SBJ/Aug. 5-11, 2013/Franchises

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  • Haslam, NFL develop Plan B

    If Jimmy Haslam were to step down from owning the Cleveland Browns because of an adverse turn in the continuing federal investigation into his truck stop company, his father would take over the club, sources said.
    The NFL and the junior Haslam developed a contingency plan in the aftermath of the April 15 FBI raid on the headquarters of Pilot Flying J, a move that fueled speculation Haslam might give up his team, which he bought last year for more than $1 billion.

    There are no indications at the moment that Haslam is stepping down, temporarily or otherwise. Haslam’s father, Jim Haslam II, 83, founded Pilot in 1958, seven years after playing on the University of Tennessee’s first national championship football team. He ceded day-to-day control of Pilot to his son in 1997, and is chairman of the Knoxville, Tenn.-based, $30 billion-a-year business.

    The truck stop company of Browns owner Jimmy Haslam is under federal investigation.
    Photo by: STEVEN BRIDGES
    Several lower-level company executives cooperated with authorities, with one, Jay Stinnett, having been publicly identified as contending that senior management was aware of the alleged fraud that sparked the investigation.
    Stinnett in June pleaded guilty to conspiracy to commit mail fraud.

    Jimmy Haslam many times has said he did not know of the alleged scheme to defraud Pilot customers by shortchanging them on gasoline and diesel rebates. The company has already reached a $35 million class-action settlement.

    His father, whose day-to-day dealings with the company are limited, has not been linked in any way to the scandal.
    The Browns declined to comment.

    NFL spokesman Brian McCarthy said in a statement, “To our knowledge, no decision to step back has been made, so looking into who would take over is purely speculative. Jimmy is the best judge of how to keep the focus of the Browns on football and the fans.”

    Questioned about the contingency plan crafted by the NFL and the Browns, McCarthy responded, “We are not commenting on any potential scenarios.”

    If Haslam’s father were to take over the team for a period of time, it is not believed the league would require an increase in his equity ownership.

    The elder Haslam does own part of the team but not enough to meet the league’s rules governing how much of a club the general partner has to own (30 percent, though less when combined with other family members).

    The senior Haslam would not be viewed as a general partner in this case but practically akin to an executive whose owner has designated that person authority and voting rights.

    There is some case history here for the NFL to rely on in selecting a family member. In 2000, Commissioner Paul Tagliabue suspended San Francisco 49ers owner Eddie DeBartolo Jr. for his role in a bribery scandal in Louisiana. DeBartolo never returned to the team, ultimately agreeing to cede his share of the team to his sister, Denise DeBartolo York. Her son Jed now runs the 49ers.

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  • New sales, loge boxes lift Hawks’ numbers

    A series of offseason marketing efforts by the Atlanta Hawks is driving revenue for the franchise.

    With much of the offseason sales period still in play, the Hawks to date have seen total revenue grow 9 percent. The increase is tied to a 12 percent increase in new full-season-ticket sales to date, with a 6 percent increase to date in total ticket revenue.

    The team also is benefiting from the expected sellout of seven new loge boxes in Philips Arena expected to generate close to $1 million in additional annual revenue.

    The Hawks also have a season-ticket renewal rate tracking close to 88 percent, the same as last season.

    More revenue-enhancing loge boxes also are expected, though the team has not yet announced any specific plans. The current boxes are 20 rows from the playing floor and offer all-inclusive food and beverage along with access to other events at the arena.

    “We are continuing to look at enhancing our revenue streams,” said Andrew Steinberg, chief revenue officer of the Hawks.

    The team’s ticket sales increases have been bolstered by two strategies: The Hawks again will waive service fees attached to the sale of tickets sold through Ticketmaster; and the team has created a year-round season-ticket membership program that delivers benefits to season-ticket buyers with a series of events held throughout the year.

    “We are up on new fulls and full-season equivalents, and last year we were No. 3 in the league in group sales, and that is a big part of our business,” team President Bob Williams said.

    Much like many other NBA teams that have adopted similar season-ticket membership clubs, the Hawks offer a variety of membership levels designed to provide a “behind-the-curtain” experience for members with events such as meetings with executives and coaches as well as special events.

    “It is the first of its kind in the Atlanta market, and we are trying to enhance the value proposition,” Steinberg said.

    The Hawks also are completing some new sponsorship deals, but team officials would not disclose specifics.

    “We have some solid corporate deals that are coming to fruition and there are some significant deals we are trying to close,” Steinberg said. “That is a big swing.”

    Like all NBA teams, the Hawks are looking to secure a deal for the league’s latest piece of inventory on the floor, in front of the team benches. Steinberg would not say whether the team will land a floor-signage deal by the start of the coming season.

