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Sharks look for returns from owner’s investment

The San Jose Sharks captured four straight Pacific Division titles and went to two Western Conference Finals in the late 2000s, and appeared to be on the verge of becoming the Bay Area’s pre-eminent franchise.

But the team’s performance slipped and in 2015 it missed the playoffs for the first time since 2003. During that time, neighbors San Francisco Giants and Golden State Warriors both captured championships, the San Francisco 49ers went to the Super Bowl, and both the 49ers and the San Jose Earthquakes opened new stadiums.

The Sharks are building off a trip to the Stanley Cup Final last season.
Photo by: GETTY IMAGES
Now, on the heels of a playoff run that took the team to the Stanley Cup Final, as well as a multimillion-dollar investment in the team’s business operations by owner Hasso Plattner, the Sharks believe they are on the verge of reclaiming that title.

“The Bay Area is a very competitive sports and collegiate market, and as an organization we may have fallen back a bit,” Sharks Chief Operating Officer John Tortora said. “To be in this market we have to compete, and that means bring in staff and great talent, as well as find creative ways to drive revenue and make sure our value proposition is right for both fans and partners.”

Plattner, who has been the team’s majority owner since 2010 and is a co-founder of SAP, listened to Tortora’s plan and agreed to invest upward of $4 million over the last 12 to 18 months, making organizational changes and hiring additional staff that is now paying dividends for the team.

Since the end of the season, the Sharks have added more than 2,500 new full-season-ticket holders, putting them in the top five across the NHL in new sales, Tortora said, adding that the team’s renewal rates have exceeded 90 percent this year after two years of finishing in the mid-80s. All together, the team’s season-ticket base is now as large as it was at its highest point in the mid-2000s, he said.

The Sharks have also refocused their now larger sponsorship sales staff, giving their account managers more inventory to sell, and the team is approaching more than 20 new agreements. Most recently, the team signed a multiyear partnership with Solar4America by PetersenDean in which the team will rename both of its practice rinks in San Jose and Fremont. Combined, the team expects a record 20 percent to 25 percent jump in overall sponsorship business this season. Open categories include banking, luxury automobile and airline.

Tortora credits the work of Flavil Hampsten, executive vice president and chief sales and marketing officer, who came from the Charlotte Hornets in June 2015. The pair have led the changes on the commercial side, most notably a membership program called Sharks 365, akin to a program that Hampsten created in Charlotte. The program, designed for full-season-ticket holders, adds a year-round membership component for fans, including discounts on merchandise, early entry to games, food and beverage credits, and invitations to events such as player forums and parties.

Hampsten also said the team has lowered pricing on blocks of seats in the arena as a result of feedback from ticket holders, established a group ticket sales department marketing toward group theme nights, and cut back on broker sales. Hampsten said the team is also looking into fan experience packages akin to those sold in the NBA but are not as widespread in the NHL, offering experiences such as sitting on the bench during warmups or taking a postgame photo in the shark head that is placed on the ice for player entrances.

The team has also created its first business intelligence department with four additional staffers, and is building a system using sales and marketing software from SAP’s Hybris. The Sharks have also built out their first CRM system. Tortora said it has helped them find more precise leads, and learn more about trends and opportunities in their growing fan base. For example, the new Sharks season-ticket holder is about 10 years younger compared with the existing base, and they’ve seen a 30 percent increase in holders that identify themselves as Hispanic.

The team has begun to shift its marketing to appeal to a wider demographic as a result. In August, it hired Bay Area-based Division of Labor as its new creative agency, which is creating new brand campaigns for the Sharks.

Tortora said other improvements will be coming to the team this year, including investments in game presentation, a digital ticketing service and a new app in partnership with VenueNext. Other capital improvements in the arena will include a solar installation and a new dehumidification system.

“We have gotten the green light to do basically what we think will improve the business and improve the experience for our fans,” he said.

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