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George Steinbrenner (Owner – New York Yankees) . . . in the bowels of Yankee Stadium, having secured buy-in from key executives of the club to purchase our EDGE 1.000 performance tracking and data base management system, two colleagues (Tom Black, Don Leopold) and I presented the system to Steinbrenner for final approval.
He interrupted my opening comments, pulled out an envelope with ten handwritten questions on it regarding our system, saying the Yankees would buy it if I answered “yes” to all ten. I answered “yes” to the first nine, and “no, but . . .” to the last. He smiled at me, turned to his VP Finance, said “buy it”, then abruptly stood up and left the room, others following in his wake.
Side-stepping its telecast and radio broadcast benefits, the Yankees focused on our system’s performance management elements and tools – game tactics planning, player performance evaluation, amateur/professional scouting data base management, draft/free agent selection and trade planning.
Jerry Colangelo (Owner – Phoenix Suns) . . . Confronted with skeptical political naysayers and self-anointed sports economics experts about the value of a new downtown arena in Phoenix, Colangelo retained us to conduct an economic impact study to provide him with an independent and rational tool that helped him argue his case before the Phoenix City Council. His vision and tough-mindedness have served the city well.
Art Savage retained me five months before the National Hockey League granted Bay Area expansion rights to George and Gordon Gund(shown here). The first CEO of the new club, initially dubbed “Bay Area Hockey ’91”, Savage asked me to craft the new franchise’s overall business plan, organization/ staffing plan, marketing/sales plan (including naming the team and designing its logo family) and week-by-week launch countdown for what became the San Jose Sharks.
Upon completion, he hired me as employee #2 to become the EVP Business Operations, overseeing all revenue streams (tickets, premium seating/suites, sponsorships and merchandise), TV and radio production, community development, advertising/ promotion and media development.
The role also included defining the culture and values of the young entity, ensuring they were synchronized with those of ownership and the marketplace.
We gained an in-depth understanding of the market and its segmentation over a 15-week period with a comprehensive mix of marketing research activity that included 32 focus groups that I moderated, “crowd group” concept testing, executive interviews with corporate and affinity group targets by phone and a global team naming sweepstakes, carrying out $350,000 worth of work for $45,000 out-of-pocket.
Having to launch the franchise twice, once in 1991 at the Cow Palace in Daly City, 40 miles north of San Jose, and two years later in San Jose when the city’s new downtown arena was completed, understanding attitudes influenced by geography and distance as well as familiarity with and interest in hockey was paramount.
On March 17, 1995 the San Jose Sharks, with my guidance, the programming assistance of a St. John’s University junior and the encouragement of franchise owner George Gund, became the second pro sports team in the world to mount a web site.
We beat the major pro sport leagues to the internet, including the National Hockey League, and followed only the Seattle Mariners, who had launched their site to connect with disenfranchised fans during the Major League Baseball stoppage late in the 1994 season. This was a decade before the blogosphere and social media explosions. An early home page appears here.
In fact, upon hearing that we had just gone live, Sun Microsystems President Scott McNealy looked at me incredulously one night at a game and exclaimed, “You’ve got to be kidding! The Sharks have a web site? The Sharks? . . . How can we help you?” Between periods, he introduced me to Ed Zander, who then introduced us to others and Sun became our first technology partner/sponsor. Before then, we had been unable to demonstrate to Silicon Valley companies the linkage and shared interests between technology and sports.
This type of partnership is now a prominent part of sports industry revenue streams and a highly effective way for technology companies to reach “C” level decision makers and tech savvy consumers.
Organizing across functions within sports entities to assess, embrace and effectively implement new technologies, however, remains a work in progress.
Whether creating, reinventing or refreshing a team’s, facility’s, event’s or product’s identity, it pays dividends to invest time and effort in a systematic and objective approach. Shortcuts have paved the way to a mortuary of missed opportunities and costly mistakes.
Here is the process we used building the San Jose Sharks identity and what we learned about how to capitalize on the best practices of consumer-driven industries worldwide.
● Put someone in charge who has strong project management skills and experience managing the creative process. Then EVP Business Operations, I was assigned responsibility for developing the team name, logo, uniform design and colors by Art Savage, President & CEO.
