Sunday, February 23, 2014

A Season Ticket Holder's Response to Mark Cuban

Dallas Mavericks owner Mark Cuban wrote an essay about sports marketing on his blog today.  The essay is great, and I suggest that everyone read it:

As an NBA season ticket holder (as well as NHL season ticket holder with the Los Angeles Kings), I could relate to several of the points Mr. Cuban made.
1. Know where your team is in their "lifecycle".
Among the three "arena" teams I hold season tickets for, the Bucks appear to be at a very different point in their "lifecycle" than the Clippers or Kings.  The Bucks struggle to fill 75% of the arena on many nights, while the Kings and Clippers routinely sell out.  The Bucks are the worst team in the league; there is little expectation of championship contention in the near future.  Good tickets to Bucks games routinely sell in the secondary market at less than half of the season ticket holder price; the secondary market will not approach box office prices for any game this season.  Kings and Clippers tickets sometimes sell for many multiples of the season ticket holder price.

There are similarities, however.  None of the three teams I support are marquee teams.  When the Bucks, Clippers and Kings play the Bulls, Lakers and Blackhawks, respectively, the live event turns on its head.  Instead of a strong home crowd it becomes a battle between home and road fans that can get uncomfortable; sometimes confrontational.

I would like to see pro sports teams take additional measures to make the live experience less stressful when marquee teams come to town.  Having one-third of Staples Center filled with Blackhawks fans may make for a memorable night for the Blackhawks fans, but that is not the audience the Kings should be trying to serve.  Having loud, inebriated fans right behind me makes my friends uncomfortable.  (I've gotten used to it by now.  I just bring up that they live in the Chicago suburbs rather than the city and they usually are unable to retort without sounding racist.)  I want to respect their right to buy tickets and cheer for their team, but I also want to enjoy the game myself.

When teams have yet to attain true marquee status, I would like to see more regulation of season sections.  One possibility is eliminating season ticket sales in certain sections.  These sections could then be designated visiting team sections when the marquee teams visit.  Designating other sections as "home team only" sections could accompany that.  In designated sections, no visiting fans would be allowed.  The regulation could be printed on the ticket and stated clearly during the sales process.  It might even help season ticket sales in those sections.
2. Know who your long time fans/customers are.
The Bucks and Kings do a great job of this.  No complaints here.  Perks for Bucks season ticket holders are the best in major pro sports.  The Kings offer fewer perks because they are far more successful at the box office right now, but they still are attentive and they still offer great rewards for fans who stay engaged with the team.

The Clippers struggle with knowing their customers.  They are just too aggressive.  The Clippers offer great rewards for attending games and they keep their prices lower than the Lakers (due to the fact that a lot of Clippers ticket buyers are like me: basketball fans who enjoy the Clippers, but who don't love them as much as they love NBA basketball), but there is always a feeling that I'm being squeezed.  Ticket prices rose almost 15% for my seats just this season.  When my season ticket representative contacts me, it almost always is about asking for more money.  "Do I want to get a suite for a game?"  "Do I want to upgrade to courtside seats for a game?" (at only $2,000 per ticket)  "Do I have any friends that might want to form a group sale of 25 or more?"  It's good to know that these options are there.  It also makes me feel like the team is just hoping to bleed every last dollar of disposable income out of me.
5. Sales is the most important job at a team. 
I hate to go out of order, but Mark Cuban made a such a great point here.  Talented sales people aren't just the bulldogs who work tirelessly.  They are also often the people who have a feel for what their customers need to hear.  My Bucks season ticket rep is fantastic.  He knows that the team is struggling at the gate and that he would like to sell more tickets.  But he also knows that I know that.  He knows that I try to get friends and family to games.  He doesn't badger me to do it.  He is attentive whenever he can be and I'm sure once the Bucks' fortunes turn, he'll tell me about how to refer friends and family for tickets.  In my opinion having a feel for the situation is part of what makes him a great salesman.
3. Price to the market, not to maximize revenue.
Mr. Cuban pointed out another topic that had been bugging me about the state of sports tickets for a while: teams' propensity to overprice tickets.

There are two ways to look at the term, "overpriced".  It could mean that prices are so high that the total gate receipts of the event is lower than it would have been if ticket prices were lower.  I disagree with that definition.  "Overpriced" could also mean that high ticket prices prevented a sellout.  This is the definition that I agree with.

