition with the industry leader, CBS. Presto typically comes in at a lower cost, sometimes a half to a third cheaper than CBS, based on some recent bids.

    Presto sets up a content management tool that enables sports information officials at the school to post their own content on the site. With the school officials doing more of the work, it helps keep Presto’s costs down. The Presto sites, however, offer many of the same features found on the bigger schools’ sites, such as ticket sales, online auctions, merchandise sales and fundraising.

    Most of Presto’s clients are looking for a website that will extend their brand — or perhaps establish a brand — while not breaking the budget.

    “We’re more like the affordable provider,” said Ted Bardach, vice president of business development, who joined Presto in 2008 after being with CSTV and CBS College Sports. “We definitely don’t have that corporate feel that you have at CBS. But we can do as much as the bigger providers.”

    Being the affordable option means running a lean operation. Presto’s modest offices sit on the sixth floor of a nondescript building in Rockville, just northwest of Washington, D.C. Only half of its work force is based there because the rest work from home.

    In the coming months, however, Knystautas expects to grow with a national ad sales team that can sell across all of Presto’s Web properties. For now, though, employees come to work in T-shirts, jeans and sweats, giving the office an early Facebook feel. Programmers sit in a “bullpen” ready to help with technical support. A foosball table provides occasional entertainment.

    Presto’s sales are currently outsourced to multiple ad networks, but the company wants to bring those sales in-house so that it has more control and it is better able to avoid conflicts, such as the one on VCU’s site last week. The Rams are a Verizon school, but Presto’s ad network sold a spot to AT&T, which ran briefly on VCU’s site before it was taken down.

    Most of the advertising on the sites now is packaged into corporate sponsorships that are sold by the schools. Additional ad sales could drive more revenue, and Presto thinks it might have the critical mass of schools now to begin selling nationally.

    “The online ad market is complicated,” Knystautas said. “But what we know is that we have a strong demographic to work with, and the ability to go after more revenue per customer will also let us go after more BCS schools.”

    A certain pride emanates from being the smaller company that’s trying to expand its business at the Division I level.

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    Dealing with Presto gave VCU a hand in keeping its expenses down.
    VCU, which selected Presto over CBS a year ago to manage vcuathletics.com, was attracted by the functionality of the system and the price ­— mostly the price. Presto asked for a little less than $10,000 to design and manage the VCU site, while CBS was going to charge three times that, said Robby Robinson, VCU’s associate athletic director who spearheaded the selection process.

    “We might have missed out on a few bells and whistles, but honestly, we got most everything we wanted,” Robinson said.

    It actually was the Butler business that helped Presto acquire VCU. The Rams, who received bids from Presto, CBS and a handful of other tech companies, were in the middle of their search as Butler made its run to the 2010 NCAA championship game. Robinson admittedly didn’t know much about Presto, so he monitored butlersports.com during last year’s tournament and was impressed by the look and layout.

    On paper, Presto against CBS was a mismatch the size of VCU against Kansas. CBS has the rights to 48 of the 65 schools from the big six conferences and has a national sales force behind the college network. But lean and mean Presto won it on affordability.

    “I kept reading and re-reading Presto’s bid,” VCU’s Robinson said. “I was thinking, ‘OK, what’s the catch? What am I not seeing?’ I thought it was too good to be true.”

    Schools can spend anywhere from $10,000 a year to $50,000 a year on their websites, whether it’s with Presto, CBS or NeuLion, and the return from them fluctuates wildly. While the Ohio States and Alabamas count their websites as a source of revenue from advertising and video subscriptions, the smaller schools are just hoping not to lose money.

    That VCU can cover its Web expenses through subscriptions to RamTV is a win for the budget.

    The Final Four runs for Butler and VCU also bring the opportunity for incremental revenue from online auctions, donations and subscriptions to the video service. Butler took advantage of its Final Four run last year to set up a new Web feature that allows fans to inquire about season tickets.

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    The Final Four runs gave Presto incremental revenue opportunities like auctions and new subscriptions.
    “Presto helped us set that up and it was pretty simple,” said Mike Freeman, associate AD at Butler. “We captured a lot of new names from that and it really helped us get off to a good start with season tickets and individual sales. We also saw our online gifts go way up.”

    For most midmajors like VCU, though, “revenue from the website is gravy,” said Robinson, who added that traffic on vcuathletics.com last week was about 10 times higher than normal. “Branding is what we’re thinking about.

    “Right now, we just want people thinking that it’s cool to be following VCU.”

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