SBJ/July 14-20, 2014/Franchises

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  • How team paved way for a beloved brand’s return

    When the Charlotte Hornets unveiled their new home floor at Time Warner Cable Arena as part of the NBA draft late last month, it capped a yearlong process to de-Bobcat the NBA franchise.

    It’s early, but there’s no doubt it has been a successful campaign — in part because of the popularity of the Hornets brand in Charlotte as well as the general lack of interest in all things Bobcats. But what is most important, the transition has shown that the team surely knows how to market its product — now that it has a product to market.

    The team formerly known as the Charlotte Bobcats, a loser on and off the court for much of its 10-year history, now looks like a franchise with a future. Michael Jordan, the Hall of Fame player who bought majority interest in 2010, last spring asked the NBA for permission to reclaim the Hornets nickname, used by Charlotte’s original expansion franchise between 1988 and 2002.

    Since owner Michael Jordan reclaimed the Hornets nickname, the team has used an analytics-driven transition plan to rebrand.

    It was a move that won widespread local approval and jump-started fan interest in the club. But the transition required a strategy of its own for the period from when the league approved the name change, in July 2013, to when the Hornets name could be used, after the 2013-14 season.

    The transition came with both the benefits of the original franchise’s arrival (including 364 straight sellouts and a nationally popular logo) and the weight of nostalgia (fans called for the exact same logo and colors as the first version of the Hornets, down to designer Alexander Julian).

    Jordan’s top executives, Fred Whitfield, team president and COO, and Pete Guelli, chief sales and marketing officer, steered the planning with a select number of other executives in the front office. They also called on Jordan’s connections, tapping the ultimate pitchman (and Jumpman, per his own logo) and his Jordan Brand division of Nike to develop the new Hornets brand identity.

    The rebranding was further bolstered by research, with team executives relying on data compiled by Harris Interactive that showed that 80 percent of fans polled were in favor of a return to the Hornets name.

    “We wanted the analytics to drive every single decision we made during the process,” Guelli said.

    But no big league sports franchise has ever left a city and taken the team’s nickname with it only to see a successor come in with a separate identity before reclaiming the original moniker. So, as Whitfield said, few examples could be found for the sake of comparison and strategy since “this had never happened before.”

    Help from the league office and one team in a recent and similar situation gave the Bobcats some guidance. The Brooklyn Nets relocated from nearby New Jersey in 2012, adopting their new hometown in their identity while overhauling team colors, logos, uniforms and their home court.

    Unlike the Nets and others with name changes, the Bobcats used the surge in interest to bring in sponsors — of the name change itself. Mercedes-Benz signed on last November as a team sponsor, an agreement including the lead role in milestone events tied to the return of the Hornets. Those events included throwback nights at the arena with former Charlotte players from the 1980s and 1990s, the introduction of the revamped logo, and ties to the Buzz City campaign created to push the return of the old team name at a time when the team couldn’t officially make use of it. Blue Cross and Blue Shield signed as the presenting sponsor of team mascot Hugo, and even the newly designed hardwood ultimately became a source of business, as the team last month locked up a lucrative apron signage deal with Novant Health: a multiyear agreement worth between $750,000 and $1 million annually.

    Hornets executives declined to disclose specific, total sales figures for the business done related to the rebrand to date. They did say that several more sponsorship deals will close later this summer and that the arrival of Mercedes-Benz, as well as McDonald’s and others that came aboard when the name change was announced, brought more than additional revenue. Those companies brought credibility and marketing power to a franchise that long lacked both.

    Luck helps, too. Dreadful teams, an even worse relationship between original team owner Robert Johnson and fans and local companies, and utter indifference to the Bobcats name and logo made the NBA an afterthought in a city once revered for its basketball passion. Heading into the final season of the Bobcats, Charlotte had won 28 games in the 2011-12 and 2012-13 seasons combined.

    Fan favorites Dell Curry (left) and Muggsy Bogues, helped reintroduce the brand.
    Photo by: NANCY PIERCE

    Expectations for 2013-14 were moderately better, but new coach Steve Clifford and free agent center Al Jefferson led the Bobcats to 43 victories and the playoffs, the second winning season for the team since its 2004 debut. Despite a four-game sweep at the hands of LeBron James and the Miami Heat, the hard-fought series nudged local sports fans. Combined with the return of the Hornets name, logo and merchandise, all rolled out over the course of last season as part of splashy events featuring popular former players and Jordan, an also-ran managed to push its way into the No. 1 ranking in the league for new season-ticket sales.

    Finally, after years of financial losses and mediocre ticket sales, fan support seems to be building.

