SBJ/April 22-28, 2013/Franchises

In the Owner’s Box: Listening, leading

Clark Hunt responds to Chiefs’ difficult season with some tough decisions

Aside from 10 years of labor peace, one of the legacies of the NFL’s 2011 lockout will be that it allowed Kansas City Chiefs Chairman Clark Hunt to step out from the shadow of his father, Pro Football Hall of Famer Lamar Hunt. As an American Football League founder and the man credited with naming the Super Bowl, Lamar Hunt was larger than life.
Still, NFL Commissioner Roger Goodell and other top league officials credited the younger Hunt with helping to break the impasse with the players and save the 2011 season with only a single preseason game missed.

However, that 2011 Chiefs season was forgettable at 7-9, and last year’s 2-14 season included the horrific murder/suicide of Chiefs linebacker Jovan Belcher and his girlfriend. Within five weeks, Hunt not only cleaned house, but he also replaced his top football executives earlier than any other NFL team, installing longtime Philadelphia Eagles coach Andy Reid as the Chiefs’ 13th head coach and John Dorsey, who’d spent 22 years with Green Bay, as the team’s new general manager.

“What you’ve seen from him this year is leadership at its best — making tough decisions when they need to be made,” said Dorsey, adding that he’d spurned four job offers before accepting the Chiefs position. “This franchise is the closest thing to the Green Bay Packer model culturally, and the ownership is so sound that everyone I trust in the league told me I had to take this job.”

Clark Hunt: "One of the things last year taught me was the need to be prepared for the unexpected."
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Reid, the NFL’s longest-tenured coach until the Eagles dismissed him in late 2012, calls Hunt “a character guy with a quiet intensity, who cares about people; a quiet guy who really listens.” That alone might make him an anomaly among NFL owners. However, Hunt also is lauded in NFL circles for his work chairing the league’s international committee and being on its digital media committee — two vital areas for revenue growth if the NFL expects to achieve its aggressive revenue targets.

In his office above the Chiefs’ training facility, just two weeks before making the No. 1 pick in Thursday’s NFL draft, Hunt, 48, spoke with SportsBusiness Journal staff writer Terry Lefton about the Chiefs’ renaissance and the overall state of the NFL.

Last season the Chiefs had two wins and just an awful off-field situation. It’s hard to believe any season could be more difficult.

HUNT:
One of the things last year taught me was the need to be prepared for the unexpected in what we experienced on the field and off. With the player involved in the murder/suicide, well, that’s not something you can prepare for, but if you have the right kind of people, you make the right decisions in a timely fashion. I certainly won’t say that was a positive thing. It wasn’t; it was a tragedy. But our guys did a good job in a tough situation.

As bad as it was, last season did not have much impact economically, right?

HUNT:
Down the stretch, we had a lot of empty seats, even though many were seats that were sold. It hurt us in that regard. On the sponsorship side, we have experienced strong growth there for three years — because of the new stadium (renovations) and the playoff team in 2010; the economy began to turn; and the team (that Chiefs President) Mark Donovan hired really started to produce.

Arrowhead Stadium has seen more empty seats of late, though many are no-shows and not unsold tickets.
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As for season tickets, it has been a bit of a roller coaster for the past three years. There was a strong surge, and then we led the league in new season-ticket sales. The next year it went down, and normally after you have a two-win season you’d be down substantially. We’re on pace to be up from last year as far as season tickets, which is a testimony to (newly hired coach) Andy (Reid) and (new GM) John (Dorsey).

Since January, you’ve brought in a new coach and a new GM. Now you’ve got the first pick in the draft, which might be an even tougher choice.

HUNT:
There’s a certain amount of pressure that goes with it. I have full confidence John will make the right decision. It’s not a typical year where there’s a bunch of quarterbacks. I have told the guys that it’s great that we have the first pick, but I never want to have it again because ofwhat you have to do to earn it. There are no sure things in the NFL as it relates to the draft.

Will media rights fees increase enough to meet the NFL’s target of growing revenue to $25 billion by 2027?