It is easy for me to sit behind my keyboard and write that sports teams should be willing to leave gate revenue on the table in an effort to sell out.  It's not my money.  Plus I don't have to pay for the extra event staff and security and general infrastructure to support that larger crowd that is bringing in less money.  I still value the sellout.  The games look better on TV and it makes fans in the arena feel like they are attending something cool.  It can be depressing to sit at a Bucks vs. Heat game and see blocks of empty seats in the upper deck.  I see Heat games on TV and the arena always looks full.  Why not here?  Is this team lame?  Is the Milwaukee market dead?  Am I supporting an uncool sport?  The real reason is D: None of the above.  The team just priced tickets too high.

Mark Cuban's third piece of advice could also be applied to an issue that he appears to disagree with me on: the proliferation of price levels.

I remember looking into Lakers season tickets during their pre-Pau Gasol down period and they had seven price levels (not counting the NBA-mandatory $10 seats and not counting the Premier seats that include Kings and Clippers games).  A seat in the first row behind the hockey boards at center court cost the same as a seat even with the basket stanchion twenty rows up.  To the current management of sports teams, they view this as a waste of money.  For tonight's Nets vs. Lakers game someone might pay over $250 to sit in the first row behind the boards at the jump line.  The seat at the stanchion twenty rows up would probably go for less than $100.

Selling two tickets of differing market values for the same price isn't just a loss of short term revenue; it's also a reward for loyal and attentive fans.  A fan who purchases a season ticket in that price category in 2014 may end up with the $100 value seat while a fan who has held season tickets since the Forum days may get a $250 value seat for the same price.  I think that's good.  It rewards fans who renew their tickets during down cycles.  The Mavs have 16 different price categories.  Let's say the Mavs have some bad fortune and hit a rebuilding cycle.  A season ticket holder who gives up his/her seat risks very little.  Some price categories cover less than ten rows.

The proliferation of price categories also hurts single game sales.  The Brewers had six price categories in the 1990s: Lower box, lower grandstand, upper box, upper grandstand, general admission and bleachers.  That's only six price levels for 53,192 seats!  If I bought tickets the day they went on sale, my upper grandstand ticket was likely to be far better than an upper grandstand ticket bought on game day.  (Well, not actually.  The Brewers drew such small crowds that my favorite seats were routinely available on game days.)

Mark Cuban's bog post today was great and I think many pro sports teams should take heed to his points.  I also believe that all three additional ideas that I suggested are practical enough that teams and fans would benefit from them.  1) Regulate a few sections of the stadium for home/visiting fans only.  2) Train salespeople avoid crossing the line between assertive and aggressive.  3) Price tickets in larger sections so that long-time season ticket holders and early single game ticket buyers are rewarded.  Let's hope we see this in the future.

Wednesday, February 12, 2014

Bucks vs. Pelicans preview (Feb 12, 2014)

It takes no great insight to say that the 2014 Bucks season has been ugly.  They're four games behind Philly, who just lost by over 40 points in back-to-back games.  They're 7 1/2 point underdogs (at, a Bitcoin-based anonymous sportsbook) at home tonight against New Orleans.  (New Orleans has been that large a favorite only five times all season, and all of those games were at home.)  They have had injuries, player-to-player confrontations, free agent acquisitions publicly criticizing the coach and an offensive scheme that appears to come from the Big Ten.

Tonight could be yet another ugly one.  Only Zaza and Slava (a nice sounding pair if you say it with the right cadence) are healthy bigs.  Ridnour might be healthy enough to play, but it might not matter.  Wolters and Knight (two players I was very, very wrong about before the season) both play Ridnour's position and they've been the best offensive options over the last few games.  Hopefully Middleton will return to form and hopefully the Grecian Formula hasn't hit the rookie wall.  Gary Neal is a good enough shooter that he could give the Pelicans trouble.  That may be the team's best hope.

The current rotation looks like so:

Point guard: Wolters (starter), Ridnour

Wings: Knight (starter), Grecian Formula (starter), Middleton (starter), Neal

Bigs: Zaza (starter), Slava Raduljica

Knight will play some point and Middleton might be asked to defend a big now and then, but that's basically it.  Teams can win with a seven-man rotation in the NBA, but it'll be a stretch for that to apply to this team.

Keys for tonight

The P-cans' backups smoked the Raptors' backups on Monday night, with Tyreke Evans leading the way.  Knight has to do a great job on him.  Brandon has to use his athleticism to keep Tyreke outside.

Zaza and Slava have to keep their focus.  Anthony Davis thrives when defenders let their guard down.  If Davis hits a few jumpers, so be it.  The killer is when Davis finds space inside and gets easy buckets.

Gary Neal or Khris Middleton has to beat Eric Gordon in the perimeter scoring game.  If one of our guys goes for 28 and Gordon goes for 18, we might have a shot.

The NOLA guys are heading home for the All-Star break.  They probably have parties and traveling "friends" on their minds.  If the Pelicans lack focus in the second half the Bucks could get a duke here.