SEAT Spring 2011


Published on

Published in: Economy & Finance, Business
1 Comment
No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

SEAT Spring 2011

  1. 1. removing premium seating’s hermetic seal in Kansas city page 52 S E AT leading the premium seat industry spring 2011 p u b l i s h e d b y t h e a s s o c i at i o n o f l u x u r y s u i t e d i r e c t o r s page 34is using groupon to sell the education of an editor through the eyes of the minor tickets a good idea? page 26 league suite director page 18 page 78
  2. 2. The Preferred Stadium Brand of Undercounter Refrigerationce Machines Wine Cellars Refrigerators Refrigerated Drawers ADA Series Ice Machines Wine Cellars Refrigerators Refrigerated Drawers ADA Series Contact us for details on our stadium programs and these Marvel’s exclusives! • Installation service • Stainless steel or your choice of color • Team logo graphics applied with SonicImageTM technology For more information on Marvel’s top of the line products, visit our website or call 1-800-223-3900
  3. 3. Your Away Team Relax responsibly.® Imported by Crown Imports LLC, Chicago, IL 60603
  4. 4. TWO WORDS:SPECIAL. TREATMENT.MOTOROLA HOSPITALITY SOLUTIONSWhether entertaining business clients, closing a major deal or socializing with family or friends, yourcustomers look to make the most out of their entertainment dollar.Service, state-of-the-art amenities, and an overall exceptional experience are a must. Exceed theirexpectations. Equip your staff with mobile voice and data solutions so they can offer the ultimate inentertainment satisfaction. Afterall, everyone loves to be treated like a VIP.For more information, please visit us, MOTO, MOTOROLA SOLUTIONS and the Stylized M Logo are trademarks or registered trademarks of Motorola Trademark Holdings, LLC and are used under license.All other trademarks are the property of their respective owners. ©2011 Motorola Solutions, Inc. All rights reserved.
  5. 5. Elite Risk Insurance Solutions Elite Risk Services, Inc. is pleased to bethe official insurance partner of the alsdWe recently launched a newly enhanced third party liability insurance policy thatis designed to protect suite owners and managers each and every time you rent a suite to a third party.  Separate your liability and pass the minimal insurance premium on to the renter or tenant. what does it coVer? • Third Party Liability • Property Damage or Bodily Injury (specific to the damages or injuries the client may cause or is held responsible) • Separates the suite manager, the venue and the suite owner from the renter or borrower of the suite • One low premium that can included in the suite rental agreement Visit   or call Kevin Kurtz at 800-596-0969 ext. 105   License # 0G40499
  6. 6. How much money did you lose today? The average FanGo order is 110.5 LARGER % than the average traditional order.When fans order concessions and merchandise from their phones, orders are significantly larger and fans order more frequently. 859.608.4521 •
  7. 7. SEAT Published by the Association of Luxury Suite DirectorscoVer story34 the solutions eVolVe The 21st Annual ALSD Conference and Tradeshow in Los SPRING 2011 Angeles is less than two months away. Check out the full schedule of events. Included are all session descriptions, keynote speakers and venue tour details.features48 when the fan experience is the luxury Learn experiential services and seating options to exceed every fan’s expectations and increase sponsor revenues. BY BOB BANGHAM AND TIM CHAMP52 remoVing premium seating’s hermetic seal LIVESTRONG Sporting Park, the new home of MLS’s 34 Sporting Kansas City, ushers a dramatic shift into the venue marketplace. With intrepid technology innovations and communal premium seating, LIVESTRONG Sporting Park brings “The Solutions” to life. BY JARED FRANK72 mlb teams score big in the suite marKet According to reports, MLB franchises increased in value on average by 7% – an all-time high – from 2010 to 2011. How does this financial success affect premium seating? Compare pricing and the variables determining those prices for all 30 MLB teams. BY DR. PETER TITLEBAUM AND DEBBIE TITLEBAUM78 through the eyes of the minor league suite director In this latest installment of our roundtable series, SEAT gathers together an assortment of Minor League suite directors from across multiple sports, venues and geographies. Discover more about the not-so-zany life in the minors. 