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Volume 20 No. 42

Events and Attractions

While the sports industry is constantly focused on increasing revenue, the prevailing sense at the 2012 IMG World Congress of Sports last week was more myopic: Focus on the current customers, enhance their experience and do everything possible to retain their business.

Industry executives said time and again that they are focused on improving customer service by providing a healthy variety of entertainment options, improved premium packages, diverse ticket prices and viable technology offerings that make everything from parking to ordering concessions easier.

In an era where people increasingly choose the videos they watch on YouTube, pick the songs they hear on Spotify and compile the news they want to read on Flipboard, the consensus of the 600 sports executives who gathered last week in Dana Point, Calif., was that customizing a fan’s experience is critical to retaining his business.

“We realize that there are fans for a three-hour baseball game who are not going to be waiting on every pitch.”
Larry Baer
President and CEO, San Francisco Giants
“Trying to dictate for your consumers and trying to give them a kind of one size fits all, that’s over,” said Jed York, CEO of the San Francisco 49ers.

San Francisco Giants President Larry Baer added, “People talk about competing for the entertainment dollar, but I see it more as competing for the entertainment hour. If you don’t get it at the ballpark, you’ll get it at the theme park or movies or sailing on the bay or driving to the wine country.”

NFL Network President and CEO Steve Bornstein said the arrival of high-definition TV improved the experience of watching games at home so much, so fast that it was impossible for teams and their venues to keep pace and add the type of value to the game-day experience that compelled people to leave the couch.

At the same time, Bedrocket founder and former CSTV co-creator Brian Bedol said ticket prices rose, so teams were asking fans to pay more for the same offerings at a time when fans could stay home, pay less and have a better experience.

Bedrocket’s Brian Bedol said the in-stadium experience hasn’t kept up with the couch.
“The at-home experience is great. The in-stadium experience has not kept up with it for the price of the ticket,” Bedol said.

This isn’t the first time that sports executives have talked about the importance of improving the customer experience. What is different is that it’s become the foremost priority as they fight to remain competitive in a fragmented entertainment environment.

Several team presidents said that one of the most immediate ways they are looking to improve the fan experience is by replicating some of the strategies employed at Disney theme parks. They are trying to do a better job policing fan behavior, offering more entertainment before and during games and training staff to provide better customer service.

“We have a fan [parking] lot with Coca-Cola, where fans can go out and hit baseballs, simulate the game, involving the mascots for the younger fans and creating a feeling that it is a bit of a theme park for the more casual fan,” Baer said. “We realize that there are fans for a three-hour baseball game who are not going to be waiting on every pitch.”

The Nets are working with the Disney Institute to train staff and help create a family-friendly, feel-good air at NBA games, said Brett Yormark, CEO of Brooklyn Sports & Entertainment.

“I had a meeting with [New Jersey Nets minority owner] Jay-Z six months ago [and] he said your goal is to make sure that everyone leaves feeling like they were a celebrity that night,” Yormark said. “And that truly is the differentiator, at least in our mind, because I’m not sure anyone is coming to any vendor in New York saying, ‘Boy, I had a great experience tonight, they treated me well.’ With our alignment with Disney … they’re going to help us treat the customer in a very special and different way and give that customer a reason to keep coming back.”

Improving premium and season-ticket-holder offerings is another way teams are looking to improve the fan experience and retain customers. The San Diego Chargers, who have a season-ticket base of 50,000 and had two games blacked out last season, are focused on giving season-ticket holders more access at Qualcomm Stadium. They’ve begun offering tours of the locker room and private coach talks and have given club ticket holders the chance to go on the field after games.

“It’s all about servicing our best clients even better,” said Ken Derrett, the Chargers’ chief marketing officer.

Other teams are trying to do that by improving their infrastructure and creating new premium offerings. The Edmonton Oilers, Calgary Flames and Vancouver Canucks recently hired Rossetti to design bird-nest suites that are perched at the top of the venue and look down over the ice the way the upper loge of an old theater hangs above the stage. It’s an area that typically attracts younger, affluent fans because it favors glass and steel over the granite and wood panels featured in most suites.

