Several of my top 40 sports business themes from 2019 came from conversations with industry … [+]
Part 1 of this two-part year-ending series focused on 20 contemporary sports business insights/themes/experiences gleaned from three separate Sports Business Journal conferences during 2019 (CAA World Congress of Sport, Intersport’s Brand Engagement and Content Summit, Learfield IMG College Intercollegiate Athletics Forum).
This article focuses on 20 additional insights/themes/experiences from attending two specific events: (1) AXS Sports Facilities & Franchises and Ticketing Symposium and (2) Octagon’s Sport Marketing Symposium. For this second part of the two-part series:
– Insights/themes 21 through 30 were from the AXS Facilities/Franchises/Ticketing Symposium
– Insights/themes 31 through 40 were from Octagon’s Sport Marketing Symposium.
Throughout this summary, key quotes are featured from the industry professionals who participated at these various events.
INSIGHTS FROM AXS SPORTS FACILITIES & FRANCHISES AND TICKETING SYMPOSIUM
21. How season tickets are sold/marketed has changed due to changes in customer preferences
a. T’Wolves and WNBA Lynx COO Ryan Tanke noted most fans today do not buy a full-season ticket, instead choosing to split a package with friends or colleagues. Tanke said now it is up to the teams to vary their ticket packages, as well as how they sell them.
b. Dodgers Business Enterprise President Tucker Kain said, “It’s customer demand, and what do the fans want out of this asset.” He added, “We’ve been — as an industry — trying to move toward convincing people that if you buy this ticket package, with it comes all financial benefits on top of the experiential benefits that come with it.”
c. Kain said the Dodgers are doubling down on selling more season tickets, but at the same time embracing the individual game market. “That’s what the fans are starting to tell us they care about,” Kain said. “The real challenge for us organizationally is not just the ticket, but how do we create demand? How do we articulate to a fan why it’s exciting to come to last Tuesday night’s game against the Tampa Bay Rays. That’s gotta be a unique event.”
d. NHL Kings and AEG Sports COO Kelly Cheeseman said his biggest pet peeve in recent years is that season-ticket members look at the economics of that purchase, not looking at “why they want to come to our events.” Cheeseman: “They’re overbuying. They’re getting sold into that concept that they can sell off what they don’t use.”
e. Rockets CRO Gretchen Sheirr said the team has now started selling the same amount of full-season equivalents, but to more accounts. “We’re just selling them in the areas where we feel like that experience delivers something better. If someone has to go on a payment plan to buy the cheapest season ticket in the upper bowl … that’s not the best experience for them, even if that’s what they want. We’re giving them some flexibility to not feel that pressure and enjoy it a bit more.”
22. Subscription-based ticketing is becoming more common and reflects changing consumer demands
a. MLB teams in Oakland and St. Louis have seen considerable success, as have many other teams.
b. NBA teams are also using the subscription model.
c. Industry professionals surveyed about the future of such ticketing models believe Major League Soccer teams might be the next league to see several teams adopt subscription ticketing.
23. Learning Lessons from the Entertainment industry on Applied Business Analytics
a. WarnerMedia Applied Analytics President Matthew Marolda described how his company tries to predict behavior and outcomes at the intersection of people and content.
b. He suggested sports execs would do well to substitute fans and teams or games. Marolda said WarnerMedia applies analytics to audience targeting. “We make a prediction whether someone will buy a movie ticket or watch a show,” he said. “We try to do that for everything … if they will tune in (to a show), or take future action. It’s like season ticket renewals and (fans) responding to promotions.”
24. Greater digitization requires greater customization in how organizations market to fans
a. Ticketmaster North America VP/Digital Marketing Catherine Wood said the digital component is “critical in understanding who the fan is.” Her company is making a shift in how it markets to customers. “We’re moving away from spray and pray and one size fits all,” Wood said. “Every fan journey is unique. … It includes all channels. Social listening, really deriving a pathway throughout the conversion funnel. Every fan is different. They may buy early or wait until the week before.”
b. AEG Presents Chief Digital Officer Brooke Kain said timing is key with their consumers. “It’s less about who are they talking about than when and how are they talking,” she said. “We’re moving away from genre and affinity to, when are they talking about shows? That’s when you apply your advertising. … We try to listen for signals on what are people talking about, when are they engaged.”
