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S E AT
leading the premium seat industry         spring 2010




Published by the Association of Luxury Suite Directors


The Transformation of a
$10 Billion Marketplace:
Buyers, Sellers and Suppliers
Come Together




PLUS
•	The 20th Anniversary Show
•	Big Changes To Come in F&B?
•	The Re-Invention of MSG
•	Salary Survey 2010
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                                                                                                                                                                                                             66
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                 The Evolution of Intelligent Design
SEAT
CONTENTS SpriNg 2010
Published by the Association of Luxury Suite Directors

DEpArTMENTS
8          NEW ALSD MEMBERS
10         EDitoR’S NotE
Why the current emphasis on sustainability (environmental and economic) is
working for the venue development industry.                                          PPL Park brings a European flair to the North American soccer
                                                                                     community. See page 18.
BY JARED FRANK

12         iNDUStRY AND ASSoCiAtioN NEWS
I&A News includes the ALSD 2010 SALARY SURVEY.

16         MEMBER HiGHLiGHt
Meet MiCHAEL SMitH of the Philadelphia Union and visit his new home, PPL
Park, for the first time.

56         CoMiNG AttRACtioNS
The first look at stories being researched for the Summer 2010 issue of SEAT. See
how you can participate.


COVEr STOrY
22         FooD AND BEVERAGE 2.0
Declining occupancy rates trickle down to declining per caps. Is it time for F&B
companies and teams to work together for the sake of creating a new version of the
hospitality market?
BY BiLL DoRSEY


FEATUrES
27         ALSD CoNFERENCE AND tRADESHoW PREViEW                                     Some new premium models include lower price points and all-inclusive
                                                                                     F&B, such as Club Cambria in Pittsburgh. See page 22.
You only turn 20 once, so the ALSD’s 20 Anniversary Conference has a few
                                         th

new tricks up its sleeve. Find out what’s new at this year’s show and discover the
events, sessions, panelists and speakers that will leave their stamp on
New York City.

38         HoW to MARKEt YoUR VENUE iN tHE 21St CENtURY
To market its upcoming $500 million transformation and new premium seating
options, Madison Square Garden has begun the most interactive marketing
campaign the industry has ever seen.
BY AMANDA VERHoFF

44         SEAt-it CoNFERENCE AND tRADESHoW PREViEW
The one-of-a-kind conference for top technology executives in sports and
entertainment returns for its fourth installment. Review this year’s conference
agenda, and you will see what the buzz is about.

46         oWNiNG tHE CUStoMER EXPERiENCE
The Orlando Magic are using customer service standards, that earn the highest
customer satisfaction ratings in the industry, to move its fans into the new Amway
Center.
BY JARED FRANK

About the Cover: Madison Square Garden suites are slotted for a half-
billion dollar renovation, a reflection of the evolution of the premium              New customer service standards are key to the Orlando Magic filling the
seating industry. Join the ALSD in New York City for its annual conference           seats in the new Amway Center. See page 46.
to learn about the industry’s new way of doing business.
                                                                                                                                   S E A T                     7
New ALSD Members
                                                                                                          ASSOCiATiON OF LUxUrY SUiTE
                                                                                                          DirECTOrS
                                                                                                          Chairman of the Board Bill Dorsey
                                                                                                          Executive Director Amanda (Kuntz) Verhoff
                                                                                                          President Jennifer Ark, Green Bay Packers
                                                                                                          VP, Business Development Pat McCaffrey
Shaunna Richardson                 Joe Carvalhido                      Collin Wallace
                                                                                                          Director, Sponsor and Partnership Development Dene Shiels
Chicago White Sox                  Tiger Athletic Foundation (LSU)     FanGo Software Systems
Manager of Guest Relations &       Director of Operations and          VP of Development                  Director of Finance Dan Lindeman
Diamond Suite Operations           Services                            1176 Appian Crossing Way           Financial Account Manager Vickie Henke
U.S. Cellular Field                PO Box 711                          Suite 124                          Director of Information Technology Sean Kellner
333 W. 35th Street                 Baton Rouge, LA 70821               Lexington, KY 40517                Editor of SEAT, Website Director Jared Frank
Chicago, IL 60616                  P: 225-578-0246                     P: 859-608-4521                    National Sales Manager Scott Hinzman
P: 312-674-5101                    F: 225-578-0184                     cwallace@thefango.com              Design Carole Winters Art + Design
srichardson@chisox.com             jcarva2@lsu.edu
                                                                       Adam Rector
Rob Boaz                           Michael Shea                        FanGo Software Systems             ExECUTIVE COMMITTEE
                                                                                                          Chris Bigelow, Bigelow Companies
Chicago White Sox                  DWA Uniforms, Inc.                  Manager and Vice President of
                                                                                                          Brian Bucciarelli, Hershey Entertainment & Resorts
Manager of Premium Seating         802 Canonie, Suite B                Communications                     Greg Hanrahan, United Center
Sales and Services                 Porter, IN 46304                    1176 Appian Crossing Way           tom Kaucic, Southern Wine & Spirits
U.S. Cellular Field                P: 900-343-0003                     Suite 124                          Pat McCaffrey, ALSD
333 W. 35th Street                 F: 865-398-9872                     Lexington, KY 40517                Jamie Norman, Dallas Stars
Chicago, IL 60616                  mshea@dwauniforms.com               arector@thefango.com               Kim Reckley, Detroit Red Wings & Olympia Entertainment
P: 312-674-5166
                                   Karen Sisco                         Linda Whitteaker-Hanson
rboaz@chisox.com                                                                                          BOARD OF DIRECTORS
                                   DWA Uniforms, Inc.                  Innovative Marketing Consultants   Pam Benoist, St. Louis Rams
Brett Zalaski                      802 Canonie, Suite B                4284 Shoreline Drive               Janie Boles, Auburn University
Washington Freedom                 Porter, IN 46304                    Spring Park, MN 55384              Natalie Burbank, Utah Jazz / Salt Lake Bees
Director, Ticket Sales                                                 P: 952-252-1254                    trent Dutry, US Airways Center
                                   Howard Kaplan
18031 Central Park Circle                                              linda@imcsuccess.com               Chris Granger, National Basketball Association
                                   Marks of Distinctions                                                  Patti Kimbrough, University of Arkansas
Germantown, MD 20841
                                   4263 Commercial Way                 Adam tschida                       Gerald Kissel, Ball State University
P: 240-449-1613
                                   Glenview, IL 60025                  Innovative Marketing Consultants   Phil MacDougall, Sacramento Kings/ARCO Arena
F: 301-515-3806
                                   P: 847-299-8800                     4284 Shoreline Drive               Debbie Massa, ROI Consulting
brett.zalaski@washingtonfreedom.
                                   howard@marksofdistinctions.com      Spring Park, MN 55384              Mike ondrejko, Madison Square Garden
com                                                                                                       Richard Searls, New York Red Bulls
                                   todd Schneiderman                   Shane Erickson                     tom Sheridan, Chicago White Sox
Jennifer Hesekiel
                                   Marks of Distinctions               Innovative Marketing Consultants   Michael Smith, Philadelphia Union
Graphic Image
                                   4263 Commercial Way                 4284 Shoreline Drive               Peter titlebaum, University of Dayton
305 Spagnoli Road
                                   Glenview, IL 60025                  Spring Park, MN 55384              Brian Varnadoe, Houston Texans
Melville, NY 11747                                                                                        Jon Vingas, Centerplate
P: 631-249-9600                    David Schneiderman                  Jeff Lundquist                     Bob White, Calgary Flames
jhesekiel@graphicimage.com         Marks of Distinctions               Innovative Marketing Consultants
                                   4263 Commercial Way                 4284 Shoreline Drive               SEAT IT Board
Christine Mosslin
                                   Glenview, IL 60025                  Spring Park, MN 55384              Christine Stoffel, S5 Enterprises / SEAT Consortium
Graphic Image                                                                                             Chris Wood, APS
305 Spagnoli Road                  thomas Patterson                    Matthew Bown
Melville, NY 11747                 Jacksonville Jaguars                Orleans Arena                      ALSD 2010 Conference Committee
                                   Senior Sales Manager, Season &      Director of Corporate Relations    Richard Dobransky, DNC Sportservice
tom Glazer
                                   Premium Seating                     4500 W. Tropicana                  Chris Gallagher, New York Yankees
Graphic Image                                                                                             Pat Jones, New York Mets
                                   One Stadium Place                   Las Vegas, NV 89113
305 Spagnoli Road                                                                                         Jon Muscalo, Legends Hospitality
                                   Jacksonville, FL 32202              P: 702-691-5107
Melville, NY 11747                                                                                        Richard Searls, New York Red Bulls
                                   P: 904-633-6317                     F: 702-284-7778                    Rob Sullivan, New York Jets
Jason Racette                      F: 904-633-6338                     matthewbown@boydgaming.com         Anne Wheat, New Meadowlands Stadium Company
Portland Trail Blazers             pattersont@nfl.jaguars.com
Corporate Sales Manager                                                                                   SEAT IT Division Steering Committee
                                   theresa Coscia
One Center Court, Suite 200                                                                               Christine Stoffel, Committee Chairman
                                   Jacksonville Jaguars
Portland, OR 97227                                                                                        Chris Wood, Committee Co-Chairman
                                   Sales & Service Executive, Suites
P: 503-963-3989                                                                                           Chris Dill, Portland Trail Blazers
                                   & Premium Seating                                                      Sasha Puric, Toronto Maple Leaf Sports & Entertainment
jason.racette@trailblazers.com
                                   One Stadium Place                                                      Mike Morris, Major League Baseball
Nate Brown                         Jacksonville, FL 32202                                                 Lorraine Spadaro, TD Banknorth Garden
Portland Trail Blazers             P: 904-633-5275                                                        Wayne Wichlacz, Green Bay Packers
Premium Sales Manager              cosciat@nfl.jaguars.com                                                Casey Bookout, University of Oklahoma
One Center Court, Suite 200                                                                               Jim Darrow, Illitch Holdings, Inc.
                                                                                                          tod Caflisch, New Orleans Hornets
Portland, OR 97227
                                                                                                          Brett Michalak, Tickets.com
P: 503-963-3971                                                                                           John Pollard, IdentityMine
nate.brown@trailblazers.com                                                                               John Gallant, IDG Enterprise