    NBA teams use the benchmark of full-season equivalents — the number of season tickets sold plus the combined season total for mini-season plans — to gauge financial health. Teams with 10,000 seats sold in full-season equivalents are considered stable. Charlotte, under Johnson and then Jordan, never has reached 10,000. For the coming season, Guelli said the Hornets will eclipse that total.

    The Hornets also have sold 2,500 new full-season-ticket packages for the coming season, a league best and the most the team has ever sold, and team executives expect record new full-season-ticket revenue in the year ahead, though they would not disclose specifics.

    “It will be the place to be this fall,” said Mike Boykin, a former executive at GMR Marketing in Charlotte and veteran sports industry consultant. “It was smart to go back into one of the more fascinating and successful times of Charlotte sports history. Go back and look at the Charlotte Hornets: passion, merchandise, celebrity.”

    The array of details in the design process proved lengthy.

    “We worked closely with the Hornets to ensure we listened to their fans and made sure the team’s brand pays homage to [the original franchise],” said Keith Crawford, Jordan Brand vice president of design.

    Team execs studied traits of real-life hornets to create a new logo (above) distinct from the old one.
    Photo by: Enter Name Here

    Whitfield mentioned studying characteristics of real-life hornets, from eyes and tails to their behavior. Then, too, the new logo and uniform, in the minds of Jordan’s executives, needed to connect Charlotte’s NBA past and present. The new identity also needed to look modern without being trendy.

    The NBA and the Hornets sell shirts and other merchandise through a legacy line, so too close of a match in the new iteration would make new and retro indistinguishable. Since the league prevents teams from bringing back an exact old logo as a main logo, a duplicate look from yesteryear was impossible.

    Christopher Arena, NBA vice president of identity, outfitting and equipment, lined up secret scrimmages in the New York area to test the new uniforms and
    court design for TV. How legible are the numbers and letters when the uniforms are seen on TV? How does the court look on TV? For TV graphics and souvenir companies, how do the logos translate, and how consistent are the designated colors? What should the secondary logos look like? Should the former designer, Julian, be involved? (He wasn’t, as Jordan opted for Nike alone.)

    All the while, the Bobcats remained in business as the transition campaign continued.

    At one point, Whitfield and other executives gathered the players to explain the elements of the Hornets rollout. They wanted to assure the team of their commitment while also avoiding surprises as announcements occurred.

    Beyond sales, the Hornets have also used the return of the name as a chance to improve their own marketing. Social media, the team concedes, had been neglected.

    With renewed interest in the franchise, combined Facebook, Twitter and other social media followers have quadrupled during the past six months, the team says. Twitter followers now total 234,000, comparable to the Atlanta Hawks (227,000) and the NFL’s Carolina Panthers (281,000), if still far behind popular NBA teams such as the Chicago Bulls (1.6 million) and Miami Heat (2.6 million).

    “It has exceeded every goal,” Guelli said. “The momentum continues to grow.”

    Erik Spanberg writes for the Charlotte Business Journal, an affiliated publication. Staff writer John Lombardo contributed to this report.

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  • Teal is back, but only as accent or alternate

    No Alexander Julian, no pleats and no “Charlotte” on the chest of the home and away jerseys. Those changes, along with an updated, clean look, punctuate the new Charlotte Hornets uniforms.

    Adidas, the NBA’s official uniform supplier, provided the fabrics. Team staffers, the NBA office in New York and Nike’s Jordan Brand division collaborated on the designs.

    “Hornets” appears on the new jerseys; “Charlotte” is on the alternates, a tribute to the originals (below).

    Charlotte takes the court as the Hornets this fall for the first time in 12 years.

    The original Hornets became one of the top-selling NBA teams when Julian, the famed fashion designer who has roots in North Carolina, introduced the purple-and-teal colors and pinstriped uniforms in 1988. “Charlotte” was spelled out across the chest on the home white jersey and the teal road jersey. In the new versions, the home whites spell out “Hornets” in teal letters across the chest. The road uniforms are purple, with white letters spelling out the team name.

    Photo by: GETTY IMAGES
    An alternate uniform, with an all-teal base, pays tribute to the originals with “Charlotte” on the chest in white letters. Hornets executives said excitement and support from fans over the return of the Hornets’ name convinced designers to put the team name rather than the city name on the home and away jerseys.

    The alternate uniforms will be worn 16 to 20 times in the coming season and allowed flexibility to incorporate elements from Julian’s original design.

    “In 1988, a lot of people needed to know who ‘Charlotte’ was,” said Seth Bennett, senior vice president of marketing, entertainment and interactive media for the Hornets. “That’s no longer the case.”

    Julian wasn’t involved in the current Hornets’ makeover. The team says the final design tweaked the earlier uniforms with a contemporary spin.