48 WITH RYAN MIRABEDINIsports technology corner62 sports geeK connects sports, fans and sponsors using social media Take a trip down under to see how two professional Australian franchises find success using digital platforms. Learn how to monetize social media assets and how to best utilize those assets to connect with fans. BY CHRISTINE STOFFEL64 sports & entertainment alliance in technology Start to plan your trip to the 5th Annual S.E.A.T. Conference and Tradeshow, held in conjunction with the ALSD Conference and Tradeshow. Browse this year’s sessions, presenters and tours. 52 About the Cover: Illustration by Rob Schuster. Photo of Los Angeles at dusk from Contents continues overleaf BigStock. | SPRING 2011 | S E A T | 7
  8. 8. SpringSEAT ASSocIATIoN of LuxuRy 2011 SuITE DIREcToRS Chairman Bill Dorsey Executive Director Amanda VerhoffPublished by the Association of Luxury Suite Directors President Jennifer Ark, Green Bay Packers VP, Business Development Pat McCaffrey Director, Sponsor and Partnership Development Dene Shiels Editor of SEAT, Website Director Jared Frank National Sales Manager Scott Hinzman Membership Director Ryan Mirabedini Design Carole Winters Art + Design Director of Finance Dan Lindeman Financial Account Manager Vickie Henke Director of Information Technology John Tymoski ExECuTIVE CoMMITTEE Chris Bigelow, Bigelow Companies Brian Bucciarelli, Hershey Entertainment & Resorts Greg Hanrahan, united Center Tom Kaucic, Southern Wine & Spirits Pat McCaffrey, ALSD 26 Kim Reckley, Detroit Red Wings & olympia Entertainment BoARD oF DIRECToRSdepartments Janie Boles, Auburn university Natalie Burbank, utah Jazz / Salt Lake Bees Richard Dobransky, Delaware North Companies10 NEW ALSD MEMBERS Trent Dutry, uS Airways Center Chris Granger, National Basketball Association Patti Kimbrough, university of Arkansas Gerald Kissel12 ALSD EDITORIAL Debbie Massa, RoI Consulting Editor’s Note Mike Ondrejko, Madison Square Garden BY JARED FRANK Richard Searls, New York Red Bulls Tom Sheridan, Chicago White Sox Your Sandwich is Online Michael Smith, Philadelphia union BY BILL DORSEY Peter Titlebaum, university of Dayton Brian Varnadoe, Houston Texans 16 Bob White, Calgary Flames16 INDUSTRY AND ASSOCIATION NEWS ALSD 2011 STEERING CoMMITTEE SPORTS & eNTeRTAiNMeNT ALLiANCe iN TeCHNOLOGy Adam Link, Home Depot Center Arsenal balances competitiveness and fiscal S.E.A.T. ExECuTIVE CoMMITTEE Alicia Fox, Home Depot Center responsibility Christine Stoffel, Founder, S.E.A.T. Consortium Bryan Lawrence, Angels Baseball Chris Wood, S.E.A.T. Chief Technology Advisor/Coordinator Chris Cockrell, AEG/STAPLES Center Is using Groupon a good idea? Michele Kajiwara, AEG/STAPLES Center S.E.A.T. 2011 STEERING CoMMITTEE Eagles, Jaguars and Vikings fans become Bob Jordan, New Meadowlands Stadium Co. the faces of the franchises Casey Bookout, university of oklahoma Craig Neeb, International Speedway Corporation Chip Foley, Forest City Ratners22 ON ALSD.COM Chris Dill, Portland Trail Blazers ALSD congratulates Jennifer Ark and the Dan O’Neil, National Hockey League Dennis Mills, Major Events International Green Bay Packers for their Super Bowl Jim Darrow, Ilitch Holdings/Detroit Red Wings Published by Venue Pub. Inc. Copyright 2011. (All rights XLV victory. John Avenson, Minnesota Twins reserved). SEAT is a registered trademark of the Association Kevin Naylor, Indiana Pacers of Luxury Suite Directors. SEAT is published quarterly and is Larry Bonfante, united States Tennis Association complimentary to all members of the Association of Luxury24 MEMBER HIGHLIGHT Lorraine Spadaro, DNC Boston, Inc/TD Garden Suite Directors. SEAT visits with Frank Hubach, VP Mike Morris, Major League Baseball Nancy Galietti, National Football League of Premium Sales & Service, American Peter Surhoff, Major League Baseball Airlines Center. Paul DelGuidice, National Basketball Association BY JARED FRANK Paul Barber, Vancouver Whitecaps FC Richard Searls, Red Bulls Arena Roger Baugh, London 2012 olympics Sasha Puric, Maple Leaf Sports & Entertainment Association of Luxury Suite Directors88 COMING ATTRACTIONS 10017 McKelvey Road, Cincinnati, oH 45231 Steve Conley, Boston Red Sox 513 674 0555 Shane Harmon, New Zealand 2011 World Cup Rugby Tod Caflisch, New orleans Hornets Please Recycle This Magazine Wayne Wichlacz, Green Bay Packers8 | S E A T | SPRING 2011 |