25. Strategies for developing and retaining fans have intensified as customer preferences and viewing habits change
a. From Boston Celtics team President Rich Gotham, “How do we make sure that we’re still retaining those customers and engaging them in ways they want to engage? I’m not sure I know what that looks like in 10 years, but I know we had to change in the last few years our view on what it really means to market, engage and retain a customer.” One change highlighted in Boston: Gotham estimated the Celtics had 50-60 employees a decade ago, whereas today they have about 160 staffers.
b. L.A. Wildcats President Heather Brooks Karatz is starting from scratch with her XFL team, and she said the league’s debut five months from now allows a runway to build a team that matches fans’ values and wishes. Karatz started a series of fan meet-and-greets where she gets together with supporters at local bars and restaurants to go over what they want to see out of the team. “Through that process, some ideas are good, some ideas aren’t,” she said. “But I’m building that generational relationship with that fan so that they’re going to be a fan for life.”
c. For TD Garden and Bruins CRO Glen Thornborough, it is all about in-arena experience. He said the venue needs to create as “much of a frictionless experience as possible.” Thornborough: “The goal is for everyone to be treated the same way when they enter the building.”
26. Sports ownership today requires real estate investments and greater interaction with fans
a. Atlanta Hawks Owner Tony Ressler said of sports ownership, “It’s not a traditional business, because you’re buying a community asset — whether you know it or not — and you should learn it early. … It’s a lot more time and presence than I anticipated.”
b. The Hawks under Ressler have already upgraded the team’s facilities, including a massive renovation to State Farm Arena and new practice facility/team HQ — both regarded among the league’s best. Ressler: “We have re-energized the community relationship and built basketball courts all around Metro Atlanta and re-energized the function of the Hawks Foundation.”
c. Oliver Ressler, Tony’s son, was also on the panel and talked about the Hawks’ innovations with premium areas that are targeting millennials. He said, “We have a younger demographic coming to our games very consistently. They want more alcoholic offerings. They want more bars close by. They want better food options all within a place that feels private and it feels upscale.”
27. Customizable Season Ticket plans continue to see growth
a. As the Netflix-style subscription model for ticketing to pro sports events looks more like an enduring feature than a passing trend, teams will have to continue to offer more customizable fan experiences to increase and sustain revenues.
b. The Oakland A’s in ’18 ditched their traditional season ticket program for a subscription model that offers fans access to all of the team’s 81 home games with a baseline of benefits and the opportunity to purchase additional benefits such as better seats. The A’s created the plan after finding that fans under 35 wanted a “new adventure” every time they came to the ballpark, said team COO Chris Giles, while fans over 35 mostly wanted consistency in service, seating, parking and concession options. “One thing really stuck with me,” Giles said. “One of the guys in the focus group said, ‘My ideal baseball experience is a food tour meets bar hopping at a baseball game.'”
c. Rams VP/Strategy & Ticketing Dan August said the team’s $250 non-transferable ticket for less desirable seats at nine NFL games, excluding the playoffs, was an introductory plan for fans who would not consider becoming season ticket holders. The package is an opportunity to test out season tickets with the aim of upselling them later. The effort has provided good sales leads for the team’s new stadium, August said.
d. Meanwhile, with 55% of NBA fans being in Generation Z or Millennial, league Senior VP/Team Marketing & Business Operations Matt Goodman said most of the league’s teams offered a customizable season ticket pass, a single or monthly pass to create more opportunities to keep them coming back to games. “They have a tremendous propensity for upsell once they activate against that pass,” Goodman said. “And there’s optionality. Giving the customer optionality is what they want.”
28. Teams these days try to address the fan experience beyond just the day of the game
a. NFL Carolina Panthers CMO Meredith Starkey said “it’s much more important to deliver a great experience outside the white lines.” Starkey and the Panthers have kept things relatively simple early on, whether it has been pregame fan tailgates with Owner David Tepper or adding the team’s logo to midfield at Bank of America Stadium (which happened before Starkey’s arrival). “That created and fostered such an affinity with our brand and with our leadership team, and that wasn’t a hard thing at all,” she said of the logo placement. “All those things can matter and add up and build equity for us.”
b. For Minnesota United, now in their third full MLS season, it has been about connecting with the multicultural fan base in the Twin Cities. Minnesota United CEO Chris Wright said there are 251 languages represented in Minneapolis-St. Paul, and the Loons now have more than 25 languages across their 200 part-time staffers, from concessions to security. “We decided that we had to hire people that reflect our audience,” Wright said.
c. While the fan experience outside the stadium is key in some markets, LA2028 Chief Business Officer Brian Lafemina said there is “still no better way to experience what we do than being inside the stadium.” For teams and leagues, and in his case the Olympics, that means improving the in-venue experience. “How do we spend the amount of money we need to in order to eliminate the pain points?” he said. “The big video screens you see, they’re great, but we should be spending just as much to eliminate the pain points. How do you program things inside the stadium that makes fans get in there earlier?”