    Hugo has returned for action, but the new version of the mascot (right) looks to have spent some time in the gym.
    Similarly, the Hornets unveiled a revamped bee logo and a sleeker font last December. A slimmer, more aggressive mascot — though still called Hugo the Hornet — emerged last month, much less Muppet-like than the popular original designed by Cheryl Henson (daughter of Jim Henson, the late Muppets creator).

    Orders for the new jerseys start in late August, and authentic jerseys will arrive in stores and be shipped to fans starting a month later. They also will be sold at the team’s arena shop, online and by various retailers starting in late September. Prices will be in the $200 range for authentic jerseys, with replicas selling for $65 to $70 each.

    Like the original jerseys, the new ones feature V-necks, but the overlay is a solid color instead of the earlier stripes. So-called tonal accents, muted lettering on the lower right portion of the shorts, include the word “Charlotte” on the home and away uniforms and “Hornets” on the alternate.

    The Julian jerseys featured four widely spaced pinstripes front and back. The new version clusters the striping along the left side only. Shorts also include a silhouette Hornets logo on the waistband and a cell pattern on the bottom left leg with a secondary or alternate logo.
    — Erik Spanberg

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  • What's all the buzz?

    April 2012

    Tom Benson buys the New Orleans Hornets and vows to change the team name to something more regional. The former Charlotte Hornets moved to New Orleans in 2002, with Charlotte getting another franchise, the Bobcats, in 2004.

    January 2013

    Benson says the New Orleans team will become the Pelicans for the 2013-14 season.

    May 2013

    Bobcats owner Michael Jordan confirms the team has asked the NBA for permission to bring the Hornets name back to Charlotte, pending a vote by the league board of governors. The team unveils a campaign called Buzz City, with purple and teal letters playing off the original colors introduced by designer Alexander Julian in 1988.

    July 2013

    The NBA, in a unanimous vote, approves Jordan’s application to make Charlotte the Hornets again, starting with the 2014-15 season. A Buzz City celebration in downtown Charlotte the same day includes appearances by former Charlotte Hornets players Muggsy Bogues, Rex Chapman, Dell Curry, Kendall Gill and Kelly Tripucka.

    November 2013

    The team selects purple and teal as primary colors for the new Hornets, with new secondary colors of black, gray and light blue. Mercedes-Benz signs as presenting sponsor of the Buzz City campaign, marking various milestones on the way to Charlotte’s reclaiming its original franchise name. McDonald’s and others become team partners and, in some cases, companies increase their investment and the size of their marketing campaigns.

    December 2013

    Jordan, flanked by former Hornets including Bogues and Curry, introduces the revamped Hornets logo and lettering during a halftime ceremony on the court as part of a Bobcats game.

    January 2014

    The team establishes a new single-day sales record for its arena team store as T-shirts, caps and other souvenirs with the new Charlotte Hornets logos debut on the same night the Bobcats host the Miami Heat at Time Warner Cable Arena.

    May 2014

    The Bobcats lose in first round of playoffs and retire the team name after 10 seasons. The Charlotte NBA franchise takes on the Hornets nickname.

    June 2014

    Team mascot Hugo the Hornet returns with a day of appearances around the city and on the roof of Time Warner Cable Arena. Jordan and Hornets executives kick off a community service day by volunteering at Hornets Nest Elementary School. Team sponsor Lowe’s and Fox Sports Carolinas/SportSouth participate in volunteer projects, gifts are provided to 9,600 teachers at local schools, and a $250,000 fund is unveiled to help teachers with classroom equipment and training. New uniforms are introduced with home, away and alternate versions that pay tribute to popular design elements of the original Charlotte uniforms. Fans also see the team’s new home floor as part of a draft day party.

    October 2014

    Hornets plan a two-day fan festival at the downtown Charlotte Convention Center leading into next season’s home opener. When the team takes the floor, the Charlotte Hornets will be on the court for the first time since 2002.

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  • Race Team Alliance: ‘Tons of things we can do’

    In early June, representatives from the nine biggest race teams in NASCAR assembled at Jones Day’s offices in Washington, D.C. They came together with a purpose. 

    After years of talk about collaborating on everything from cutting costs to arranging driver appearances, the teams agreed it was time to unite. 

    Race Team Alliance Chairman Rob Kauffman (right), with drivers Clint Bowyer (center) and Brian Vickers
    Photo by: GETTY IMAGES

    The Race Team Alliance, announced last week, is the result. The new business association was formed over the course of the last month with the assistance of Jones Day attorney Glen Nager, who represented American Needle in its antitrust case against the NFL before the Supreme Court. 