    “It is an exciting piece of inventory,” he said. “I am bullish on the asset, but you need the right partner.”

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  • Vidalin leaving 49ers to take Heat’s CRO post

    Veteran NFL marketing executive John Vidalin is leaving the San Francisco 49ers to become chief revenue officer for the Miami Heat.

    Vidalin, who has worked as chief sales officer for the 49ers since 2010, begins his new job with the Heat on Aug. 19. His last day with the 49ers is Friday.

    Vidalin
    The chief revenue officer job is a new position for the Heat. Vidalin, 47, will be responsible for all revenue growth initiatives for the team, including tickets, corporate sponsorships and premium seating. He will manage a staff of between 35 and 40 sales executives, and will report to Eric Woolworth, Heat president of business operations.

    Vidalin was responsible for the 49ers’ business development and played a key role in selling sponsorships for the team’s new stadium set to open in 2014, including the 20-year, $220 million naming-rights deal with Levi Strauss. He also was responsible for the team’s broadcasting deals.

    “No one has sold more corporate deals in the last three or four years than John and his team in San Francisco, including the Levi’s deal and the stadium project,” Woolworth said. “We scoured the country and feel we got the best of the best.”

    Prior to the 49ers, Vidalin worked for the Houston Texans for six years as vice president of sales and marketing, and he previously worked as vice president of marketing for the Washington Capitals Now, he joins a new league with the NBA’s Heat.

    “In general, what I do translates on the business side to any front office, but there are nuances between the league,” Vidalin said. “The NBA does very well with collaboration with other teams.”

    Vidalin said that leaving the 49ers during construction of the team’s new stadium is difficult, but the job at the Heat was too attractive to pass up.

    “The Heat is a great brand and a great franchise,” he said. “I will focus on protecting the base of business and look where the opportunities are in terms of growth of major partnerships. The Heat is an international brand and there are so many ways to get creative.”

    The Heat is the latest NBA team to create the chief revenue officer front-office position. The Philadelphia 76ers last month hired Chris Heck as their chief revenue officer, and the Cleveland Cavaliers, Atlanta Hawks and Milwaukee Bucks have all added the chief revenue officer position to their front-office staffs in the past year.

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  • Can Veritix chip away at Ticketmaster’s NFL business?

    Ticketmaster’s complete dominance of the NFL ticketing market came to an end last week with the Detroit Lions’ switch to Veritix for season and game-day primary tickets.

    The Lions and Veritix talked up the ability of the 7-year-old company to customize and brand the ticket-buying experience for the team, suggesting that, in an era where fan engagement is a top priority for the NFL, other clubs might follow suit.

    So is Ticketmaster in danger of losing traction in the NFL, the only league among the big four where it had managed ticketing for every club?

    “Teams are looking at it, but Ticketmaster has done a good job,” said one top team executive, who requested anonymity because he did not want to alienate his tickets partner. “But being able to brand ticket-buying is part of the total fan experience.”

    Right now, fans that call Ticketmaster get a company that brands itself as the place for tickets, with the brands of the individual clubs secondary.

    Veritix pitches itself as a back-office-type organization, and when fans call its number, they get taken through as if calling the team.

    “Veritix [does] not insert ourselves [into] their fan relationship,” said Sam Gerace, the CEO of Cleveland-based Veritix. “We are not brand forward. And the Lions are pursuing a true, 365-day-a-year relationship with their fans.”

    Ticketmaster said it remains bullish on its NFL business. “We continue to focus on delivering innovation around the things our clients and fans want most — like mobile ticket management, social media integration and the best possible fan experience,” the company said in a statement.

    The Lions may have had reasons for going with Veritix other than just branding. The company is co-owned by Cleveland Cavaliers owner Dan Gilbert, who is investing heavily in an effort to rebuild downtown Detroit through his Opportunity Detroit real estate project. Through that, he has forged ties with the Lions, noted by team President Tom Lewand.

    Still, the NFL has been making the fan experience a top priority for years now as it tries to compete with luxury home entertainment systems.

    How the people answering the ticket line identify themselves may not be the most critical part, but it is still a part, said the team executive.

    Lewand added: “A lot of people are looking at different opportunities to engage with fans. This is a huge opportunity because tickets are a backbone of our operations in a lot of different ways.”

    The Lions’ secondary ticketing remains with Ticketmaster’s TicketExchange, which has a league deal with the NFL. Veritix’s Flash Seats, however, will provide secondary ticketing services for non-Lions events at Ford Field, including an upcoming concert by Jay-Z and Justin Timberlake and the Monster Jam monster truck rally in January.

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