HUNT:
A lot of it will come from the continuing digital revolution. The National Football League used to be a product consumed on TV during the weekend. Now we have fans who want to stay connected to their favorite team seven days a week. When we started looking at digital content for the league, our focus was on streaming clips for fans. Now it’s on social media. The fans want to stay connected with us and interact with each other, so it’s incumbent upon us to provide the platform and the content that allows them to do that.

Things are changing so quickly on the digital front, it’s hard to predict where that goes, but it has been a dramatic growth area, and there’s a lot of opportunity remaining.

The growth of football overseas is important, and the league has made London the centerpiece of that initiative as we go from one to two games there this year. One of the things that excites me is that 30,000 people bought tickets to both games, which shows there might be a fan base if we can put a team in London. … I do think it is going to happen, but I don’t know if it will be a team or maybe a division based in Europe. If you want to think outside the box, that would help us with some of the travel dynamics. Certainly the Bills have been successful in Canada, and we’ve had a lot of success in Mexico. Those are the markets that are ripe. … Growth will have to come from international for the league to continue to grow like it has.

(Overseas), the TV audience has to follow the live audience. It has been that way for most U.S. sports over time; you have to build the live audience first. Ultimately, to be successful, you have to have valuable media rights or financially I don’t think the model makes sense. However, since we are talking about the future, I don’t know whether the model we’ll be talking about is TV or some kind of digital distribution.

The various versions of minor-league NFL did well in Germany. Why all the focus on London and none there?

HUNT:
Certainly, on our radar screen is how we are going to get back to Germany. For a lot of reasons, it made sense for the league to retrench and focus on the U.K., and London in particular. … The next opportunity in Europe is probably Germany.

Could you envision a time when the Super Bowl is played offshore?

HUNT:
I sure could. In a lot of ways, it’s easier than basing a team in Europe. It’s one game; you’d have a two-week lead time. It certainly could happen.

Has ownership really addressed that issue yet?

HUNT:
Not really. I don’t know if we’d have to have teams based outside the U.S. before we do that (with the Super Bowl), but you’d at least have to be pretty far down the thought process on that before you take that asset outside the U.S.

How vital is it to give fans the same connectivity in stadiums they’re used to elsewhere?

HUNT:
Long term, that’s very important. Most stadiums, including Arrowhead, have tackled the (cellular) side of it, so you can text and make phone calls. Solving the wi-fi part of the equation is more difficult and more expensive. It’s something the league is very focused on. We need to give our consumers in seats at our stadiums the same digital experience they can have at home. That’s the decision consumers are making now: Do I stay home with my high-def TV and all my devices and follow the game like that, or is it better to be at a stadium?

I would argue that it’s better to be at an NFL stadium and be part of the communal joy of cheering on your team, particularly if you can be connecting with your friends and pulling up stats from around the league, so you can follow your fantasy team.

We have to make sure the experience at the stadium is as good or better than home.

So, the league is looking at providing content for fans at the stadium that you can’t get at home: locker-room shots, audio on the referee, and those kinds of things. Interestingly, the networks are supportive of that. We thought they might be upset at not getting that same content, but they’re not. It’s so important for them that our stadiums are filled, because that makes for such a better broadcast.

There’s an understanding at the league level that we are in the entertainment business. The integrity of the game will always be first, along with player safety, but our fans want to be entertained, and with the changes in technology, anything that allows us to add to the in-stadium experience will be considered with an open-minded approach.

How far are we from making the NFL sidelines digital, with tablets instead of clipboards for coaches?

A difficult season turned tragic when linebacker  Jovan Belcher killed himself in the stadium parking lot after police say he killed his girlfriend..
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HUNT:
The league is taking baby steps, but I think we’re moving. A lot of times, things move slowly out of the competition committee, with good reason. Things need to be studied. It took my father 20 or 25 years to convince the league to bring back the two-point conversion, which everybody on the business side agreed was a good thing. There was a lot of resistance from the coaches on the competition committee, which is why it took so long.

