1. removing premium seating’s hermetic seal in Kansas city page 52
S E AT
leading the premium seat industry www.alsd.com 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 34
is 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. The Preferred Stadium Brand
of Undercounter Refrigeration
ce 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 www.marvelrefrigeration.com

3. Your Away Team
Relax responsibly.®
Imported by Crown Imports LLC, Chicago, IL 60603

4. TWO WORDS:
SPECIAL. TREATMENT.
MOTOROLA HOSPITALITY SOLUTIONS
Whether entertaining business clients, closing a major deal or socializing with family or friends, your
customers 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 their
expectations. Equip your staff with mobile voice and data solutions so they can offer the ultimate in
entertainment satisfaction. Afterall, everyone loves to be treated like a VIP.
For more information, please visit us at:
www.motorolasolutions.com/hospitality
MOTOROLA, 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. Elite Risk
Insurance Solutions
Elite Risk Services, Inc. is pleased to be
the official insurance partner of the alsd
We recently launched a newly enhanced third party liability insurance policy that
is 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 www.suiteinsurance.com
or call Kevin Kurtz at 800-596-0969 ext. 105
License # 0G40499

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 • info@thefango.com

7. SEAT
Published by the Association of Luxury Suite Directors
coVer story
34 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.
features
48 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 CHAMP
52 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 FRANK
72 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 TITLEBAUM
78 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 MIRABEDINI
sports technology corner
62 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 STOFFEL
64 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.
www.alsd.com | SPRING 2011 | S E A T | 7

8. Spring
SEAT
ASSocIATIoN of LuxuRy
2011
SuITE DIREcToRS
Chairman Bill Dorsey
Executive Director Amanda Verhoff
Published 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 DIRECToRS
departments Janie Boles, Auburn university
Natalie Burbank, utah Jazz / Salt Lake Bees
Richard Dobransky, Delaware North Companies
10 NEW ALSD MEMBERS Trent Dutry, uS Airways Center
Chris Granger, National Basketball Association
Patti Kimbrough, university of Arkansas
Gerald Kissel
12 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 Flames
16 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 Ratners
22 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 Luxury
24 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 Directors
88 COMING ATTRACTIONS 10017 McKelvey Road, Cincinnati, oH 45231
Steve Conley, Boston Red Sox
513 674 0555
Shane Harmon, New Zealand 2011 World Cup Rugby
amanda@alsd.com
Tod Caflisch, New orleans Hornets
Please Recycle This Magazine Wayne Wichlacz, Green Bay Packers
8 | S E A T | SPRING 2011 | www.alsd.com