  9. 9. NEw ALSD MEMbERS SPRING 2011Gregory J. MyfordAssociate Athletic Director for Business Relations & Mark Steinkamp Paula PoleiCommunications Senior Marketing Director STRATACACHEPenn State university Daktronics 2 Riverplace, Suite 200101-M Bryce Jordan Center 331 32nd Avenue Dayton, oH 45405university Park, PA 16802 Po Box 5135 P: 937-224-0485P: 814-865-9080 Brookings, SD 57006-5135 P: 800-325-8766 Patrick GilbertShelley Volpenhein STRATACACHESuite and Premium Services Manager Steve Stonehouse 2 Riverplace, Suite 200Cincinnati Reds Senior Vice President of Sales Dayton, oH 45405100 Main Street Ballena Technologies pgilbert@stratacache.comCincinnati, oH 45202 1150 Ballena Blvd., Suite 250P: 513-765-7079 Alameda, CA 94501 Stephen P: 510-521-0720 STRATACACHE 2 Riverplace, Suite 200Rob Gardenhire Dayton, oH 45405Director of Marketing & Business Development Kip Nelson schoi@stratacache.comTulsa Drillers Senior Account Manager201 N Elgin Avenue Ballena Technologies John MorrettTulsa, oK 74120 1150 Ballena Blvd., Suite 250 STRATACACHEP: 918-574-8308 Alameda, CA 94501 2 Riverplace, Suite Dayton, oH 45405 jmorrett@stratacache.comJimmy DiLella Roger GasserDirector of Business Development Channel Manager Ashley HurneyConneaut Leather Gasser Chair Co. MTM Recognition494 E Main Road 4136 Logan Way 3201 SE 29thConneaut, oH 44030 Youngstown, oH 44505 oklahoma City, oK 73115P: 440-593-5205; 800-356-1177 P: 800-323-2234 P: ahurney@mtmrecognition.comKai Murray Jim Elenz Donna LamprechtPremium Sales Manager operations Manager MTM RecognitionReal Salt Lake Gasser Chair Co. 3201 SE 29th9256 S State Street 4136 Logan Way oklahoma City, oK 73115Sandy, uT 84070 Youngstown, oH 44505 dlamprecht@mtmrecognition.comP: 801-727-2786 Jeff Thompson Evelyn Mihin MTM RecognitionMatt Garner Coo 3201 SE 29thSharp Electronics Gasser Chair Co. oklahoma City, oK 7311512119 South Tallkid Ct. 4136 Logan Way jthompson@mtmrecognition.comParker, Co 80138 Youngstown, oH 44505P: 720-479-8204 Molly MTM Recognition Dan Vass 3201 SE 29thLarry Schilz Sales Manager oklahoma City, oK 73115Sharp Electronics Gasser Chair Co. mmartin@mtmrecognition.com5901 Bolsa Avenue 4136 Logan WayHuntington Beach, CA 92647 Youngstown, oH 44505 Mike MTM Recognition 3201 SE 29thMark Zbylski Taraya Alston oklahoma City, oK 73115President/owner Student mketcherside@mtmrecognition.comProforma abZ Imprints Temple university6865 Ingleton Drive 1745 W Diamond Street Derek DeBreeCastle Rock, Co 80108 Philadelphia, PA 19121 StoneTimberRiver LLCP: 303-955-4565 P: 724-709-4129 Po Box Fairhaven, NJ 07704 P: 732-383-6500JC Hoops Jennifer Ross derek.debree@stonetimberriver.comBusiness Development Manager FanVisionGivex 60 Columbus Circle1341 Estes Street 19th FloorGurnee, IL 60031 New York, NY 10023P: 847-360-1092 P: jross@fanvision.comBill Makris Matt LukensSenior Director, Ticket Sales & Customer Experience Vice President, Business DevelopmentEdmonton oilers Hockey Club FanVision11230 110th Street 204 Spencer AvenueEdmonton, AB T5G 3H7 Canada E Greenwich, RI 02818P: 780-409-5830 P: mlukens@fanvision.com10 | S E A T | SPRING 2011 |
  10. 10. TO K E N S & I C O N S ...recycled nostalgiaTOKENS & ICONS offers inventive gifts crafted from gameused baseballs, stadium seating, arena basketball floor, evencracked game used bats. We work exclusively with real,existing materials that are filled with venue and team history.Audience participation... it all starts with your nostalgic artifact. 877-558-7404
  11. 11. Editor’s notE by JAREd FRANkWhy Do You Do What You Do?F irst, a caveat: I’m an idealist. Sure I’m Connect with me on cumbered at times, like we all are, by an imbalance of work and life or jaredfrank whether to choose a 6- or a 7-ironfrom 137 yards out. There were even times and follow me onduring the creation of this issue when I found questioning, “Why am I doing this?” SEAT_EditorNow that it is near completion, I am reminded for daily updates.of what I already knew – the greater the chal- Here is a sampling of my tweets:lenge, the greater the reward in the end. The epiphanic moment came while receiv-ing my education from the American Airlines G-Braves transform Home Plate ClubCenter (see page 26). To reward its season