SBJ/May 9-15, 2011/Facilities

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  • Legends to help plan Farmers premium seating

    AEG has signed Legends Premium Sales to a one-year consulting deal to help develop the premium-seat program for Farmers Field, the $1 billion NFL stadium AEG wants to build in downtown Los Angeles.

    AEG
    Legends Premium Sales signed a one-year deal to consult on the proposed Los Angeles stadium.
    Legends Premium Sales is a division of Legends Hospitality Management, a food and retail concessions company co-owned by the Dallas Cowboys, the New York Yankees and two private equity firms.

    The deal is strictly a consulting agreement, said Shervin Mirhashemi, AEG Global Partnerships chief operating officer. Chad Estis, president of Legends Premium Sales, will be the sole individual working directly with AEG officials to determine the right prices for selling PSLs, suites and club seats, as well as finding the right mix of those premium products. After that information is established, AEG Global Partnerships would sell the inventory, Mirhashemi said.

    AEG has a track record for developing arenas and stadiums worldwide but has never worked in the NFL. It hired Legends after Estis spearheaded a Cowboys Stadium sales force that generated $500 million in revenue tied to the $1.2 billion facility’s 300 suites and 15,000 club seats. AEG President and CEO Tim Leiweke and Todd Goldstein, president of AEG Global Partnerships, toured Cowboys Stadium last fall, and both officials were impressed with Estis’ role directing the massive sales campaign.

    The design proposal Icon Venue Group issued for Farmers Field called for 218 suites, including 40 event-level units, and 14,700 club seats. AEG hired architect Gensler in March to do the design, so those numbers could change, project officials said.

    “Our mind-set is the same as theirs, to maximize revenue,” Mirhashemi said. “They know the potential pitfalls and opportunities with an NFL team. PSLs is not something we have done and they clearly are the model. It’s a fantastic blueprint to look to and put our own AEG flavor on top.”

    Legends Premium Sales continues to expand its business outside of north Texas and is already working with the San Francisco 49ers, who hired Legends as a consultant and then signed it to sell premium seats for the team’s proposed stadium in Santa Clara, Calif. The opportunity to do business with AEG gives Legends greater credibility in a space where there are few competitors outside of CSL Marketing Group in Dallas.

    AEG doesn’t use a consultant to assist with a sports project very often, Estis said. “It’s a feather in our cap.”

    Estis met with AEG officials in Los Angeles a few weeks ago and will make about four more trips to the West Coast over the next 12 months as Farmers Field’s premium-seat plan takes shape.

    The project still has a long way to go before it breaks ground. AEG must get city approval to build the stadium across the street from Staples Center on land occupied by the Los Angeles Convention Center. AEG must also have an NFL team relocate from another market.

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  • Rangers like the sound of audio improvements at ballpark

    Don Muret
    The Texas Rangers have installed new audio technology at their ballpark that its inventor says could revolutionize the way sound is distributed for MLB games and dramatically improve the fan experience.

    The product, Stadium Sound, is computer software developed by musician, producer and composer Paul Gilman. It is tied to a black box in the control room at Rangers Ballpark that reshapes sound waves and distributes them evenly throughout the facility.

    In essence, the software acts as the audio system’s “brain” to intelligently transform sound before it is piped through the ballpark’s amplifiers and speakers, Gilman said. Current audio technology inside most stadiums has sound waves often “fighting each other” with choppy distribution to the seating bowl and adjustments made after the fact, he said. Repurposing sound through the new device on the front end ensures smoother distribution of sound. With the addition of the box in the control room, Gilman can monitor the ballpark’s audio system from his office in Los Angeles through an Ethernet connection to his home computer.

    “One facility, one sound,” said Rob Matwick, the Rangers’ executive vice president of ballpark operations. “The difference has been amazing.”

    BRAD NEWTON / TEXAS RANGERS
    The Rangers now hope to bring shows like KC and the Sunshine Band inside the ballpark.
    For the Rangers, installing Stadium Sound was a portion of the $800,000 overhaul of the park’s audio system before the 2011 season. Those upgrades could prompt the team to move a few postgame concerts, now held on the North Lawn outside the ballpark, inside the building. An act such as KC and the Sunshine Band, which performed April 24 in that space, could play inside the park and tap into the improved house system without having to bring in much of their own audio equipment, Matwick said.

    The change in venue could save the Rangers money. They had to pay KC and the Sunshine Band $15,000 above its normal fees to cover enhanced sound production.

    “We have been talking for a few years about the opportunity to do shows inside the park at the end of the game, and we can do it now,” Matwick said.

    WHERE’S BIG RED?: Officials developing the new Haymarket Arena in Lincoln, Neb., started discussions last week over how the new $168 million home of Nebraska men’s basketball will be themed when it opens in the fall of 2013.

    The building is publicly owned, and the city prefers to maintain the right mix of branding between Nebraska athletics, any potential naming-rights partner and other branding tied to its role as a multipurpose facility, said Paula Yancey, the facility’s program manager.

    As of now, the plan is to have a big “N” installed on the arena exterior similar to Memorial Stadium on campus, and officials were to present options with a combination of red seats for the seating bowl and black seats for suites and possibly club seats. As of last week, the decisions on those seat colors had not been confirmed, Yancey said.

