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Volume 21 No. 1


The Milwaukee Bucks have hired Ted Loehrke as chief revenue officer, a newly created position, making the club at least the third NBA franchise to add the title to its front office in the past year.

Loehrke comes to the Bucks from the NBA’s headquarters, where he worked as senior vice president in the team marketing and business operations department (SportsBusiness Journal, Oct. 22-28 issue). He joined the NBA in 2007.

He begins his new job this week, reporting to Bucks vice president and alternate governor Ron Walter.

“The Bucks see opportunities to continue to grow revenue, and I’m thrilled to join their talented staff in the new CRO role to help capture these opportunities across the organization,” Loehrke said.
Earlier this year, the Cleveland Cavaliers hired Brad Sims, who also worked in the NBA’s team marketing and business operations division, as senior vice president and chief revenue officer. The Atlanta Hawks in June hired Andrew Steinberg as their senior vice president and chief revenue officer.

With the CRO additions, the Bucks, Cavs and Hawks join six other NBA teams — Charlotte, Indiana, Memphis, Orlando, Sacramento and San Antonio — that have executives with similar, chief-revenue responsibilities. These executives have oversight of all team revenue operations, ranging from ticket sales and sponsorships to arena-related income.

“Instead of having different silos — one for tickets, one for sponsors, one for the arena — you have one person driving the revenue,” said Bill Sutton, a former NBA executive who now runs his own sports marketing consultancy, Bill Sutton & Associates, which counts NBA teams as clients.

Sutton said he expects more NBA clubs to create CRO positions as teams look to better coordinate and streamline all revenue-generating responsibilities.

“I think it is essential,” he said. “You are not hung up on department results, you are hung up on organizational results.”

San Francisco Giants officials are looking to strengthen their aggressive entry into dynamic pricing after a scorching resale market for World Series tickets set records last week.

Industry sources said more than 10,000 tickets changed hands for last Wednesday’s World Series Game 1 at AT&T Park just on StubHub, MLB’s official ticket resale marketplace. The figure represents just shy of 25 percent of the total stadium capacity.

StubHub hit a sales milestone the day before Game 1 of the World Series at AT&T Park.
With even standing-room-only tickets selling for more than $300 each on the secondary market and StubHub commanding a 25 percent combined fee on every sale, sources said the sales just for the Series opener easily generated more than $1 million in commissions. A portion of the revenue goes to MLB and is distributed among its teams.

Executives at San Francisco-based StubHub declined to confirm the figures because of confidentiality provisions included in its deal with the league. The company did say that Oct. 23, the day before the start of the World Series between the Giants and Detroit Tigers, represented the single largest day of sales in the company’s 12-year history.

The bullish World Series ticket resales, amplifying trends seen in the earlier rounds of this year’s playoffs, have given Giants executives more confidence regarding their efforts in dynamic pricing. Secondary market ticketing directly affects dynamic pricing, because the market-based pricing on the secondary market gives entities such as the Giants additional, valuable data points to feed into the algorithms used for dynamic pricing.

For the past several seasons, the club, with the aid of Texas-based analytics firm Qcue, has changed prices for single-game tickets based on supply and demand. The league expanded the program this year to the league division series and league championship series for the first time, and MLB allowed the Giants to run a limited dynamic pricing test for the World Series.

Dynamic pricing has generated incremental boosts in Giants total ticket revenue of 7 percent to 8 percent a year. The club’s season-ticket base has soared to nearly 30,000 full-season equivalents, up by nearly half in just two years, and will likely be capped for 2013, leaving a quarter of the ballpark at most subject to price changes. But the overall ticket revenue growth figure could still move into double-digit percentages next year, as the pricing model becomes more detailed and dynamic ticketing becomes more accepted.

“I’m really looking forward to all the dust settling on this,” said Russ Stanley, Giants managing vice president of ticket services. “This additional data is immensely valuable, and we’re getting better with the dynamic pricing all the time. We’re still not going too crazy with it, certainly relative to the secondary market. But where we’ve gone up $1, $2 a ticket in the past, we can now maybe think about $5, $10 or $15 for high-demand games.”

San Francisco has long been one of StubHub’s hottest-selling markets in addition to its corporate home, and the 2002 World Series between the Giants and the then-Anaheim Angels represented a turning point in the mainstream acceptance of the secondary market as an important fixture in sports ticketing. About 1 million Giants tickets trade on the resale markets during the regular season, when such activity is more common, representing about a third of the club’s total attendance.

The club’s active sellout streak is at 166 games and counting as of press time, second longest in baseball behind Boston’s active mark of 793 games.