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SBJ/November 21-27, 2011/Facilities
Legends buys sports facility marketer CSL
Published November 21, 2011, Page 1
Legends, the joint venture involving the Dallas Cowboys, the New York Yankees and two private equity groups, has bought CSL International and CSL Marketing Group,which founder Bill Rhoda developed into major forces in facility development. The deal instantly gives Legends a dominant position among companies that help teams develop and market premium seating for their buildings.
Legends began in October 2008 by running food and retail at the Yankees’ and Cowboys’ stadiums, but in the past 18 months it has expanded to premium-seat sales and consulting, ticket sales training and CRM installations.
Red Bull Arena suite prices will more than double.
CSL International has been a leading player in determining the feasibility of building arenas, stadiums and other public assembly facilities. In 17 years, it has completed research on more than 750 projects worldwide, including 80 major league sports facilities and 60 college venues. CSL Marketing Group, formed in 2007, generated $1 billion in gross sales for its clients at Yankee Stadium and MetLife Stadium through the sale of suites and club seats there, and also markets naming rights.
“They are combining two powerhouses in stadium development,” said Paraag Marathe, the San Francisco 49ers’ chief operating officer, who as point man for the team’s stadium project in Santa Clara has worked with both Legends and CSL. “It’s like having two Pro Bowl quarterbacks on the same team.”
Officials with Legends and CSL, private companies based in Greater Dallas, refused to disclose the purchase price. Industry sources familiar with CSL’s body of work said the nature of the firm’s short-term contracts for consulting on and selling premium seats made it difficult to estimate a dollar value for the deal. Typically, feasibility study fees range from $60,000 to $150,000, although the value of those deals has declined in recent years because of the economic downturn and a shortage of projects, sources said.
On the marketing and sales side, where there is much more money to be made, sources estimated CSL Marketing Group has pulled in tens of millions of dollars over the past four years. In Lincoln, Neb., where CSL Marketing Group is selling premium seats and naming rights for a new 16,000-seat arena, the firm could potentially earn $5.6 million on top of a $16,000 monthly fee, according to a public document.
Despite its relatively modest consulting fees on the feasibility side, the depth of experience CSL International brings to the table carries value, said consultant Bob Jordan, managing partner of Venue Research and Design.
“This is not a money issue but an attempt to corner the market,” said Jordan, who worked with both CSL groups as MetLife Stadium’s vice president of design and construction.
“CSL is so well-placed due to CSL International,” he said. “With CSL International part of the mix, Legends is now in the game before anybody knows something is happening. They are growing vertically, from the inception of the project to sales and marketing.”
CSL International, an 11-person operation with offices in Minneapolis and Plano, Texas, will continue to run under its own name. Founder Rhoda remains president.
The four executives at CSL Marketing Group, co-founded by Rhoda and Ben Wrigley, will be combined with Legends Premium Sales’ nine-person staff to create Legends Sales and Marketing. Chad Estis, a Legends principal, retains his title as president of the sales and marketing group, and Rhoda has been named executive vice president.
Legends Sales and Marketing vice presidents Al Guido and Jason Gonella remain in control of the 49ers and Rose Bowl projects, respectively. Mike Ondrejko retains his role as Legends’ chief operating officer responsible for international development. A new addition to Legends is Mike Behan, a former NBA executive hired to lead a premium-seat sales effort at Red Bull Arena, the company’s newest account.
Legends Sales and Marketing’s competitors for premium-seat sales include Wasserman Media Group, Premier Partnerships, IMG, Learfield Sports and Front Row Marketing. The joint venture Legends and IMG formed in October 2009 to help colleges finance arenas and stadiums, an alliance that won the job to sell new suites and club seats at Rose Bowl Stadium, officially ended in early July, officials with both companies confirmed. Legends then took over that account on its own, Estis said.
For feasibility studies, CSL International will continue to compete against the likes of Barrett Sports Group and AECOM’s Economic Research Associates.
Rhoda and Estis first crossed paths on the Cowboys Stadium project. Rhoda consulted for the Cowboys in the early stages of stadium development and was on the ground floor to help the NFL club form Legends’ business model. About eight years later, in July 2007,the Cowboys hired Estis to lead a sales team that generated more than $500 million upfront in premium-seat revenue to help finance $1.2 billion in stadium construction.
Over the past year, Rhoda and Estis found themselves in the same rooms pitching their services — their firms were finalists to sell premium seating for the San Francisco 49ers’ proposed $1 billion stadium and for the Rose Bowl’s $156 million renovation. (Legends won those deals, where in each case CSL International had worked as a consultant.)
It was then that they started a conversation about joining forces. “We thought, Wouldn’t it be a better business if we could approach this together?” Estis said. “Now here we are, really excited about bringing all our resources under one roof and operating as one unit.”
To some competitors, those resources may appear to blur the lines of fair play. Combining feasibility studies and sales and marketing under one umbrella has some, including Jordan, questioning whether it poses a conflict of interest for Legends.
For publicly funded projects, ethical issues could arise if one firm sets the price of a suite knowing it could possibly provide a favorable return for its sister company that ends up selling the skybox, Jordan said.
For that very reason, facility manager Global Spectrum, whose sister firm Front Row Marketing sells premium seats, does not conduct feasibility studies, said Frank Russo, Global’s senior vice president of business development.
Rhoda said there will be clear separation between CSL International and Legends Sales and Marketing.