                                                                                                          Published by Venue Pub. Inc. Copyright 2010. (All rights reserved).
                                                                                                          SEAT is a registered trademark of the Association of Luxury Suite
                                                                                                          Directors. SEAT is published quarterly and is complimentary
                                                                                                           to all members of the Association of Luxury Suite Directors.
                                                                                                          10017 McKelvey Road, Cincinnati, OH 45231 • 513 674 0555 •
                                                                                                          amanda@alsd.com



8           S E A T
A rAre


                                                         blend of


                                                            design


                                                               And


                                                         comfort




Seating and tables for the sports and entertainment market.

    loewensteininc.com | 800.327.2548 | a division of OFS Brands
Editor’s Note
SuStaining the SportS Facility Marketplace
the vernacular of today is slowly evolving to include words and phrases like cap and trade,
carbon footprint and leeD. What comes even slower is the understanding of these words and
phrases. and what comes even more slowly is the delivery of green messages that do not
sound dictatorial or exclusive to just a few groups of people.
By Jared Frank



T
      he conversation surrounding green                                                           to the idea, but now because eco-design
      initiatives is one filled with common                                                       and building principles and procedures are
      sense and stewardship or rhetoric and                                                       more refined and less arcane to architects
agendas depending on the perspective.                                                             and construction managers, upfront costs
While campaigning for the merits of either                                                        are competitive with similar plans simply
side of the debate is futile and frustrating,                                                     built to standard code. Again, if we factor
we can champion the middle ground by                                                              in both the operational cost savings and
embracing a simple buzzword that ap-                                                              additional money generated over the long
peals to both sides - Sustainability.                                                             term, environmental responsibility and fi-
       One thing we can all agree on, espe-                                                       nancial returns juxtapose.
cially in the current economic state, is that
saving money is good. Obviously, we are                                                           Moving ForWarD
still focused on generating new revenues,                                                         Leadership in Energy and Environmental
but there is an increasing acceptance of                                                          Design (LEED) is not perfect. It is currently
cost savings as a viable part of the mix.                                                         a blanket rating system that does not take
Sustainability provides a unique variable                                                         into account regional environmental differ-
which enables us to focus on both costs                                                           ences. But you have to start somewhere.
and revenues at the same time. This flex-                                                         And many municipalities incentivize LEED
ibility is very powerful for our community.                                                       construction with tax credits and exemp-
So simply stated, sustainability is a vein to a healthier bottom line     tions, which sweetens the deal for owners, so we all have a stake
and necessary to preserve our financial models that depend great-         in this ongoing movement.
ly on the continued profits produced by our venues.                              Sustainable building concepts are still in their infancy, but
                                                                          certainly are crescendoing towards the status quo. Nationals Park,
the caSe For SuStainaBility                                               home of the Washington Nationals, became the first LEED Silver
A little over 20 years ago, the era of new stadium construction ush-      Certified professional sports stadium in 2008. Following suit, the
ered in a new economic landscape, spurring urban development              two newest buildings in the industry due to open shortly, Target
as well as sports business revenues. Today, new venues, such              Field and New Meadowlands Stadium, both have incorporated
as the New Meadowlands Stadium, come with a $1.6 billion price            green design elements.
tag. Venues must be scalable to maximize return on investment                  The Minnesota Twins have taken things one step further by
and must be sustainable in order to ensure profits well beyond 20         partnering with Pentair, a Minneapolis-based water solutions com-
years.                                                                    pany, and by establishing the first-ever eco-sponsorship in profes-
       Not all new builds are primarily financed through public funds     sional sports. Pentair’s Rain Water Recycle System (RWRS) will
any longer due to economic and/or political reasons. In those mar-        reduce Target Field’s municipal water needs by 50% by catching
kets where owners are footing a larger portion of the bill, making        and reusing rain water. And saving water means saving money.
their investment last is essential. And for those facilities still tap-   While we should never view these savings as a means to mon-
ping into public coffers, taxpayers will know their contribution has      etize environmental ethics, saving, whether it be water or money,
gone to an effort that nourishes the entire community and not only        means sustaining future revenues for the sports facility market-
sustains the sports facility, but the urban development surrounding       place. #
the facility. It is almost a sense of charity or source of civic pride    What sustainable building or operational practices is your team
in the least.                                                             currently employing?
       Clearly, this issue is not top of the mind just for the environ-
                                                                          Write to me at jared@alsd.com and follow me on Twitter
mentally conscious anymore. We have all seen “Avatar” by now.
                                                                          @SEAT_Editor.
It has taken time for technology and understanding to catch up
10          S E A T
While your team is winning the game, Agilysys helps you win the crowd.




                                                                  Wants a beer but doesn’t want to miss the action.
                                                                  Use mobile POS to pre-order and bust the queue.



                                       Halftime starting in four minutes and stadium network has just crashed.
                                       Still serve three times as many customers off-line with easy-to-use POS.



Pre-ordered four vegetarian plates for luxury suite.
Automatically adjust catering inventory.




Agilysys solutions provide you with total control of your retail and food & beverage operations—so you can
simplify management and improve revenue stadium-wide. Provide faster, more accurate service in luxury suites
and club sections with mobile POS devices. Speed up concession lines and increase sales volumes with easy-to-use
POS terminals. Maintain accurate inventory of every concession, bar, restaurant, caterer and fan shop—in real time—
during your events. And improve planning with in-depth analytics and superior reporting capabilities. It’s everything
you need to simplify operations and boost your bottom line—only from Agilysys. Find out what Agilysys can do for you.
Call 1-877-374-4783 or email hsgsales@agilysys.com | www.agilysys.com




                                                                                             Agilysys solutions include:
Industry and Association News
plaStic BaSeBall capS are green?
not the batting helmet albert pujols is wearing in the batter’s box,
but the cap the beer man is sporting in Section 136.
By Jared Frank




