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Will the NBA & NHL be forced to cut teams?

Posted by ZA on March 24, 2009

There is a saying that “once is chance, twice is coincidence and three times is a pattern.”  If that saying is true, then we will soon see a pattern of conversations about the NBA and NHL being forced to shut down teams due to the economy.  That is because a couple of knowledgeable sports columnists have recently written articles about the dire situation for certain teams due to the current economy.  It is only a matter of time until more of the mainstream sports media begin to harp on this subject.

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My initial reaction was surprise at reading in Bill Simmon’s “Welcome to the No Benjamins Association” column that he and his sources guess that between “three and eight” NBA teams will be sold, move to a new city or turn over operations to the league.  I had not thought about this possibility because I naively assumed that all of these owners or ownership groups had sufficient capital to ride out the current economic storm.  But I heard a similar story, confirming what Simmons has heard, when I talked to a friend of mine who works in the front office of a prominent NBA team.  My friend specifically pointed to the Memphis Grizzlies as an example of a team that is riding on fumes and said everyone in the league knows it.

Simmons went on to say in his article that the situation in the NHL is probably worse than the NBA.  Simmons writes that contraction of teams in the NHL is likely, whereas NBA Commissioner David Stern will probably refuse to cut NBA teams, even if he should do it.  Simmons said Stern’s stubborn nature that would probably be the reason the NBA doesn’t eliminate failing teams.  Wow that is a lot to absorb; it’s hard to fathom multiple NHL teams closing up and the possibility of the same in the NBA.

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But Bill Simmons makes a compelling case in his column; he mentions the declining attendance, corporations who cannot afford their luxury suites and fans that are choosing to stay home.  Combine those factors with the escalating salaries in the NBA and you start to see a recipe for disaster.  And just when I think I’m starting to get my head around it, then another respected media member comes 0ut with a similar story that adds credibility to the dangerous situation the league’s face.

Darren Rovell, who is master of all things sports and business for CNBC, wrote a column about the trouble owners needing to sell might find in trying to locate a buyer.  He says that some of people who own pro franchises are not nearly as rich today as they were when they bought their club.  That downturn in their net worth may cause some of those owners to be forced to sell their team.

Complicating the matter, says Rovell,  is the fact that the days of debt financing the purchase of a professional sports franchise are done.  That means the only people who have the means to buy a franchise are those with loads of cash; like $300 million dollars or more in liquid assets.  Rovell says at this point that it is probably more feasible for a team to be taken over by their league than sold on the open market right now.

The question then becomes how many teams can the NBA & NHL afford to operate on their own dime?  If the rumblings turn out to be true, and there are a handful of teams in each league that cannot afford to continue on their own, then how can the leagues help them?  The simple answer is that they cannot save them; the NBA and NHL would have to instead shut down some of their teams.

I believe it is beyond theory now, it is going to happen.  The NBA & NHL will have to shutter some of their teams, or make otherwise drastic changes in order to save them.  Fans should get accustomed to this idea now, because it is only a matter of time.

Again, if I had just read it once I might shrug it off as a theory that might not come to fruition.  But this story is out there and being told by people who are “in the know”.  So in my mind it is no longer a matter of “if” the leagues are going to shut down teams, it is “when” they make the decision and how many teams will be affected.

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Posted in Improve Attendance, NBA, NHL, Sports Brands, Tickets | Tagged: , , , , , , | Leave a Comment »

New Twins ballpark will be cash cow for team

Posted by ZA on April 29, 2008

The Minnesota Twins are about to get a lot richer.  That’s because it is estimated that the Twins new ballpark will help the club generate more than $1 billion dollars in additional revenue.  The yet to be named new ballpark being built in Minneapolis, Minnesota is expected to be completed for the 2010 baseball season.

The reason for the cash windfall is the Twins will own all of the revenue from the new park, while they currently get very little from their lease at the HHH Metrodome.  At the new park the Twins will have revenue from naming rights, concessions, in-stadium signage, suites and the 40K seats in the ballpark.  The suites alone are estimated to generate $8 million per year.

The new Twins ballparkis being built by HOK Sport.  The capacity is expected to be around 42,000.  The new ballpark will be 4000 seats smaller than their current home in the Metrodome.  It will also be a natural grass surface, the Metrodome has an artificial playing surface.  And the new Twins home will not have a roof like the Metrodome, so the Twins will have to get used to playing outside in the elements.  Brrr…I don’t want to be a fan a Twins fan sitting in the stands the next time they play a November World Series game.

