Highlights from the 2008 Sports Facilities & Franchises Conference

Street & Smith’s Conference Group’s 8th annual Sports Facilities & Franchises conference began in Washington, D.C., with a panel of team and facility presidents discussing key business challenges. Panelists included the Pirates' Frank Coonelly, Cavaliers' Leonard Komoroski, Marlins' David Samson and Auto Club Speedway’s Gillian Zucker.

Samson Says Promotions Are Part Of Job For Major League Player

The issue: Are players and managers becoming more open to promotions?
The skinny: Coonelly: "This is why we keep our roster young. You have to set the expectation level. We do have it in player contracts that players must go to reasonable promotions as part of their job. They cannot just show up for BP and the game. If you allow your athletes to think they are not required, you are setting yourself up for a no answer."
Zucker: "I disagree that promotions are inherently part of players’ jobs. We see a difference when we get to know the athletes and what they enjoy to better tailor what promotions they can help within the community."
Samson: "We don’t ask. I would never ask a player. What players want to do on their free time is play video games and buy cars. They are not my friends. I don’t care about my relationship with them in any way. My job is to sign them, trade them, discipline them. They have enough people around them to treat them like gods, I don’t want to add our people to the list. I don’t want to imply that I don’t treat them like human beings, but they are human beings who are under contract to me. They are to do exactly what we tell them to do, exactly when we tell them to do it. We treat our players with kid gloves with the union so strong. The way they travel, the way they check into hotels. I’m not a monster. Our players have responsibilities in the community. We don’t wait for them to tell us what they are interested in. If they want to give money to our foundation, we will support them. We will help with their own charitable organizations."
Komoroski: "There needs to be a happy medium. We put players in the community trying to have them doing things they may like and things that will help them succeed."

The issue: Why are promotions like all-you-can-eat sections and loaded tickets doing well?
Coonelly: "Well, in Pittsburgh, we just like to eat. But really, you see things like college kids who like to come out and see if they can eat 20 hot dogs. But we really sold it to families who know they can come to the ballpark and get their meal and entertainment at a set price. Loaded tickets are another way to maximize on sections of the stadium that haven’t sold really well."
Samson: "We’re often criticized by media for having too big a marketing budget, maybe even by your own publication. There is such a high supply of tickets at Dolphin stadium, and it is hot, so people don’t need to come to the ballpark to be uncomfortable. The all-you-can-eat section helps bring them in."
Greatest hit: "We thought the all-you-can-eat section would be a moneymaker for us, and it could be economy-related, but we’re selling the section out to people like Randy Quaid from “Vegas Vacation,” who I think may be stuffing their tins with food" -- Samson.

The issue: Looking forward three years to 2011, what will the ticketing experience look like?
Komoroski: "We’ve got our sister company, Veritix/FlashSeats, which has 65 percent of our season ticket base using e-tickets. So we’re moving away from hard tickets. The new system will make it easier to transfer tickets among fans. It helps us to better understand who is sitting in our building during games. No counterfeit tickets, no scalped tickets. We now have an incredible amount of data and we can tell things like if fans come 15 minutes early. That can then translate into perhaps issuing that fan a coupon for a free drink pass redeemable before the game."
Zucker: "We also have an incredible amount of data, so much so now that we need more people to just sit and analyze the data, and we don’t have the manpower for that right now. Going forward, particularly for the Pepsi race in July, we’re installing kiosks which will capture your info and give you an agenda for the day. There will be certain rewards associated with it, like perhaps going to Victory Lane, but you can only get it if you are an Auto Club member."

Kasten Discusses Integration Of Team Sponsors At Nationals Park

NATS BALLPARK: The second panel of the day, titled "Working With Corporate Partners on Seamless Brand Integration," featured PNC Financial Services Group VP/External Affairs Brian Goerke, Nationals President Stan Kasten, Coca-Cola North America Associate VP/Bottle Sales & Marketing Dori Silverman and Sony Electronics Sports & Solutions Group Director of Sales & Marketing Steve Stubelt. The panel highlighted how sponsors have collaborated with the Nationals to integrate their brands into the new NationalsPark. Kasten said, "I need to entertain you for four hours, and that’s why providing other spaces in the ballpark that have other things that interest you is so important. It used to be that when the Yankees sold their one millionth ticket, they were very excited because that meant they had a great year, because that paid the freight. That doesn’t pay the freight any more. To pay the freight, I need to do a lot more than attract just hard-core fans. So if you are one of the 99% of people that don’t just want to sit in your seat for 9 innings, then we’re the place for you." Kasten also said '08 sponsor revenue will exceed the team’s projections. Kasten: "Everything started new this year. All our existing contracts expired after last season, by design. Usually about one-third of the deals are carried over. That made for a difficult offseason for the sales staff."

