      |
   |
 |
 |
August 2004 Champions of the Turnstiles
by David Markus Alums Charged with Filling Ballparks, Stadiums, and Arenas Find Sports Marketing a Creative Playing Field.Time was in the not-so-distant past your average sports fan was only too happy to plunk down a few bucks for a seat at the ballpark, drop six bits on peanuts or Cracker Jack, and root (root, root) for the home team. Today, the average fan has a few more issues to consider—and considerably more choices to ponder—before coughing up the big bucks it now takes to get a seat at the stadium. For starters, season tickets for any of America's big four professional sports (football, baseball, basketball, and hockey) are a four-figure financial investment, and that's if you buy a ticket or two per game. Taking the whole family? Not an option for the vast majority of fans, unless you opt for a partial plan, mini-plan, or some other arrangement that lets you attend some but nowhere near all the games. But there looms a larger issue every fan must face: Is watching the sport worth it, plain and simple, when the mall, the beach, the cinema, even the ski slopes or the local golf course can provide possibly more fulfilling and definitely less costly diversions? Turning these matters over in their minds, today's sports executives know one thing: Fan attendance at the game, no matter how profitable media contracts and other ancillary revenue streams may make the franchise, is still the sine qua non of long-term success. And so, these execs stand astride two incongruous and not easily reconciled worlds and try to make them work together. On the one hand is the pro sports marketplace, driven by higher-than-ever-imagined salaries for athletes, pressures to expand geographic markets with new, ever more comfortable stadiums, and a growing, cutthroat competition with other entertainment industries. On the other is the fan, who, clutching his fistful of discretionary dollars, wonders if watching the team play will make him happy—or just make him default on his mortgage. The good news for the industry and for the fans of tomorrow is that today's sports execs, with more than a few Business School alums among them, are integrating these disparate realities with some innovative strategic planning, good old-fashioned, community-based marketing, and inspired but uncomplicated uses of email and other inexpensive means of communication.
"It all begins with research, research, research," says Bryan Perez, MBA '96, executive vice president for sales and marketing for the National Hockey League's Dallas Stars. "We are gathering data on our fans all the time. Not just age, income, and gender. But … what does he like outside of hockey? How much time does he—or she—spend on the computer? How do he and she spend their leisure time away from hockey?" Perez's mission is multiplex. Hockey is by far the smallest of the big four sports in terms of total fan base, television dollars, and sponsorship. However, the NHL fan base is the most affluent and well educated of the four, making the expensive full season ticket package a possibility for many. With the Stars an established franchise vying for the playoffs almost every year, season ticket marketing is a big part of the team's overall strategy. "We know that the number of season ticket holders who bail out of their season package during their first two years is high relative to those who drop out later," says Perez. "If we can hang on to a customer for five years, we believe we will have him for a long while." Perez's aggressive surveying of Dallas Stars fans—online, in the arena, and through various blind survey efforts—revealed that most were computer literate, liked to travel, and loved to play golf. In addition, virtually all were eager to receive more residual value for their season ticket investment. Inspiration: In a cashless barter deal, the Stars licensed its name to a top-flight local golf and country club with two much ballyhooed courses, automatically making all Stars season ticket holders members and giving them access to affiliated clubs around the country. Conversely, all prior members of the club received the complete package of amenities and concierge treatment Stars season ticket holders enjoyed at the team's arena—plus four free games per season and discounts on the rest. Hockey fans and golfers alike flocked to the opportunity, and both the team and the club are still counting their new customer acquisitions.
As senior vice president for business operations for the National Basketball Association's Memphis Grizzlies, Mike Golub, MBA '88, faces a slightly different challenge. His franchise is new to its city, having relocated to Memphis from Vancouver, British Columbia, three years ago. It is the only major pro sports franchise in a city whose traditional fan loyalties tilt to the legendary college football programs of the Southeastern Conference. As the new sports kid on the block, the Grizzlies faced some sobering "small market" facts of life. Memphis is the smallest market in the NBA, with the smallest corporate sponsor base in the league. The number of people in the area with the discretionary income to spend on professional sports is likewise modest by NBA standards, and the region's broadcast rights are nowhere near as lucrative as those in the larger metropolitan areas. So, filling the arena, not just in the short term but for many years to come, is foremost on Golub's strategic agenda. His job, he says, is "building fans for life." He enjoyed two huge assists in his mission this year. First, the opening of the team's new arena, the FedEx Forum ("best arena in the country," Golub opines unabashedly), and, second, the Grizzlies first-ever trip to the NBA playoffs, under the leadership of the league's newly named coach of the year, Hubie Brown. But no amount of good news on the sports page will make a smaller pool of potential fans substantially larger, so, in a competitively reduced universe, what's the model for building a fan for life? Golub points to the National Football League's Green Bay Packers as perhaps the best-known small-market case in point. "In Green Bay," he says, "people are branded Packer fans practically from birth, and they stay that way right through their adult lives. We want the same. It starts with the 8-year-old kid, making him a fan forever." Not always easy in a world where the image of the professional athlete is not the beacon for youth it once was. Golub and especially his boss, former Los Angeles Lakers superstar and NBA icon Jerry West, now Grizzlies President of Basketball Operations, have made character, philanthropy and community service the hallmark of the franchise. The Grizzlies, through its ownership, have donated more than $13 million to various community groups in the three years they have been in Memphis. Grizzlies players have taken up the cause as well, regularly reading to kids, serving meals to the homeless, particpating on community boards and being a visible presence throughout the year. "With Jerry West as our model, we put the players out front as we build our image. We want to break the negative stereotype of the insensitive professional athlete." And as much as Golub wants parents to approve of and encourage their kids to embrace the Grizzlies players, he also wants those families, especially the kids, to be able to attend some games. So before every game, 500 tickets go on sale for $5 apiece. "Memphis is not only a very evenly balanced city racially, but is very diverse socioeconomically. Everyone should have access," Golub says. Every sports marketer is looking for a way to pitch his sport as high quality, low cost entertainment for the whole family, but few will embrace as bold a strategy to achieve it as Dave Kaval, MBA '92. Next summer, founder and CEO Kaval will launch a new West Coast minor league baseball circuit called the Golden League. With plans to debut with six teams and quickly expand to 10 and ultimately 20, Kaval has adopted a cost-saving, single-entity ownership structure that allows for maximum focus on building fan followings in league locales. His target markets are the exurban bedroom communities of Northern and Southern California, Southern Oregon, and Western Arizona.
