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Florida team execs talk about challenges of the market
June 7, 2012 11:02 AMFrom the challenge of building generations of fans to the challenges of working in harmony with other Florida franchises, the opening panel of the day featured a lively discussion among the presidents of four of the state’s professional teams.
Examining the Florida Sports Scene
Mike Dee, Miami Dolphins
Alex Martins, Orlando Magic
David Samson, Miami Marlins
Eric Woolworth, The Heat GroupWith seven teams in the state joining the four major leagues in the last 25 years, the execs said that trying to establish themselves to generations of fans is one of their biggest challenges. Marlins President David Samson, whose team played its first game in ’93, said, “We’re a little jealous of the Dolphins. They’ve been around longer, so they’ve been able to establish a much bigger tradition down here in Miami.” He added, “When you talk about trying to build a multi-generational team and affinity to your brand, it takes a longer time. None of us will be in these chairs by the time our franchises are really embedded in Miami.”
The Magic debuted in ’89, and team CEO Alex Martins said, “The joke in our marketplace is that nobody is really from Orlando. The first decade when we would have games, particularly against Boston or New York or L.A., there would be more of their fans in our building than our fans. The kids that came to games that first decade with their parents as a five- or six-year old are just now coming into the marketplace, coming out of college, getting their first job and becoming season-ticket holders or partial season-ticket holders. We’re really just starting to get the core of our fan base to grow.” Martins: “It’s going to take our franchises … 40 or 50 years before we truly have that multi-generational fan.”
Dolphins CEO Mike Dee said the diversity of the South Florida fan base is the team’s biggest challenge. Dee noted that the team regards its market as a 100-mile stretch up the Atlantic Ocean that includes Miami, Ft. Lauderdale and West Palm Beach. “The ethnic diversity, the cultural diversity, the economic diversity - you really have four or five different distinct markets, and in some cases distinct languages – in this 100-mile patch,” he said. “Each of those markets demand and requires a specific marketing approach.”
The relationship between the Marlins, Dolphins and Heat appears to be one of mutual respect. Samson did not mention the Panthers by name, but said, “The three ‘Miami’ teams work very well together.” He added, “I can’t speak for anyone else in this market, but we will not go to a sponsor and say, ‘The Marlins are this, the Marlins are that, don’t do business with them.’ That doesn’t make us look good.” Dee noted that he goes to Heat and Marlins games and said, “It’s far better to have that kind of relationship than it is to have one that is contentious or acrimonious, and I’m glad to say that (the Dolphins, Marlins and Heat) want that kind of relationship.”
QUICK HITS:
Heat President of Business Operations Eric Woolworth, on the biggest challenge facing the team: “Miami has a reputation of being a big-event town. The challenge then becomes how can you make every game a big event, and what are you doing at your games to differentiate the experience from what people are having at home to make it compelling, to make people really want to come.”
Samson, on having two major arenas, BankAtlantic Center and AmericanAirlines Arena, in the South Florida market: “The decision to build two arenas was a major moment in the sports landscape of Miami. Even to this day, it has impacted our market in terms of other events and the competition that takes place. It’s an extra layer of competition that really is not necessary.”
Martins, on what he considers competition: “If we’re only worried about competing with each other, we’re going to get beat. We’re really not competing against each other in terms of sports franchises. We’re competing for people’s time with everything else, whether it’s going out to dinner and going to the movies or staying home and watching TV.”
Dee, on the public perception of Dolphins Owner Stephen Ross: “The guy bought this franchise to win a Super Bowl championship. Some of the things that have happened [unfortunately have] sent the wrong message, and we’re trying to correct that.”
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One-on-One: Buffalo Sabres owner Terry Pegula
June 7, 2012 09:02 AMSBJ/SBD Executive Editor Abraham Madkour (left) interviewed Buffalo Sabres owner Terry Pegula.
Photo by: Gort ProductionsBuffalo Sabres owner Terry Pegula, appearing in a featured one-on-one interview during the SBJ/SBD Facilities & Franchises Conference, said he purposely lowered his public profile during the 2011-12 hockey season to lessen pressure on his players. After Pegula purchased the team in February 2011, he boldly stated, "Starting today, the Buffalo Sabres' reason for existence will be to win the Stanley Cup." That remains the case, buttressed in part by a recent, multi-million dollar improvement of the Sabres' locker room and training facilities at First Niagara Center. But the former oil-and-gas executive acknowledged that sports team ownership has been an adjustment. "I definitely made a decision to step back a bit this past season," Pegula said. "At the same time, you can't be an absentee owner. So it's been about finding a balance."