    Otherwise, the arena won’t go heavy on the Huskers. In that respect, the building is a big departure from KFC Yum! Center in Louisville, the most recent project Yancey worked on for PC Sports, a firm that serves as an owner’s representative to develop sports facilities. That arena is red all over, reflecting the color scheme of the University of Louisville Cardinals, the primary tenant, and the marks of the food brands connected to the naming-rights holder.

    In Lincoln, CSL Marketing has been hired to sell naming rights, founding partnerships and the 36 suites, 20 loge boxes and 900 club seats planned for the arena, whose name reflects the warehouse district where it will be built.

    The University of Nebraska owns the advertising rights for the scoreboard and LED signs in the bowl for its basketball games.

    DLR Group is the architect of record for the 16,000-seat arena.

    ASSEMBLY LINE: The University of Illinois issued a proposal last month for an architect to design major improvements to 48-year-old Assembly Hall.

    It’s a project the Big Ten school has kicked around for a decade as officials wavered between renovation and building a new arena.

    The sports group at Aecom, formerly Ellerbe Becket, has completed three studies tied to Assembly Hall upgrades and will go after this job as well, said Brett Fuller, director of business development. Proposals are due Tuesday.�8;

    Don Muret can be reached at dmuret@sportsbusinessjournal.com. Follow him on Twitter @BreakGround.

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  • Tracks cover seats as attendance stays soft

    NASCAR fans first saw banners covering seats at Auto Club Speedway in late March, they saw them again at Talladega Superspeedway in April, and they’ll see them for a third time this weekend at Dover.

    NEWSCOM
    Auto Club Speedway covered seats at its March NASCAR race.
    The banners are the manifestation of a sport wrestling with attendance woes following the recent recession. Soft attendance at NASCAR Sprint Cup races in California, Alabama and Delaware compelled the three tracks in those states to cover several thousand of their seats. Dover first covered seats four years ago. Auto Club and Talladega followed suit this year. The coverings amount to less than 10 percent of the track’s total capacity. As of now, no other tracks have plans to follow suit.

    The tracks’ motivation was designed to reduce operational costs, tighten ticket supply and, in some cases, create inventory for new or existing sponsors. By eliminating a section of seating, they were able to cut the costs of ushers, security and cleaning services. They also could sell or give sponsors logo exposure on the banners that cover the seats as both Dover and Auto Club Speedway have done, respectively.

    “It’s been a challenge to figure out ways to reduce expenses and keep the facilities as comfortable as possible without raising ticket prices,” said Gillian Zucker, Auto Club Speedway’s president. “If you’re not filling seats, you don’t have to staff that section. You can quickly recognize operational savings.”

    The tracks preferred to cover the seats so that fans couldn’t move into the sections and didn’t have to look at an area of empty seats.

    “The good thing about banners is you can put them up and when demand comes back you can take them down,” said Grant Lynch, Talladega’s chairman. “If you remove seats, you have to spend capital to put them back up.”

    Only Dover has made a concerted effort to convert its coverings into revenue. It turned approximately 10,000 covered seats into the track’s largest billboards and began selling them to sponsors. The 12-by-20-foot coverings are visible on TV and were sold to Best Buy and Sunoco for a race weekend and were included in sales packages for title partners like Heluva Good.

    Mark Rossi, Dover’s vice president of sales and marketing, compared the move to turning “lemons into lemonade,” adding, “I don’t want the grandstands to turn into signage. Any of us would rather have butts in seats.”

    Rossi declined to say what advertisers paid to be featured on the banner, but implied it was less than the low- to mid-six figures the track would make by selling the tickets to several thousand paying customers who also would likely buy drinks, food and merchandise.

    Auto Club Speedway’s approach to its banners for its March race underscored the speedway’s collective preference for selling tickets. The track initially planned to cover 9,000 seats at its March race and give its naming-rights partner, Auto Club, signage on the coverings. But Zucker said they decided not to tell Auto Club executives of those plans in case demand for the race rose and the track had to release more seats. Weeks before the race, ticket demand increased, and the track released additional tickets each time the number of tickets available in a section dropped to 100 tickets. As a result, it wound up covering approximately 4,000 seats, half of what it initially planned, and put Auto Club’s logo only on banners in the track’s first turn.

    Talladega made a very different decision with its covered seats. Because it covered 12,000 seats in its upper towers out of TV camera view, the track decided to use the coverings to market the track’s legacy. It featured images of famous moments at the track for drivers like Richard Petty and Dale Earnhardt Sr.

    International Speedway Corp., which owns 12 tracks that host Sprint Cup races, developed the idea for covering seats and asked tracks if they were interested in participating. Daryl Wolfe, ISC’s chief marketer, said only Auto Club and Talladega have opted to put up banners. Talladega will have them up for its fall race, he said, but no other ISC tracks are expected to put them up this season.

    “We hope it doesn’t last long,” Wolfe said. “Those seats are there for a reason. We want to sell them and we want to see demand back up to historical levels.”

    Fans sometimes argue that rather than cover seats, tracks should just lower ticket prices, Rossi said, but tracks have already reduced ticket prices considerably and doing so doesn’t guarantee increased attendance. He’s optimistic that as the economy improves, Dover will be able to reduce the number.

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