● Build a multifunctional team that understands the customer and is comfortable with experimentation and open to alternatives. We forged a team of freelance talents (rather than delegate the project to one outside agency) to develop the NHL’s first “family” of logos and logotypes, i.e., a primary crest (the shark biting stick treatment), a shoulder patch (the stylized fin), the serrated tooth typeface and an alphabet of its own (Triangle Gothic). Among the four designers engaged to develop the logo family, Terry Smith eventually Read more
The spate of interim league takeovers and new owners acquiring existing franchises (frequently with facilities assets) in Major League Baseball, the NBA and NHL is inevitably accompanied by dramatic alterations to operating and debt service economics and fan base uncertainty or malaise. Incoming owners always want to put a personal stamp of added value on their new investments during the first 6-12 months after their assumption of the reins, preferring to take time to assess beyond their due diligence processes what exactly they have bought. . . in other cases, as anyone familiar with Machiavelli will understand, the new owners make their first moves within hours or days.
This has reignited interest (and need) for fresh, objective introspection which is an important segment of our practice.
Rick White (Executive – Major League Baseball Properties, now a sports apparel industry principal), with support from his boss, Joe Podesta, anticipated the emergence of league headquarters-provided hands-on, localized marketing guidance to member clubs when he retained me to carry out market and organization studies of the struggling Seattle Mariners and New York Mets.
Our latter work was completed just as the franchise was sold to Doubleday Publishing and minority investor, Fred Wilpon, so we presented the implications of our findings separately to Nelson Doubleday in his Doubleday Publishing offices and to the latter in his Long Island-situated Sterling Equities offices, his colleagues in attendance. Eventually, Doubleday and Wilpon purchased the club from the publishing house and, later, Wilpon bought out Doubleday.
Since then, when Paul Allen, owner of the Portland Trailblazers, asked the NBA to investigate how he could streamline his business organization and decision making processes, the league created a task force (which retained me to assist), headed by Bernie Mullin, to help bring the organization into alignment with its newly expressed straight forward mission of effectively running an NBA franchise and its venue as opposed to a once-broader vision of becoming a multifaceted media company.
George/Gordon Gund (Owners: Cleveland Cavaliers, Cleveland Barons/Minnesota North Stars and San Jose Sharks) . . . introduced to me by my former employer, McKinsey & Co., asked for assistance to determine the success prospects and risks at the Richfield Coliseum near Cleveland for their newly acquired, struggling Barons NHL club (formerly the California Seals); they took my assessment and conclusions to the NHL Board of Governors to help make the case for the unprecedented action, relocating the Barons franchise and merging it with the Minnesota North Stars.
See SI feature for in-depth insight into the principals.
To gain these insights, we can carried out in-depth qualitative and quantitative marketing research with the region’s pro hockey followers, event attenders and those who had defected, followers who had stopped attending. In this case, we found that the Barons attending fan base was heavily segmented by seat location preferences, patrons with the deepest hockey knowledge preferring to sit in the corners and behind the goals in mid-range to high locations, while basketball crossovers, newly introduced or lightly wed to hockey, were drawn to the red line at center ice.
Jackie Autry (Owner – California (now “Los Angeles”) Angels) . . . Not satisfied with having attendance stalled, win or lose, at the 2.5 million level, Autry retained us to understand the decision making dynamics of light and heavy attending Angels fans, including focused attention on Hispanic communities, in order to increase marketing and ticket sales effectiveness and productivity. Her customer service consciousness, bred of her experience in banking, was among the highest in the entire pro sports industry.
The structure of the Hispanic community, reinforcing what we had learned when working with the Houston Astros, highlighted the importance of engaging community leaders, informal and formal, including religious, political and small business principals. A key hurdle we discovered that had to be overcome was the issue of “trust” and “commitment to diversity” reflected in the team’s and playing facility’s hiring practices.
Growth potential, disruptive technology and profit economics top the list of factors influencing an emerging company’s value.
But without perceived brand value embodied in its image/reputation/marketplace validation, customer excitement/buying traction, a multi-layered “story” that piques imagination and a prominent scent of innovation and leadership, investors will never even get to the due diligence process, let alone ask for the financial statements.
We have exerted an important impact on building high order company value that was embraced by investors, subsequently measurably enhancing the purchase price of four companies and their assets.
Edward DeBartolo Sr. Owner – Thistledown/Louisiana Downs/Balmoral (subsequently sold before opening of Remington in Oklahoma City) race tracks . . . Hired our firm to develop a factual understanding of patron attitudes, behavior, satisfaction levels and geographic dispersion so that marketing efforts could more effectively address how to increase the visitation frequency of light attenders and profitable high spenders, affectionately called “degenerates”. He immediately grasped the parallel between building shopping mall traffic (the foundation of his business interests) and attracting/serving race track patron