The average ticket price in the new stadium is expected to be around $17.00, which is the most affordable average ticket price among recently built stadiums in the 4 major U.S. sports leagues.  Now that’s a great way to make sure you keep fans filling up the stands…give them prices they can afford.

New Minnesota Twins ballpark
Drawing of new Twins ballpark (image courtesy of MLB.com)

Posted in Improve Attendance, MLB, New Venues, Stadium Construction, Tickets, Venue Information, Venue Naming Rights | 2 Comments »

Plan for upgrade to Dodger Stadium

Posted by ZA on April 24, 2008

Next season Dodger Stadium will be the 3rd oldest stadium in Major League Baseball.  The only older stadiums are legendary venues: Fenway Park and Wrigley Field.  So to breathe some new life into the the almost 50 year old stadium, there is a plan to spend $500 million renovating the stadium.

The renovation project would call for a multi-use facility to be built in the parking lot outside the stadium.  It would include a large park lined with trees, restaurants, retail shops and a Los Angeles Dodgers museum.  Plus, there would be two parking garages built to support the lose of surface parking spots.  The proposed plan from the Dodgers ownership group has the support of the Mayor and City Council.  So it expected that approval of this renovation plan is merely a formality.  The City of Los Angeles supports the project because the additions will bring revenue to the Dodger Stadium area on a year-round basis.  Also, the additional of the park plaza with trees should help the ecological balance with the surrounding neighborhoods.

The news of improvements to Dodger Stadium comes on the heels of a plan that was recently proposed to renovate the Los Angeles Coliseum, where the USC Trojans play their home games.  It’s nice to see the City of Los Angeles find unique ways to upgrade existing venues, rather than just demand that new venues be built to replace older one’s.  Because it is these ‘old venues’ that bring character to sporting events.

Places like Yankee Stadium (the old one), the Cotton Bowl and Lambeau Field might not have all of the amentities of modern stadiums.  But those places have one thing the new stadiums may never obtain, a rich history from generations of fans attending games there.  That’s something that can never be replaced in sports.  I’ll never forget my first trip to Wrigley, Soldier Field or Fenway.  The mystique in those venues is what makes them special.

Posted in Improve Attendance, MLB, Stadium Construction, Venue Information | 2 Comments »

How to improve attendance at the Frank Erwin Center?

Posted by ZA on February 12, 2008

The University of Texas is my alma mater and I’ve always been a big supporter of UT athletics. During my years supporting the Longhorn sports, one of the on-going topics has been ‘how to improve attendance at UT basketball games’? Fans have debated it, journalists have written about it and coaches (particularly Rick Barnes) have fretted over it. My opinion is it will only take a few simple steps to fix attendance at the Erwin Center for UT basketball games.  But the first thing we need to do is understand the goal.  Are we just trying to get more revenue?  Are we trying to get more butts in seats?  Are we trying to create a more lively atmosphere?  Or all of the above?  My goal is to focus on getting new people to the games, which will ultimately help cure all three items mentioned above.  Some great advice I once received was, “it’s not how big your piece of the pie is, it’s about making the whole pie bigger”.  That applies here because we want to focus on making the games a great “experience” so more people will try them.

1) Give non-season ticketholders better options for tickets. Currently only upper-level seats are available to purchase for single games. All of the lower-level seats are owned by season ticket holders, or are assigned to students. For more than half of the games on the home schedule you could take away a large portion of the seats allotted to students, and sell those to regular fans. My suggestion would be to takeaway the top half of the lower-level student sections (sections 27/28 & 42/43, on each end of the court), and sell those to the general public.  Charge an aggressive price, like $15 to $20, to entice more fans to try UT games.  Those games would include all non-conference games and a few of the lesser conference games. I attend all of the home games and it is obvious that the students do not fill up their allotment of lower-level seats for most games. This would be the solution to get those seats filled, and at least give the lower portion of the FEC a full crowd.  Plus, the new fans you’d expose the games (better seats at lower price point) will become regular patrons.

2) Increase student attendance at games, by engaging them better on campus. With more than 50K students at UT, it shouldn’t be a problem to get a fraction of them to games.  The issue is how you target those students.  First, get more signage on campus on gameday. Make sure students are aware of dates and times of the games. Also, make it possible for students to “draw” their tickets on-campus rather than just at the FEC. Also, try to engage student groups in order to get them to the games. Every single game should have 3-4 groups who are featured guests at the game. Block off an upper-level section for them, and find ways to engage them in the game. Let their leaders compete in the in-game entertainment games down on the court (half court shot, shoe race, etc). Rope off a special “concessions area” for them just outside their section on upper-level where they can buy unique, and possibly discounted, food & drinks. Really challenge the different student groups (Greeks especially) to get out to certain games. Provide a reward to the one’s who show best attendance, like use of a suite for the final game of the year.

