SBJ/February 27-March 4, 2012/Franchises

New AEG division to oversee 11 properties

AEG has created a new division, AEG Sports, that aims to increase both efficiencies and revenue for individual properties at the company but could also result in more job consolidation, AEG President and CEO Tim Leiweke said last week.

Chris McGowan, who as COO of the Los Angeles Kings has spurred an increase in ticket sales for the NHL club in recent years, will serve as COO of AEG Sports. Earlier this month, it was announced that Tom Payne, who had been president of business operations for the AEG-owned Los Angeles Galaxy, was leaving the MLS club and that McGowan would be stepping into that role. That move with McGowan was a step toward this larger, AEG Sports entity for the company.

AEG President and CEO Tim Leiweke said AEG Sports COO Chris McGowan’s first priority is to dramatically increase ticket sales for the Galaxy, who he said lead MLS in several business categories but “are not even top three in season-ticket sales.”
Photo by: NEWSCOM
But AEG Sports will oversee the operations of not just the Kings and Galaxy, but also nine other properties at AEG, Leiweke said. AEG Sports will be on par under the AEG corporate umbrella with existing entities AEG Facilities, AEG Live and AEG China, among others.

McGowan, who remains as COO of the Kings, will report directly to Leiweke.

The 11 affected sports franchises and properties that will fall under AEG Sports are entities over which AEG has at least some, if not all, operational control. AEG is involved in many other sporting events, such as international soccer tours, that will be outside the new header. In addition, AEG is the second-largest shareholder, behind Oscar De La Hoya, in Golden Boy Promotions, and Phil Anschutz, personally, holds shares of the Los Angeles Lakers, but neither Golden Boy nor the Lakers are part of AEG Sports.

While AEG Sports will be the division all 11 affected properties are listed under for internal, financial reporting purposes, McGowan initially will personally oversee operations at only the Kings, Galaxy and the ECHL Ontario (Calif.) Reign, who play about 50 miles east of downtown Los Angeles.

“The L.A. Kings, the Ontario Reign and the L.A. Galaxy — yes, there will be some consolidation as we try to find some synergies between those three teams,” Leiweke said. “At the Galaxy, yes, there are going to be some additional people leaving as we try to become even more driven on the bottom-line results for ticket sales and for season-ticket sales.”

Leiweke did not say how many employees would be leaving, but in addition to Payne, Patrick Donnelly, director of communications, and Veronica Avila, director of marketing, have left the Galaxy.

McGowan may take a more hands-on role in the other sports properties over time, but that will be a developing situation, Leiweke said.

“For the purpose of reporting and consolidation on our balance sheet, AEG Sports will be where all these entities lie,” Leiweke said. “It doesn’t necessarily mean that Chris McGowan is running all of these, because some of them are based in Europe. It doesn’t make sense to run them out of Southern California.”

In addition to the three Southern California teams, AEG owns the AHL Manchester (N.H.) Monarchs, a Kings affiliate; the Amgen Tour of California cycling event; and the Bay to Breakers footrace in Northern California. In Europe, AEG owns the hockey teams the Hamburg Freezers and Berlin Eisbaren in Germany, and Djurgardens IF in Sweden. It also owns the Hammarby soccer team in Sweden.

In MLS, in addition to the Galaxy, AEG has an ownership stake in the Houston Dynamo. The Dynamo will not be run by McGowan but will continue to be run by Dynamo CEO Chris Canetti.

Leiweke said McGowan’s first priority in his new job is to “dramatically” increase ticket sales for the Galaxy. The MLS season opens March 10.

“We are No. 1 in Major League Soccer with our jersey deal, with our naming-rights deal, with our sponsorships, with our premium-seating revenue,” Leiweke said. “We are No. 1 straight across the board. We are not even top three in season-ticket sales. This is all about season-ticket sales for the Galaxy.”

Leiweke said McGowan has added about 1,000 season tickets over the past month, since joining the Galaxy, to bring the club’s number to around 7,500.

McGowan said he plans on developing a leadership team, through hiring, in the business specialities of public relations and communication; marketing; ticket sales; digital/new media; database and customer relationship management; and business operations analysis. The focus initially for this team will be on work with the Kings, Galaxy and Reign.

Such a structure would help, for example, in investments for team websites so that they could be done in a collective manner rather than individually, McGowan said.

“So, essentially, the key areas of running a sports franchise are now vertically aligned,” he said.

McGowan, 38, has spent his entire career working for AEG in multiple capacities, starting as an account executive with the Kings in 1996.

Leiweke said that although the running of the Southern California teams is the initial focus, it made sense to create the larger division.

“We wanted to get everything under one roof where it made sense and especially as it relates to the three teams in Los Angeles,” he said. “There is no reason not to have one person who oversees the sales side of all three of those teams.”

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