ONE-ON-ONE: Following a luncheon hosted by International Micro Systems, Inc., Redskins Executive VP/Football Operations Vinny Cerrato sat for a one-on-one interview. Cerrato listed suspended Falcons QB Michael Vick’s signing bonus -- which he gets to keep even though he’s in jail -- and Falcons QB Matt Ryan’s six-year, $72 million rookie contract -- which is higher than most veterans -- as two reasons why NFL owners felt they needed to opt out of the current CBA contract. He used both examples to demonstrate a rising cost structure in the sport that owners want to control. Cerrato: “If [Ryan is] a bust, you throw the franchise back 10 years. Nowadays you don’t want a top pick because it costs so much money. … At least the NBA’s got a system in place where rookies get paid at a certain level.” Cerrato also praised NFL Commissioner Roger Goodell for his handling of Spygate. Cerrato: “It’s something that gives you a black eye … (but) now it’s time to move on.”

FAN EXPERIENCE: In a panel titled "Game-Day Innovations: Offering the Ultimate Fan Experience," Aramark Sports & Entertainment Group President Liza Cartmell, Comcast-Spectacor Director of Event & Video Production Matt Coppola, SMG-Reliant Park Assistant GM Juan Rodriguez and Braves Executive VP/Sales & Marketing Derek Schiller discussed the programs that they have implemented to create and enhance fans’ game-day experiences.

The issue: How has the economy affected fan and team spending?
The skinny: Schiller: "We’re not being reactionary and we have not discounted anything."
Rodriguez: "We are not expecting people to stop coming out. We have a responsibility to give people what they expect and what they are paying for."
Coppola: "When things get difficult, sports do give people an opportunity to escape. If fans are in the building, that means they are not home watching TV, and its on us to give them a good time."
Cartmell: "I would make the argument that now is the best time to invest in the business. I’d say now is the best time to build fan loyalty."

The issue: All-you-can-eat ticketing.
The Skinny: Schiller: "I am completely surprised by all the attention the media has given to this. Obviously, for fans who want and need cost certainty, this really appeals to them. If all we were doing was taking fans that were already coming to the ballpark, it doesn’t make financial sense. But if you are really trying to get new fans to the ballpark, because of the value added offer you are creating, that’s the strategy we are using.
We have three different types of food and beverage opportunities available. The most expensive one is the one we are selling the most of. It also happens to include beer."
Cartmell: "In reality, this offering has a fairly limited scope. In a baseball stadium, 600, maybe 700, people take advantage of this. It tends to work well in a group setting. It is definitely attractive to the cost-conscious group. One of the biggest groups are the social networkers. Which, to us, means that the much bigger story here is the creation of destination zones -- locations where you can bring people in."
Schiller: "What we’ve done is taken a $48 season ticket from last year, and made it a $60 season ticket that includes $10 of built in food and beverage. We did it for our highest-demand seats -- the 1,700 seats behind home plate. These spaces have terrific ROI."
Rodriguez: "We took the upper level endzone seats -- the seats that were usually sold last -- put new carpet, nicer furniture, plasma TVs and added all inclusive food, and now it has become a popular area.

COMMUNITY RELATIONS: One of the best ways for teams to get the most out of their community relations programs is to focus on three or four causes that are most closely aligned with your market. That was the consensus from a panel of four community relations executives participating in a panel titled "Community Relations Initiatives That Support Your Franchise Business Model." For example, the MLB Giants focus on education, health, violence prevention and youth. “If a group wants to come in and save the rainforest, it doesn’t fit within our four areas and gives us a respectable way to say no,” said Executive Director of the Giants Community Fund Sue Petersen. The executives also spoke about the best way to get players to buy into their teams’ charity drives. They all meet with players before the season and map out which ones will attend which functions. “Player appearances are a whole different animal,” said Wizards Senior VP/Community Relations Judy Holland. “Organizers of a $5,000-a-plate dinner don’t want the rookie that has no name recognition. But that rookie is the one that has the time to do it.”

The afternoon continued with "Utilizing the Facility as a Catalyst for Incremental Non-Game-Day Revenue” featuring Heinz Field Executive Director of Stadium Management Jimmie Sacco, AEG VP/Event Booking & Development Eric Bresler, Fenway Sports Group Executive VP Chuck Steedman, Lions VP/Events Kelly Urquhart and Brewers Enterprises Senior Director Wil Gorman.