29. How both the Chase Center (Warriors) and Banc of California Stadium (LAFC) have set new standards in sports facility architecture
30. Renovations to Dodger Stadium ahead of the 2020 MLB All-Star Game
a. Dodgers President & CEO Stan Kasten and Dodgers Business Enterprise President Tucker Kain sat for a Q&A on the state of the club and the pending upgrades to the league’s largest venue. Included in the renovations are a new center field plaza, elevators (which are already being installed) and bridges that will connect the ballpark’s pavilions.
b. Kasten noted the plaza will provide a true main entrance for the first time, and fans will be greeted by an existing statue of Jackie Robinson, as well as one to be added next year of Sandy Koufax. But Kasten said fans will still get the classic view from home plate looking out over the San Gabriel Mountains. “Our postcard view, with everything we’re doing next year, is not changing. … We’re very proud of maintaining that postcard shot.”
c. The Dodgers this season will lead MLB in attendance for the seventh straight year, and Kasten said, “When we came in here, we talked about the Dodger brand and what the Dodgers mean, not just here but across the country. … We are the franchise of Jackie Robinson. There is no franchise that has had the impact on popular culture or society at large as the Dodgers. So, we talk about that all the time. … We can talk about the tangible quality of Dodger pride. And motivating people here has just never been a very big challenge.”
d. Kain added: “The culture of innovation that the Dodgers have built — we’ve done everything we can to foster that and create internal challenges that will manifest themselves on the field. In every position, we’re challenging people to continue to carry this brand forward and take it to the next level. That’s got to be done through thinking outside the way we’ve traditionally always done things.”
INSIGHTS FROM OCTAGON’S SPORT MARKETING SYMPOSIUM
31. Connecting with Gen Z consumers
a. A main theme that emerged was that today’s younger sports fans are accessible — just not in the traditional sense. Content being pushed to Gen Z must be innovative and specialized, or else these young fans will not be interested.
b. Octagon Senior VP Dan Cohen pointed to realizing the different consumption habits of older and younger generations. “They consume through access and experiences as opposed to material possessions,” he said. “What is ‘Snap-able’, what’s ‘Tweetable.’”
c. Along similar lines, Snap Head of Sports Partnerships Anmol Malhotra believes Gen Z does not care as much about the action on the field as much as the culture of sports. That is why Malhotra said his social media platform is moving past only trying to attract hardcore sports fans and focusing more on casual followers.
d. MLB Senior VP/Marketing Barbara McHugh noted Gen Z baseball fans are more likely to be a follower of an individual player rather than a team or league, which is why the league has made it a point to provide its players with social content to push out on their own channels.
e. Dan Porter, CEO of Overtime, said Porter “You just have so much competition from other things. Whether it’s 8 million people watching a Black Hole on ‘Fortnite,’ whether it’s watching Netflix, whether it’s watching twenty other streaming services.”
f. Malhotra said leagues, teams and companies need to make sure content is formatted properly for each platform. “Our biggest fear is that they fall into the bucket of just taking the exact content they have somewhere else and putting it on Snap,” he said. “That can’t work. You have to customize it.”
32. Luna Bar’s Decision to Back the U.S. Women’s National Team on Equal Pay Front
a. Luna Bar (a division of health snack Clif Bar) made the bold move of donating $718,750 to the USWNT as it was fighting to close the pay gap with its male counterparts ahead of the FIFA Women’s World Cup. That donation allowed each player on the women’s side to get $31,250, which made up the difference in roster bonus with the USMNT players. Clif Bar Senior Marketing Dir for Luna Ritu Mathur spoke to conference attendees about the genesis of the donation, the metrics following the move and what might be next for the brand.
b. On how this came about, Mathur said “It was an issue that we really felt was close to our brand. We’ve always been about championing women, inspiring women and trying to support them in any way that we can. And so, the past three years we’d been talking about the gender pay gap specifically.”
c. On the public response to their actions, Mathur said: There was a lot of dialogue and conversation around should a company or a brand do this and is it taking the responsibility off of, in this case, U.S. Soccer to close that gap? That sparked some really interesting conversations. … We generated over 4 billion media impressions from this campaign, which was more than in our 25+ years of existing as a company. Over 3 billion of that was earned media.
