marketing ballpark 'events' to people who "don't even know who is playing tonight" (NY Times)

http://www.nytimes.com/2006/10/22/business/yourmoney/22stadium.html

Oh Yeah, There’s a Ballgame, Too
By KEN BELSON

Atlanta

DINERS in the members-only 755 Club at Turner Field were recently digging into pulled chicken sandwiches and $6 desserts. Across the stadium, near right field, 20-somethings packed the Chop House bar and grill, one of this city’s best places for a first date. In the plaza behind the center field scoreboard, parents watched their children run around Tooner Field, a free playground sponsored by the Cartoon Network.

The multimillionaires on the field — otherwise known as baseball players — were almost a distraction amid all of this activity, as fans preoccupied with prime rib, panini and pinot could barely spare a hand to clap. Competition and athleticism may occupy center stage in modern sports coliseums, but they no longer are necessarily the only magnets for fans. Owners and their minions are well aware — and are trying to make the most of this new reality.

Mike Plant, the head of baseball operations at Turner Field, the Braves’ home since 1997, said off-the-field wining, dining and commotion is a sign that fans come to the park to be entertained, and not just to cheer for their favorite team. “Half the people here don’t even know who is playing tonight,” he said jokingly, while nodding toward the Chop House. “We want to make sure the food is good, the place is clean — and if the team wins, it’s a bonus.”

Mr. Plant and other experts on the business of sports also say that acknowledging these new stadium dynamics is simply a matter of commercial aptitude. As the cost of attending games rises and people’s lives become ever busier, they say, teams must turn more of their parks into shopping malls to give fans extra reasons to spend a day or evening there.

“We are a society that craves entertainment, and a game might not do it anymore on its own,” said Becky Wallace, executive editor of Team Marketing Report, a sports marketing publication. “There aren’t as many true fans as there used to be, so teams are turning games into events.”

WITH the World Series upon us and the football season well under way, Mr. Plant’s efforts to emphasize the diversions at Turner Field are another reminder that American sports is a business — and that the games themselves are just one ring in a multiringed circus. A half-century ago, Bill Veeck, the owner at various times of the Cleveland Indians, St. Louis Browns and Chicago White Sox, was one of the first to push this idea. But in an era when baseball had little competition from football, basketball or television, Mr. Veeck was considered a showman trying to enliven his often-woeful teams.

These days, Mr. Veeck is an icon and the sideshows are front and center. Stadiums are essential to the health of clubs from Atlanta to Denver to San Francisco that are run with an ever-sharper eye on profitability. And cities prize them so highly that they are willing to shell out hundreds of millions of dollars in subsidies to help support megaparks.

Yet putting on a game — from signing players and hiring ushers to turning on the lights and cooking the hot dogs or even finer fare — has become only more expensive. That has made it a priority for owners to wring more money out of stadiums by turning them into mini-malls — and more. The Braves, for example, now have a suite where professional cooks prepare elaborate meals in front of fans, in a studio featuring klieg lights and overhead mirrors that allow diners in the back of the room to see their food being whipped into shape.

The Braves’ approach might be heresy to purists who believe that fans will head for the park and shrug off expensive tickets, grubby food and uncomfortable seats as long as a winning team is on the field. Just consider the record crowds this year at Shea Stadium — considered one of the worst parks in the game — where the Mets won their first division crown in a generation.

But the Braves — the team the Mets unseated — have learned the hard way that a winning ball club does not necessarily equal a winning balance sheet. The Braves won an unparalleled 14 consecutive division titles through 2005, yet attendance fell by 1.3 million, or a third, from 1997 to 2004. The Braves lost a dizzying $30 million in 2003, Mr. Plant said.

It is possible that the Braves became a victim of their own success, having done so well for so long that their fans took them for granted. Yet when a team in a relatively new ballpark has difficulty selling out playoff games, as the Braves did for several years during their division championship string, something more fundamental is amiss. A bad team, of course, usually guarantees financial problems for a sports stadium. But the Braves’ experience, and the views of analysts and other experts, also indicate that a good team — even a great team — alone is no longer enough to guarantee a stadium’s success.

The Braves’ owners at Turner Broadcasting, a division of Time Warner, recognized this new financial game plan when they hired Mr. Plant and Derek Schiller, the head of sales and marketing for the team, in late 2003. While Mr. Plant ran the operations at Turner Sports, Mr. Schiller worked for one of the company’s teams, the Atlanta Thrashers of the National Hockey League, aiming to lure new fans to the rink. Both men were also Braves season ticket holders who, night after night, saw from their seats what could be done to improve the ballpark.