at Coolray Field from pregame hangout spot toticket holders and premium seat customers, “a private club feel.”the Dallas Mavericks instituted the High-Five tainhead of civic pride. It is a postcard by itselfLine. You’ll have to read ahead to learn the or as part of the larger skyline. It is no different Rose Bowl turns to Legends to selldetails, but for now, I’ll share that there were than any other building, road or transportation new premium seating.lots of smiling faces. While observing, I recalled resource. It must be joined together with exist- 20 of 55 new suites have been sold.something very important. ing infrastructure or spawn new infrastructure I recalled that we all work in the greatest in order to properly integrate into the existingindustry in the world – sports and entertain- identity and growth of a city. It involves plan- Nets to sell All-Access tickets @ Barclays Center. Includes unlimited food & membershipment. No, we are not in labs researching the ning, studies and community outreach. And into Barclays Center Business Alliance.cure for cancer. We are not risking our lives in perhaps more so than any other source, it servestsunami-impaired Japan to save others. But we as a familiar interest and common conversationdo something just as intrinsically important, if starter that transcends race or economic status. Renovations to Club Level at Camden Yardsnot instrumentally valuable. We remind people I believe this fellowship derives from a simple include drink rail seating down left/right field lines and 15 field-view bistro be happy. noun – kindness. I believe in genuine acts of kindness, that service is not merely a means toHold tHat tHougHt for a moment. a reciprocal end. Live with kindness I say, not Club built inside a boxing venue at because you expect something in return, but the Cosmopolitan on the Vegas strip has seating because kindness is the act and the reward. Like 10-feet from the ropes.People do not buy into what you do. They buyinto why you do it. Your clients don’t buy a I said, I’m an game (or whatever sport you sell or Remember those smiling season ticket holder Angel Stadium to add healthy, local foodsservice) from you. They buy into why you are faces in the Mavs High-Five Line? I’m not too with new “farm to fan” program.selling it to them. So, I ask you, the readers of much of an idealist to know that the emotionalSEAT, “Why do you do what you do?” high from the high-five experience incentiv- ALSD member Andy Silverman announces I don’t mean to put you on the spot. So izes a renewal of those season tickets. But what all 379 all-inclusive Diamond Club seats atthink about it for a second, while you read about the dozen or so kids in the line? They Marlins Ballpark sold out for 2012.what my response would be if our roles were aren’t renewing any season tickets. There is noreversed: reciprocity for them. Their reward is our reward – genuine happiness. University of Michigan has sold out all I believe in community. I believe cities are a premium seating at Michigan Stadium, including 81natural human creation, because shaved down So I ask you again, loyal readers of SEAT, suites for a most rudimentary level of understanding, “Why do you do what you do?”we desire company. We’re happiest when shar- Give it some thought. And don’t forget to be Portland Timbers are extending season ticket our lives with others. And cities serve as a happy. Goal of 12,000 has been surpassed;means of sharing commercial, political, philan- +500 seats made available.thropic, health and wellness, fashion, cultural,art, dining and sports experiences. I’ll see you next in L.A. at the ALSD Conference. On Twitter, The sports experience starts with the facility follow conference updates leading up to and through its– a trademark for any city. It serves as a foun- duration via the hash tag, #ALSD2011.12 | S E A T | SPRING 2011 |