10. NEw ALSD MEMbERS SPRING 2011
Gregory J. Myford
Associate Athletic Director for Business Relations & Mark Steinkamp Paula Polei
Communications Senior Marketing Director STRATACACHE
Penn State university Daktronics 2 Riverplace, Suite 200
101-M Bryce Jordan Center 331 32nd Avenue Dayton, oH 45405
university Park, PA 16802 Po Box 5135 P: 937-224-0485
P: 814-865-9080 Brookings, SD 57006-5135 ppolei@stratacache.com
gjm14@psu.edu P: 800-325-8766
msteink@daktronics.com Patrick Gilbert
Shelley Volpenhein STRATACACHE
Suite and Premium Services Manager Steve Stonehouse 2 Riverplace, Suite 200
Cincinnati Reds Senior Vice President of Sales Dayton, oH 45405
100 Main Street Ballena Technologies pgilbert@stratacache.com
Cincinnati, oH 45202 1150 Ballena Blvd., Suite 250
P: 513-765-7079 Alameda, CA 94501 Stephen Choi
svolpenhein@reds.com P: 510-521-0720 STRATACACHE
steve@ballenatech.com 2 Riverplace, Suite 200
Rob Gardenhire Dayton, oH 45405
Director of Marketing & Business Development Kip Nelson schoi@stratacache.com
Tulsa Drillers Senior Account Manager
201 N Elgin Avenue Ballena Technologies John Morrett
Tulsa, oK 74120 1150 Ballena Blvd., Suite 250 STRATACACHE
P: 918-574-8308 Alameda, CA 94501 2 Riverplace, Suite 200
rob@tulsadrillers.com knelson@ballenatech.com Dayton, oH 45405
jmorrett@stratacache.com
Jimmy DiLella Roger Gasser
Director of Business Development Channel Manager Ashley Hurney
Conneaut Leather Gasser Chair Co. MTM Recognition
494 E Main Road 4136 Logan Way 3201 SE 29th
Conneaut, oH 44030 Youngstown, oH 44505 oklahoma City, oK 73115
P: 440-593-5205; 800-356-1177 P: 800-323-2234 P: 405-609-6817
jimmy.dilella@conneautleather.com rgasser@gasserchair.com ahurney@mtmrecognition.com
Kai Murray Jim Elenz Donna Lamprecht
Premium Sales Manager operations Manager MTM Recognition
Real Salt Lake Gasser Chair Co. 3201 SE 29th
9256 S State Street 4136 Logan Way oklahoma City, oK 73115
Sandy, uT 84070 Youngstown, oH 44505 dlamprecht@mtmrecognition.com
P: 801-727-2786 jelenz@gasserchair.com
kmurray@realsaltlake.com Jeff Thompson
Evelyn Mihin MTM Recognition
Matt Garner Coo 3201 SE 29th
Sharp Electronics Gasser Chair Co. oklahoma City, oK 73115
12119 South Tallkid Ct. 4136 Logan Way jthompson@mtmrecognition.com
Parker, Co 80138 Youngstown, oH 44505
P: 720-479-8204 emihin@gasserchair.com Molly Martin
garnerm@sharpsec.com MTM Recognition
Dan Vass 3201 SE 29th
Larry Schilz Sales Manager oklahoma City, oK 73115
Sharp Electronics Gasser Chair Co. mmartin@mtmrecognition.com
5901 Bolsa Avenue 4136 Logan Way
Huntington Beach, CA 92647 Youngstown, oH 44505 Mike Ketcherside
schilzl@sharpsec.com dvass@gasserchair.com MTM Recognition
3201 SE 29th
Mark Zbylski Taraya Alston oklahoma City, oK 73115
President/owner Student mketcherside@mtmrecognition.com
Proforma abZ Imprints Temple university
6865 Ingleton Drive 1745 W Diamond Street Derek DeBree
Castle Rock, Co 80108 Philadelphia, PA 19121 StoneTimberRiver LLC
P: 303-955-4565 P: 724-709-4129 Po Box 6307
mark.zbylski@proforma.com taraya.alston@temple.edu Fairhaven, NJ 07704
P: 732-383-6500
JC Hoops Jennifer Ross derek.debree@stonetimberriver.com
Business Development Manager FanVision
Givex 60 Columbus Circle
1341 Estes Street 19th Floor
Gurnee, IL 60031 New York, NY 10023
P: 847-360-1092 P: 212-801-1000
jchoops@givex.com jross@fanvision.com
Bill Makris Matt Lukens
Senior Director, Ticket Sales & Customer Experience Vice President, Business Development
Edmonton oilers Hockey Club FanVision
11230 110th Street 204 Spencer Avenue
Edmonton, AB T5G 3H7 Canada E Greenwich, RI 02818
P: 780-409-5830 P: 401-219-6578
bmakris@edmontonoilers.com mlukens@fanvision.com
10 | S E A T | SPRING 2011 | www.alsd.com

11. TO K E N S & I C O N S
...recycled nostalgia
TOKENS & ICONS offers inventive gifts crafted from game
used baseballs, stadium seating, arena basketball floor, even
cracked 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.
tokens-icons.com 877-558-7404