Packers President Mark Murphy warned of crowds becoming too corporate.
“It catches a different demo and delivers a different type of access,” said Matt Rossetti, the architecture firm’s president.

Diversifying ticket prices is another area where teams believe they can make a difference. Some executives believe ticket prices have increased too much. Green Bay Packers President Mark Murphy gasped when Madison Square Garden Sports President Scott O’Neil mentioned that courtside seats for Knicks games cost more than $3,000.

“Not to pick on [the Knicks], but $3,000 for a courtside seat?” Murphy said. “All fans and crowds have become more corporate. We’re getting away from really having family events.”

But O’Neil made the point that those are the high end of the Garden’s ticket prices.

“We like to have something for everyone,” he said. “In our market, if someone wants to sit on the front row, there’s a premium. If someone wants to get in the building, we have $10 seats. If somebody wants to have the food and beverage inclusive … we’ve got you too, buddy.”

The biggest area in which industry executives believe teams and leagues can improve the fan experience is, of course, with technology. Old and new venues alike feel increasing pressure to provide Wi-Fi and wireless service that allows fans to upload photos, watch replays and order concessions.

“If you can’t take a picture and send it to your friend, you get frustrated,” said Gary Stevenson, Pac-12 Enterprises president. “Our view is that the infrastructure has to improve so you don’t get frustrated.”

There was a real sense last week that venues are on the precipice of being able to offer Wi-Fi and wireless service to every fan at every game. When it opens next year, Barclays Center will have high-density Wi-Fi that the Nets claim will service all 18,000 spectators. Cisco also has updated old stadiums like Real Madrid’s famed Estadio Santiago Bernabéu so that they have the capability to deliver Wi-Fi to 85,000 spectators a game.

Providing connectivity is a seven-figure expense for teams, and most executives remain unsure of how they will monetize it. But they know there will be upsides in making sure fans are wired at games.

“Maybe your no-show ratio drops. Maybe you drive higher per caps. Maybe you shorten concession lines,” said Marc Riccio, senior vice president of the New York Jets, who recently invested in improving the Wi-Fi service at MetLife Stadium. “That provides better value and gets fans to games. You can’t pin it on any one thing. It won’t be the same for every fan. But you have to do it.”

Technology developers said that most of the financial upside in connecting fans at venues rests in the ability to upsell fans. Ticketmaster developed technology that allows people to post their seats on Facebook and Twitter, which in turn produced incremental ticket sales of $6 and $20, respectively, per post to each site. And the Staples Center, which adopted Cisco video platforms that allow customers to order concessions from their premium seats, has seen a 10 percent increase in per-cap spending.

“Everything we’re doing we’re trying to take back to how does it pay for itself,” said David Holland, Cisco’s senior vice president and general manager of sports and entertainment. “These investments don’t just create cool stuff, but they [have to] help them make money and hopefully bring in players and win on the field.”

The evolution of paperless ticketing is another advancement that will help teams further improve the way they service fans, said Ticketmaster CEO Nathan Hubbard. Right now, teams don’t know who buys two-thirds of the tickets for any given game because those purchases occur on the secondary ticket market. Having customers swipe their credit card when they attend a game or use their smartphone as a ticket will allow teams to learn a wealth of information about who is attending games.

“Paperless ticketing is a data point,” Hubbard said. “It’s about how do we get to know each and every person who’s walking through that venue so that these guys who are the best in the world at marketing can get the right experience at the right time to the right person at the right price.”

Whether it was technology improvements, new premium offerings or more entertainment at games, the consensus throughout the two-day event kept coming back to one thing: Teams have to put fans attending games first.

“You have to think of yourself as a steward,” said Golden State Warriors co-owner Peter Guber. “You have to look at these people as guests, and you’ve got to get these guests to come back one time, two times, 10 times, 12 times. You have to build relationships with them, not transactions. Most of these owners aim for people’s wallets instead of their hearts.”