33. The importance of sports to Bank of America’s overall marketing strategy
a. Bank of America CMO Meredith Verdone believes BofA’s connection to sports gives it the ability to have a broad appeal in any given market and differentiate itself from competitors.
b. One of the ways that BofA has sought to connect both locally and nationally with fans is through deals with MLB and a number of its teams. Verdone explained that clients who are aware of BofA’s MLB deal tend to have a higher favorability rating of the bank (79%) than those who do not (62%). “Favorability is something that really matters to us,” Verdone said. “We’ve done a lot of work to understand the economic value of a client who has higher favorability with us. We can show that they are more likely to do more business, … so this data point is so important for us to put the value on the relationship.”
34. The Rise of Giannis as a Product Endorser
a. Octagon Basketball agent Alex Saratsis opined on various aspects of working with Giannis Antetokounmpo.
On working with Nike, Saratsis said “Nike has this down to a science.” The brand signed Antetokounmpo for the bargain price of $5,000 per year before he was drafted in ’13. After the four-year deal, he decided to remain with Nike and become the company’s first international signature athlete.”
On Antetokounmpo growing his brand in Milwaukee: “He’s one of the few people in the NBA now that has truly outgrown his market.”
On Greek yogurt companies proposing deals for Antetokounmpo: “That’s too easy. We want to do something that’s a little bit more complex, a little bit more thought-provoking than ‘he’s Greek and there’s Greek yogurt.’”
35. The Partnership between UPS and PGA of America
a. PGA of America Chief Commercial Officer Jeff Price and UPS Dir of Global Sponsorships & Events Jennifer Oliveras discussed the genesis of that relationship.
Oliveras said “The Ryder Cup has always been an interest to us because of its global appeal. We’re a global company, and we didn’t want to partner with Team USA or Team Europe because we’re global. Jeff and the team worked really hard with the Ryder Cup Europe team to develop a worldwide partner package. At that point, we had a lot of conversations and it made sense.”
Price said “Really thinking holistically about how UPS was making the event better gave us a great foundation because it was truly an authentic relationship, where there suppliers status was making the Ryder Cup better and allowing us to deliver a better experience for our fans.”
Price noted UPS will help make deliveries as quickly as possible to Whistling Straits in Wisconsin — home of the ‘20 Ryder Cup — if items in the merch shop at the event sell out. The shipping company will also allow fans to send home anything they buy on-site. “It truly is an integrative partnership,” Oliveras said. “We were providing shipping solutions to fans for years. But now we have a deeper integration with them, and we’re actually able to improve the supply chain process on the back end with them.”
36. Strategic partnership between Allegiant Air and Minor League Baseball
a. Allegiant CMO Scott DeAngelo said “We’re in a little over 120 markets. And for those that know Allegiant, we fly out of very small, small and mid-size markets. So if you think about, who better in the markets that we serve than Minor League Baseball? They were in the right place.” The affordable aspect of flying Allegiant combined with the affordability of going to an MiLB game made the partnership a perfect match, according to DeAngelo. “We pride ourselves as the hometown airline for many of these markets that these other airlines have either never been to or orphaned,” DeAngelo said.
b. MiLB Chief Marketing & Commercial Officer David Wright said, “For us, airline was a category. After doing a lot of research, we got 160 markets and there’s a couple brands that bubble up once you run the analytics,” Wright said. “Allegiant just happened to be one of them, and it’s just been a phenomenal start to what we hope will be a long-term deal.”