  12. 12. EdIToRIAl by bIll doRSEy, ChAIRmAN, AlSdYour Sandwich is OnlineL et’s start with a caption. The inset photo is of your boyish, albeit aging, former executive director of the ALSD. The boy I am holding andthe other boy are my grandchildren. The littlegirl hanging onto me is my adopted daughter,McKenna. The photo is dated. McKenna is now13 years old, 5-feet, 3-inches tall and has amean volleyball serve. She no longer calls me“Daddy.” I am just Dad now, and she says Ican’t sing, so I can’t go on American Idol, and Ican’t dance, so I shouldn’t even think about go-ing on So You Think You Can Dance. Accordingto McKenna, her Dad works too much, and hissingular achievement in life is being able to fallasleep almost anywhere, anytime, anyhow. I resemble that remark. But I am bringing this up, because I alsohave a point. My guess is that more peoplehave read this paragraph than did my insightfularticle in the last issue of SEAT on collectivebargaining. Why? Because we are all suckers for humaninterest stories. We crave to see others’ liveswritten on Facebook walls or need to readabout what Charlie Sheen is doing on his Twit-ter feed, because we somehow identify with thefact that we can post online a picture of thesandwich we are eating on Tuesday in Cincin-nati, and someone on Wednesday in HongKong can respond to us that it looks “yummy,” each post… is important to so, you have probably held them at one time.even if that is what your Facebook caption I bet some of you even have pictures of youralready says. the person who believes kids posted on your refrigerator door, which There are more than 500 million active Face- his or her big, beautiful is exactly where this one has been hanging forbook users, almost twice the population of the years now.United States. It connects the world, and some deli sub with all the fixins Somehow, someway, there is a connectioncredit the downfall of dictators with its ability has interest to the world with another human being somewhere in theto stage an online coup. world. Clearly, relationship marketing works. If Facebook can help depose dictators, I at large. funny thing is, it And isn’t that what suites and premium seatsam not so sure we should call it “Social,” but does. as a business concept are all about: Relation-indeed, that is what it is: Social Media. And ship Marketing? There is something abouteach post, no matter how seemingly stupid, seeing customers face-to-face, getting to knowno matter how seemingly irrelevant, no mat- And so does my photo. There is someone out them in ways that do not quite translate in anter how many sandwiches appear online, is there in our membership who will look at this email or over the phone or in a memo. Sportsimportant to the person who believes his or her photo and see something that interests them. are not politics and not religion. It is both safebig, beautiful deli sub with all the fixins has Unfortunately again, I bet more people look at and sacred ground. It is a communal gather-interest to the world at large. Funny thing is, this photo than read my insightful article on ing of like-minded people who are having funit does. It has meaning to someone out there collective bargaining. Why? Because you can together. Meeting a person in a suite, and beingin Hong Kong who says it looks “yummy.” identify with it. Many of you have kids, and if “captive” with them for several hours, often14 | S E A T | SPRING 2011 |
  13. 13. with a game going on and drinks going down,creates an atmosphere of conviviality. Don’t look now, but it also creates business.Because in part, business is about relationshipsand trust in the person you are doing businesswith. You can talk about your family, and youcan talk business. You can even tell them whatkind of sandwich you post online. You canallow them into your weird little world as muchas you want to or not at all. But the personyou bring into the suite or premium seat canread your body language. They can see youreyes and see if you are sincere. They can decideif they are going to bring you into their weirdlittle worlds or whether to simply say thanks forthe invitation to the suite, and I hope we meetagain. Suites are the original Facebook, the originalSocial Media. They are not what the mediatoo often portrays them as – some kind ofseparation from the “Haves” and “Have-Nots.” What’s On Your Mind?: When ALSD executive director Amanda Verhoff posted this photo on Facebook, she received more comments than from any of her articles written for SEAT.They do not exist so that wealthy corporationscan feel far from the madding crowd or so theycan let their customers into these exclusive do- Just as facebook connects Write to Bill at, and connect with him onmains, so they can feel superior to Joe Six-Pack LinkedIn at his hot dog