SBJ/July 30-August 5, 2012/Franchises

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  • Cavs unit to build online revenue

    The Cleveland Cavaliers have created a digital operations department to drive online revenue.

    Last month, the Cavs rehired Mike Maleski as vice president of digital sales, marketing and operations. Maleski rejoins the team after leaving last year to open the Cleveland office of mobile marketing company Phizzle.

    Maleski will lead a new six-person team that combines digital content development and sales into a single department. He will report to Cavs chief revenue officer Brad Sims.

    The department’s goal is to drive at least $2 million in revenue, derived primarily from the sponsorship of digital content.

    “There is a lot of ramp-up that needs to take place, but a sports team with a strong brand presence should be able to drive $2 million in [digital] revenue,” Maleski said.

    The team is working on two new digital initiatives. One is a new Wi-Fi network in Quicken Loans Arena to be installed by the start of the season. The team is close to a deal with vendor on the network, along with a sponsorship deal. Both deals are expected to close within weeks.

    “We did not have Wi-Fi throughout the building last year, and it creates a whole new partnership element for the team,” Maleski said. “It will be a free network for fans giving them online access throughout the building.”

    The other major digital initiative is a team-branded mobile application that will be linked with the Cavs’ social network page, called CavFanatic. The team is also rebranding its video player content on Cavs.com.

    The new mobile app will include daily deals on ticket sales along with bar codes to allow fans to scan their smartphones at retail points of sale.

    “Most apps give scores and information on how to buy tickets, but the difference for us is that fans will be able to access our social network page from our app,” Maleski said. “We want to give fans a reason to open up the app multiple times a week.”

    Verizon Wireless is the presenting sponsor of the new app, though the team is planning to sell other partnership deals within the app.

    The Cavs are using Detroit Labs, owned by team owner Dan Gilbert, to develop the mobile application.

    “Our new department will allow us to focus on a large area of growth in sports,” Maleski said. “It is not just providing great content, but also about some great revenue opportunities.”

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  • Liverpool in the black for North American jaunt

    Liverpool FC executives said the club sold more than 111,000 tickets and turned a profit for its first North American tour since Fenway Sports Group bought the English Premier League club in October 2010.

    The club’s three-game preseason series concluded Saturday at M&T Bank Stadium in Baltimore with a match against Tottenham Hotspur. More than 40,000 tickets had been sold as of midweek last week. The Baltimore match follows a July 25 sellout at Fenway Park in Boston against AS Roma that drew more than 38,000, and a July 21 match at Rogers Centre against MLS club Toronto FC that drew 33,087.

    Liverpool FC announced a four-year deal to make Chevrolet its official automotive partner. From left: Manager Brendan Rogers, Chairman Tom Werner, Chevy’s Chris Perry and players Steven Gerrard and Glen Johnson.
    Photo by: MATTHEW WEST
    Liverpool and sister entity Fenway Sports Management sold sponsorships for the tour to Chevrolet, Dunkin’ Donuts, Lumber Liquidators, Warrior and Foxwoods, among others. Before the Fenway Park match, the club announced a much larger four-year deal with Chevrolet in which the U.S. automaker becomes Liverpool’s official automotive partner.

    “This has been a big undertaking, but it’s obviously something we wanted to do from the time we acquired the club, and we feel like a number of objectives have been achieved during the tour,” said Billy Hogan, former FSM managing director and newly installed as Liverpool’s chief commercial officer.

    “We’ve spent the majority of our time in Boston, and between the training and daily community events we’ve done here, we feel like we’ve really established a more solid presence in Boston, which was one of our goals. And more broadly, a lot has been done to expand the Liverpool brand on this continent,” Hogan said.

    Liverpool took on MLS club Toronto FC, then played in Boston and Baltimore.
    Photo by: GETTY IMAGES
    Hogan said he now intends to alternate between North America and Asia for Liverpool’s summer tours. The club played in China, Malaysia and South Korea last year.

    Chevrolet, meanwhile, through the Liverpool deal sharply expands an interest in soccer that also includes a pact signed last month with EPL rival Manchester United.

    “We’re obviously selling cars globally, but until recently, we really hadn’t been managing the brand globally in a full sense,” said Chris Perry, Chevrolet vice president of global marketing. “Football is an obvious and important tool in globalizing the brand.”

    Liverpool’s North American tour is but one of a historically large spate of European soccer powers traveling American and Canadian cities this summer. Between mid-July and mid-August, 35 matches involving international teams are slated for the U.S. and Canada, with Yankee Stadium and Wrigley Field among the iconic facilities participating.

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  • Man U’s planned offering makes few waves in U.S.

    While Manchester United’s plan to sell shares on the New York Stock Exchange is drawing headlines as a big international finance and sports story, on the U.S. sports scene, the EPL club’s efforts are being received with more of a yawn.

    The age of public team ownership in U.S. sports is seen as having come and gone, if ever there was such an age. Time and time again, teams have proved poorly suited for the public markets, which focus on quarterly returns and do not appreciate the longer-term aspects of sports team ownership.

    “We all know the real value of sports team ownership is appreciation over time,” said Bob Caporale, a sports finance adviser with Game Plan. “It would be unrealistic to expect any kind of distributions or profits.”

    Indeed, Man U plans no dividends from the sale, according to the prospectus. The club chose the United States for its listing because of the receptivity to dual-stock structures that will keep Man U’s control in the hands of its current owners, the Glazers.

    The team last week reportedly was reviewing whether to proceed with the offering later this year, given the choppy market conditions. A spokesman for one of Manu U’s IPO underwriters, Jefferies, declined to comment on when the shares will be sold.

    Teams in the last two decades that have been public and then gone private include the Florida Panthers, Boston Celtics and Cleveland Indians. Public media companies have controlled a host of teams, but in most of those cases, the teams have been spun out and sold.

    Sports finance adviser Rob Tilliss, whose firm, Inner Circle Sports, brokered the sale of Liverpool FC, pointed to the escalating media fees in the EPL as evidence that the initial public offering might attract more than just fans wanting a piece of Red Devil memorabilia over their fireplace.

    “If any team could go public, it’s Man U,” said Tilliss of the team, widely seen as the top sports team brand in the world.

    The team will have something else going for it that any U.S. team would not: Man U will not have to file quarterly earning reports for five years. A law designed to attract foreign listing exempts the club from the quarterly requirements that local teams would have.

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