SBJ/Sept. 9-15, 2013/Franchises

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  • For loyal fans, a spot on the floor?

    Two NBA teams are awaiting league approval of a plan that would put the names of season-ticket holders on their playing floors.

    The teams, Cleveland and Milwaukee, intend the plan as another benefit tied to their year-round membership and fan-loyalty clubs. Details are still being finalized and must be approved by the league, but the program would allow for the names of the season-ticket holders who are part of the loyalty clubs to be placed on the apron that surrounds the playing floor — or possibly even on the playing floor itself.

    One source said the Cavaliers are proposing to put the account holders’ names on the sideline aprons while the Bucks are considering putting the names near the half-court line on the playing floor. The locations are subject to change depending on league response to the proposal.

    Neither league nor team officials would discuss the plans, pending their approval, but sources said that if allowed, the initiative could be in
    The Cleveland Cavaliers hope to create a court-centered version of the idea of selling inscribed bricks, as the Mets have done outside Citi Field.
    Photo by: GETTY IMAGES (2)
    place by the start of the coming season.

    Many details of the idea, beyond the location of the names, are still being discussed. For example, which season-ticket holders would be eligible for the perk must be determined — whether it would be for existing or only new season-ticket holders, or if a fan would need to be in a certain tier of the teams’ memberships groups. A decision also must be made on whether the names would appear on the floor in a decal form or if they would be painted onto the floor panels.

    Whether there will be keepsake options offered to fans as part of the plan is not yet known. League executives also are studying the proposal to make sure the names won’t clutter the court or affect how the court appears on television.

    Those and other details notwithstanding, though, the proposal in theory comes at a time when all leagues are looking for ways to enhance their season-ticket offerings and provide a sense of “exclusive membership privileges.” The NFL this season, for example, has rolled out a benefits package for its roughly 1 million season-ticket holders called The Membership Club (SportsBusiness Journal, Sept. 2-8). Those benefits include mobile access to RedZone and a free download to supplement a fan’s purchase of Electronic Arts’ “Madden” game.

    The idea also advances what NBA teams already have been doing with their fan-loyalty clubs, looking for ways to increase season-ticket sales by adding benefits beyond the game tickets. The Cavs’ season-ticket club, known as Wine & Gold United, offers year-round benefits such as conference calls with owner Dan Gilbert and meet-and-greet events with the Cavs’ basketball staff.

    The Bucks’ season-ticket loyalty club is called the MVP Loyalty Program.

    Fans would be given the opportunity to see their names on the floor in pregame events or during other events at the arena. The cost of the floor name recognition would be included in the price of the season ticket.

    Putting fans’ names on the floor would be akin to what teams typically have done outside their venues, selling bricks on sidewalks or walkways where fans can have their names appear. The idea also comes after the NBA earlier this summer allowed teams to sell advertising space on the floor in front of team benches. But unlike that new floor advertising inventory, which is placed in high visibility areas for maximum television exposure and sponsorship value, the names of the season-ticket holders would be small and would not be camera visible.

    The fan-name idea was presented this summer to the league office independently by the Bucks and the Cavs. Other teams are taking a wait-and-see approach, considering questions of whether the plan would clutter the court or take up sideline space that could be used for potential advertising inventory in the future.

    “There are a lot of ways to acknowledge your season-ticket holders,” said Pete Guelli, chief sales and marketing officer of the Charlotte Bobcats, one of the first NBA teams to roll out a year-round season-ticket benefits program, called Cats 365. “I am not convinced that it is a viable way to do it at this point.”

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  • Orlando City sets up for its shot at MLS

    A pair of votes in the coming weeks on the financing of a new soccer stadium in Orlando may be the only thing standing in the way of Orlando City SC obtaining an MLS expansion franchise.

    The Lions have seen attendance at the Florida Citrus Bowl Stadium grow in each of the team’s first three seasons in Florida, including more than 8,000 for the current USL Pro season.
    Photo by: AP IMAGES
    At least, that’s the view of the owners of the club, currently a member of the USL Pro League.

    “We are planning to start playing in MLS in 2015,” said Flávio Augusto da Silva, the 41-year-old Brazilian billionaire who is majority owner of Orlando City. “We are continuing to talk to MLS constantly and we’re working very hard to make this happen.”

    MLS Commissioner Don Garber announced at the league’s All-Star Game this summer that MLS would expand to 24 teams by 2020. NYCFC, owned by Manchester City and the New York Yankees, will start play in New York in 2015 as the league’s 20th club. Orlando City co-owner and president Phil Rawlins is optimistic Orlando’s club will start in MLS at the same time.

    “We’re very, very close to securing the first of those four expansion franchise openings,” said Rawlins, who is also a co-owner and board member of Stoke City of the English Premier League.

    Groups in several U.S. markets — including Atlanta, Minneapolis and Miami, among others — are working to position themselves for expansion franchises, as well (see chart below). But Orlando appears to have a leg up on the competition. In a telling move, Rawlins on June 5 hired Brett Lashbrook, formerly a special assistant to Garber, to spearhead Orlando City’s efforts to join MLS. Lashbrook, who had spent the previous seven years with the league, declined to be interviewed, but as one source said, “The commissioner didn’t let Lashbrook go to Orlando for the city not to get an expansion team.”

    Da Silva said hiring Lashbrook was not required by MLS, but it was clear in Orlando that his addition could be instrumental in the club making a move from USL Pro to the top soccer league in North America.