in the Dawg Pound. the world… suites and During the recession of the past several premium seats, in general,years, I think this opinion of the high priceof premium seats has become more prevalent. exist because they are theIndeed, some corporations – mindful of what original Social media.appeared to be in the impending collapse ofthe American financial system – actually tooktheir names off the name plaques in front oftheir suites. The idea that a major corporation kinds of marketing expenditures are thought ofis somehow partying seems callous for those as “effective” or “necessary” or as a legitimatepeople who are being laid off. It felt like Marie way of building a business. But a suite? Learn-Antoinette was sitting in the suite and telling ing what customers want? Learning about thethe masses to “let them eat cake.” How dare personal experiences of your customers’ familiesanyone fiddle while Rome burned? and finding out what sandwich they like? No, No matter that suites are anything but that. not legitimate.They are there for a business purpose, and it Yet those companies who will not postis one that is time-honored – to get to know their names on the doors of their suites stillyour customer in a comfortable setting. It is for renew their suites, in most cases. And that isa social purpose, not a purpose that screams, because they work. Just as Facebook connects“Stay away from me.” the world, just as magazines like People and Us Yet that is how the media portrays the Weekly are now the most popular magazines in ComIng uP neXt:process. For some reason, this attitude does not terms of circulation, suites and premium seats, arSenal SetS eXamPle forseem to have the same affect on those compa- in general, exist because they are the Original englISH PremIer leaguenies who are spending money, advertising or Social Media.sponsoring an event. For some reason, those | SPRING 2011 | S E A T | 15
  14. 14. Eagles, Jaguars and Vikings Fans Are FacesINduSTRy ANd ASSoCIATIoN NEwS of the Franchises, p.20 Member Highlight: Frank Hubach, p.24arsenal balances competitiveness and fiscal responsibilityThe Gunners are one of few top European clubs not to operate at a lossC ompeting in the increasingly competitive business environment of international football comes with its challenges. At the top of this list of challenges is turning aprofit. Very few do. “Our club has built everything it has andeverything it represents without relying on outsideinvestment for its success. This is a challengingpath to tread. But as a result, we have earned ourindependence and our long-term financial abilityto support our football, our values and our com-munity. We don’t have to rely on anybody butourselves for our future success,” says Ivan Gazidis,Chief Executive of Arsenal Football Club, whichhas won three Premier League championships. But why is Arsenal’s mix of winning andcommitment to financial self-sufficiency such an One-Nil to the Arsenal: Club supporters routinely pack Emirates Stadium and chant the club to victory and winning match-day revenues,accomplishment? £115 million in 2010. The economics of international football havechanged dramatically in recent years. Trying to valued by Forbes at $1.2 billion in 2010, seventh Club Level seats. As a result of increased corporatekeep up with the Joneses proves more and more in the world in all sports. “We continue to be in hospitality seating in the new ground, stadiumdifficult each year. So much so that only a hand- a healthy financial position,” states Gazidis. “The income increased from £37.4 million in 2005 toful of Joneses remain relevant. To illustrate this club is run on a self-sustaining basis, and the close to £115 million last year. “The club and boxpoint, consider that Cristiano Ronaldo’s transfer results continue to show long-term sustainability propositions have sold well, and we continue tofee alone, the most expensive in history, from and health, so there are some real positives.” have a strong waiting list and high demand for theManchester United to Real Madrid in 2009 was Among these positives is the club’s genera- coming seasons,” says Charles Bruner, Premiumworth £80 million (€94M, US$132M). Very few tion of the fifth highest revenues in Europe and Sales Manager at Arsenal.clubs can afford this going-rate to acquire top-tier second highest in