D
       id you know you can wear a plastic bottle on your head? No          prices. “The nice thing about this green product is the cost. It is
       really, you can. In fact, you can wear six bottles on your head     near the same price, maybe four or five percent more at the very
       at the same time and still look cool. That is how many plastic      most,” Patterson says. Even if there is a small increase in price,
bottles it takes to produce one RPET baseball cap. RPET is thank-          there are tax incentives that make up for those costs and then
fully short for Recycled Polyethylene Terephthalete, the environ-          some. “One of the things that is now being considered by the big
mentally friendly molecular brother of polyester.                          players is taking advantage of the tax benefits of having employ-
       You do not have to be a chemist to understand the RPET              ees wearing a green product,” Patterson continues. “There are tax
process. It is actually very simple. It starts by taking plastic bottles   incentives that are being offered for companies to go green. That
and crushing them. The crushed bottles are then shredded into              could be anything from changing their light bulbs to wearing a uni-
tiny chips. Add a little heat and some pressure and voila, you have        form that is green.” Some of the “big players” outside of sports and
a polyester fiber that can be turned into caps, shirts, bags, even         entertainment to fully embrace RPET include McDonald’s, Disney,
jackets.                                                                   Procter & Gamble and General Mills.
       Apparel products have been used in a couple different ways               Another incentive for teams is the possibility of working with
in the sports industry. The Atlanta Braves have done promotional           sponsors. “There is an opportunity for sports teams to take their
giveaways using 50,000                                                                                              vendor of choice, whether it
RPET caps made out of                                                                                               is a Pepsi product or a Coke
100% recycled plastic bot-                                                                                          product or Budweiser or Mill-
tles. Consider again that six                                                                                       er or Coors, and co-brand
plastic bottles are needed to                                                                                       an RPET product,” says
make one cap and one bot-                                                                                           Patterson. While this is not a
tle takes 450 years to break                                                                                        new idea, it is a new way to
down in a landfill. Multiply                                                                                        sell the corporate partner on
both those figures by 50,000                                                                                        a giveaway. Sponsors, who
caps, and 300,000 plastic                                                                                           are also trying to deliver a
bottles are saved from land-                                                                                        green message and con-
fills, and 22.5 million years                                                                                       nect that message with their
of landfill decomposition are                                                                                       brand, can benefit greatly
saved from one giveaway.                                                                                            from being associated with
So the environmental ben-
efits of RPET products are
                                         When you drink a bottle of water from now on,                              RPET apparel.
                                                                                                                          RPET has gone through
measurable. Other teams                      remember the next time you see it,                                     every imaginable test to
who have done giveaways                                                                                             check for color, washability,
involving RPET products or                         you could be wearing it.                                         crocking, twisting/turning,
are currently involved in the                                                                                       abrasiveness and anything
ordering process include the                                                                                        else that can be thought of
Atlanta Falcons, Baltimore Ravens, Cleveland Indians, Los Ange-            to ensure the fabrics do not harm people. So not only is it eco-
les Angels, San Francisco Giants and New York Yankees.                     friendly, it is safe, versatile and reliable. “RPET keeps its color
       Besides promotional giveaways, some teams use RPET as               amazingly well, and it can be dyed any custom color,” says Pat-
the material for all stadium staff apparel. “The idea is to be able to     terson. Additionally, fulfillment timelines are essentially the same
wear a green product and also have that product perform,” says             as cotton, polyester or blended products. The entire process of
Bill Patterson, Vice President of Sales at HTT, an industry leader         making to delivering a cap is 6-8 weeks. Shirts and jackets come
in RPET products. “The apron the peanut vendor wears used to be            with a 90 -100 day timeline.
made out of polyester and cotton. Now it can be made out of 100%                When you drink a bottle of water from now on, remember the
RPET or a blend of RPET, and wear as well, if not better than the          next time you see it, you could be wearing it. Plastic bottles turned
last one. And it is eco-friendly.” Some stadium staffs currently out-      into caps and shirts. What will they think of next? #
fitted in RPET gear include the Atlanta Braves, San Diego Padres,          Is your team using green products?
Cincinnati Reds and Texas Rangers.
                                                                           Share them on our Association of Luxury Suite Directors
       The green benefits of minimizing landfill waste and conserv-
                                                                           Facebook page.
ing oil, a chief ingredient in polyester, are not trade outs for higher

12          S E A T
Industry and Association News
Salary Survey 2010
Despite the economy lagging, over one-third of those working in the premium seat industry
saw their salaries increase over the past year.

research by Colleen Gibson, Marketing assistant, alSD



T
    he 2010 ALSD Salary Survey provides important information
    about the current premium seating industry working conditions   Job Satisfaction
    and those operating in it. The categories that are covered in
the survey are Demographics, Work Experience, Job Satisfac-
tion, Economic Impact and Compensation.


Demographics
 Gender            age                 race/ethnicity

 Male: 50%         Average: 37         White/Non-Hispanic: 90%

 Women: 50%        Youngest: 24        African American: 6%

                   Oldest: 61          Asian American: 3%

                                       Hispanic: 1%




 Marital Status Children               education
                                                                    Economic Impact
 Married: 65%      1-2 children: 44%   Bachelors Degree: 66%

 Single: 30%       No children: 43%    Masters Degree: 14%

 Divorced: 5%      3-4 children: 12%   Some Graduate School: 7%

 Separated: 1%     5-6 children: 1%    High School: 3%

                                       Associate Degree: 2%



Work Experience
     years in Industry                 % of responses
     0-3                               22.1%
     4-7                               31.8%
     8-15                              21.2%
     16-20+                            9.7%
                                                                    Are you curious to know how your total compensation package
     years in Current Position         % of responses               compares to the industry average?
     0-1                               11.5%
     2-3                               27.4%                        See Salary Survey on page 52
     4-5                               25.7%
     6+                                35.4%                        For complete salary survey details and write-up,
                                                                    visit www.alsd.com.

14            S E A T
NO MATTER THE SPORT, WE’RE IN YOUR LEAGUE
                     Today’s premium seat holders demand more. They want to check fantasy scores,
                     access stats in real time, and order concessions at the touch of a button. You can
                     provide your guests with all this and more by teaming with Insight.

                     Teams in every major sports league rely on us to deliver the game-changing
                     technology solutions they need to streamline venue operations and enhance the
                     fan experience. Let Insight get behind your team.




                                                              Designed, deployed and managed by


 © 2008 Insight Direct USA, Inc. All rights reserved. Insight is a registered trademark of Insight Direct USA, Inc.



22 15     S E AS E A T
                T                            WWW.INSIGHT.COM � 800.INSIGHT
ALSD Member Highlight
a conversation with Michael Smith
Manager of Suite and Premium Seating Sales, Philadelphia Union
The man in charge of selling premium seating for soccer to a sports-crazy city for the first time recounts his path
to the sports industry, shares why he jumped at the chance to work for an expansion franchise and invites
the ALSD inside PPL Park.

By ryan Mirabedini, Marketing assistant, alSD
                                 Q: You are becoming a seasoned         opportunity to be a part of something new came up, I should defi-
                                  veteran in MLS circles having         nitely take it. So it was definitely something I jumped on when the
                                  worked for D.C. United and now        opportunity came.
                                  the Philadelphia Union. Have                All of us here are learning the process. It’s two-fold. It’s an
                                  you worked outside of sports?         education about soccer the sport. Then it’s explaining the team,
                                  And what has your path been to        explaining what we’re about and what we’re looking to do. Obvi-
                                  where you are today?                  ously soccer is the world’s sport, but it’s not necessarily North
                                  A: D.C. United was the first loca-    America’s sport. Getting them familiar with the sport in general
                                  tion I was involved with in sports.   and then the team is our goal. We’re trying to break down walls
                                  I got my start in the finance back-   of preconceived notions. That to me would be the hardest thing.
                                  ground. I worked for a financial      It’s not a challenge marked by expansion, but by the challenge of
                                  servicing firm and then a mort-       growing the sport.
                                  gage brokering firm. Obviously
                                  with the economy, that industry       Q: Do you see the MLS taking that next step so it becomes the
                                  was in a bit of a tailspin. Since     Big 5 instead of just the Big 4?
                                  the money was no longer there, I      A: Absolutely. I see that happening, and I see it happening right
         Michael Smith            at least wanted to do something       now. Business in sport is key. That’s what we need to take it to
                                  I loved. So I went to Game Face       the next level. It’s all about business and the revenue brought in
(sport management school) in Oregon to help learn the craft. It         by business. When you look at the NFL, a lot of the revenue is
was a program that was a few weeks long, and then they set me           brought in by businesses that spend money on the sponsorship
up with D.C. United. Obviously I came in there with a sales back-       side, the premium seating side. That’s one of the things Major
ground, but I was definitely willing to throw everything out of the     League Soccer has been lacking for a long, long time. If we’re
window and learn how everything works in sports and go from             going to be a successful league, that’s something you have to tap
the bottom up.                                                          into.
                                                                              We’ve been around since ’96. Once those kids of ‘96 are
Q:: So we spoke a little bit about your path to the Union. Would        CEOs and Presidents, soccer will not be such a foreign thing,
you say you have had any kind of a “eureka” moment where you            and they will be willing to spend money on the product, or they’ll
knew you had arrived on the sports business scene?                      be willing to have business during our games and treat their em-
A: I don’t know if it was a “eureka” moment, but maybe when I           ployees to our games as opposed to other sports. We need the
first started as an inside sales rep, I knew what I wanted to do        kids to get into positions of power, and it won’t be long until they
and wanted to focus on. Mike Harloff (Director of Sales at D.C.         are there.
United) sent me on that path. Within the first 60 days or so, I was
able to wake up and say I moved a couple of suites, and I knew          Q: Moving on to PPL Park, what is the first thing you would
that’s what I wanted to focus on. The rest was history. Once I saw      say about the facility? What makes it unique? Sell the ALSD
success, I decided to stay on that path.                                members.
                                                                        A: It’s a great facility. Just the other day Nick Sakiewicz, our CEO
Q: Has your involvement with ALSD helped you with developing            said, “Oh my goodness I think we may have built too small!” I
and implementing procedures at the Union?                               think that’s one of the key selling points and a key to the success
A: Oh, definitely. Some of the policies here were adopted follow-       of the team- to make sure the stadium is intimate. You want a
ing what is done by others in ALSD. One of the main things it’s         stadium not to be cavernous like the one I came from before.
done for me personally is created relationships with other people
who I probably wouldn’t have had relationships with before, and
we’ve been able to hold conversations about ideas and practices.            turn the page to keep reading Michael’s
                                                                            highlight of ppl park.