Staff writers Terry Lefton, John Ourand, Chasen Marshall and Dave Morgan contributed to this report.

The organizers of the Formula One Grand Prix of America race in the New York-New Jersey market have begun a search for a title sponsor willing to pay $15 million and developed preliminary pricing for ticket and hospitality packages.

Sponsorship, general ticket sales and hospitality will be the event’s three primary revenue streams, said Leo Hindery, the race’s promoter and founder of InterMedia Partners. The race, which will be held along the Hudson River in New Jersey, is scheduled for June 2013.

Hindery said his agreement with F1 Management Chair Bernie Ecclestone calls for race organizers to share sponsorship, hospitality and ticket revenue with F1 management. He declined to specify how that revenue would be split, but said the revenue-sharing arrangement combined with the sanction fee for the race will deliver F1 management the same amount of money in aggregate that it receives from other races.

Sponsor volume may be higher than at the Petronas Malaysia Grand Prix, Hindery says.
Under terms of the agreement with F1, New York-New Jersey race organizers will have three sponsorships to sell: a title sponsorship and two official partnerships. The three companies that sign on for those deals will be featured in pre-race promotions and trackside signage that will be visible on the F1 worldwide broadcast that reaches an estimated 30 million people.

“Because it’s New York, we’ll have more sponsors than other races elsewhere in the world. The volume of sponsorship might be higher than Kuala Lumpur,” said Hindery referring to the March 19 Petronas Malaysia Grand Prix.

The organizers have hired SJX Partners to assist with sponsorship sales. The agency, which is headed by former USTA chief marketer Harlan Stone, is working with Grand Prix of America chief marketer Trip Wheeler on selling the race title sponsorship. The group initially went to market with a $20 million package, but that has decreased to $15 million. NASCAR Sprint Cup race title sponsorships typically sell for $3 million to $5 million.

They also are looking for two official sponsors. The pricing on those agreements wasn’t available.

The categories that the sales team is focused on include: financial services, pharmaceutical, technology, telecommunications, energy and apparel. They hope to find a sponsor by June so that they can announce the sponsor with one year to go before the race.

The pricing for sponsorship is based on the premium paid for F1’s global sponsorships, which can cost as much as $40 million a year and include trackside signage during races, and other marquee New York sports events such as the U.S. Open.

Race organizers also have begun outlining ticket pricing. The current plan is to offer three-day hospitality packages that cost $3,000 to $4,000 per person. Those packages will include seat locations above the pit area and catered food and drink.

Three-day general admission tickets will be sold for an average price of $400 to $450.

The organizers plan to market both the race and the entertainment offerings of the New York market in their ticket sales efforts. They plan to play up the city’s restaurants, theaters, music and other options.

Internal projections estimate the race will attract 110,000 people. That number is based in part on the 90,000 spectators who attend the annual F1 race in Montreal.

Organizers don’t think ticket prices will impede them from hitting their attendance goal. The average price for U.S. Open men’s final tickets are $330.

“New York’s a special market, and if there’s a premium, then New York demands it,” said Tom Cotter, president of Grand Prix of America.

Cotter said he plans to hire a number of contractors to assist with the race. He recently interviewed design companies for a job developing temporary suites for the race. He plans to hire a ticketing company and may consider hiring a sales agency to assist with hospitality packages.

Cotter said one of the other things New York race organizers are discussing is creating ancillary events that turn the week before the F1 race into a celebration similar to the one that precedes the Super Bowl. They would host concerts on both sides of the Hudson.

If they did that, Cotter said the organizers would look to sell additional sponsorships around that celebration.

The group hopes to iron out those plans and others this spring. Hindery said that when the race was announced last fall he felt like he had plenty of time to prepare for the summer of 2013 event, but that’s begun to change.

