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Volume 22 No. 32
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NBA to help clubs upgrade arena operations, profits

The NBA is developing a leaguewide initiative designed to improve facility operations and arena profitability among its 30 teams.

The effort, in its early stages, will be led by the league’s team marketing and business operations division but also will include input from its technology, security and facilities departments.

The TMBO division for years has been a way for teams to share best practices in areas such as ticket sales, sponsorships, promotions, customer service and, most recently, food and beverage. Now, arena operations is the target, with the focus on helping teams with staffing considerations, filling open dates with events, potential renovations, and use of technologies in their buildings.

The initiative also aims to address deals teams have with third-party operators, such as AEG and SMG, including the terms of those agreements. About two-thirds of the NBA’s 30 teams control their own arenas, but all 30 clubs will have access to the shared resources.

BROOKS
“We are beginning to look into arena operations,” said Amy Brooks, executive vice president of the NBA’s TMBO division. “We have a lot of teams that control the best arenas in the world. We are looking at efficiencies in how teams operate their arenas. We have had a lot of discussions with teams. It is anything from how they schedule the building to how they staff it. It’s the nitty-gritty details while still maintaining fantastic customer service. It’s an approach to running an arena properly and looking at metrics at how teams do so.”

Brooks noted that the effort was just beginning and was not intended to displace a team’s third-party operator. She would not say whether the league would hire more staff to help with the new area of focus.

“We are at the stage of pointing out disparities, and that often means opportunity,” Brooks said. “We are just starting to look at data.”

The move marks a significantly enhanced role for the league in arena operations. The NBA in recent years has addressed the issue for clubs in presentations during the league’s annual sales and marketing meetings in January. The more formalized effort being developed now comes at the request of the teams. Just last week, NBA officials visited American Airlines Center in Dallas to test the arena’s security operation as part of the league’s “audit” to help upgrade those systems, said Dave Brown, the facility’s executive vice president and general manager.

“We welcome any additional experience the NBA can provide,” Brown said. “We always need to be benchmarking.”

Staples Center President Lee Zeidman agreed with Brown’s assessment. “Anything TMBO can do in terms of best practices, we’re open to all kinds of things,” Zeidman said. “It can only improve our venues and make it a better fan experience.”

The Magic doesn’t book shows for its arena, but says data sharing among clubs will still be helpful.
Photo by: AP IMAGES
The Orlando Magic is one of the eight NBA teams that does not book its arena; the Magic relies on the city of Orlando to run publicly owned Amway Center in that regard. But Magic CEO Alex Martins said having access to information from across the NBA could pay dividends for the team for its relationship with the city.

“From the TMBO perspective, [the new initiative] is more along the lines of helping teams share best practices, similar to what we have done in ticketing, sponsorship, and food and beverage,” he said. “There are some elements we can take advantage of. When it comes to booking, that is not our responsibility, but we can go back to the city based on the information and let them know how we can help.”

NBA teams for years have brought in outside consultants to review arena operations. For example, eight years ago in Charlotte, Global Spectrum, now Spectra Venue Management, took a look at the then-Bobcats’ operation of Time Warner Cable Arena to see how the team could attract more concerts to the building. The Bobcats were struggling to secure dates in a competitive regional market and ended up signing a booking agreement with AEG Live. As it stands now, Live Nation fills that role for the rechristened Charlotte Hornets as part of the team’s ticketing deal with Ticketmaster.

Teams could still retain consultants in tandem with the league’s new effort. But whereas a team seeking help from the league previously might have been first referred to a consultant, the NBA’s new focus could be a way for clubs to receive additional insight more directly.

“We love that the NBA is leaning in to provide more insights on arena operations,” said Mike Evans, president of Live Nation Arenas. “We work closely with virtually all NBA teams and venues, and we look forward to leveraging our existing partnership between Ticketmaster and the league to grow live events, maximize arena opportunities, and help drive best practices.”

Among facility management companies, SMG runs two NBA venues: Chesapeake Energy Arena in Oklahoma City and Smoothie King Center in New Orleans. Jim McCue, senior vice president of SMG Sports and Entertainment, said the company and the teams at the local level do combine their marketing resources for all events. Most recently, SMG teamed with the Thunder to create a 30-second television spot, co-branded with their respective marks, that runs during game broadcasts and promotes upcoming events at the arena. McCue, a former arena executive at the Palace of Auburn Hills and the Rose Garden, now Moda Center, supports the NBA’s effort.

“I spent 10 years in two NBA buildings and I’m all for that,” McCue said. “It’s a great opportunity to cross-promote, especially social media-wise, with the NBA teams and all their firepower. It all ties in together.”

Separately, Oak View Group, the new company owned by former AEG President and CEO Tim Leiweke, concert industry executive Irving Azoff, and sports marketer Dan Griffis, has signed deals with Madison Square Garden and Philips Arena to bring more shows to those venues. The new NBA arena effort will be a way for the Knicks and Hawks, respectively, to share information with Oak View Group, and with others booking events, about what’s being done at other venues to improve efficiencies.