                                                                                                                  
Q: Obviously you are an expansion franchise in MLS. What are
some of the positive and negative aspects of that process?
A: Harloff always spoke of being a part of the league and the
team. He would tell me about when the league first started back
in ‘96, it was cool to be a part of something brand new and if an
16          S E A T
ALSD Member Venue Highlight
introducing ppl park:
the new home of the philadelphia union
With a scenic setting on the banks of the Delaware River amid a European flair and atmosphere, PPL Park is the new
quintessential North American soccer venue.

By ryan Mirabedini with Michael Smith




O
      n the west side of London, there is a quaint soccer stadium        love. Clearly, fans want to be a part of a special experience and
      known as Craven Cottage. Opened in 1896 as the profes-             help contribute to its outcome. As Smith sees it, there is no need
      sional grounds for Fulham Football Club, it is conveniently        to change a century’s worth of success. “If you are on the field as
placed on the banks of the River Thames and still holds English          an opposing team, you will hear our fans loud and clear. It is defi-
Premier League (EPL) games to this day. With seats inches from           nitely going to be a tough place to play.”
the field and rain cover for most of the 25,700 supporters, it is a            Such a fantastic ambiance is enabled by the fact that this
classic example of viewing soccer in its purest form.                    stadium is soccer specific, which is now the standard in MLS.
      Now transport yourself over 3,500 miles across the Atlantic        Many feel that new facilities geared directly towards MLS teams
to Philadelphia, where the MLS expansion Philadelphia Union              will help the league grow financially and competitively due to their
is having a venue renaissance of sorts. The club’s new facility,         ability to generate greater revenues, avoid scheduling conflicts
known as PPL Park, is located right along the Delaware River             and create brand loyalty. “It is cool to have the uniqueness that
and has several other similarities to the aforementioned Craven          I think MLS and the new stadiums are providing, such as up in
Cottage plus the benefit of some cutting-edge seating options.           New York (Red Bull Arena) and Rio Tinto (Stadium) out in Utah,”
“It seats 18,500, which I think is a great number,” says Michael         says Smith. “We have uniqueness in our stadium, and each one
Smith, Manager of Suite and Premium Seating Sales. “The seats            of them has something to offer.” Rio Tinto Stadium, which was
are steep, and [the stadium] is basically one level so no matter         opened in 2008, and Red Bull Arena, which opened just last
where you are in the stadium, you will have a great seat.”               month, provides PPL Park with some fantastic brothers in arms
      Likeness to EPL stadiums for PPL Park is not limited to ca-        so to speak.
pacity alone. Watch any European match and you will be sure to                 As an expansion franchise, the Union is attempting to cre-
hear the home supporters singing with pride about the club they          ate a positive buzz in the City of Brotherly Love. By indications




       club settings have a riverfront view of the Delaware just beyond the façade of ppl park.



18          S E A T
left: inside the suites at ppl park
                                                                          Below: a view from one of the 30 suites in ppl park




of suite and ticket sales, they are doing just that. According to
Smith, all signs point to soon reaching a full season sell-out
at PPL Park. “We are at over 10,000 season tickets sold, and
they are full season tickets, so we are well on our way to meet-
ing a capacity number,” comments Smith. These numbers are
impressive considering the struggling economy and the satu-
rated Philadelphia marketplace.
     In addition to the beautiful sightlines for regular seating,      suite just yet due to the economy, but they may want a sampling.”
the premium options at PPL Park are truly fantastic, starting with           For those Union fans that still want to be close to the action,
the 30 corporate suites priced at $50,000 per year that sit just       but may not desire an area with a table, there is an option for
27 rows from the playing field. “I would have to say 30 is a good      them as well- 150 field level seats priced at $2,000 each. “Field
number to provide maximum revenue. I can also tell you that the        level seats obviously are a less expensive option that is not just
30 is expandable if needed,” Smith says. “We have room to grow         married to a business or company,” says Smith. “Anybody that
on all levels including the premium areas.”                            wants a field level seat can obviously have one if they are willing
     As an alternative to the suite option, the Union also offer       to meet that price range.”
ten field side tables with seating for four priced at approximately          The Union additionally offers “super club” seats with VIP club
$10,000 per year. According to Smith, this is one of their most        access priced at $7,500 each. There are 28 of these seats with
attractive items. “Our biggest success is with the field side table.   14 behind each bench. “(Super club seats) are for businesses
Some of the mid-level companies here may not be able to do a           that pride themselves on taking care of their employees. Some of
                                                                       the items in the Super Club include a trip to an away game, lodg-
                                                                       ing and access to the stadium. Food and beverage is also pro-
             PPL Park at a Glance                                      vided for these seats. So when you want to reward employees,
                                                                       we do have some good programs,” says Smith.
                                                                             As the quality of soccer continues to grow in Major League
                                                                       Soccer, so does the clientele base and general fan fare. Some
     capacity:              18,500 (soccer)                            major local companies have noticed the great opportunity in
                            26,000 (concerts)                          Philadelphia, such as PPL Energy, who signed onto the naming
                                                                       rights of the stadium. The timing is perfect for PPL Energy with
     number of Suites: 30                                              energy being regulated at the beginning of next year, and for the
                                                                       Union, who share many of the same ideas with its new partner.
     club info:             11,000 SF full-service                     “They have a great green initiative, and one of the cool things
                            club restaurant                            about the stadium is that it will be run completely green,” notes
                                                                       Smith. “It was almost like a eureka moment when we saw some-
                                                                       thing line up with exactly what we were trying to do. For us it was
     architect:             rossetti
                                                                       all about timing and matching up with great partners.”
                                                                             As new generations of soccer players enter the business
     cost:                  approximately $120M                        world, we continue to speculate when the MLS will take the next
                                                                       step. But by comparing PPL Park to Fulham’s Craven Cottage,
     owner:                 Delaware county, pa                        it is comfortable to say that the MLS is taking it now. The Union
                                                                       have successfully gone back to the roots of attending soccer
     operator:              city of chester                            matches but kept up with growing premium demands. Knowing
                                                                       this, we cannot blame Michael when he proclaims, “I think it is
     community:             ppl park is the center                     going to be a tremendous place to play, and lord knows I cannot
                            piece of a $500M mixed-use                 wait.” #
                            development project.
                                                                       Highlight your venue by posting photos on the wall of the
                                                                       Association of Luxury Suite Directors’ Facebook page.



20           S E A T
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Food and Beverage 2.0                                                                                  
            Roots and Wings                           
With declining occupancy rates and lower per caps, there is a feeling that “something has to give”
in a business looking for cost certainty in uncertain economic times. It appears that Big F&B may be
willing to change how it operates. But will the teams go along?