As a result, Mr. Plant and Mr. Schiller already had their own strategic wish list when Turner Broadcasting told them “to blow everything up” after they were hired. That they did.

Since arriving, they have spent more than $30 million on about 100 different projects like expanding the dining clubs, overhauling the concession stands and remodeling the corporate suites. They pushed the sales team to sign up more season ticket holders and to pamper them with perks, the way airlines do for their frequent fliers.

They created a new position, director of guest services, and hired Rob George from the Ritz-Carlton chain for the job; his mission was to change the culture of the staff and to expand the tiers of service to different fan groups. To some consternation, they dismissed eight longtime executives who, they felt, were unwilling to change.

“It’s been a little tough for some people, but the train’s left the station,” said Mr. Plant, who skated with Eric Heiden on the 1980 Winter Olympic team and never tires of talking about sports.

The shock therapy worked. Attendance has risen for the last two seasons, reversing a steady decline. The Braves expect to break even this year despite missing the playoffs for the first time since 1990. And with the regular season over, Mr. Plant and Mr. Schiller are planning another wave of renovations.

THE turnaround is good news for Time Warner, which is considering selling the team; a return to profitability could drive up the value of the club. It is also a sign that stadiums that open with a bang, then slip when their honeymoon phases end, can be nurtured back to health.

In Denver, for example, the Colorado Rockies sold out every game at Coors Field during the first several seasons after it opened in 1995. The city had been hungry for a major-league franchise, and the team had some initial success. But as the buzz wore off the stadium and the team sank in the standings, attendance fell and the team has struggled to win back the fans.

“The stadium is only as profitable as the teams that come in,” said Richard L. Monfort, the vice chairman of the Rockies.

Still, the club and the stadium have been a boon for Denver. Before Coors Field was built, the surrounding Lower Downtown district was better known for winos and flophouses. The neighborhood started to turn in the early 1990’s as artists and small businesses crept in, but the stadium’s opening in 1995 spurred a revival.

With Coors Field as an anchor, LoDo, as the area is known, attracted dozens of restaurants, shops and hotels. About 12,000 apartments and homes have been built, as well as a convention center. City taxes collected in the area, which were already on the rise before the stadium opened, have jumped fivefold since then.

“Coors Field became the most powerful marketing magnet for the area,” said John Hickenlooper, Denver’s mayor. “The stadium is such a part of the neighborhood that you can’t remove it. There’s a symbiotic relationship.”

An increase of one-tenth of a cent in the metro-area sales tax helped the local stadium authority repay the 20-year construction bonds for Coors in less than a decade. But revitalizing neighborhoods by building stadiums may be more difficult in New York, where the Yankees and Mets have broken ground on new fields next door to their existing stadiums. The Mets’ park in Queens is surrounded by highways and auto body shops, hardly an ideal magnet for upscale restaurants and boutique hotels. Parks border parts of Yankee Stadium, and fans have a myriad of dining and entertainment options elsewhere in the city.

Many civic leaders and taxpayers have also balked at how much money municipalities are being asked to pay for stadium projects, whether in the form of street improvements, parking lots, tax abatements or dozens of other subsidies. Relatively new parks in places like Milwaukee remain burdens on their cities, said Maury Brown, a writer for Baseball Prospectus, a publication devoted to analyzing the game. Local leaders in Oakland, Miami and Washington are keeping this in mind as they consider stadium upgrades in their cities.

“It’s reasonable to tax people who go to the ballparks through ticket taxes, but the general taxpayer should not bear the brunt of it,” said Mr. Brown, who is also editor of www.bizofbaseball.com. “There are a lot of hidden costs that get purposely buried. A lot of municipalities are pushing back.”

Back in Atlanta, the potential sale of the Braves has put a crimp in some of the continuing plans of Mr. Plant and Mr. Schiller to overhaul Turner Field. An even more exclusive dining club under the stands behind home plate, for instance, is on hold.

Still, Mr. Plant and Mr. Schiller, their BlackBerries endlessly buzzing, clearly have more planned for the park. They note that when they first came to the Braves, fans were often treated as a single group rather than as customers who paid different prices for different levels of service.

