Friday, July 31, 2009

Explaining Phenomena: Toronto FC

Once in a while, something happens that is entirely unexpected and changes the environment completely. Toronto FC in its first three years has surpassed all expectationf of attendance and popularity and is well on its way to becoming one of Toronto's sports darlings.

Toronto FC has sold out all regular season MLS, tournament play, friendly, and exhibition games with vocal support never before seen by a Toronto crowd. That's what's so amazing about it: that in a city where fans are notoriously quiet and self-conscious that there is such atmosphere at these games. This can probably be attributed to fans organizing together for these initiatives. U-Sector, one of the most prominent supporters group dates back to the Toronto Lynx days in the United Soccer Leagues. Comprised of soccer die-hards and proud Torontonians and Canadians, they supported the Lynx just as they supported TFC, though the level of competition is less than MLS and their popularity plateaued.

Once MLS was brought to Toronto, season ticket sales were steady but not overwhelming until David Beckham signed with the LA Galaxy in the 2007 offseason. This immediately brought attention to the quality of play in the MLS and season tickets for TFC (as well as other teams) reached capacity. That set the stage for U-Sector, Red Patch Boys, and other support groups to start these TFC fan initiatives and start an atmosphere that would extend from the south end of the stadium to all other areas, making fans out of people who may have just purchased tickets to see Beckham. Today Beckham is no longer the reason that TFC gets the support it does, thanks to the fever that as carried out through Toronto.

The second more scientific reason that TFC is contrary to the idea of fans: that tickets and time require minimal commitment. Season tickets were initially $280 for the cheapest seat at BMO Field, and require time commitment of 19 games. This allows the most dedicated fans to attend their game, but not feel obligated to spend most of their summer evenings at the stadium. To put that in perspective, a similar seat at Rogers Centre for the Blue Jays would cost about $1700 for the season and require commitment of 81 games, which is difficult for many people to committ to. And even if they can, it requires a lot of energy to get *that* excited for every game. The specifications of MLS soccer work in this favour.

The relative lack of supply has worked in excellent favour of Toronto FC. 20,000 seats has kept the stadium packed, and has created fan interest in people who may not consider themselves to be soccer die-hards. People want what they can't have and even if tickets are cheap, most people who want TFC tickets can't get them. The worst thing that they could do is to expand their stadium by more than 5,000 seats. The waitlist for season tickets exceeds 14,000, however if capacity of the field was expanded to 35,000 there is substantial risk that some games would not sellout. The second that a non-sellout is recorded, fan intrigue declines as well. In the meantime, they are encouraged to make select tickets available to people on the waitlist, just to keep their interests in the team.

Toronto FC is not without its challenges as television ratings do not approach baseball and hockey ratings Canada wide, but with success on the field, they have the power to captivate the city and build the sport through Toronto and Canada.

Thursday, July 30, 2009

Dealing with Public Relation Trainwrecks

The Womens National Basketball Association and Major League Baseball are both suffering through extensive PR crises at the moment. The WBNA does not have a widespread appeal and in a tough economic recession has had to sell uniform sponsorship just to keep themselves around. Major League Baseball for the last decade has dealt with a ever increasing problem of players using performance enhancing drugs. Even though attendance and television ratings continue to rise and their place next to the NFL in Tier 1 professional sports is certainly not at risk, the public perception among fans, media, and non-fans is negative because of this situation. The WNBA and MLB both have unique situations.

Professional women's basketball has declined in popularity. Attendance is down throughout the league and stable organizations have lost their footing. The NBA, the mecca of sports promotion is not a team promoting league: they promote their individual stars which has proven to be successful. On top of this, the showboat nature of the NBA has made it appealing to television and live audiences. For the WNBA, unfortunately there are fewer thrilling slam dunks, a staple of the NBA's popularity in their games. My recommendation is that they consider altering the specifications of the playing surface. Not in a trampoline installing sense, but by bringing the nets lower, and closer together, they can maintain the look of the game while significantly increasing the entertainment value. Sports Centre highlight reels drive popularity in individual players, and by making the surface alterations can highlight the performances of these extremely athletic basketball players.

The PED issue is much more complex. This has been a runaway train for nearly a decade. It must be understood that while the players as a whole are not entirely responsible for what has happened, they will undoubtedly take the fall. The list of 103 players who tested positive for PEDs in 2003, when there were no consequences for failing tests has slowly been trickling through anonymous sources. Also, recall that rules concerning PEDs were never passed by the MLBPA--this was Selig on his own. So they never agreed to rules that have no consequence, which is really a recipe for something to go wrong. So while taking steroids are poor life choices, they weren't doing anything outrageous, illegal, or anything that has consequence. It's difficult to feel sorry for these players but there's context in what happened. In any event, if Selig opts for the Do Nothing approach, he will have this list of names trickle down through the media, for probably another decade, which is enough time to induct someone into the Hall of Fame who did PEDs. If they want this situation to go away, they will undoubtedly have release the 103 names (I think that we probably know ten), make a settledment with the players union, not an easy task, and induct a new set of punishments for PED use: such as lifetime banishment. That sends the message to the fans that they've woken up to what the issue is and that they will do what is necessary to make sure it doesn't repeat.

Unlike the WNBA, who can turn this around before it's too late, fan perception of PEDs in baseball has been completely tarnished for at least the next two decades. Then we'll either all forgive the players who did them, or acknowledge that like crack cocaine, it is just part of society.