By Bill Dorsey, Chairman of the Board, Association of Luxury Suite Directors



I
    s food and beverage on the premium levels an art or a business?                 Food is one of those rare things that people need every day that
    Have rights fees gotten so high that everything has become too             can’t be manufactured in Japan or China, even if people love Su-
    much about maximizing revenue and not enough about quality                 shi and Moo Goo Guy Pan. But food is “Made in America,” and
in the age of the $50 six pack? Can Big F&B win a contract anymore             that comes with a high price. F&B companies love the big spend-
on just the quality of the food served? Or has food and beverage               ers. They love to please people, and a good chef works with food
on premium levels become commoditized by the customers, i.e., do               like Michelangelo works with paint. There is the pride in “exceeding
they only order enough food and beverage not to be embarrassed? Is             expectations” and if given a chance, F&B companies will bend over
everything about increasing per caps? Or squeezing out value with              backwards on top of their carving stations to produce the kind of
every food order? Is F&B in suites passe anymore…nothing really                experience that keep the customers coming back. That’s how many
special about the service? What are the new trends in F&B? Why                 of the F&B guys got started…they love food the way so many of the
are the margins getting lower? Or is this what the F&B companies               people in the suite business love sports. The top chefs receive awards
merely claim and have done so for a long time? What can F&B com-               the way directors win Oscars. That’s the way some of the more suc-
panies do about propping up profits?                                           cessful caterers cut their teeth in the business…by providing quality
      All good questions. Maybe not so many answers for the state              the owners of the teams demanded. Time was.
of F&B in 2010. This is a roots and wings business if ever there was                The business, when done right, can rise far above the madding
one: as bottom line and hard-nosed as any you will want to find, but           crowd.
at once, one that aspires to soar and to serve and be proud of great                When it becomes bottom line, corporate F&B on hospitality
cuisine.                                                                       levels becomes well…not an art, but a science. F&B for the big com-
      On the premium levels, the big F&B companies – and there                 panies competing for big bids becomes “all about the math.” How
are about a half-dozen left – hire great chefs and can provide almost          much investment should be made? What is the market potential?
anything you ask for…at a price. A steep price. A good meal for four           Does the company have other accounts in the vicinity so it can get
with a good bottle of wine or two can cost about as much as a flat             an economy of scale? Is it tied to the concession contract? How long
screen TV. So, you can go out and have a great meal or order in and            is the contract? Does the team owner require the F&B company to
watch your new TV.                                                             build out its own space? What kind of edge does one company have
                                                                                                        over the other? Does all the owner care about
                                                                                                        is how much money he or she can make on
                                                                                                        the deal?
                                                                                                              More good questions. Everything inevi-
                                                                                                        tably is factored into the bottom line equa-
                                                                                                        tions: Cost of Goods Sold (CGS); New
                                                                                                        Products; Increase in Revenue Opportuni-
                                                                                                        ties, etc. Yes, it’s a business.
                                                                                                              And the business is tied not just to the
                                                                                                        concessionaire, but also the caterer on the
                                                                                                        premium levels. It’s important for Big F&B
                                                                                                        to understand the premium space. Such as?
                                                                                                        How many suites and club seats? What sport?
                                                                                                        What are the estimated per caps? How many
                                                                                                        games are played and in what venues? Can
                                                                                                        the F&B company rely on volunteers, or are
                                                                                                        there so many events that a large daily staff is
                                                                                                        needed? What are the liabilities these days for
                                                                                                        serving minors?

                                                                                                        Club Cambria at PNC Park

22             S E A T
The new Club Cambria at PNC Park in
                  Pittsburgh is an example of a new premium
                       seating option with all-inclusive pricing.




The Occupancy Question
There is a new factor in 2010 that has reared its ugly head
that is truly changing the business. And perhaps in 2010,
this factor above all is changing the game.
      The dirty little secret is not so secret anymore: It’s
called Occupancy. Or some call it Utilization. Same thing. There is
an occupancy problem on the premium levels that is creating havoc            What the Down Cycle Might Lead To:
on the business right now. There are no customers to eat the food            1) F&B companies pay too much for rights fees to get the
that is available.                                                           work and keep their large labor pools occupied.
      Where rights fees were calculated and created for contracts that       2) The economy falters.
are sometimes several years old, most of the “math” was created with
                                                                             3) Corporations, which are laying off people, cut way back
higher occupancy levels in mind. That’s because the occupancy rates
                                                                             on F&B and hospitality expenditures, not just because they
in the four major sports were between 10% and 20% higher than
                                                                             can’t afford it any longer, but because it is politically correct
they are now.
                                                                             to do so.
      No more. No-shows in club seat areas are sometimes 20%. Per
caps have dropped, and a per cap in which no one shows up is pretty          4) F&B companies, not making the money on per caps and
low unless Casper the Friendly Ghost likes beer and has a credit card.       losing revenue on no-shows, try to make up for the differ-
So the math does not work anymore in many places.                            ence by charging more for less or by cutting quality, going to
      It also does not work for many F&B companies in suites, where          smaller portions, etc.
utilization curves have also dropped. When some of the big corpora-          5) Corporations, the buyers, recognize they are not getting
tions are only using their suites in some cases 60% of the time, it          what they had been accustomed to paying for. They start ques-
can translate to serious lost revenue. One large customer with mul-          tioning things like the restocking fees, the nightly tipping, the
tiple suites has claimed that they are using suites only 55% of the          general loss of quality. They begin to complain to their teams.
time, and that it saves them millions of dollars in F&B costs. When          They order less food, or they no longer show up for the game
companies don’t use suites, because the F&B cost cannot justify the          so they are not billed.
usage, then the industry has a problem to solve.                             6) Teams have unhappy customers. Renewals decline. Teams
      In the four major leagues, with caps ranging from $40 for MLB          receive less revenue, because they are no longer providing the
to $75 on average for the NFL (with $50 to $60 caps for NBA and              experience that keeps their customers happy.
NHL), lost F&B revenue costs, for any given suite that is unoc-
                                                                             7) Teams receive less revenue in renewals, in part because
cupied, around $650 for MLB and $1250 for the NFL. The cost of
                                                                             F&B companies can’t provide the kind of corporate hospital-
F&B in the minor leagues and colleges, as a percentage of the cost of
                                                                             ity expected.
the suite in terms of revenue, is even higher than those figures. This
is because the cost of beer can still stay high in lower priced boxes.       8) Eventually, teams will receive lower concession rights fees,
So F&B is not just an issue for the four major sports.                       because the premium seat asset is no longer as valuable to the
      It has been calculated by the ALSD that a 10% decline in oc-           team itself.
cupancy for all 30,000 suites in all four major sports leagues plus all
other sports including MLS, colleges, racing venues, minor leagues,       In other words, in some way, the F&B industry is in the midst of a
etc. costs the F&B industry more than $100 million dollars (See           declining spiral. Unless they change the way they do business.
chart on Total Lost Revenue on page 24). That’s a lot of hot dogs.
In an individual sport such as baseball, which has a lot of games, the
math is also ominous (See chart on MLB Lost Revenue on page 24).
      Which gets quickly to the next point- something has to give.
To make up for the lost revenue, F&B companies have had to raise
prices to levels that have corporations, who buy the food, fuming.
The result: A kind of self-fulfilling down cycle.

                                                                                                                    S E A T                      23
TOTAL F&B LOST REVENUE AS A RESULT OF UNSOLD SUITES & NO-SHOWS
                 Unsold Lost   No-Show Lost                   Total
     NFL          $4,044,384      $817,864                 $4,862,248                             There is meaningful lost revenue for F&B
     NBA         $15,698,183    $11,496,610               $27,194,793                             companies as a result of unsold suites and
     NHL         $13,881,780     $9,485,883               $23,367,663                             no-shows. When you include additional events
     MLB         $25,587,900    $20,470,320               $46,058,220                             and sports, this number grows even larger.
                 $59,212,247    $42,270,677              $101,482,924



                                            MLB Regular Season Length
                                  Teams          Home Games       Total Games
                                    30                81              2430

                                                       Team Inventory: Average # of Unsold Suites/Team/Game*
       Direct                 Suites/Venue             Sold (%)          Sold (#)        Unsold/Game        Unsold/Season        Avg. Price
       Suite                         78                   80%              62                   16              38,880             $2,700
      Revenue               *Source: Suite Model v01 (BR); ALSD




                                  Lost Revenue as a Result of Unsold Suites
                                               Unsold Lost
                                             $104,976,000