The team had little information about who the fans were and what motivated them to come to games. So they turned to focus groups and compiled market research reports. One study determined that the biggest group of fans, 40 percent, was parents with children under 12, and many parents said their kids needed more to do at the park than just watch the Braves circle the bases.

So last year, the Braves opened Tooner Field, the stadium’s playground. During every game, about 3,000 children run around a small ball field that once was an area for smokers. The kids play interactive games featuring Johnny Bravo and other Cartoon Network characters. (Turner Broadcasting owns the network.)

The Braves also added two-for-one tickets, holiday concerts and fireworks displays on Friday nights. On Sundays, children can run the bases after the game. In addition to scheduling the usual giveaway days, the Braves play host to events like Elvis Night, when fans get awards for the best outfits and peanut butter and banana sandwiches, the King’s favorite snack, are sold at concession stands.

“The market has evolved,” said Ron Seaver, the president of the Seaver Marketing Group, a sports promotions company. “Consumers are used to getting instant entertainment, getting bombarded by 100 different stimuli. Teams have realized that sports are not just about the games any more.”

To keep abreast of shifting fan preferences at Turner Field, employees now interview fans at random at each game; four secret shoppers evaluate the parking, ushers, concessions and cleanliness of the park. Fans have been complaining about traffic and safety near Turner Field. This was not an inconsequential concern, because market research showed that half the team’s fans live 50 or more miles from the stadium.

The Braves have spent $400,000 on 60 traffic signs around the stadium, some that can be updated with traffic reports. They widened roads, worked with the city to alter bus routes to promote the use of public transportation and spent an additional $1 million to make parking lots safer and more accessible. Though Turner Field, which was host for the Summer Olympics in 1996, is just a decade old, Mr. Plant is a stickler when it comes to keeping the park presentable. Walking through the main concourse during the game, he points to the green steel beams.

“Once you paint, you’re a slave to it,” he said, adding that the team has spent $3 million repainting the steel and employs four full-time painters. “Do we have to paint? No. But it preserves the building.”

BECAUSE many teams are privately held, details about their finances are hard to unearth. The Braves are owned by a multibillion-dollar, publicly held corporation, but because the team is a subsidiary deep in the organization, specific profits and losses are rarely shared.

From time to time, teams offer a hint of how poorly they are doing when they want public financing for a stadium or more revenue from their leagues. But most clubs stay quiet about their finances because they want to avoid angering fans already annoyed by the rising cost of tickets, parking and food. If fans knew how much money their team brought in, the reasoning goes, they might also complain that the owners weren’t spending more to sign big-name stars.

Various baseball executives, however, make it clear that the Braves are a middle-market team with a relatively new stadium, a favorable lease and more than the usual share of broadcast revenue, thanks to deals with TBS, another Turner property; Sports South; and FSN South.

Turner Field is also a comparatively affordable place to watch a game. A typical family of four at Turner spends $146 for tickets, two small beers, four small sodas, four hot dogs, one parking spot, two programs and two baseball caps, according to the Fan Cost Index, which calculates how much fans spend at major-league parks. That is $25 below the major-league average and nearly half what fans pay at Boston’s Fenway Park, the most expensive place to see a game. Like the Boston Red Sox, the Braves continually search for season ticket holders willing to pay in advance for seats, which helps to stabilize planning during the year. Corporations usually fit that bill. In Atlanta’s case, the roster includes Home Depot, Cingular Wireless and Delta Air Lines. Not coincidentally, these companies double as sponsors that can spend millions of dollars on advertising at the park.

The Braves have about 15,000 season ticket holders, down from about 25,000 in 1997. To try to return to that level, Mr. Schiller has not raised season-ticket prices in three years and offers discounts on certain plans as well as perks like better parking and food. To keep these high-end fans happy, team representatives call them three or four times a year to ask about everything from the food to promotions on giveaway days.

“We focus on customer service and give season ticket holders the highest level of service,” Mr. Schiller said. “You thank them for coming and entertain them in between.”

TICKET revenue often accounts for about a third of a sports team’s sales. Holders of club seats and suites generate only a small part of ticket income, yet pleasing these fans has turned into an elaborate science because they pay so much more per ticket and often double as sponsors.

That is why the Braves spent $10 million to turn the concourse behind Turner Field’s 66 suites into the “Lexus Level.” Air-conditioned and carpeted, its wide hallway has its own premium concessions, including pasta bars where chefs in starched white smocks mix your favorite bowl of noodles. Lexus paid to sponsor the area, and some of its cars are on display. The Braves created a separate parking lot for fans who drive a Lexus to the stadium — a far cry from the bygone era when fans in many cities walked to games, sat in cheap bleachers and waved inexpensive pennants.