A lifelong hockey fan, Pegula said he talks to team GM Darcy Regier at least three times a day to discuss player personnel, and that he wants to model the Sabres in part after the Red Wings, Patriots and Steelers. "Each of those teams are very steady, very consistent, don't overreact and are absolutely committed to excellence," Pegula said.
Quick Hits:
On the Sabres' turbulent '11-12 season, which saw injuries, particularly to star G Ryan Miller and D Tyler Myers, leave the team out of the playoffs: "There's an adage that you should win despite injuries. But guess what? You don't. Health is an absolutely critical factor in determining your success."
On the NHL's oft-debated presence in non-traditional markets in the Southeast and Southwest: "I'm a big believer in building and growing the league in the Sun Belt areas."
On spending on players: "I don't make decisions based foremost on money. The first thing, the main thing we look at, is what the player's contributions are, and what his gifts are. I've never made a decision about money. It may seem hard to believe, but it's true."
On NHL Commissioner Gary Bettman: "He's a tough negotiator. A very smart guy. He's become a friend."
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Faces in the Crowd
June 7, 2012 08:44 AMScenes from Day 1 of the 2012 Sports Facilities & Franchises conference.
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Dynamic pricing can boost sales, but requires a deft touch, execs say
June 7, 2012 08:24 AMFor the Giants, dynamic pricing has generated a 7 percent incremental boost in ticket revenue in 2010, an 8 percent boost last year, and at least a similar increase this season. The Cubs, in their first year of dynamic pricing, are also seeing incremental revenue gains in the 2012 season's early going. And in Chicago, particularly, the additional revenue is plowed back into ongoing restoration efforts to build on both a last-place club on the field and a Wrigley Field badly in need of repair.
In-Depth Look: Dynamic Pricing
Colin Faulkner, Chicago Cubs
Russ Stanley, San Francisco GiantsBut beyond the additional revenue, dynamic pricing still required a deft touch with regard to public relations and customer management. Not only are season ticket prices honored as a floor to maintain price integrity for core customers, but both clubs are seeking to not overly train fans to be strictly price sensitive.
"It's a constant balancing act," Stanley said. "There are a number of things we’re always trying to balance, including our [AT&T Park] sellout streak and revenue maximization."
Perhaps surprisingly, both Stanley and Faulkner said the rise of dynamic pricing has had no corrosive effects on the secondary market. In both San Francisco and Chicago, the secondary market continued to grow in scale at double-digit annual percentages, and for the Giants, nearly 1 million tickets for the team traded hands on resale markets, nearly a third of their overall attendance. Faulkner said some high-end premiums on resale pricing have decreased in the wake of dynamic pricing, but has been more than made up in increased volume.
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One minute with Rams CMO Bob Reif
June 6, 2012 03:25 PMWhat do teams have to do to make the in-stadium experience more attractive to fans? For the St. Louis Rams, it means trying everything from video games to personal services, says CMO Bob Reif in this one-minute chat.
St. Louis Rams CMO Bob Reif talks about making the in-stadium experience more attractive to fans. -
Fan Preferences: How the At-Home and In-Venue Experiences Stack Up
June 6, 2012 02:12 PM
The majority of fans in six major sports – the NFL, NBA, NHL, MLB, college football and college basketball – would rather watch a game from home instead of attending the event, said Luker on Trends Founder Rich Luker during a presentation at the ’12 SBJ/SBD Sports Facilities & Franchises conference. That is a switch from ’98, when all six sports saw fans preferring to go to the games. “We are in the middle of a shift in our industry where the center of the universe is no longer going to be being there,” Luker said. “We are shifting from a contact that was made by being there to one that is based on watching.”Rich Luker talks about the in-venue experience versus watching at home.
Photo by: Gort ProductionsLuker, who founded the ESPN Sports Poll, noted it is not the “cream of the crop who are saying, ‘I’d rather watch it on TV.’” The bigger fans are the ones that have the highest preference of attending a game. Also, going to a game is still important to fans in the 12-to-34-year-old demographic. Luker: “Attending still is very important for your biggest fans, for your young fans and for those also active in sports. But, watching (on TV) is becoming a much bigger piece.”
Luker said that though more fans “prefer to watch, I would suggest to you that being there is still the pinnacle experience.” However, there are several implications to this mentality shift, the biggest of which potentially could be that if the trend continues and the “love of sport is based on watching the games on TV and personal experience is less critical,” then team’s competition changes from being other sports properties to being TV programs like “American Idol,” “The Bachelorette” and “Survivor.” Luker: “These are ‘sporting events.’ These are live, real things where consumers can pick a side and a team that you want to win.”
