Monday, June 14, 2010

Bottoms in the Seats

You can measure a professional sports team’s success any way you want, but if you want to understand its real health, just follow the money.

In a sign of two franchises going in vastly different directions Crain’s Cleveland Business had stories this week about both the Browns and the Indians and their various marketing efforts and yet didn’t seem to connect the dots. I’m glad to provide that service.

The first Crain’s story detailed how the Cleveland Indians have taken to essentially using reverse marketing to find an audience. Instead of focusing on its mish mash of a roster that’s as compelling as watching a PBS fund raiser, the Indians instead are selling access to players on other teams as a reason to head to Progressive Field.

Meanwhile, Crain’s also was reporting that the Browns season tickets renewals are in the 90% range, a mostly positive story that overlooks some key facts.

But the broader story here is that one team is relying on organic growth to fund its operations, the other on smoke and mirrors. It’s pretty easy to guess which is which.

The Indians drew their second biggest crowd of the season on Sunday when Stephen Strasburg of the Washington Nationals made his second major league start. Strasburg is certainly a phenom with a growing legend, but we’ve seen his type before and we’ll see it again. That there would be an uptick in attention given the intrigue factor was expected.

Yet as good as the flush of cash that came through the door probably was to team management, it has to be a little sobering to realize that it’s not your team the fans are pining to see. It’s one thing to design partial season ticket packages around the league’s best teams, everyone does that. It’s quite another to erect billboards, as the Indians do, to spur single game sales because Strasburg or Derek Jeter is in town.

There was a time of course when the Indians didn’t have to stoop to that level, a time when the team was both competitive and well run. Sadly, that’s not where the Indians are for now or for as far as the eye can see. When you’re selling another team’s talent as more or less the only reason to spend your money, it’s an admission that the product you’re putting on the field simply isn’t good enough.

In fact, the Indians are now one of those throw-in teams when other clubs are trying to sell partial season ticket packages of their own. The Indians are just as lousy of a draw on the road as they are at home. If fans in, say, Chicago want to see the Boston Red Sox, they may have to take a game or two of the Indians as well.

If you want a measure of how far this franchise has fallen, that is it. And as much as general manager Mark Shapiro would like to think that Carlos Santana might be his team’s version of Strasburg, in truth Santana would have to throw out 200% of the base runners and hit a grand slam in every at bat for the next three weeks before the Indians are going to be able to convince anyone, at home or on the road, to pay money to see him.

With the Browns the story seems to be going much differently, at least if you believe their marketing department and don’t ask too many questions. The Browns held a pick-your-seat day on Saturday, which isn’t as disgusting as the name implies.

This was the opportunity for current season ticket holders to upgrade to a better location. And happily the Browns reported that it was a runaway success just as they are happily reporting that they have had a 90% renewal rate on season tickets.

What’s really happened, of course, is that 10 years of abject mismanagement eventually caught up with the Browns as well. While they were able to sell out in the early years just on the premise that it was good to have a NFL team back in town, keeping that season ticket subscriber base at high levels eventually and naturally became a challenge.

When a team holds a seat selection day (the politically correct term), it’s an acknowledgement that there are actually plenty of seats available. If there weren’t, what would be the point of having people come down to the Stadium in mid-June?

The other thing to keep in mind is that while a 90% renewal rate is impressive, it’s also an admission that there will be less season ticket holders next season than last. Where the Browns would like to be is a team with a waiting list, something they once had. Now not only is there not a waiting list but each year the season ticket base erodes further.

But what is likely comforting to Browns’ management, as it should be, is that the renewal rate does mean that erosion to that base has slowed considerably. Remember last year when the Browns and Indians were engaged in some cross-marketing as a way of trying to improve both of their sagging bottom lines? This year is different and now you get the sense that the Browns don’t see any compelling need at the moment to associate directly wit the Indians.

There’s no question that the average fan thinks the Browns, far more than the Indians, are heading in the right direction and they’re probably right. Their faith in new club president Mike Holmgren is now where it used to be for Shapiro.

Far more than individual wins, what really sells tickets is confidence. People willing to buy season tickets think of it more as an investment than an impulse spend. And people tend to make investments when they have a high enough degree of confidence that they won’t get burned. Getting burned when it comes to season tickets occurs when you realize you couldn’t give them away even if you agreed to wash the other person’s car.

The Browns obviously haven’t completely convinced their current season ticket holders that another year is worth the cost, but an increasingly higher number are becoming convinced and that’s the start. Crawl before you walk; walk before you run.

The Crain’s article didn’t really make much mention of the Cavs and that’s probably because it’s far too early to tell. If LeBron James is back every game next season will be a sell out just as it was this past season. If he’s not, attendance will fall. More importantly to the Cavs bottom line, attendance will take a hit in the priciest of seats, the ones that corporations and really well-heeled individuals can afford.

Without James, the Cavs will be a challenge to market in the near term. No matter who the next coach is, fans come to see players. And unless owner Dan Gilbert can find a reasonable replacement for James, he knows that until he does he’ll have to reverse market his team too, probably with the team that eventually signs James, along with teams like the Celtics and the Lakers because when it’s all said and done, professional sports is simply about getting bottoms in the seats.


m. said...

marketing is smoke and mirrors so much of the time and it dictates not only what we see, but what we want or need or hope for as well. i'm glad there is you to connect the dots. in film and publishing, the big decisions are made by marketing departments. what book to publish gets determined by how marketable it is perceived to be. the merit of the book, well...not so much. the trouble is that the bottom line is so often at the bottom of the barrel in regards to quality. if it means anything, i would go to cavs games with or without lebron because i enjoy basketball--maybe why you go to indians games? i will take issue with pbs fundraisers--i don't seem to get tired of roy orbison's black and white concert--featuring your fave--the boss. m.

Gary Benz said...

m: Heck, I watch PBS fundraisers, but that doesn't mean they're compelling. It's interesting you talk about book publishing because that industry is in the middle of a sea change. The major publishers have their heads in the sand at the moment. Self-publishing will be huge and anyone with anything to say can get their book published these days and still sell it electronically on Amazon. The marketing will be through the internet.

m. said...

gary, we are on the same page. traditional publishing is a black hole--especially for new authors and publishers. amazon and others on that track are the wave of the future. print on demand will also save a few trees. and anyone anywhere in the world can have immediate access--a dream for any artist. i do listen and learn gary--nothing you have ever said has been lost on me. the sea change will be a tidal wave of fresh ideas and voices. did you ever open my book...hear me? m.