As coauthor of the widely acclaimed book The Summer That Saved Baseball, the story of his 38-day tour of all 30 of the major league baseball stadiums in 1998, Kaval has learned a thing or two about what makes people come out to the ballpark. "We are building our league focused squarely on serving and entertaining the family, to the point where we will have local kids, ages 6 to 12, name the teams and create concepts for their mascots," says Kaval. Kids also will be able to run the bases mid-innings and be photographed with their favorite players. Even moms and dads will get a shot at a season-long home run derby after games. The league's target communities are semi-distant from the larger metropolitan areas where territorial rights bar big league teams and their minor league franchises from expanding. "The Golden League will give these folks a chance to interact with their neighbors, eat some great locally prepared food, and enjoy a day out with their kids. We provide baseball as a catalyst for family, for culture, for history. In return we get fan support, long term, we believe," says Kaval. Securing the allegiance of the traditional fan is one thing, but what about the other half of the nutshell, winning the hearts and mindshare of those outside target demographics? Perhaps the most coveted of these "new demographics" is the Hispanic audience. In Miami, home of the nation's third largest Hispanic population, media consultant Jessamy Tang keeps the Spanish-speaking fan top of mind as she pursues broadcast television, radio, cable, and satellite television agreements for the NFL's Miami Dolphins. The 1994 MBA reports that for the first time the Dolphins are planning Spanish-language television broadcasts of their preseason games in South Florida, where the Spanish-speaking audience is almost evenly split between Cuban Americans and the families of immigrants from Mexico and Latin America. The Dolphins also will enlist their Spanish broadcasting partners' support in youth football clinics in Hispanic communities. More broadly, Tang is working to expand radio coverage of the team's games and other programs across Mexico, Latin America, and Spain. Efforts are also under way to continue to broadcast the team's magazine-style television program in some of these same international markets. Says Tang, "The countries much of South Florida's community came from represent potential fan bases, and our goal is to strengthen our relationship with them and continue to build loyalty to the Dolphins." Mike Golub's Memphis Grizzlies found their way to a larger Spanish-speaking audience by way of their recently acquired star center from Spain, Pau Gasol. Like other overseas NBA players, Gasol is something of an international star, and the team has leveraged that interest to appeal to Spanish-speaking fans with Web coverage en español on its official Grizzlies site. In Dallas, where there are significant Hispanic (largely Mexican American) communities, Bryan Perez's focus is on youth. "We are looking for kids, many of them the second-generation sons and daughters of immigrant parents, who, like their non-Hispanic peers, are learning to enjoy hockey as a fast, hard-hitting sport. We don't make the ethnic pitch as much as we count on the innate appeal of the sport and our general youth marketing efforts to convert these young people to paying customers when they get older." And if Perez has his way, those same kids may soon find their way to a Stars game by online networking—a medium growing in leaps and bounds across the pro sports landscape. No spam here, just some good old-fashioned free ticket offers via the Net. The plan was built as a friendly competition within the Stars organization. Every employee was encouraged to send out emails to friends, family, and other acquaintances offering the chance to win free tickets in a special drawing. Each email contained the employee's company ID number as did the response form. In addition, the response had to contain answers to basic customer data queries—name, address, phone number, and so on. Internally, the employee whose ID number came back most frequently won a prize. With the email addresses in hand, the Stars were free to try to cultivate an online relationship with all contest participants, especially those who won the drawing. After the winners attended their free game, the team sent each of them offers for 25 percent discounts on subsequent games and options on various partial season ticket packages. The results swiftly became a marketing hat trick and a watershed moment for the Stars. The first day of the contest drew 20,000 responses. By week's end, there were 60,000, all registered as potential customers. Lastly, the company was galvanized internally by the friendly competitive drive to be the employee to bring in the most responses. The winner, who alone triggered 10,000 responses, received a cash bonus equivalent to a week's pay. And the tidbit about Stars fans being avid computer users unearthed in Perez's fan survey, well, it proved to yield a gold mine. And gold will continue to be what smart marketing is worth to team owners hungry for a better return on their dollar. There are no guarantees for success, other then perhaps a championship caliber team in combination with an affordable ticket. But these advantages, falling together in tandem, are becoming more and more difficult to produce, as sports leagues expand across multiple cultural and national borders and the costs of stadiums and athletes continue to climb. Sports team marketers will have no shortage of challenges and opportunities. And in an environment where success is measured by ubiquitous clicks of the turnstiles, they will have to eat their Wheaties if they want to compete. David Markus is a San Francisco-based writer, editor, and producer. |
|
RELATED STORIES MBA Students Sign up for Front Office #560 A Different Game in College Sports
|
|
||||
 |
|
|
|