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From digital menus to new clubs, teams try it all to gain new revenue
June 6, 2012 01:42 PMTicketing technology, premium seat revamps and special events play key roles in providing teams with incremental income, according to a panel discussing future revenue opportunities at the SBJ/SBD Sports Facilities and Franchises conference.
Future Revenue Opportunities: What's on the Horizon?
Greg Economou, Madison Square Garden Sports
Andrew Feffer, Washington Nationals
Charles Freeman, Orlando Magic
Shervin Mirhashemi, AEG Global Partnerships
Derek Schiller, Atlanta BravesThe three-year, $1 billion transformation of Madison Square Garden will add three premium clubs to the famed arena, something it had never had before, said Greg Economou, MSG's executive vice president of corporate sales and solutions. The second phase of offseason construction, demolishing the entire upper bowl, started a few weeks ago after the Rangers bowed out of the Stanley Cup playoffs. All told, the project has created 28 "major transformational assets, 22 of which we have sold already, all found money," Economou said. "It's been an extraordinary run to date, and after this phase, from top to bottom, when we add these amenities, it's going to take on a much different feel. We joke that's like throwing a dinner party every night while you're reconstructing your kitchen."
Moving forward, international companies will play a key role for new activation at the upgraded Garden, in part due to MSG's marketing of New York Knicks guard Jeremy Lin. "We started to figure out how to tell the story ... we went on a few forays, we hit China, Europe and Russia, talking to companies we felt we could identify with that will be spending money in the U.S. in the near future to explain their brands," Economou said. "Obviously, our priorities changed, the Asian sector became a super high priority. We did some deals with Chinese based companies right away, which was more of an emotional reaction. For us, it's taking this gateway into the media capital, fashion, advertising and overlay that with incredible relevance with Jeremy and the Asian business community, it starts to take shape. I think there's going to be a lot of momentum in that space."
The Orlando Magic are trying to figure out how to continue to generate more revenue through the use of technology at Amway Center, the NBA team's 2-year-old arena. Digital menu boards have produced food per caps rivaling larger markets in Chicago, New York and Los Angeles, said Charlie Freeman, the Magic's executive vice president of business development. "The one that we are really interested in is yield management," he said. "How do you take the technology with upgrades and apply that to your arenas? We've been talking to Ticketmaster and other firms, so that a few days out prior to a game, during the game, how do you get that emotional purchase of upgrading that inventory? I saw that in Orlando yesterday when I checked into the airport, $45 to upgrade to first class. There's a market there to take advantage and increase your yields that we have to get to from a technology perspective. You have to be able to push the offer to the consumer so they can make an emotional buy. You will get a feel, with all the dynamic pricing teams are doing, for the inventory you have to fill. We have to get to that model at some point."
The Atlanta Braves are reaping the benefits of booking about a half-dozen postgame concerts a season at Turner Field, said Derek Schiller, the team's executive vice president of sales and marketing. The Braves bought a portable stage that cuts down on the expenses tied to production costs and artist fees. In addition, the team defrays those costs by selling advance seats and standing room space in front of the stage for $10 to $25. The extent to which bands are active on social media plays into choosing the right acts to play the ballpark, and the Braves work together to promote those special events through Facebook and Twitter. "One of the biggest successes we had last year was the Avett Brothers," Schiller said. "Fifteen thousand people showed up for that game in our estimation because of the band. They have a very activated fan base that wanted to see that particular band."
The Washington Nationals' test of paperless ticketing this season has enabled the team to track their customers' spending in real time from the moment they enter the ballpark. The team provides their fans with an option to use smart cards as their season ticket and to pay for food and retail concessions after loading credit onto the cards. In turn, the Nationals can provide their fans with special offers and discounts as part of a larger loyalty program. Fortress, the tech vendor, works with dozens of European soccer teams in addition to Major League Soccer's New York Red Bulls. The technology provides the Nationals with a "360-degree view" of their fans, said Andy Feffer, the team's chief operating officer. In Europe, those "e-cash" transactions have proven to generate three times the revenue compared with spending cash for concessions, Feffer said. "We will utilize this across the board for all season ticket holders next year, it won't be an option. The incentive to use this is tied to the loyalty points that you get by using the card ... for additional tickets, parking and experiences."
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One minute with Jags' president Mark Lamping
June 6, 2012 01:21 PMWhen it comes to connectivity, should you be able to do everything in a sports venue that you can do in your local Starbucks? During the opening panel this morning, Falcons CEO Rich McKay said fans expect that level of service. In our one-minute chat with Mark Lamping, president of the Jacksonville Jaguars, he picked up on that idea and talked about giving fans the technology they crave when they attend games.