                                                      Value of F&B Per Caps/Suite                                               *No-Shows
                             Per Cap Range            $/Person      Avg. # of People      Value/Suite                           No-Show %
                                $40-$50                 $45                15                $675                                  20%
      F&B Suite             *Source: The Bigelow Companies; ALSD

      Revenue
                                          Total F&B Lost Revenue as a Result of Unsold Suites & No-Shows
                                                  Unsold Lost     No-Show Lost          Total
                                                  $25,587,900     $20,470,320       $46,058,220


Changing the Paradigm                                                       years to not make this an issue. As long as the teams did not see a de-
That cycle appears to be what is beginning to happen in this roots          cline in what customers were willing to pay (as evidenced by high re-
and wings business. Interviews with multiple high-level executives in       newal percentages), then there was no need for this kind of thinking.
the F&B business indicate they are willing to change the way they                Now though, that appears to be changing. Some teams are be-
do business.                                                                ginning to look at this as an option in the name of keeping their
     One popular method that is finally gaining momentum is in-             customers happy and their renewal percentages higher. One price
cluding the cost of F&B in the price of the suite. On nightly rentals,      options have shown real promise in new charter clubs.
this practice is fairly common, especially in venues such as the home            Greg Hanrahan at the United Center in Chicago tells us that
of the Utah Jazz, EnergySolutions Arena, a building that is inde-           the members of the Harris Club love the all-inclusive pricing. We’ve
pendently run. Big F&B has wanted to do this for years and years,           heard the same thing at various other member clubs, such as Club
because it creates cost certainty, but the teams have resisted to date      Cambria, which started at the Target Center in Minneapolis and has
because a la carte pricing brings in higher prices (F&B companies           moved on to various other venues in the U.S. and Canada.
have known about the secrets of individually pricing items for years,            Chris Bigelow, President of Bigelow Companies, Inc. in Kansas
and that’s why food can cost so much at a nice restaurant). Nightly         City, believes the reason these clubs with all-inclusive pricing work is
rental companies don’t understand how F&B is ordered in some cas-           because they cater to smaller groups – only two to four people – and
es and merely order “packages.” This may start to happen more and           these groups tend to be small businesses or professionals such as law
more on a leased basis, according to several F&B companies who are          firms with tickets. Occupancy is higher, and the buyer does not like
looking at ways to improve the bottom line.                                 being billed nightly.
     Occupancy rates for teams were high enough until the past two                 Filling up a 16-person suite is not so easy. Corporations might


24           S E A T
                   It has been calculated by the ALSD that a 10%
                                                  decline in occupancy costs the F&B industry more
                                                  than $100 million dollars.

be hesitant to have an F&B charge included if they do not use the            What an Increasing Business Model May
box. Again though, this might change.                                        Lead To:
      The feeling in talking with food and beverage executives is that
                                                                             1) Lower the cost of F&B, and include it in the price of the
they would be willing to charge less for food with a subsequent low-
                                                                             leased suite.
ering of the rights fees. Big F&B would have cost certainty, and the
suite holders would no longer be asked to pay on a nightly basis for         2) Offset the lower revenue F&B companies make with lower
the cost of F&B.                                                             rights fees.
      But what about the teams? Why would owners want to risk rais-          3) F&B companies have cost certainty because they no longer
ing the suite’s base price and except lower rights fees? To date, they       have to factor in occupancy and no-show issues.
have been unwilling to do so, despite pleas from nearly all the Big          4) Corporations will also have a cost certainty and will no
F&B companies.                                                               longer have the incentive not to use their boxes, because they
      But there comes a point in time when that might change. Again,         will be charged for the F&B. Utilization will go up, and cor-
it’s all about occupancy and/or utilization. If renewals drop to a cer-      porations will have one bill to pay and one check to write each
tain level, in part because of high F&B prices and lease prices, which       year.
have not dropped substantially despite a poor economy, is there not
                                                                             5) Teams will initally “eat” some of the costs in lower F&B
a point in time when filling the boxes is more important than retain-
                                                                             rights fees (which will eventually go lower anyway when the
ing higher F&B rights fees?
                                                                             next contract comes up). But like the Laffer Curve, teams will
      It appears to be getting to that point in 2010.
                                                                             have happier customers, who will renew their suites at a higher
                                                                             renewal percentage.
The Laffer Curve: Maybe It’s Time for Team                                   6) One price options become the standard in the industry:
                                                                             very similar to the way it is in Europe, where the price of cor-
Owners to Pay Attention
                                                                             porate hospitality is included in the price of the suite.
In the 1980s, Arthur Laffer, a professor and advisor to Ronald Rea-
gan, made the argument that lowering taxes would actually increase
revenues to the Federal Government. It was in a sense a counter-in-
tuitive argument, but one that ultimately proved to be true. Letting      Inevitable Resistance
people keep their money resulted in higher employment, more rev-          There will be inevitable resistance for the above scenario for some
enue to the government and more money spent on consumer-related           poor reasons and some compelling reasons.
goods and services. This allowed private companies, who had more              Here are some of the arguments against this scenario:
money and more customers, to hire more people, who paid more                  1) Teams will be resistant to anything that initially lowers
taxes and had more money to spend in the economy. This resulted               their revenues. After all, why should they take the risk?
in the longest post-war economic expansion this country has ever              2) Corporations won’t like paying for a product that they
seen- something around eight years.                                           don’t always use (there still will be a cost for F&B, but it
     Maybe something like the Laffer Curve would work on the pre-             won’t be nearly as high as it once was).
mium seat levels.
                                                                              3) Anything new in the slow-adopting business that is the
                                                                              sports world will probably not receive immediate traction.


      Are you interested in interacting with buyers, sellers and          Is There a Metric That Can Be Developed?
     suppliers all at the same time to understand how business            Is there a metric that can be developed to demonstrate what will
     on the premium levels is changing? Plan to attend the first-         bring in the maximum revenue to the teams, the corporations and
                                                                          the F&B companies? Probably not, because sports is bought and
       ever Premium Seat Summit at the ALSD Conference.                   sold not so much as a commodity, but as an emotional purchase.
                                                                          When teams are doing well, people will apparently still pay high
                                                                          prices to maintain their premium seats. At least that is the theory of
                                                                          the Hero Business, i.e., the Business of Sports.
                                                                               Unfortunately, in sports there is always a winner and a loser for
                                                                          every team against team event. It’s a zero sum game. Someone wins
                                                                          and someone loses every time (with the exception of a few ties).
                                                                          Realizing this is important, because it means that it is very, very rare

25            S E A T                                                                                                  S E A T                25
             At what point does a lower occupancy rate suggest a
                                               change in how the teams do business?
                                               70%? 50%?


indeed that one team can always win or even win significantly above       A Discussion, a Future and a Pro-Active Solution:
the 50/50 ratio, especially in pro sports with salary caps (all but       ALSD Premium Seat Summit
baseball).                                                                The ALSD is going to conduct a Premium Seat Summit at its An-
     In other words, if teams base their pricing on the fact that they    nual Conference this June 27-30 to talk about these issues. The
will be a winning team, in most instances they will be right...about      premium markets are in a correction stage. They need to re-invent
half the time. Teams might want to adjust their pricing models for        themselves or else, the downward spiral previously discussed might
the time when teams are not winning, which is also, in most cases,        occur.
about half the time. And the corporations, who buy suites on an an-             This will be a kind of suite holder focus group, but one which
nual basis and for multi-year deals, cannot expect the suite they lease   is far more interactive and greatly expanded. We will bring in F&B
will be for a team who wins much more than half the time.                 and Ticketing Executives; Team Presidents; Big Corporate Buyers
     The emotional buy goes both ways…about half the time. Bas-           and have them interact with many of the Team Executives.
ing a business model on winning, for most teams this side of the                The result? We don’t know. At best, it’s the start of a dialogue.
wealthy baseball teams, is probably not a good idea.                      And a dialogue that is much needed and long overdue. #