England in 2010. And they But most top clubs have made improvements totalent. And top-tier talent usually wins champion- did this while controlling costs. Subsequently, their facilities so to not lose out on the corporateships. the club’s pre-tax profits were £56 million during hospitality spend. Again, what sets Arsenal apart The reality is to accommodate such inflated the same period. The teeming revenues largely is these similar revenues coupled with lower costs.transfer fees and contracts, wealthy investors stem from match-day revenue, £114.7 million in Costs are controlled largely through internallyrunning their clubs at a loss has become a com- 2010, which makes up for its modest commercial developing players as opposed to acquiring tal-mon practice. Chelsea Football Club, a perennial revenues, £44 million in 2010, which ranked 13th ent via transfers and then signing players to bigpower in the EPL in recent years since Russian in the world. Improving on global commercial contracts, a philosophy that will benefit Arsenalbillionaire Roman Abramovich bought the club, income is the next hurdle to overcome for Arsenal, when UEFA’s new financial fair play rules beginhas operated in red figures since Abramovich took who is making a significant investment in this in 2013. The new rules are a response to thecontrol, including a loss of £44.4 million in the area. “Commercial is going to be a big focus for recent transfer activity and will stipulate all clubslast financial year. But in the same period, this has us, particularly globally,” Gazidis says. “So as we balance their incomes and expenses and operatecorrelated, at least in part, to Chelsea winning six look at our commercial partnerships, we have under break-even principles. Already guided bymajor trophies. The club recently announced that made a significant investment in our commercial such policies, Arsenal is positioned for continuedit is now virtually debt-free after converting most partnerships team, and I think the fans will begin success.outstanding debt to equity, but most clubs do not to see some of the results of that over the next few – Jared Frankhave that ability or willingness of ownership cof- years.”fers capable of propping up such an imbalanced Like its North American counterparts, Arsenal For more information about the Club Level at Emirates Stadium,balance sheet over a multi-year period. started witnessing increased match-day revenue contact: The contrarian in this money game is Arsenal, after construction of a state-of-the-art new Charles A. Bruneran annual contender for major trophies under stadium. Emirates Stadium, opened in 2006, has Premium Sales Managertheir self-sustaining approach. And the club does 150 executive boxes, which account for a little +44 (0)207 704 4552not sacrifice brand equity to be so. Arsenal was over one-third of match-day revenue, and 6,700 | S E A T | SPRING 2011 |
  15. 15. INduSTRy ANd ASSoCIATIoN NEwSIs using groupon a good idea?The online sales intermediary helps move unsold inventory without having to broadcast discounts in publicI n November, the New Jersey Nets offered low- City Company discount Sold Category er-level sideline seats for up to 65% off of $100 and $200 tickets for games against the Hawks, Chicago Gap 50% 42,334 apparelTrail Blazers, Thunder and Wizards, selling 988 NYC Gap 50% 23,322 appareltickets through Groupon. Assuming half were Boston Gap 50% 20,542 apparelsold at each ticket price, the Nets netted $27,170 Chicago Chicago Riverafter giving half the proceeds to Groupon. Other Architecture Tour 52% 19,743 admissionsports organizations have generated the sale of an Chicago Jamba Juice 50% 19,516 food/beverageadditional few thousand tickets through Groupon, Boston Blue Ribbon BBQ 53% 16,571 food/beveragesuch as TCU (60% discount for TCU vs. Oregon; NYC American Apparel 50% 15,637 apparel2,771 sold), the Wrigley Field Rooftop Club Chicago Make Your Own Bears 50% 15,543 bears(22% discount for selected games; 2,381 sold) and Chicago Brunswick Bowling 67% 14,771 bowlingthe New England Revolution (67% discount for Chicago Chicago Auto Show 45% 14,666 admissionNew England vs. Seattle; 2,515 sold). Seattle Woodland Park Zoo 45% 12,527 admission The basic model for online group sales interme- NYC Maoz Vegetarian 50% 11,698 food/beveragediaries is to negotiate