Talking digital connectivity with Mark Lamping of the Jacksonville Jaguars. -
Chief execs talk about the challenges of keeping teams on track
June 6, 2012 11:12 AMThe ’12 SBJ/SBD Sports Facilities & Franchises conference kicked off with a panel of high-ranking team execs talking about how to keep their franchises on track in a changing sports landscape.
The Chief Executive Challenge: Keeping the Organization on Track
Adam Aron, Philadelphia 76ers
Mark Lamping, Jacksonville Jaguars
Rich McKay, Atlanta Falcons
Mark Wilf, Minnesota VikingsJaguars President Mark Lamping talked about understanding customers and knowing who they, as fans now “have so many ways to connect with us that we never had to worry about.” Lamping: “In the past, you knew who your season-ticket holders were. Now, you can have a customer that is re-tweeting tweets, goes to our website, likes us on Facebook, communicating with his or her social network about things with our franchise. But we have no idea who they are.”
As the Vikings gear up for their new stadium, which is scheduled to open in time for the ’16 NFL season, team President Mark Wilf said, “What we’re going to be looking at very, very hard is how do we get people out of their seats. The in-home experience is so good right now, we’ve got to make going to the game something exciting, something different.” Falcons President & CEO Rich McKay added, “The in-game experience is probably as important an area as there is. We’ve really focused on it the last three years and really ramped up what we deliver. We take the driveway-to-driveway look, and our fans expect a lot from us.”
Noting the advent of the RedZone channel and other benefits that exist for fans who stay at home to watch games, McKay said, “We need to deliver a media experience, and we need to understand that the media experience is not just three hours of football.”
Twitter remains a important avenue for teams to reach both existing fans and prospective fans. 76ers CEO Adam Aron said he sent out more than 2,200 tweets during the season this year as a way to help rejuvenate what had been a declining fan base. He said, “It boggles my mind that I could communicate with 125,000 potential customers, 10 times a day, instantaneously with instant feed back – I do it all for free.”
Aron added, “When I started out in advertising in 1981, you would spend two months working on a magazine ad. You would send it to the magazine, and three months later it would run. People would look at it for six seconds and they’re done. The communication now is so different.”
QUICK HITS:
McKay, on the need for venues to upgrade the capability for fans to be able to text and tweet more successfully: “All I want to be able to do when I go to a game is be able to do what I do when I go to Starbucks. Fans sitting in the stands pay pretty good money for their tickets. They want to text their buddies, they want to talk about fantasy football -- they can’t do any of it.”
Wilf, on HBO’s struggles to find a team to follow during training camp this season: “If a team that’s on ‘Hard Knocks’ wins the Super Bowl, you’ll have 32 teams wanting to do it next year.”
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Building a winning sales culture requires strong core principles
June 6, 2012 08:09 AMIt is impossible to build a winning sales culture without first establishing a set of clear, overall organizational principles, said panelists at the SBJ/SBD Ticketing Summit.
Maximizing Sales: Why It All Starts with Developing Your Sales Culture
Bill Sutton, Moderator
Drew Cloud, Madison Square Garden Sports
Murray Cohn, NBA
Steve Griggs, Tampa Bay Lightning
Jeff Ianello, Phoenix Suns
Ben Milson, Tampa Bay BuccaneersLightning COO Steve Griggs outlined the hockey team's overarching rebuilding process both on and off the ice, a process that ultimately left it better prepared to boost season ticket sales from fewer than 4,000 full-season equivalents to more than 10,000. "Without having those core principles of what your organization stands for, you don't have anything to sell," Griggs said. "We had to change everything we do, and then sales resulted from there."
Murray Cohn, the NBA's VP for team ticket sales and team marketing operations, outlined his five core traits of a successful ticket salesman: positivity, a pursuit of greatness that believes good is the enemy of great, honesty and integrity, a strong work ethic, and teachability.
Quick Hits:
-- Bill Sutton, panel moderator and founding director of the Tampa Sport and Entertainment MBA/MS program, said three reliable backgrounds of great ticket sellers are bartenders, female soccer players and fraternity rush chairman. With regard to the latter, Sutton referenced one of the most famous fictional fraternity rush chairmen, Eric Stratton from "Animal House."
-- Drew Cloud, vice president of ticket sales and service for Madison Square Garden Sports, on the need for employee recognition within a sales team: "Our salesmen deal with a lot of rejection. Our best salesmen fail 93 percent of the time. In baseball, players go to the Hall of Fame if they fail seven times out of ten. But our close rate is 2, 3, 4, 5 percent. So recognition is very important and it's critical we create a culture where we're always rooting for each other."