3) Better distribution of concessions. I’m not going to suggest they change the concession provider, but that would help. Atleast hire more vendors to work the aisles selling food & refreshments. Currently they walk around with cotton candy or snow cones. That’s it. I’m attending a dozen plus games a year at the Erwin Center. Many of these games are after work. So make it easy for me to relax and get some decent food & beverages.  Plus, selling more concessions raises revenue and it makes the whole “experience” better.

4) Engage the Austin business community. Develop programs to get different businesses and/or organizations to the game. Corporations aren’t going to buy & use the crappy upper-level seats. But involve them in a buy & donate program, where they purchase the tickets that are going to be donated to a worthy group. The tickets then would be provided to non-profits, schools, or other organizations who will attend and enjoy the free perk.  Every game should have businesses and community groups in attendance, even if there seats are in the upper-level.  Again, a solution to make the event seem more custom is to provide the group their “own” concessions area and/or private tent.  A business might be willing to overlook the fact that their seats are upstairs, if they pick up some additional networking perks.  I envision a tent for pregame, in-game and postgame that has ammentities similar to what you’d find in a suite (i.e.- better than concession stand food & alcohol).  Companies can then turn it into an event.  And if their people aren’t wowed by the seats, they’ve also got the option to retreat to their private tent a few steps away in the concourse.  Yes, some of these folks will camp out in here watching the game on TV, but the first step to increasing attendance is making it an “experience” for more people to attend the games.  Eventually you’ll convert those folks into regular, screaming fans if you get them to the games.

5) Get people into the building quicker at the beginning of games.  Open a few more doors, make sure the electronic scanners are working and staff a few extra “purse checkers”.  Train the staff on how to move quickly to get people inside.  Also every good game, there are long lines of people waiting outside the FEC’s Will Call window to pick up their tickets. Many of them are students who are required to scan their ID’s at the stadium in order to get student tickets. This should not be allowed to go on because it’s a huge deterrent to fans. Who’s going to show up and wait 45 minutes in line, thereby missing the first 10 minutes of the game? More importantly, who’s going to ever return to see another UT game after going through that experience? Fix the problem. Provide separate, and easy to use, pick up options for students. Tie it into an online system where all students can quickly check availability of seats for the game.

6) Market them games better in Austin and Centex. Make the million plus people in Centex fans of the UT basketball team.  UT has very marketable players, so make sure fans know these guys. Names like DJ Augustin, Damion James, AJ Abrams, Conner Atchley and Justin Mason should be on the tips of people’s tongues.  And they should also know the younger generation of players, like Gary Johnson, Dexter Pittman and Clint Chapman.  Get players pictures on posters and TV spots.  Work with the media outlets to get more “human interest” stories for players on the team.  Get the players out to more schools to try to develop rabid support from younger fans.  If fans know the players, then they’ll want to show up to see them play.

7) Quit complaining about the attendance at UT home basketball games.  I’ve heard it the names and excuses for years.  The Erwin Center is ‘a morgue’ or a ‘vacuum’.  The fans are all ‘blue hairs’ who don’t let you stand up at the games.  The students should be closer to the court, to make more noise. The fact is that UT averages a decent crowd for every home game. People are complaining because they see open seats, or they want a more lively atmosphere. Well this ain’t Duke. Show up and support the team, and quit worrying about some things no one can change…like the fact that UT fans prefer football to basketball.

A funny thing happened on the way to this post, as I was writing the AAS came out with an article that details how attendance is up at the Erwin Center.  So it sounds like things could already be headed in the right direction.  Now we just need to get a few more of the things above going and the Erwin Center will be a better atmosphere for college basketball.

Posted in College Basketball, Improve Attendance | Leave a Comment »

Why can’t the Hornets sell any tickets?

Posted by ZA on February 9, 2008

The Seattle Post-Intelligencer reported that Dallas Mavericks owner, Mark Cuban, recently took a few shots at the New Orleans Hornets. The “swats” at the Hornets were in-regard to their difficulty selling tickets to home games. So far this season the Hornets are averaging around 12K fans per game, and they need to average more than 14K per game by end of next year to stay in New Orleans.

Cuban said, “Somebody’s got to get off their ass and sell tickets. There’s enough fans to get 16, 17,000 people to come, even if they’re weekend games.” Cubans right, the issue here is the teams lack of effort to generate buzz about their team. They aren’t connecting with the local residents, the business community in New Orleans or tourists visiting the city.

