SBJ/March 10-16, 2014/Leagues and Governing Bodies

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  • Locker room cameras still lacking fans in NFL

    Last NFL offseason, locker room cameras were hyped as one of the big in-stadium enhancements for 2013. Visions of fans being able to see on video boards coaches offering halftime encouragement quickly met reality, though, as many teams ultimately used the cameras only to show players walking down the tunnel to the field before the game — if they used them at all.

    Don’t expect that to change any time soon.

    “It’s a complicated issue for those of us who want to win,” said New England Patriots owner Robert Kraft, chuckling, when asked why only two of 32 teams (Seattle and St. Louis) showed footage in the stadium at halftime from the locker rooms in 2013.

    Kraft’s comment echoes what others have said previously: Coaches and players do not want what they consider their inner sanctum televised. Kraft did say he has his head coach, Bill Belichick, comfortable with the idea now — but that’s not to say new coverage should be immediately expected.

    Dallas Cowboys Chief Operating Officer Stephen Jones said at a SportsBusiness Journal/Daily conference last fall that coaches were not comfortable with the camera plans, a point the league has contested. Jones was unavailable for comment, but team spokesman Rich Dalrymple said Jones still believes halftime footage is problematic because of coaching resistance.

    Kansas City Chiefs President Mark Donovan, a member of the league’s fan-experience committee, predicted it could be three to four years before teams become comfortable enough to show footage from halftime. Part of the issue, he said, is figuring out how to present a halftime feed that likely has no audio, and doing so in a way that is enticing to fans. Teams are concerned that if audio is aired from the locker room at halftime, it could betray competitive secrets.

    “We won’t do audio at halftime,” Donovan said, “so how good is it?”

    The Chiefs and Patriots were among roughly half the league’s teams that showed in-stadium footage of the locker room last year, but only before the game, not from halftime.

    The NFL this offseason is expected to unveil several new initiatives in the continuing quest to offer something at venues that competes with or even trumps at-home viewing. Details on those coming developments were not available, so it’s unclear if it could mean changing the rules on how the locker room cameras are used. Currently, the league requires only that teams have them in the locker room, not that they actually be used.

    Most teams contacted in recent weeks said it was premature to talk about how they might use cameras, or not, in the 2014 season.

    New York Jets President Neil Glat said the Jets would study whether to expand their camera use from last season’s pregame adoption — but, he added, “I wouldn’t say anything is imminent.”

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  • NFL warms up to variable pricing

    The NFL could have 10 or more teams using variable ticket pricing in some fashion for the 2014 season, said Brian Lafemina, league senior vice president of club business development, further evidence of the league’s embrace this offseason of more advanced pricing strategies.

    The Detroit Lions, New England Patriots, Miami Dolphins and Buffalo Bills have recently announced new pricing structures placing higher value on marquee regular-season games and lower value for lesser contests, including preseason games.

    Variable pricing has been common in baseball, basketball and hockey for more than a decade, and those sports are now embracing dynamic pricing as a further means to adjust ticket values. The NFL, however, for years buttressed by soaring media revenue and solid season-ticket sales, has resisted such moves, believing its 10-game home slates for teams did not warrant variable pricing.

    The Lions were the first NFL team to make the leap to variable ticket pricing.
    Photo by: GETTY IMAGES
    But with more recent sales softness in some markets and a sharply increased overall industry awareness of real-time ticket fluctuations, NFL teams have begun to act. The Lions, Patriots , Dolphins and Bills were the first to make such a leap, but tiered pricing will be rapidly mirrored by many other teams around the NFL, league and club officials said.

    “You’ll see more teams doing variable for this season. Certainly you’ll hear more about this after the schedule release [in April],” Lafemina said. “There is increasing data that tell us that fans would prefer to see each game charged at the appropriate price, even if there’s no change in the overall price of a season-ticket package.”

    A key driver for the move is the secondary ticket market. Now a fully established component of the entire sports industry, the secondary market provides a sophisticated, real-time view into the value of any game in full view to the fan.