“We have to find those sponsors and treat them with respect so they want to stay sponsors; we have to get 100,000 people to show up and the food better be good,” he said. “Thank God we’ve got a year to do this. I’m getting a little edgy to get things done.”

Staff writer Terry Lefton contributed to this report.

This week’s college dunk contest will get an assist from Twitter users.

Intersport’s popular event at the site of the Final Four will be decided for the first time, in part, by votes on Twitter from fans watching on ESPN.

The dunk contest, which has been run by Chicago-based Intersport for more than 20 years, typically is shown on ESPN with a one-hour or two-hour delay. Thursday night’s contest, however, will be televised live from start to finish.

“The great part of the dunk contest is the immediate payoff with the dunk, followed by the judges throwing up their scorecards,” said Shannon Dan, Intersport’s vice president of digital media. “We want to keep that aspect alive while also opening it up to give the fans a voice on Twitter.”

After each dunk, viewers will go to Twitter and post the dunker’s name and score, and those will be quickly tallied into an overall fan score. ESPN broadcasters will give the viewers instructions before the dunks begin. That average fan score will be figured along with scores from the four celebrity judges.

Increasing the social media extensions for the dunk competition and its accompanying three-point contest have been primary goals for Intersport, now in its 24th year of staging the basketball events in the host city of the Final Four. Intersport has worked with the NCAA in the past to include the dunk and three-point contests in the NCAA’s Bracket Town fan fest, but Intersport decided last year to go back to doing the event on its own.

This year’s dunk and three-point contests will be held at Tulane’s Fogelman Arena. State Farm is the event’s title sponsor, while Denny’s also is back as the dunk contest sponsor.

While Twitter gives fans the more immediate involvement in the judging, Intersport has been active on the dunk contest’s Facebook page for months, inviting dunkers on college teams to upload videos of their best dunks. The idea was to find a “Darkhorse Dunker,” in other words, a no-name who seldom plays or a player from a small school, to participate in the dunk contest. Voters on Facebook chose James Justice, a 5-foot-9 guard from NAIA Martin Methodist College in Tennessee, to compete.

This is the second year that Intersport has used Facebook to incorporate fan votes into the selection process.
Intersport, which produces seven live events like this each year for TV, will watch how the Twitter voting works at the dunk contest and will perhaps add it to some of its other events, like the college home run derby, the high school dunk contest or the college football skills challenge.

Madison Square Garden Inc. has abandoned plans for New York City’s first major BMX and skateboard event this summer.

The event, which was to be called the Empire Open, was to have been held in Queens at the USTA Billie Jean King National Tennis Center. The company last year hired ASA Entertainment, an action sports event and television production company, to assist in developing and producing the event.

In anticipation of the Empire Open, MSG last summer created an action sports division and produced a BMX and skateboard demonstration in Times Square called Air in the Square.

An MSG spokeswoman declined to comment on the Empire Open, but provided a statement that said MSG remains interested in action sports.

“We are constantly exploring potential growth opportunities for MSG Sports,” the statement said. “We continue to be very interested in the action sports space and are always exploring new event and partnership opportunities.”

This summer’s Empire Open is the second planned action sports event in New York that has been canceled. Quiksilver canceled its ASP World Tour surf event, the Quiksilver Pro New York, late last year. The company didn’t provide a reason for the cancellation at the time.

MSG partnered with Quiksilver to broadcast the 2011 Quiksilver Pro New York event. It’s unclear if that event’s cancellation had any effect on plans for the Empire Open.

MSG’s networks — MSG, MSG Plus and Fuse — have a history of showing action sports programming. In addition to the Quiksilver Pro New York, the networks broadcast Red Bull Snowscrapers, a 2009 snowboard competition along the East River, and BMX rider Kevin Robinson’s attempt to set the world record on a BMX bike by soaring to a height of nearly six stories in 2008.

New York has a strong BMX and skate community, but no multisport event organizer has tried to bring a competition to the city.

The Maloof Money Cup held a skateboard-only competition in Flushing Meadows in Queens in 2010 and 2011.