“Whatever it takes to get people in the arena, you gotta do it and that’s what they’re not doing done there.” stated Cuban.

The positive news is that the Hornets currently have approximately 6500 season ticket holders. The Hornets ticket office is offering cheap seating, some as low as $10.00 per seat in the upper-level.  And they offer several affordable mini-plans.  Plus, the team has some exciting young stars like Chris Paul and most important the Hornets have been winning.  Even though they are in the brutal Western Conference, they’ve managed to hold up really well against their competition.

But they’ve had to come from behind the eight ball from as well.  Most notably they had to play the last two seasons away from New Orleans as the city recovered from Hurricane Katrina.  While the played in Oklahoma City they were known as the New Orleans/Oklahoma City Hornets.  And this season, the Hornets started with TV blackouts in certain regions of New Orleans, due to a contract dispute with Charter Communications. And they also lost their VP of Ticket Sales right at the start of the year.

So why can’t the New Orleans Hornets sell more tickets? Here are a few reasons:

1)Their owner, George Shinn, is not a good NBA owner.  He has a reputation for being cheap, and has shown an unwillingness to pay star players their market value.  During his tenure with the team in Charlotte he alienated the fan base with a series of moves, most which were motivated by greed.  But some that just showed his horrible judgement in how to handle himself.  So it’s hard to imagine the fans in the Big Easy are going to be loyal to a team that has an owner at the helm with such a sorted history.  An owner who moved his team once, and has already flirted with another city (OKC).  In short, Shinn is viewed as a scumbag by most of the fans.  George Shinn’s bio is prominently displayed on the Hornets site, and raises questions with me about what kind of family man he is.
2)They are not winning the state. They play 3rd fiddle behind the Saints & LSU. LSU is the sports team in the state. And the Saints are the team for New Orleans. The Hornets need to tap into those ravenous fanbases, especially LSU. Market the team in Baton Rouge. They state that getting Baton Rouge is a goal, but they haven’t made enough push into that market. Offer special deals to Tigers Alums. Get some former LSU stars involved in the Hornets. If they get the LSU fan base, they could increase numbers dramatically.

3) No one recognizes the players. Get the community and state to relate to the team. Don’t market the opponents so much, instead try getting people behind the stars you have on your own team. Chris Paul, Tyson Chandler, etc. need to be the focal points of all marketing efforts. It’ll start slow, but eventually pay off big.  And most importantly the Hornets need to pay whatever necessary to retain their brightest stars, like Chris Paul.  Are you listening George Shinn?  The fans will resist connecting if they think the player they show the love will be gone soon (think Baron Davis).

4)Apologize for OKC. It was unfortunate that the team ever had to move as a result of the Katrina tragedgy.  But the Hornets relocated to Oklahoma City for last two years and even wore jerseys with Oklahoma City on them.  The fans in OKC embraced the Hornets as their own, and Shinn open flirted with the new city.  That’s hard for any fan to see – you’re team sporting the identity of another city.  Everyone should be thankful that OKC opened their hearts to the visiting team, but now the Hornets (and Shinn) need to reaffirm their unconditional love for Louisiana and New Orleans.

So what should the Hornets do right now?  First priority should be to lock up Chris Paul, the face of the franchise for years to come, to a Max Deal.  End the rumors that the Hornets might not give Paul the max extension.  That level of commitment will show the Hornets fans that the team is committed to winning.  Then start the marketing campaigns even stronger than before.  Get the faces of Paul, Chandler and Peja out there in the community so fans can relate.  Now is the time because the team is headed for a playoff spot.  Make the goal to be the best home venue for playoff games (think Golden State Warriors) from the first playoff game on.  In addition, the Hornets marketing brass needs to hatch solutions to start to relate to the LSU fans and Saints fans.  Do some cross-promo stuff with the teams to try to increase attendance.  Invite LSU basketball team into the New Orleans Coliseum for a series of home games in coming years.  Try to align themselves with the LSU community, as that rabid fanbase can give the Hornets an immediate jolt in the arm. Even consider adding a special yellow/purple uniform to be worn on unique occasions.  And before you say a uniform with LSU colors is crazy, where do you think the teal blue color originated from?  Remember the team started in Charlotte, North Carolina and was trying to appeal to fans of the Tarheels.

So I say do it now New Orleans Hornets and you can start to turn the corner towards being a dominate team in the NBA.

Official site of the New Orleans Hornets.

Posted in Attendance Figures, Improve Attendance, NBA | 2 Comments »