The issue: How is database marketing an advantage?
The skinny: Sacco: "We’ve had Kenny Chesney three of the last four years now, and have pre-sold 20,000 concert tickets to our database, while offering season-ticket holders first shot at tickets. We are already sold out, and have a waiting list of 30,000."
Gorman: "We always say an empty date is a bad date. Utilizing database marketing has led to other events at the venue like weddings at home plate. We’ve even got a wedding coming up where two of the racing sausages will serve as ushers."
Greatest Hit: "While I’d like to have Megadeth play Fenway, it doesn’t appeal to our season-ticket holders. Whether it was Springsteen, Buffett, The Rolling Stones, Dave Matthews, The Police or this year Neil Diamond, we spend a lot of time pairing up the acts to the database" -- Steedman.

The issue: In trying to keep fans at the venue, what sort of plans are in the works for pre- and post-game?
The skinny: Sacco: "We’re working on getting fans to the game earlier, and to buy our concessions in the parking lot. For our late games, we’ve also opened the gates a few hours earlier and will put up two games up on the Daktronics board, and it has been successful."
Bresler: "We’ve opened up our arenas when some teams are on the road for viewing events. Something we’ve tried to do is get local bands to play the venue. We reach out to the community to find out who the popular bands are and they like getting the exposure."
Steedman: "It isn’t really a problem at Fenway since we always have long lines before the game and have to kick the fans out afterwards. But we have helped the Celtics, Bruins and

BostonCollege. The Bruins saw a 17% increase in sales when we added the band Dropkick Murphys after games."
Gorman: "Our culture is that the fans arrive early and stay in the parking lot. We try to gear it to our sponsors around that. People don’t want to come in right away. What we are doing is appealing to that and trying to grab revenue while they are outside."

The issue: How does Fenway Sports Group balance the desire to squeeze as much revenue as possible out of the stadium while maintaining the integrity of the ballpark?
The skinny: Steedman: "The Red Sox have what’s known as an art committee, which reviews every prospective sponsorship deal and how it could impact the ballpark. The Green Monster had advertising all over it until 1945, but when we decided to bring sponsorship back, everyone felt it was forbidden territory, almost like putting an LED on the Great Wall of China. But what we did do was make sure everything was white on green. People didn’t feel that was so bad. Our CEO actually feels everything in the park should be white on green. But the art committee is very powerful in what fixed signage gets in now. With all due respect to events like motocross and tractor pulls, they don’t fit the character of what FenwayPark is. It was earth-shattering enough to bring concerts in. There were some events that could have made us a lot of money, but at the end of the day, it wasn’t what Fenway stands for. We probably won’t have any public executions or floggings either. We also had an opportunity to do a ski jump off the Green Monster, but it didn’t work logistically. We have looked into college hockey as an outgrowth of our effort with BostonCollege, and we are also hosting next year’s ACC baseball tournament at Fenway to help grow the ACC's presence in the Northeast."

The issue: What about hockey games in stadiums?
The skinny: Sacco: "We’ve had some discussions with the NHL, and wanted to wait and see how Buffalo went. The league wants to keep it on New Year’s Day, but that’s still football season. I’m a believer that this is a big event that people look for, like a Chesney concert."
Urquhart: "We’re set to host the Frozen Four in 2010, and the ice will be in the center, and we’re looking at logistics now as to zambonis and other things."
Bresler: "I think it could work at the HomeDepotCenter. I remember a few years ago when they froze the CaesarsPalace parking lot in Vegas for an NHL exhibition game, so Los Angeles wouldn’t be a problem."
Steedman: "Our winter renovation schedule the last few years has prevented us from having hockey games, as we have talked to BU and BC. We did market research and found we could even get 10,000 people for high school hockey. So the question is just shoehorning it in."

Day two of the conference began with a panel titled "Anticipating the Changing Marketplace to Create Facilities for the Future." Panelists included Mets Executive VP/Business Operations Dave Howard, Proskauer Rose Partner & co-Chairman Joe Leccese, Dodgers Executive VP and COO Dennis Mannion, The Aspire Group Principal Bernie Mullin and USTA Billie Jean King National Tennis Center Managing Director Daniel Zausner.