12. Editor’s notE by JAREd FRANk
Why 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,
www.linkedin.com/in/
by an imbalance of work and life or
jaredfrank
whether to choose a 6- or a 7-iron
from 137 yards out. There were even times and follow me on
during the creation of this issue when I found www.twitter.com/
myself questioning, “Why am I doing this?” SEAT_Editor
Now 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 Club
Center (see page 26). To reward its season at Coolray Field from pregame hangout spot to
ticket 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 itself
Line. 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 sell
details, 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 existing
industry 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 & membership
ment. 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 serves
tsunami-impaired Japan to save others. But we as a familiar interest and common conversation
do something just as intrinsically important, if starter that transcends race or economic status. Renovations to Club Level at Camden Yards
not 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 tables.
to be happy. noun – kindness. I believe in genuine acts of
kindness, that service is not merely a means to
Hold 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 buy
into why you do it. Your clients don’t buy a I said, I’m an idealist.
baseball game (or whatever sport you sell or Remember those smiling season ticket holder Angel Stadium to add healthy, local foods
service) 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 emotional
SEAT, “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 at
think 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 no
reversed: 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 81
natural human creation, because shaved down So I ask you again, loyal readers of SEAT, suites for 2011.
to 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 sales.
ing 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 | www.alsd.com

14. EdIToRIAl by bIll doRSEy, ChAIRmAN, AlSd
Your Sandwich is Online
L
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 and
the other boy are my grandchildren. The little
girl hanging onto me is my adopted daughter,
McKenna.
The photo is dated. McKenna is now
13 years old, 5-feet, 3-inches tall and has a
mean volleyball serve. She no longer calls me
“Daddy.” I am just Dad now, and she says I
can’t sing, so I can’t go on American Idol, and I
can’t dance, so I shouldn’t even think about go-
ing on So You Think You Can Dance. According
to McKenna, her Dad works too much, and his
singular achievement in life is being able to fall
asleep almost anywhere, anytime, anyhow.
I resemble that remark.
But I am bringing this up, because I also
have a point. My guess is that more people
have read this paragraph than did my insightful
article in the last issue of SEAT on collective
bargaining.
Why? Because we are all suckers for human
interest stories. We crave to see others’ lives
written on Facebook walls or need to read
about what Charlie Sheen is doing on his Twit-
ter feed, because we somehow identify with the
fact that we can post online a picture of the
sandwich we are eating on Tuesday in Cincin-
nati, and someone on Wednesday in Hong
Kong 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 your
already 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 for
book 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 connection
credit the downfall of dictators with its ability has interest to the world with another human being somewhere in the
to 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 seats
am 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 about
each post, no matter how seemingly stupid, seeing customers face-to-face, getting to know
no matter how seemingly irrelevant, no mat- And so does my photo. There is someone out them in ways that do not quite translate in an
ter how many sandwiches appear online, is there in our membership who will look at this email or over the phone or in a memo. Sports
important to the person who believes his or her photo and see something that interests them. are not politics and not religion. It is both safe
big, 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 fun
it does. It has meaning to someone out there collective bargaining. Why? Because you can together. Meeting a person in a suite, and being
in Hong Kong who says it looks “yummy.” identify with it. Many of you have kids, and if “captive” with them for several hours, often
14 | S E A T | SPRING 2011 | www.alsd.com