Still, sponsors are ubiquitous — reminiscent of baseball’s early days, when billboards for shaving cream and chewing gum plastered the walls of small ballparks. BellSouth, for instance, has its logo on one of the four giant signs on the center-field scoreboard in Atlanta. If the sign were sold by itself, it would cost about $1 million a year, Mr. Plant said. But BellSouth, as part of a bigger package, also has its name inserted in a video feature shown on the scoreboard, and company executives sometimes throw out the first pitch at games. The company has seats near the dugout and a suite in the Lexus Level and runs a stadium shop called the BellSouth Hot Corner, where as many as 1,000 fans a game can play a karaoke game designed to show off the benefits of high-speed Internet connections.

“A sponsorship will never pay for itself, so it needs to be part of a bigger marketing plan,” said William Pate, BellSouth’s chief marketing officer, who said the deal with the Braves was the company’s second-largest sponsorship, after the BellSouth Classic golf tournament.

Though Mr. Pate declined to discuss the value of the deal with the Braves, Shawn Bradley, the chief operating officer of the Bonham Group, a sports market research company, said BellSouth probably paid in the neighborhood of $2 million a year to the team.

Keeping clients like BellSouth happy is so crucial that the Braves have been picking up the bill to renovate suites for companies that sign multiyear leases. The team has already overhauled a third of the rooms, adding halogen lights, leather sofas and high-end refrigerators. Mr. Plant expects to redecorate 10 more suites this winter.

Despite all the effort put into upgrading the food at stadiums, many fans still prefer standbys like pizza and kielbasa. And fans seem willing to pay more for even downscale chow if they see it made in front of them. Mr. Plant said he learned this lesson last year when he installed cotton candy machines in the main concourse. Swirling the cotton candy in front of fan increased sales to $350,000 from $12,000 the previous year, when it was sold in bags.

Fans spend about $10 a game on food, on average, according to several baseball executives. After expenses, that amounts to about $6.50. Just reading how much food is served on opening day at Turner Field, though, is enough to cause indigestion: 17,500 hot dogs, 4,500 gallons of soda, 4,500 slices of pizza, 500 orders of chicken tenders and so on.

Teams divide the money from food concessions in various ways, depending on whether the food was sold at a restaurant, by vendors plying the aisles, or in other places. In Atlanta, Mr. Plant expanded the 755 Club — named after Hank Aaron’s home-run total — by building a patio so more fans could dine outside rather than behind thick windows. Annual memberships cost $500. The concept was so popular that he expanded the area by removing an additional 250 seats. Over the course of a year, the food sold at the tables generates about 10 times more revenue than the tickets for those seats.

Mr. Plant also sees opportunities where none now exist. Walking along the main concourse, he points to the ceiling about 30 feet up. If an auto dealer was willing to pay for it, he could hang cars from the beams and create an aerial showroom.

If and when Turner gives him the green light, he is also ready to build the Chairman’s Club, a section of 130 seats behind home plate, along with its own restaurant. The format has worked well in San Diego, where the Padres have built a similar venture, the Sony Club. Mr. Plant figures that the section would pay for itself in about two years. It would be “very Ritz-Carlton,” he said.

AS Mr. Plant entertained executives and greeted distinguished guests, including former President Jimmy Carter and his wife, Rosalynn, on a recent evening, his BlackBerry kept buzzing. A message ticked off the night’s rather meager tally: announced attendance, 19,352; actual attendance in the park, 11,871; walk-up sales, 1,369; and gross revenue, $522,198.80 (for an average of $26.98 a ticket). His shrug suggested a disappointing end to a disappointing season.

When the game ends, Mr. Plant has one last stop before making the 35-mile drive home to Peachtree City: a snug lounge below the stands for team executives. He grabs a beer and a bowl of popcorn and joins Jim Allen, the senior director of corporate sales. A few minutes later, John Schuerholz, the Braves’ longtime general manager, stops by and opens a pricey bottle of Opus One cabernet.

The three settle into the sofas, half-watching ESPN on a flat-panel television. They are more interested in rehashing the game — the Braves won — and plotting their strategy for next season.

Copyright 2006 The New York Times Company