How Business on the Premium Levels                                        Should your team reevaluate how it does business with F&B companies
is Changing                                                               on the premium levels?
I am not going to argue here and go into the details of creating an
actual mathematical formula or algorithm that will locate the exact       Write to Bill at bill@alsd.com
price point that maximizes revenue. The purpose of this article is
for buyers, sellers and middlemen (such as F&B) to at least begin to
look at how business in conducted.
     And I’m here to suggest business is changing on the premium
levels in the following manner:                                              Are you interested in learning more about F&B/team rela-
     1) Pro Formas: Teams are building half the number of suites,              tions? Plan to attend the combined session at the ALSD
     but charging four times as much on the theory that big cor-              Conference, “Bridging the Gap: The Partnership Between
     porations have deep pockets and will pay any price. Not true
     anymore.                                                                           F&B Companies and Teams/Venues.”
     2) F&B companies, to get business, pay enormous rights fees.
     To pay for the business, they are charging very high fees to the
     corporations. This is a scenario that is no longer working like
     it did in the past, and it probably will have to change. One         A per cap in which no one shows up is pretty low
     price, all-inclusive F&B is an option that should be seriously       unless Casper the Friendly Ghost likes beer and
     looked at.
     3) Teams are fine when occupancy rates are in the 90% range.
                                                                          has a credit card.
     They are not anymore in most venues. At what point does
     a lower occupancy rate suggest a change in how the teams
     do business? 70%? 50%? There is probably a number here in
     which it will be smart for teams to make sure these premium
     seats are filled. What number?
     4) Corporations: The large buyers own too many suites and
     are going to start offloading them (and already are). The age
     of the per-event suite is ahead of us. The 8,000 companies
     that own the 12,000 suites will start to be expanded to the
     hundreds of thousands of customers needed to fill up the per-
     event inventory. But to do so, teams will have to change the
     way they do business by hiring more people on the local level
     to market their suites or rely on outside, third-party vendor
     services. Probably a combination of both.



26           S E A T
20TH ANNUAL ALSD CONFERENCE AND TRADESHOW
                                             June 27 – 30, 2010
               We are less than two months from the ALSD Conference in the Big Apple.
Sessions are taking shape; many are set. All sessions include strong panelists and experienced presenters.
           Find the most fitting sessions that will help you meet your professional objectives.

                                                     Schedule of Events
  Please note: The schedule of events is simply a meeting and traveler planner, and the conference program will be updated continually.

           Sunday, June 27
           7:00 a.m. – 6:00 p.m.                      Conference Registration Open
           8:00 a.m. – 3:30 p.m.                      Exhibitor Set-Up
           2:00 p.m. – 3:00 p.m.                      Board of Directors Meeting
           3:00 p.m. – 3:30 p.m.                      New Attendee Welcome Meeting
           4:00 p.m.                                  Welcome Address:
                                                      Scott O’Neil, President, Madison Square Garden Sports
           4:00 p.m. – 6:30 p.m.                      Exhibit Hall Open; Schedule Monday Meetings; Cocktails in Hall
           7:00 p.m. – 10:00 p.m.                     Yankee Stadium Tour and Reception

           Monday, June 28
           7:00 a.m. – 6:00 p.m.                      Conference Registration Open
           8:00 a.m. – 9:00 a.m.                      Optional Exhibit Hall Appointment Hour
           All Day                                    Leagues to Visit Madison Square Garden Presentation Center
           9:00 a.m. – 12:00 p.m.                     League Meetings (continued after lunch)
           12:00 p.m. – 1:00 p.m.                     League Lunches or Lunch on Own
           1:00 p.m. – 4:00 p.m.                      League Meetings (continued)
           4:30 p.m. – 6:00 p.m.                      Exhibit Hall Open; Cocktails in Hall
           6:00 p.m.                                  Keynote Speaker
           6:00 p.m. – 9:00 p.m.                      Exhibit Hall Open; Dinner and Reception in Exhibit Hall

           Tuesday, June 29
           8:00 a.m. – 3:00 p.m.                      Conference Registration Open
           8:00 a.m. – 11:00 a.m.                     Disney Institute Seminar “Disney’s Approach to Quality Service”
           9:30 a.m. – 11:00 a.m.                     Other Sessions
           11:00 a.m. – 1:00 p.m.                     Exhibit Hall Open; Lunch in Hall
           1:00 p.m. – 4:30 p.m.                      Sessions; Premium Seat Summit
           6:00 p.m.                                  Welcome Address:
                                                      Mark Lamping, President and CEO, New Meadowlands Stadium Company, LLC
           6:00 p.m. – 9:00 p.m.                      New Meadowlands Stadium Tour and Reception

           Wednesday, June 30
           8:30 a.m.                                  Keynote Speaker
           9:00 a.m. – 12:00 p.m.                     Sessions
           1:00 p.m. – 4:45 p.m.                      Sessions
           6:30 p.m. – 8:30p.m.                       Red Bull Arena Tour




                                                                                                                  S E A T                 27
ALSD Conference and Tradeshow: Detailed Schedule of Events and Sessions
              Please note: The agenda detailed below is subject to change. A comprehensive Conference Program will be distributed at
                              the ALSD Conference with rooming assignments and final sessions and presentations.


Sunday, June 27, 2010                                                      ed around the shared mission of becoming better leaders through
                                                                           education and idea exchange. O’Neil dedicates his time to working
7:00 a.m. – 6:00 p.m.                                                      with a number of non-profit organizations, including serving as a
Conference Registration Open                                               Board Member for the Garden of Dreams Foundation, the non-
                                                                           profit charity that works with all areas of Madison Square Garden
8:00 a.m. – 3:30 p.m.                                                      to “make dreams come true for kids in crisis.” In addition, he is on
Exhibitor Set-Up                                                           the Advisory Board for the Each One Counts Foundation and a
2:00 p.m. – 3:00 p.m.                                                      Board Member for the TRU Foundation.
Board of Directors Meeting                                                      He holds a degree in Marketing from Villanova University and
3:00 p.m. – 3:30 p.m.                                                      M.B.A. from the Harvard Business School. O’Neil resides in New
New Attendee Welcome Meeting                                               Jersey with his wife and three daughters.
                 Led by: Jennifer Ark, Director of Premium Sales           4:00 p.m. – 6:30 p.m.
                 & Guest Services, Green Bay Packers                       Exhibit Hall Open; Schedule Monday Meetings;
                                                                           Cocktails in Hall

                                                                           6:30 p.m.
                                                                           Buses Depart for Yankee Stadium
   Jennifer Ark                                                            7:00 p.m. – 10:00 p.m.
                                                                           Tour and Reception at Yankee Stadium
                                                                                 Sponsored by: Legends Hospitality; New York Yankees; Southern
4:00 p.m.                                                                        Wine & Spirits; Corona
Welcome Address:
SCOTT O’NEIL
PRESIDENT
MADISON SQUARE GARDEN SPORTS
                               Scott O’Neil was named President,
                               Madison Square Garden Sports in
                               July 2008. In this role, he oversees all
                               aspects of business operations for the
                                                                           Monday, June 28, 2010
                               three professional sports teams, the New    7:00 a.m. – 6:00 p.m.
                               York Knicks, Rangers and Liberty, as        Conference Registration Open
                               well as the Sports Properties area, which   8:00 a.m. – 9:00 a.m.
                               includes college basketball, boxing, ten-   Optional Exhibit Hall Appointment Hour
                               nis and all other sports events. He also
                                                                           9:00 a.m. – 12:00 p.m.; 1:00 p.m. – 4:00 p.m.
                               manages marketing partnerships and
                                                                           League Meetings
                               suite sales for the soon to be renovated
                                                                                 NHL, NBA, MLB, NFL, F&B, Minor Leagues/Racing,
                               Garden.
                                                                                 Soccer, College, IT
         Scott O’Neil               Since joining Madison Square Gar-
                              den, O’Neil has attracted premier talent     10:15 a.m. – 11:15 a.m.
                              from around the sports world to lead the     Tour Madison Square Garden Presentation Center
business in establishing an innovative, passionate and results-orient-     Leagues: College, Minor Leagues, Racing, Soccer
ed culture. He has directed a refocused commitment to providing            12:00 p.m. – 1:00 p.m.
first class service to fans, subscribers and marketing partners, result-   Sponsored Lunches; Specific Leagues TBA
ing in growth across all areas of the division.
      O’Neil comes to Madison Square Garden from the National                    NBA
Basketball Association, where, as Senior Vice President, he oversaw              NHL: Lunch compliments of Ovations Management
the league’s team marketing and business operations, advising NBA                Minor Leagues: Lunch sponsored by Hershey Entertainment
and WNBA teams on ticket sales and service, sponsorship develop-                 and Resorts
ment and marketing. He also managed the NBA’s Canadian busi-               1:00 p.m. – 2:00 p.m.
ness and the NBA Development League. Prior to joining the NBA,             Tour Madison Square Garden Presentation Center
he oversaw the launch of HoopsTV, and honed his sales and mar-             Leagues: NFL, MLB
keting expertise with the Philadelphia Eagles and New Jersey Nets.         3:00 p.m. – 4:00 p.m.
      O’Neil was named to Street and Smith’s Sports Business               Tour Madison Square Garden Presentation Center
Journal Forty Under 40 Hall of Fame and was named one of the               Leagues: NHL, F&B
nation’s top marketing executives under 40 by Advertising Age
in 2006. He is also a member of Young Presidents’ Organization             4:30 p.m. – 6:00 p.m.
(YPO), a not-for-profit, global network of chief executives connect-       Exhibit Hall Open; Cocktail Hour