15. 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 relationships
and trust in the person you are doing business
with. You can talk about your family, and you
can talk business. You can even tell them what
kind of sandwich you post online. You can
allow them into your weird little world as much
as you want to or not at all. But the person
you bring into the suite or premium seat can
read your body language. They can see your
eyes and see if you are sincere. They can decide
if they are going to bring you into their weird
little worlds or whether to simply say thanks for
the invitation to the suite, and I hope we meet
again.
Suites are the original Facebook, the original
Social Media. They are not what the media
too often portrays them as – some kind of
separation 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 corporations
can feel far from the madding crowd or so they
can let their customers into these exclusive do- Just as facebook connects Write to Bill at bill@alsd.com, and connect with him on
mains, so they can feel superior to Joe Six-Pack LinkedIn at www.linkedin.com/pub/bill-dorsey/6/125/76a.
eating 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 price
of premium seats has become more prevalent. exist because they are the
Indeed, some corporations – mindful of what original Social media.
appeared to be in the impending collapse of
the American financial system – actually took
their names off the name plaques in front of
their suites. The idea that a major corporation kinds of marketing expenditures are thought of
is somehow partying seems callous for those as “effective” or “necessary” or as a legitimate
people 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 the
the masses to “let them eat cake.” How dare personal experiences of your customers’ families
anyone 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 post
is one that is time-honored – to get to know their names on the doors of their suites still
your customer in a comfortable setting. It is for renew their suites, in most cases. And that is
a 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 for
seem to have the same affect on those compa- in general, exist because they are the Original englISH PremIer league
nies who are spending money, advertising or Social Media.
sponsoring an event. For some reason, those
www.alsd.com | SPRING 2011 | S E A T | 15

16. Eagles, Jaguars and Vikings Fans Are Faces
INduSTRy ANd ASSoCIATIoN NEwS of the Franchises, p.20
Member Highlight: Frank Hubach, p.24
arsenal balances competitiveness and fiscal responsibility
The Gunners are one of few top European clubs not to operate at a loss
C
ompeting in the increasingly competitive
business environment of international
football comes with its challenges. At the
top of this list of challenges is turning a
profit. Very few do.
“Our club has built everything it has and
everything it represents without relying on outside
investment for its success. This is a challenging
path to tread. But as a result, we have earned our
independence and our long-term financial ability
to support our football, our values and our com-
munity. We don’t have to rely on anybody but
ourselves for our future success,” says Ivan Gazidis,
Chief Executive of Arsenal Football Club, which
has won three Premier League championships.
But why is Arsenal’s mix of winning and
commitment 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 have
changed dramatically in recent years. Trying to valued by Forbes at $1.2 billion in 2010, seventh Club Level seats. As a result of increased corporate
keep 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, stadium
difficult each year. So much so that only a hand- a healthy financial position,” states Gazidis. “The income increased from £37.4 million in 2005 to
ful 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 box
point, consider that Cristiano Ronaldo’s transfer results continue to show long-term sustainability propositions have sold well, and we continue to
fee alone, the most expensive in history, from and health, so there are some real positives.” have a strong waiting list and high demand for the
Manchester United to Real Madrid in 2009 was Among these positives is the club’s genera- coming seasons,” says Charles Bruner, Premium
worth £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 to
talent. And top-tier talent usually wins champion- did this while controlling costs. Subsequently, their facilities so to not lose out on the corporate
ships. 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 internally
running 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 big
power in the EPL in recent years since Russian in the world. Improving on global commercial contracts, a philosophy that will benefit Arsenal
billionaire Roman Abramovich bought the club, income is the next hurdle to overcome for Arsenal, when UEFA’s new financial fair play rules begin
has operated in red figures since Abramovich took who is making a significant investment in this in 2013. The new rules are a response to the
control, 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 clubs
last financial year. But in the same period, this has us, particularly globally,” Gazidis says. “So as we balance their incomes and expenses and operate
correlated, at least in part, to Chelsea winning six look at our commercial partnerships, we have under break-even principles. Already guided by
major trophies. The club recently announced that made a significant investment in our commercial such policies, Arsenal is positioned for continued
it 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 Frank
have 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. Bruner
an annual contender for major trophies under stadium. Emirates Stadium, opened in 2006, has Premium Sales Manager
their self-sustaining approach. And the club does 150 executive boxes, which account for a little +44 (0)207 704 4552
not sacrifice brand equity to be so. Arsenal was over one-third of match-day revenue, and 6,700 cbruner@arsenal.co.uk
16 | S E A T | SPRING 2011 | www.alsd.com