    “Even with so few games in football and the smaller sample size you have, certain games can still carry very different values, and fans do understand that,” said Sam Gerace, chief executive for Veritix, ticketing provider to the Lions and an adviser to the team as it introduced its new pricing strategy. “What’s happening here is that the sports industry for a long time relied simply on fans, which was great for awhile, but now you’re seeing approaches used in other industries for pricing making their way into sports in terms of meaningfully using market data.”

    Also at play is the common practice of NFL fans using the secondary market to resell portions of their season-ticket packages to help finance the rest of their purchase.

    In the Patriots’ home state of Massachusetts, resale above face value without a license is forbidden by law. As a result, Patriots season-ticket holders unable to recoup their costs on the resale market for preseason games haven’t been able to make up their early losses later in the season. That scenario helped push the Patriots toward a variable structure for 2014 that will create three classifications for games, said Jessica Gelman, vice president of consumer marketing and strategy for Kraft Sports Group, the club’s ownership group. Games will be divided into “preseason,” “premier” and “marquee” groups. Face values for the “marquee” group of four games will be more than twice that for the preseason grouping.

    The Lions last summer embarked on a similar effort to develop a system that provides more value for season-ticket holders as well as captures more incremental revenue from single-game sales for high-demand portions of the schedule. Working extensively with Lafemina’s group at NFL headquarters and also with Veritix, the Lions in January announced its three-tiered pricing structure, including a 70 percent price cut for preseason games unpopular with many fans.

    Arriving just days before formal announcements in New England and Miami, the Lions were technically the first NFL team to roll out variable pricing.

    Detroit’s plan holds two key objectives: improve season-ticket retention, particularly with the team having just one winning season since 2000, and capture more incremental revenue from single-game sales during the regular season. Club executives declined to specify the team’s projected revenue boost, but internal modeling of the system does show an increase.

    “We believe we will recoup more value that’s been lost to the secondary market,” said Luis Perez, Lions senior vice president and chief financial officer. “First and foremost, though, this is about providing more value and transparency to our season-ticket holders.”

    Nationally, the Lions’ move generated significant buzz, and the club has received calls from other teams in the league. Locally, fan and media attention has been more focused on an average 8.2 percent price increase the team also implemented for 2014. Technically, the price increase and the variable pricing structure were developed separately, and modeling from variable pricing shows a revenue bump even without the overall price increase — but Perez said he didn’t want to wait to roll out either program.

    Dolphins executives tell a somewhat similar story. Among the initial projects conducted by new team president and former San Diego Padres executive Tom Garfinkel after his arrival last September, the team’s variable pricing plan arrives along with an expanded loyalty program. Pricing and tiering for the Dolphins’ plan will be finalized after the schedule release, but helping push the Dolphins in the direction of variable pricing was the team’s typically large influx of visiting fans.

    “We know we get a lot of fans from out of town and that South Florida is obviously a big tourist destination,” said Garfinkel. “So that creates varying demand for games, sometimes significantly varying demand. This structure captures that demand more appropriately.”

    The Bills announced their move to variable ticket pricing at Ralph Wilson Stadium on Thursday.

    Individual teams are the foremost drivers of the NFL’s move into variable pricing, and final ticketing decisions lie strictly with them. But at the league level, Lafemina and his group have been actively studying the issue for more than two years.

    NFL variable pricing was discussed at length at a league meeting in Dallas last year, and industry suggestions then were that as many as half of the teams were considering using it. While those teams that have made the move remain a small minority of the league, some clubs not doing it, such as Green Bay, have gone on record with their interest in actively monitoring the subject.

    “Incremental revenue from tickets and concessions historically hasn’t been a singular needle mover in football like it has been in other sports,” said Marc Ganis, Chicago-based industry consultant to the NFL and several teams. “But there are now several initiatives afoot in this area within the league with regard to pricing, getting early playoff games sold out with the quick calendar turnaround, and so forth.”

    Staff writer Daniel Kaplan contributed to this report.

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