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SBJ/September 10-16, 2012/FranchisesPrint All
Despite a controversy-fueled 2011-12 season and a stormy offseason that saw the team trade superstar Dwight Howard, the Orlando Magic has preserved its season-ticket and sponsorship base.
To date, the team has sold 1,500 new full-season tickets, equal to last season through the same time. Total season-ticket sales are expected to land between 13,000 and 14,000 by the start of the upcoming season, ranking the Magic among the top teams in the league in full-season-ticket sales.
The team’s season-ticket renewal rate stands at 80 percent, about the leaguewide average.
“We are on pace from last season and are pleased where we stand,” said Magic CEO Alex Martins. “Our intent is to rebound quickly from the transition.”
Helping preserve the season-ticket base is the draw of the 2-year-old Amway Center and the team’s decision to keep season-ticket pricing flat overall for the coming season. But there are still challenges on the business side, as team revenue could be hurt by a drop in single-game and group sales should the loss of Howard and the team’s front-office shake-up lead to poor on-court performance.
The Magic this offseason fired coach Stan Van Gundy, and general manager Otis Smith resigned.
The team has not completed its pricing of single-game tickets for 2012-13 and is still in the early stages of completing group sales and sponsorship deals.
“We won’t know about groups and individual-game tickets until we get into the season, and the story will be told in how we come out of the gate,” Martins said, adding that he expects sponsorship revenue to be on par with last year.
The Magic has 50 team sponsors, with more expected by the time the regular season begins in late October. The team’s corporate base is smaller than other NBA franchises, some of which count at least 100 sponsorship deals.
“We went to a less-is-more approach when we went into our new building with larger and more encompassing deals as opposed to greater numbers at a lower yield, and we have maintained that approach,” Martins said.
The Magic is also protected by long-term premium-seating deals put in place when the team moved into the Amway Center in 2010. Of the team’s 60 suites, none was up for renewal this offseason, and just eight to 10 upper-level suites were signed to three-year deals that will expire after this year.
Few insiders were stunned when they heard that Scott O’Neil was stepping down as president of Madison Square Garden Sports, considering his ambitious style and the demands that come from running one of the biggest and most complex properties in sports.
Instead, what caught those familiar both with O’Neil and MSG off guard was the abruptness and the mystery surrounding his departure. The company and O’Neil issued short, separate releases announcing the change last Wednesday, neither of which addressed any specific reasons for the move.
No reason was given for Scott O’Neil’s departure.
Photo by:GETTY IMAGES
With the company in the middle of phase two of a three-part, $1 billion renovation of the Garden, some insiders figured that O’Neil would look to leave once the project was completed. One source said O’Neil had more than a year remaining on his contract, making his sudden departure all the more unexpected.
Now, with no specific plans for his professional future, O’Neil will bank on a mostly successful stint at MSG Sports and his influence within team and league circles as he plots his next move.
Both the Rangers and Knicks were seen as being among the more progressive organizations under O’Neil, whose high-water marks were clearly in guiding the renovation of MSG, along with forging a massive 10-year, $300 million sponsorship deal with Chase, both of which were among the most talked about stories in the industry.
The building renovations were largely met positively by both New York fans and media, with MSG Chief Executive Officer Hank Ratner recently showing off phase two of the renovations and staying active in this process. O’Neil, in turn, largely focused on selling and servicing all that came with the renovations, winning notice for the magnitude of the deals.
When O’Neil left his position of running the NBA’s team marketing and business operations in 2008 to go 20 blocks south in Manhattan and work for MSG Chairman James Dolan and Ratner, the company already had designs on a major renovation of the Garden and an eye on expanding their holdings.
Many insiders viewed the job as an organizational and cultural challenge, but for O’Neil, the move to MSG was a chance to move out of the league where he presided over TMBO’s laboratory-like approach in helping NBA teams run their business to leading one of the industry’s highest-profile properties.
He immediately pushed for significant organizational change at MSG by ushering in a more aggressive sales culture that emphasized service and creativity. He brought in a raft of new employees, some of whom he had worked with in his previous stints at the NBA, to bolster his own initiatives. He hired a new senior vice president of sales and created new jobs and titles, such as executive vice president of revenue performance and executive vice president of business development and operations.
O’Neil, 42, also revamped MSG Sports’ ticket-selling operations and added a new vice president of corporate entertainment solutions.
“He instilled an aggressive sales culture that had been lacking at MSG,” said industry consultant Bill Sutton.
He also brought in outside help, hiring CAA Sports to help broker sponsorship deals, a move that not only led to the lucrative Chase agreement, but also to signature deals with Anheuser-Busch, Delta and Coca-Cola.
But it wasn’t just the team’s corporate sales that sparked industry buzz. O’Neil was the public voice in MSG’s decision in 2011 to raise Knicks ticket prices a massive 49 percent after six seasons of flat pricing, while raising Rangers ticket prices 23 percent. The Knicks also were stung this offseason by allowing NBA sensation Jeremy Lin to leave via free agency for Houston.
With only brief statements issued Wednesday — which some cited as strategic timing coming just hours before the NFL season kicked off across the Hudson — it was difficult to determine what led to O’Neil’s departure, but many close to the situation cited a growing rift between O’Neil and the two men at the top, Dolan and Ratner.
While the team said it would immediately begin to search for a successor, O’Neil stated he was looking forward to “the process of discovering what lies ahead.”
Where O’Neil lands will be one the industry’s more closely watched stories, with one possibility being a return to the NBA at a high level.
“I would envision Scott putting together some good folks and buying a property, or could see him in a major role with one of the professional leagues or agencies,” Sutton said.