Naming rights and premium seating have not recovered from the recession. What’s the view here in Kansas City?

HUNT:
Naming rights are something we pursued awhile back, but with the downturn in the economy, the timing just wasn’t right. That’s something we’ll probably circle back to. The special consideration here is that the name Arrowhead means a lot to our fans, and we’ll certainly take that into consideration with anything we do there.

As far as premium seats, that market has not recovered. I don’t know if it ever recovers to get back to the way it was before the recession. Fan preferences have changed somewhat. Still, if you have an exciting product on the field, it can help sell a lot of things.

Will the Super Bowl in New Jersey be a referendum on cold-weather, outdoor Super Bowls?
HUNT:
It will be, whether that’s fair or not. I know people are going to remember the weather there (in New Jersey) when we get around to voting on future Super Bowls. I also think New York is a very special situation. If you are going to play a (Super Bowl) game in an outdoor, cold-weather market, it should be in New York.

What happens on the field will be memorable, even if the weather impacts that. I don’t think it will detract from the game at all, but I do think it will affect people’s perceptions of going to another cold-weather market. … Intellectually, you certainly shouldn’t base a future decision on just this year. Theoretically, it shouldn’t make that big a difference, even though it probably will. I would be open-minded to going north again, but I do think New York’s a special situation.

Assuming a friend had the requisite resources, what advice would you offer if he or she said they were looking at an NFL franchise?

HUNT:
They’d need to be 100 percent in, because it is that involved and that big a business. One of the best things about the National Football League is that the owners are very engaged. … You also have to make sure that you have the right stadium situation. In today’s NFL, if you don’t have a modern stadium, it is very, very difficult. That’s not to say you couldn’t go in and get a new stadium built, but make sure you plan for that because you can’t be successful without it.

Other than your dad, were there any NFL owners you modeled yourself after?

Hunt recently introduced Andy Reid as the Chiefs’ new coach.
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HUNT: The Rooney and the Mara families. What struck me about them is that although their teams are always among the most competitive on the field, they always put the league first. My dad was always someone who thought that way, but to see those gentlemen conduct themselves in that way made a big impression on me.

I learned a lot of my management style from my dad, and he was the epitome of a humble leader. There are not a lot of those. I often think about the humility he displayed in every circumstance. The folks who worked for him would run through a wall for him because they knew he would do the same. I want our employees to feel the same way about me.

As an MLS owner (for Columbus and Dallas), how do you feel about the proliferation of European soccer in the U.S.? It seems like there is a battle for the hearts and minds of soccer fans in America between the EPL and MLS.

HUNT:
I’ve been told you can watch more EPL games on TV in the United States than you can if you live in the U.K., which is astounding. There’s huge growth of the (soccer) fan base in the U.S. You see it in the ratings for the EPL games, the U.S. national team games; every four years, World Cup ratings here set a new standard. We have a country with soccer fans that have a lot of options. Major League Soccer, to some degree, has benefited from the over-saturation of the market because it has converted a lot of people who weren’t soccer fans. The real growth for MLS audiences is coming from that 18-35 male demographic, whereas when we started MLS, we were certain soccer families would be our core.

What would you be doing, if not this job?

HUNT:
I was a finance major in college and worked for Goldman Sachs for two years. I don’t know if I would be an investment banker, but I’d probably be somewhere in finance. People will tell you that I’m a numbers guy, but nothing like my dad. We’d frequently be sitting in meetings with him, and when large numbers came up and most of the room would reach for their calculators, he’d always figure out the answer in his head before anyone could punch the numbers into their calculator.

There are bigger businesses than NFL teams, but perhaps no bigger goldfish bowl. Is that something you can ever get used to?

HUNT:
I had a chance to be around my father in the business for 15 to 20 years and I saw the constant spotlight that was on him. But it’s so different when the spotlight shifts from being on the person standing next to you to being big on you. It’s not something you can prepare for and it may be something you never get used to. With what’s going on as far as social media and the news cycle being about 30 seconds long, that fishbowl is getting even bigger every day.
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