The issue: Why are facilities suddenly becoming "old" after just 20 years? How do you keep current in today's "what's new" environment and how do you constantly stay in sync with shifting consumer preferences?
The skinny: Howard: "We want nothing more than for every seat to be the best seat, and that every seat is well served. Lines at Shea Stadium are legendary. We don’t want any fan waiting in lines. We’ve taken some heat in New York for building a stadium that seats only 42,500. We keep hearing comments like, 'the Mets are thinking too small.'"
Mannion: "On the baseball side of this project, (Dodgers Owner Frank) McCourt has envisioned a hub for baseball operations that would help the team do the three big things it does: acquire and develop talent, and competitive prep. So the stadium will be the center, or laboratory, of development for our other baseball sites. From a design perspective, he wants to improve the ballpark’s circulation and circuitry, and I couldn’t come up with a word for it, so I just called it Californication. There’ll be over $14 million spent on landscaping to represent the beauty of California."
Zausner: "(USTA Chief Exec of Professional Tennis) Arlen Kantarian came in 2000, and said this is not just about sports, but entertainment as well, and now the tennis center has become a sports and entertainment spectacle. We have committed over $150 million over the past seven years for three reasons: to improve the experience for our fans, our players and our staff. Contrary to some of the things we heard yesterday, our players are important to us."
Leccese: "There is obviously a different solution in every market. With $5 gas coming and the rise in steel prices, my guess is if the Mets had done their project 10 years ago it would have cost half, maybe less than half, of what is costs today. Up until now construction costs have been mitigated because interest rates were low and easy money was flowing. In addition, sponsors were doing well, corporate America was doing well, so you could plan on deals like the Citi Field deal. But now, despite the fact that the Federal Reserve and European banks have cut interest rates, those deals are still more expensive today than the deals cut just two years ago.

Mullin Discusses International Sports Venues

The issue: International sports venues.
The skinny: Mullin: "You don’t have the public funding of sports facilities in the rest of the world the way you do in the U.S. In Europe, they’ve really addressed the problem of crowd violence, although it was more of a problem of crowd management, as most clubs didn’t know what the hell they were doing. They’ve gotten rid of standing sections and gone to all-seating stadiums. But the old stadiums are archaic, and the retrofits are awful. Also, in most parts of Europe, sports are still a male-dominated event, unlike the family atmosphere you often see here. Have the venues evolved? The men still have to use latrines, like you did in the army. There’s no urinals. There’s just a concrete wall painted in the color of the team and you tinkle against it. But there are signs that things are beginning to improve.

The conference concluded Thursday with a panel titled “Charting the New Ticketing Frontier,” featuring NLL Minnesota Swarm President Tom Garrity, Rockets VP/Ticket Sales & Business Communications Seliece Fulweber, Altoona Curve and Greensons Baseball Group Associate GM & Senior Director, Ticket Sales Jeff Garner, Warriors VP/Ticket & Premium Sales Ben Shapiro and White Sox Director of Ticket Sales Tom Sheridan.

(left to right) Swarm's Tom Garrity, Rockets' Seliece Fulweber And Altoona Curve's Jeff Garner

The issue: What does the secondary ticket space look like for you?
The skinny: Sheridan: "We are aligned with Ticketmaster, and after the MLB deal with StubHub, we went from being almost adversaries to partners. We haven’t fully integrated yet, but we should be good by late June or July. "
Fulweber: "We’re now fully aligned with Veritix/Flash Seats and rolled it out for the last three regular-season games and the playoffs. It has been successful for us and our season-ticket holders. It gives us flexibility in the sales space because it attracts season ticket holders with full control in reselling."
Shapiro: "The topic is very important to us, obviously, with us recently extending with Ticketmaster. We’re making TicketExchange the primary place for season ticket holders to go to resell. The team understands season ticket holders often can’t make all home games, so promotion of the site is becoming more important for us."

The issue: Talk about the partnerships and cross-selling going on between teams.
The skinny: Sheridan: "Well with the ownership, front office change at the Blackhawks recently, they became more open to new opportunities to expand their fan base in the market. The Blackhawks came to us, wanted to tap into our fan base, and bought some sponsorship where they have their mascot and some players come out from time to time. We’ll also have a ticketing table at their place. We’ve had talks about a dual ticketing plan, but nothing is done yet. Our demographics are very close to the Blackhawks' fans.”
Shapiro: "We did something similar with the 49ers on a Jewish Heritage night. We promoted theirs, and vice versa. It’s the same community. We also worked with the Raiders in sending ticket info out to their database, and they sent ticket info out to ours."
Garner: "We worked with PennState’s men’s and women’s basketball, because the school draws from the whole state, while we draw from eight or nine counties. The structure basically has us as a sales agent for the university."
Fulweber: "This isn’t really something we’ve done before. We’ve worked with the Greater Houston Partnership, but not with a team like the Astros. I don’t think we’d have tables at each other’s games."

The issue: What trends/innovations will we be talking about in this space in the next 6-12 months?
The skinny: Shapiro: "Secondary market. Hackers have been getting into those sites recently."
Garner: "Secondary ticket market, expansion on the technology."
Fulweber: "Applying technology to all ticketing."
Garrity: "Technology, new media in reaching out to fan bases."