discounts with businesses, Chicago The Body Shop 50% 11,232 skin caresend the offer to subscribers via email and split the Dallas Gap 50% 10,852 apparelrevenue proceeds with the business if a minimum NYC Nordstrom Rack 50% 10,668 apparelnumber of people accept the offer. The success Chicago NYC Bagel Deli 60% 10,526 food/beverageof Groupon led Google to offer $6 billion in a Chicago Chicago Magazine 50% 10,448 subscriptionbuyout. Groupon declined and is instead raising Dallas Dallas Arboretumnearly $1 billion to sustain the company and its & Botanical Garden 50% 10,307 admissiongrowth. Groupon and LivingSocial, which to- Chicago Flat Top Grill 50% 10,022 food/beveragegether maintain a 90% market share, continue to Seattle Taco Time 50% 10,000 food/beverageexpand their reach, while others tweak the modelto get a piece of the pie. is we are not really generating any new qualified The inset chart shows the best-selling Groupon the overlap between for the New York City, Chicago, Boston, subscribers to groupon and A second set of problems exists in the lessSeattle and Dallas markets drawn from a listing likely case that a subscriber accepting the offer isof recent deals on the Groupon website. Of the likely season ticket holders someone who loves the sport with some interest intop-20 listed here, 15 are tangible goods with should be low. the team. If so, then we are talking about someoneestablished or known quality. The availability of already inclined to attend. Is offering a significantinventory among sports teams, such as the Nets the objective is to effectively and efficiently target discount your best shot at convincing a fan towho offer only selected inventory at selected price-sensitive buyers, Groupon succeeds. attend a game?games, makes it unlikely any would make this Second, as the Nets and other examples show, Some may argue that discounts are necessarylist, but we do see five entertainment venues listed organizations can generate revenue directly attrib- to fill seats for lower quality opponents or otheramong the 20. utable to the Groupon deal with relatively little reasons. The problem is that if the fan is a likely effort. Buyers are provided sufficient informa- attender, but prone to respond to promotions, theSo IS uSIng grouPon to Sell tICketS a tion by Groupon and are encouraged to generate discount offer most likely shifts attendance fromgood Idea? referrals with a $10 incentive, which leads to a another game. The question then becomes, “HowOrganizations using services such as Groupon may third benefit – teams may generate new leads and many accepting the offer would have come onbenefit in several ways. First, individual subscrib- referrals. another date without the offer?” Given that halfers self-identify themselves as price-sensitive shop- However, if the price-sensitive buyer subscrib- of proceeds go to the online service provider, thepers. So the discounts are not offered to those like- ing to Groupon is not likely to fit the profile for a answer needs to be more than to become season ticket holders. Our research buyer of season ticket plans, how qualified are the Finally, what are you saying to the marketover the past 20 years on price-sensitive shoppers, leads? This question suggests two problems. with a Groupon offer? One of the things we learnparticularly for sports and leisure, suggests that the The first problem relates to the fact that if it in economics and marketing is the concept ofprice-sensitive segment is often over-estimated by takes a 50% discount for someone to consider price signals. Since consumers actually engage insellers. Buyers for season tickets are more likely to attending a game, most likely we are not talking relatively little information search, they use priceperceive higher value from higher-priced tickets about someone who is passionate about the sport to determine quality. Price can communicate(not the cheap seats). The point is that the overlap or the team. Our research shows that such fans demand-related or supply-related quality informa-between subscribers to Groupon and likely season will buy that ticket, but will not come back until tion. Higher ticket prices signal high demand andticket holders should be low. Consequently, if the next deal, if then. In this case, the problem [continued on page 86]18 | S E A T | SPRING 2011 |