37. The Importance of Connecting with “Fluid Fans” Using Technology
a. MSG Head of Esports Dan Fleeter said the fluid fan is constantly top of mind when putting together events at the company’s venues. “We think about using our venues in new and different ways,” Fleeter said. “It’s not just about the traditional sports, but about how to make sure our venues are equipped for all sports and all sorts of esports events.”
b. USGA Senior Dir of Digital Media Amanda Weiner said that connecting with the fluid fan has enabled her organization to test out its own esports model. “We actually do a bit of our own in terms of virtual golf,” Weiner said. “We are incredibly interested in what esports could provide just from a venue perspective, but also in the world of golf.”
c. Cisco Marketing Manager for Global Sponsorship Marketing Ashley Marusak said “At any sporting event, fans sort of want the same things. They expect to have connectivity when they’re there. That’s something that when you arrive anywhere you’re like, ‘What’s the WiFi code? What’s the WiFi? Can I get to the WiFi?’ So that is like the baseline. It’s foundational of what’s expected. But people want convenience. If you’re going to get people to get off their couch, they want an experience that’s convenient.”
d. NBA Senior VP/Team Marketing & Business Operations Matt Wolf said “Both at the NBA level and at the individual team level and as an industry we’ve been investing for so long into data and data infrastructure to collect all this information about who our fans are and what they’re doing and how they’re behaving. And now finally with mobile and other technologies, we have this great device that every single person is carrying into our venue to deliver them not only information and insights, but customized recommendations.”
38. Enhanced emphasis on wellness: Kaiser’s Partnership with the NBA
a. Kaiser Permanente Senior VP & Chief Marketing Exec Christine Paige and NBA Senior VP/Global Marketing Partnerships Kerry Tatlock discussed their wellness partnership that began in ’15.
b. Kaiser became the NBA’s first-ever healthcare partner as the Oakland-based company looked to expand its national brand. Kaiser had already been a longtime partner of the Warriors, as well as several other NBA teams. “There was a bit of a confluence between our desire to have more of a national voice and seeing this relationship which built on the local team partnerships we had,” Paige said.
c. For the NBA, the partnership was about changing its outlook on wellness to include a stronger focus on mental health. “We have had a long history at the NBA of being focused on health and wellness, but frankly that has often been more so physical activity,” said Tatlock. “And we as an organization were thinking about how do we evolve our programming within health and wellness.”
39. Emphasis on engaging fans in real-time
a. NFL VP/Digital Media Business Development Blake Stuchin said the league during the offseason gets ready for player transactions by creating mock-up graphics for all kinds of potential free agency moves and trades. “Odell Beckham Jr. went to Cleveland, and we were ready. “There was a piece of content that was published within minutes … and everyone was looking around saying, ‘I can’t believe you guys had that ready.'”
b. Octagon Senior VP/Digital Strategy Meredith Kinsman acknowledged the strategy, which she termed “scenario planning,” has its unique challenges. “Every day there’s new reasons to be careful about what you’re posting,” she said. “If we are trying to execute something big in real time, do we have that group together? Do we know what time we’re ready to approve something? Do we have someone on call?”
c. Instagram Head of Sports Partnerships Will Yoder highlighted the company’s efforts engaging fans through its shopping feature in special moments like championships and players changing teams, when fans are most excited. “Sports has a cool, unfair advantage when it comes to real time commerce.”
40. The Proliferation of Incentive-Laden Partnerships: The ABI Case Example
a. A-B InBev VP/Partnerships, Beer Culture & Community, Nick Kelly said that it took about a year for the program to get up and running, but that it was a rather easy sell internally because of the company’s familiarity with the new model. Kelly: “The culture is there internally for us. We basically have to sell the fact that our agencies are built off of a variable. So, all of our agencies had that model in place. Our employees had it, our media partners have it with ratings guarantees, the Facebooks and Twitters of the world have the same thing with reach. The only thing that was guaranteed no matter how poor or positive it was was partnerships. So the internal sale was easy.”
b. Kelly said “The hard part was actually on the team side and the league side. We had to have some believers to jump on board at first.” A-B InBev has implemented daily forecasting to see which partnerships will work and which will not.
c. Kelly: “We had about 18 teams who had an incentive to make the (MLB) playoffs. Well, they’re all not going to make it. So, then all of a sudden that immediately frees up x amount of dollars on that date. … Now I can go buy more postseason inventory. I can go reallocate those dollars and have real working dollars.”
d. Kelly said that teams have come around to the new sponsorship model. “Fewer and fewer teams are scared of it because what we’ve been able to show them is you can control your own destiny for probably, if we’re taking 10-20% of the contract, you can probably control 80-90% of it just off of the assets that we have,” Kelly said. “You’re asking me to bet on you, but you need to bet on yourself.” Kelly said that the company has done 83 deals under the new model with all of their clients and partners. The only partners that A-B InBev has not touched yet with the new model is college sports.
Click here to read Part 1 of my list of 40 contemporary sports business insights from 2019.