    The organization has bylaws, a mission statement and a chairman, Rob Kauffman, the co-owner of Michael Waltrip Racing and retired founder of Fortress Investment Group. It has the backing of the biggest names in the sport: Rick Hendrick, Roger Penske, Richard Childress, Richard Petty, Joe Gibbs, Jack Roush and Chip Ganassi. 

    They collectively agree the time has come for them to have a single voice and work together off the track to improve their businesses. They want to cut costs by possibly eliminating their private air fleets or finding a common insurer. They want to provide brands interested in getting involved in the sport with a turnkey way to work with some of the teams’ top drivers. They want to increase revenue by signing multiteam sponsorships in nonconflicting categories such as hotels. 

    “There are tons of things we can do,” Kauffman said. “Some people misinterpret NASCAR’s role. They’re a business. They operate in their own best business interest. It’s not their responsibility to help the teams. We need to help ourselves.” 

    The Race Team Alliance will collect dues, hire a small staff and invite other teams across NASCAR to become members. The nine founding members will be the only voting members, but rules in the bylaws allow a multicar team that fields a top-25 car to become a voting member. Similarly, if one of the founding members becomes a one-car team, it would lose its voting privileges. 

    “We made it a meritocracy,” Kauffman said. “We wanted to strike a balance between the nine teams and having natural growth in the future.” 

    Kauffman said the group came together following years of collaboration after the recent recession. NASCAR was hit harder than most sports, and several of its teams shuttered operations or merged during the economic crisis. In the wake of it, many of the teams began talking more and sharing more information. 

    NASCAR also encouraged the entire industry to work together and brought teams together to discuss the future of the sport. 

    “It’s taken time for people to get comfortable working together and delegating some authority to something outside their control,” Kauffman said. “There was a big enough need and enough pressure on teams financially that there was a feeling [teams] need to help themselves.”

    The concern at NASCAR and across the industry is that the teams want to do more than collaborate and cut costs. There’s concern that they want to create a stronger voice to change the way the sport distributes TV money, which is its largest source of revenue.

    NASCAR, which will begin a new, 10-year TV deal in 2015 worth more than $8 billion, now splits the revenue under a formula developed in the early 2000s that gives tracks 65 percent, teams 25 percent and NASCAR 10 percent. In recent years, team owners like Kauffman’s partner, Michael Waltrip, have questioned whether the portion they receive is fair.

    There’s also a concern across the NASCAR industry that the alliance will pressure NASCAR to shift from today’s owner-operator model, where each team runs its own business, to a franchise model, where the teams have a voice in how the sport is governed. 

    Race Team Alliance Mission Statement

    The mission of the Race Team Alliance is to provide an organization through which members can collectively preserve, promote and grow the sport of stock car racing and thereby advance the long term interests of the racing teams. The Race Team Alliance will be a forum for open dialog among the members about issues of common interest; it will provide a point of contact for those who wish to engage with teams collectively; and it will be a vehicle through which the teams can speak with a single, common voice. The Race Team Alliance will work collaboratively for the betterment of the sport and to create value for its members.

    But Kauffman said that the way TV money is split and franchising weren’t factors in forming the alliance. 

    “The association’s plan is to stay on the high road,” Kauffman said. “Things beyond [our] control are best not to focus on. The business model of team ownership could be improved, but it is what it is. No one forces you to [own a team]. What the team alliance is about is team owners working together.” 

    NASCAR’s public response to the alliance’s creation has been limited. Though the sanctioning body knew of the alliance for more than a month, NASCAR Chief Communications Officer Brett Jewkes issued a statement describing the formalized business association as a “concept.” 

    “It is apparently still in development and we’re still learning about the details so it would be inappropriate to comment right now,” Jewkes said. “NASCAR’s mission, as it has always been, is to create a fair playing field where anyone can come and compete. Our job is to support and strengthen all of the teams, large and small, across all of our series, and we’ll continue to do that.”

    But behind the scenes, NASCAR has sent a clear message to the nine owners that it’s not pleased about the creation of the Race Team Alliance. Sources said it let the organization know that it should direct communication from its lawyers at Jones Day through NASCAR’s lawyers, an approach typically reserved for when legal issues like a lawsuit or a sale are in play. 

    But according to Kauffman, who declined to comment on the lawyer-to-lawyer communication, there’s no need for NASCAR and the alliance to communicate now. The alliance’s focus is on building the organization. 

    “We’re really at the beginning of the beginning,” Kauffman said. “Step one is to get organized. If you approach it like a business and a company buys a big division from another company, they try to figure out what they’ve got before they make lots of changes. That’s the type of overlay we’re applying. It’s about organization and process.” 

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