Wednesday, July 29, 2009

Death by Free Ticket Giveaways

Watching Larry Smith's presentation on the Montreal Alouettes at the John Molson Sports Marketing Conference at Concordia University in Montreal last summer reminded me of some of the most important rules that can never be stressed in the business of sports. The biggest rule is to never, ever give your product away. Unfortunately, it's one of the most common rules, a rule so abused that it has contributed to the collapse of major sports brands.

Advocates of free ticket giveaways will argue that it puts people in the seats, giving the impression that there is a demand. That the people who have free tickets will spend money on food, programs, and merchandise. This is all true, but there are long term consequences for these irresponsible, short sighted decisions.

If people are given enough tickets, their value perception of those seats will be zero. Even if the team is doing well and competing for a playoff spot, these people will be sitting at home, waiting for their annual or monthly pair to arrive in the mail. If the team is doing poorly, they will apathetically make decisions about whether or not to attend the game at all, causing their value perception of the game to be negative--that their time at the game is not worth their time doing everything else. And when people get things for free, or believe that something is worth it, they don't keep it within themselves: they tell everybody about it. They tell them about how they always get free Wizards, Rays, or Blue Jackets tickets. And the next time that friend considers going to a game, they will also wait, because they might get those tickets for free. Or worse, they'll feel stupid that they ever paid money for their ticket when their neighbour got them for free, and will resent the team entirely.

When the Steelers and Dolphins visited Rogers Centre last winter to play the Buffalo Bills in the first year of a 5 year, 7 game Bills in Toronto series, officials priced themselves way beyond what the market was willing to pay for the tickets. With the least expensive seat well over $100, officials realized in the days before the game that attendance would not reach anywhere close to capacity. In doing so, they gave free tickets away: 15,000 free tickets for the Steelers game alone. Tickets went to promoters, who handed them right to their clients. In one case, my friend Jason was given a pair of upper bowl seats for purchasing a pizza. At the game, the guy sitting next to him was lamenting his purchase of $200. Then Jason told him how much he paid for his ticket. You think that fan will ever come back? Not a chance. It didn't help that the papers ran this free ticket giveaway story on their sports section front pages the very next day.

Giving away free tickets is the drug of sport marketers. Short term high, long term consequences and enough abuse will put your brand at risk of losing all its value.

Tuesday, July 28, 2009

Jays @ Seattle: Unchartered Waters of Revenue

When the Jays take on the Seattle Mariners this weekend, officials expect around 10,000 fans from the north side of the border to travel down to Safeco Field and watch their Jays play. That's 10,000 fans buying tickets, 10,000 fans buying merchandise, and 10,000 fans whose trips would be elevated to a euphoric feeling level if they actually got the chance to meet the members of their favorite team. So it would seem like a natural decision for the Jays to capitalize on this west coast passion, financially, if only to help solidify the Jays relationship with their fans.

In a year where attendance is down and several major sponsorship deals have fallen through, it is prudent for sports teams to discover alternate sources of revenue, to help minimize the impact felt by their losses. For the Jays, they have been offered a gift by the fans of the west: they must capitalize on their passionate fan base.

Paul Beeston's philosophy on the Blue Jays has always been to brand them as Canada's Team, and with the Expos gone, can truly market themselves all over Canada. In terms of British Colombia, the Jays could very easily start up a Blue Jays Tour division, that organizes and schedules Blue Jays related trips to Seattle and maybe even other places, depending on demand. BC Place has previously held baseball games and could very easily book a Exhibition Series against the Mariners before the regular season begins. If the average ticket price is $20, and attendance for a two game series is 70,000, gate revenues alone would be 1.4 million and could easily top 2 million dollars once box sales, merchandise sales, VIP packages with player signings, and other areas of revenue are factored in. A three game series could increase this number to 2.5 million. For an organization that has lost key sponsors in the past year, that money is not chump change.

Lost in the finances is also the goodwill gained from providing fans with an opportunity to exclusively watch their team in an unusual place at an unusual time, and the positive relationships made with fans and the brand during that series. After the series, installing a Jays Shop in a popular centrally located Vancouver mall will help gauge interest in the team over the season but provide additional revenue, now and for the future.

These ideas are not exclusive to British Colombia either. Winnipeg is in fair proximity to Minnesota. There are currently bus trips that run to Minnesota designed for Jays fans in Winnipeg to take. Since the organization itself is scheduling these trips, there is potential to include special rallies, signings, or player meet-and-greets that not only build relatinoships with the fans who participate but act as a competitive device over alternate bus tour groups. Admittedly, this is a different, unsusual business for a sports organization to be in, but is something that the Red Sox do with DestiNations, who are blessed with an endless road of money have started and continue to do.


Welcome to Sport Marketing Discussion Blog. I have previously started several other blogs, and in a short time discontinued them. I have found the blogging universe to be incredibly saturated nowadays, specifically the sports blogosphere, so I knew that if I was going to blog about something, it would have to be about something that isn't overly discussed online. That is not to diminish the vastly popular industry of sports marketing, but just to satisfy my own needs to discuss marketing as it pertains to sports, my ideas, and to collect my thoughts. I plan on getting into this business, so I may as well write down my ideas, opinions, and spins on current events in this industry.

Anything that affects the sport marketing, I would like to discuss here, from player personnal transactions to stadium construction plans. Next to the players on the field, ice rink, or court, marketers have just as much responsibility in making sure that there are people in the stands, watching on tv, wearing merchandise, and seeing value in all of that.