    “Brett knows how things work inside MLS,” da Silva said. “He’s done a great job for us handling all of the legal, contract and operational aspects of MLS. It has also been an opportunity for Brett to be part of a team from the ground up.”

    Orlando City co-owner and president Phil Rawlins founded the team in Austin in 2008, then moved it to Florida three years later.
    Photo by: AP IMAGES
    MLS President and Deputy Commissioner Mark Abbott acknowledged that Orlando was a candidate for expansion but would not go further than that. “We continue to have very positive discussions with Orlando City,” Abbott said. “We’re closely monitoring the situations and we’re in regular contact with Orlando City officials about their stadium plans.”

    Now, about those votes …

    The boards of commissioners of both Orange County and the city of Orlando have to approve Orlando City’s deal for a desired new $85 million downtown soccer stadium. The votes are expected to take place later this month or in early October. The deal, already approved by the county mayor and city mayor, calls for Orlando City to fund $30 million of the project, with the city and county providing the rest.

    “The city and county boards know that their approvals are the final dominoes that put everything in place for Orlando to get an MLS team,” Rawlins said. “The stadium is the only piece left on the checklist to show MLS that we’re ready. It will come down to these votes. I am hopeful.”

    Asked what would happen if one or both of the votes does not pass, da Silva said, “We do not believe in that possibility.”

    There has been some resistance to the proposal. Orange County District 3 Commissioner Pete Clarke wants the county to get a share of the team’s annual revenue — or proceeds from a sale of the team — if county taxpayers invest $20 million in the stadium. Another counterproposal asks the team to provide $1.5 million in public soccer fields in return for any stadium subsidy by the county.

    Da Silva declined to discuss his reaction to Clarke’s idea but said that the county’s piece of the deal, which is $20 million, will come from a tourism tax.

    “We will be meeting with the hotel owners and tourist people in Orlando for the next few weeks,” da Silva said. “They know that $20 million is worth it. MLS will bring in even more people to Orlando, especially from Brazil.”

    Majority owner Flávio Augusto da Silva (center) intends to make Orlando Brazil’s team in MLS.
    Photo by: KEVIN KRAUSE
    A native of Brazil, da Silva founded a chain of English-language schools that he sold last year to the Abril Group for $600 million. He controls more than a dozen media companies in his homeland, including HBO Brazil and MTV Brazil.

    Orlando City intends to brand itself, in part, as Brazil’s team in MLS.

    “Orlando is the No. 1 destination for the Brazil people,” da Silva said. “We love Disney World and shopping at the outlets. Orlando is paradise for Brazilians. I plan on signing at least one Brazilian soccer star for our team when we get to MLS.”

    The proposed stadium would seat 18,000 with the ability to expand to 23,000 in a second phase of construction. It would be located one block from Amway Center, home of the Orlando Magic, and four blocks from Orlando’s Church Street entertainment district. The stadium could be accessed by public rail and would have 15,000 parking spots.

    The stadium is a necessity for Orlando to be considered by MLS for expansion.

    “For any MLS club to be successful, it clearly needs a first-class stadium,” Abbott said. “We encourage both the city and county commissioners to follow the mayor’s stadium recommendations and support funding for the public-private partnership.”

    Orlando City currently plays in the Florida Citrus Bowl Stadium, which has a capacity of 80,000, but only the lower bowl is opened for matches. The team has seen attendance gains in each of its first three seasons in Florida: from 5,400 in 2011, to 6,600 in 2012, to more than 8,000 in the current season.

    USL Pro is viewed as the third tier of professional soccer in the United States, behind MLS and the North American Soccer League.

    If there were any construction delays on the proposed new stadium (if approved), Orlando City would continue to play at its current, 77-year-old home, which is undergoing a $200 million renovation project scheduled to be completed in 2015.

    The club also owns and operates its own soccer complex, with 11 fields, and has its own academy soccer program.

    Rawlins, 54, founded the franchise in Austin, Texas, in 2008 before moving it to Orlando three years later, he said, because of Orlando’s potential as a soccer market. Team executives cite data they attribute to Visit Orlando, the official tourism bureau for the region, that Orlando is the 14th most populated urban region in the United States, that 59 percent of the population is younger than 35 years old, and that more than 59 million people visited the city in 2012.

    Rawlins said that if Orlando City became an MLS franchise, the club would not seek additional investors beyond himself and da Silva, even though the business model would change. USL Pro player salaries, for example, range from $12,000 to $40,000 per season. The average salary in MLS this season is $148,000.

    “There would be no need, even with the increased operating expenses that come with a step up to MLS,” said Rawlins, who moved to the United States from England 20 years ago. “Flávio and I both have homes in Orlando and we are dedicated to making the team successful here.”

    Said da Silva: “We have all the capital to start this business as an MLS franchise.”

    Unlike the NASL, USL Pro has a partnership with MLS. In January, it was announced that USL Pro teams would serve as development team affiliates for MLS franchises. Orlando City is the affiliate of Sporting Kansas City of MLS.

    “Flávio Augusto da Silva, Phil Rawlins and their entire staff have been very strategic in their quest to secure an MLS expansion club,” MLS’s Abbott said. “We are impressed with the professionalism of Orlando City SC.”

    On March 1, 2012, Garber visited Orlando and met with club executives and some of the team’s supporters groups. After his meetings, when asked by reporters if Orlando will be part of MLS, Garber said, “It’s not a matter of if, but rather only a matter of when.”

    Said da Silva: “Everything that Mr. Garber asked for us to provide since then — strong ownership, large attendance, a commitment to the community — we have delivered. ‘When,’ for us, is 2015.”



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