18. INduSTRy ANd ASSoCIATIoN NEwS
Is using groupon a good idea?
The online sales intermediary helps move unsold inventory without having to broadcast discounts in public
I
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 apparel
Trail Blazers, Thunder and Wizards, selling 988 NYC Gap 50% 23,322 apparel
tickets through Groupon. Assuming half were Boston Gap 50% 20,542 apparel
sold at each ticket price, the Nets netted $27,170 Chicago Chicago River
after giving half the proceeds to Groupon. Other Architecture Tour 52% 19,743 admission
sports organizations have generated the sale of an Chicago Jamba Juice 50% 19,516 food/beverage
additional few thousand tickets through Groupon, Boston Blue Ribbon BBQ 53% 16,571 food/beverage
such as TCU (60% discount for TCU vs. Oregon; NYC American Apparel 50% 15,637 apparel
2,771 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 bowling
the New England Revolution (67% discount for Chicago Chicago Auto Show 45% 14,666 admission
New 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/beverage
diaries is to negotiate discounts with businesses, Chicago The Body Shop 50% 11,232 skin care
send the offer to subscribers via email and split the Dallas Gap 50% 10,852 apparel
revenue proceeds with the business if a minimum NYC Nordstrom Rack 50% 10,668 apparel
number of people accept the offer. The success Chicago NYC Bagel Deli 60% 10,526 food/beverage
of Groupon led Google to offer $6 billion in a Chicago Chicago Magazine 50% 10,448 subscription
buyout. Groupon declined and is instead raising Dallas Dallas Arboretum
nearly $1 billion to sustain the company and its & Botanical Garden 50% 10,307 admission
growth. Groupon and LivingSocial, which to- Chicago Flat Top Grill 50% 10,022 food/beverage
gether maintain a 90% market share, continue to Seattle Taco Time 50% 10,000 food/beverage
expand their reach, while others tweak the model
to 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 leads.
deals for the New York City, Chicago, Boston, subscribers to groupon and A second set of problems exists in the less
Seattle and Dallas markets drawn from a listing likely case that a subscriber accepting the offer is
of recent deals on the Groupon website. Of the
likely season ticket holders someone who loves the sport with some interest in
top-20 listed here, 15 are tangible goods with should be low. the team. If so, then we are talking about someone
established or known quality. The availability of already inclined to attend. Is offering a significant
inventory among sports teams, such as the Nets the objective is to effectively and efficiently target discount your best shot at convincing a fan to
who 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 necessary
list, but we do see five entertainment venues listed organizations can generate revenue directly attrib- to fill seats for lower quality opponents or other
among 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, the
So IS uSIng grouPon to Sell tICketS a tion by Groupon and are encouraged to generate discount offer most likely shifts attendance from
good Idea? referrals with a $10 incentive, which leads to a another game. The question then becomes, “How
Organizations using services such as Groupon may third benefit – teams may generate new leads and many accepting the offer would have come on
benefit in several ways. First, individual subscrib- referrals. another date without the offer?” Given that half
ers self-identify themselves as price-sensitive shop- However, if the price-sensitive buyer subscrib- of proceeds go to the online service provider, the
pers. 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 50%.
ly to become season ticket holders. Our research buyer of season ticket plans, how qualified are the Finally, what are you saying to the market
over the past 20 years on price-sensitive shoppers, leads? This question suggests two problems. with a Groupon offer? One of the things we learn
particularly for sports and leisure, suggests that the The first problem relates to the fact that if it in economics and marketing is the concept of
price-sensitive segment is often over-estimated by takes a 50% discount for someone to consider price signals. Since consumers actually engage in
sellers. Buyers for season tickets are more likely to attending a game, most likely we are not talking relatively little information search, they use price
perceive 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 and
ticket 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 | www.alsd.com