28            S E A T
Monday, June 28, 2010, cont.
6:00 p.m.
Keynote Speaker:
To Be Announced
Sponsored by and Presented by: Motorola
6:00 p.m. – 9:00 p.m.
Exhibit Hall Open: Dinner Served, Reception
      Sponsored by: ALSD, Southern Wine & Spirits, Corona



                                                                                           Madison Square Garden Presentation Center


                                                          LEAgUE MEETiNgS




                     Tom Sheridan       Scott O’Connell    Jeff Morander    Beth Conroy           Cari Maas       Jennifer Ark

   MLB LEAGUE MEETING                                                       MINOR LEAGUE MEETING
   Moderator: Tom Sheridan, Director of Ticket Sales, Chicago               Moderator: Brian Bucciarelli, Director of Corporate Partner-
   White Sox                                                                ships/Premium Seating, Giant Center/Hershey Bears
   Moderator: Scott O’Connell, Director of Suite and Premium
   Seat Sales and Service, Minnesota Twins                                  COLLEGE LEAGUE MEETING
                                                                            Moderator: Janie Boles, Director of Donor Services and An-
   NHL LEAGUE MEETING                                                       nual Giving, Tigers Unlimited, Auburn University Athletics
   Moderator: Jeff Morander, Vice President, Ticketing Strategy,            Department
   National Hockey League                                                   Moderator: Patti Kimbrough, Director of Guest Services, Uni-
   Moderator: Beth Conroy, Manager, Integrated Marketing, Na-               versity of Arkansas Razorbacks
   tional Hockey League
                                                                            SOCCER LEAGUE MEETING
   NBA LEAGUE MEETING                                                       Tentative Moderator: Rich Searls, Director of Sales & Fan
   Moderator: Chris Granger, Senior Vice President, Team Market-            Services, New York Red Bulls
   ing & Business Operations, National Basketball Association
   Moderator: Caryn Dolich, Manager, Team Marketing & Busi-                 FOOD AND BEvERAGE LEAGUE MEETING
   ness Operations                                                          Tentative Moderator: Chris Bigelow, President, Bigelow
                                                                            Companies
   NFL LEAGUE MEETING
   Moderator: Cari Belanger-Maas, Senior Manager, Premium Seat              SEAT-IT DIvISION MEETING
   Services & Guest Relations, Arizona Cardinals Football Club              Moderator: Christine Stoffel, Business Development Director –
   Moderator: Jennifer Ark, Director of Premium Sales & Guest               Connected Sports/Entertainment, Insight Networking
   Services, Green Bay Packers




                    Brian Bucciarelli     Janie Boles     Patti Kimbrough    Rich Searls        Chris Bigelow   Christine Stoffel


                                                                                                                         S E A T            29
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010
SEAT Spring 2010

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SEAT Spring 2010

  • 1. S E AT leading the premium seat industry spring 2010 Published by the Association of Luxury Suite Directors The Transformation of a $10 Billion Marketplace: Buyers, Sellers and Suppliers Come Together PLUS • The 20th Anniversary Show • Big Changes To Come in F&B? • The Re-Invention of MSG • Salary Survey 2010
  • 2. Marvel Makes the Game! Contact us for details on our stadium programs and these Marvel exclusives! Installation service M Stainless steel or your choice of color Team Logo graphics applied with SonicImage™ Technology. Deluxe Half Keg Beer Dispenser Refrigerated Drawer 24” Refrigerator UL Listed suitable for outdoor use UL Listed suitable for outdoor use UL Listed suitable for outdoor use Refrigerator cabinet encased in high performance Exclusive Sentry System™ monitors critical Refrigerator cabinet encased in high stainless steel functions including over/under temperature, performance stainless steel power failure and door ajar conditions Holds half and quarter kegs and has casters for mobility Two removable tempered glass shelves Touch controls and electronic display are Complete with mug rail, built-in drain, draft tower, discreetly located Three door shelves hoses, CO2 tank and regulator, drip tray and interior Refrigerator cabinet encased in high Automatic interior light floor shield performance stainless steel Optional heavy-duty 23-ounce vinyl cover Adjustable temperatures from frosty cold to 52° F for Increased capacity drawers vertically store dark lagers and ales 24” W x 34”H x 24 1/4”D 2-liter and wine bottles Full auto defrost Full extension drawer slides provide easy access Easy-to-roll casters add portability 24” W x 34”H x 24 1/4”D 24” W & 38”H with casters x 24 1/4”D T: 877-650-5775 For further details and other amazing products visit us at E A T S www.marvelrefrigeration.com www.marvelrefrigeration.com
  • 3. S E AT 3
  • 4.
  • 5. MOTOA4™ Mission Critical Portfolio THE INCIDENT NEEDS YOUR FOCUS. THE TECHNOLOGY SHOULDN’T In an emergency, multi-agency coordination isn’t a luxury — it is a necessity. And Motorola makes this necessity a reality. Our interoperable data and voice solutions empower response teams with real-time information to make better decisions. For example, our evacuee tracking application enables responders to better assist and track individuals throughout the evacuation process. When responders and command staff have the tools to prepare and respond to emergency situations, recovery operations are more effective, helping government and citizens get back to normal quicker. It’s no wonder our interoperable networks have been implemented more often than all other manufacturers combined. It’s just another way Motorola enables you to focus on your mission, not the technology. HELLOMOTO™ Learn more about Motorola solutions for your mission critical communication needs at motorola.com/secondnature MOTOROLA and the Stylized M Logo are registered in the U.S. Patent & Trademark Office. All other product or service names are the property of their respective owners. © Motorola, Inc. 2009. All rights reserved. 66
  • 6. A New Level of Enlightenment Carving board available in granite Introducing our new line of Carving Stations & Warming Lamps • Manufactured of solid stainless steel ...not chromed brass! • Available in satin or mirror polished finishes ...will not tarnish! • Solid positioning arm ...maintains adjustment without falling! www.springusa.com 1-800-535-8974 The Evolution of Intelligent Design
  • 7. SEAT CONTENTS SpriNg 2010 Published by the Association of Luxury Suite Directors DEpArTMENTS 8 NEW ALSD MEMBERS 10 EDitoR’S NotE Why the current emphasis on sustainability (environmental and economic) is working for the venue development industry. PPL Park brings a European flair to the North American soccer community. See page 18. BY JARED FRANK 12 iNDUStRY AND ASSoCiAtioN NEWS I&A News includes the ALSD 2010 SALARY SURVEY. 16 MEMBER HiGHLiGHt Meet MiCHAEL SMitH of the Philadelphia Union and visit his new home, PPL Park, for the first time. 56 CoMiNG AttRACtioNS The first look at stories being researched for the Summer 2010 issue of SEAT. See how you can participate. COVEr STOrY 22 FooD AND BEVERAGE 2.0 Declining occupancy rates trickle down to declining per caps. Is it time for F&B companies and teams to work together for the sake of creating a new version of the hospitality market? BY BiLL DoRSEY FEATUrES 27 ALSD CoNFERENCE AND tRADESHoW PREViEW Some new premium models include lower price points and all-inclusive F&B, such as Club Cambria in Pittsburgh. See page 22. You only turn 20 once, so the ALSD’s 20 Anniversary Conference has a few th new tricks up its sleeve. Find out what’s new at this year’s show and discover the events, sessions, panelists and speakers that will leave their stamp on New York City. 38 HoW to MARKEt YoUR VENUE iN tHE 21St CENtURY To market its upcoming $500 million transformation and new premium seating options, Madison Square Garden has begun the most interactive marketing campaign the industry has ever seen. BY AMANDA VERHoFF 44 SEAt-it CoNFERENCE AND tRADESHoW PREViEW The one-of-a-kind conference for top technology executives in sports and entertainment returns for its fourth installment. Review this year’s conference agenda, and you will see what the buzz is about. 46 oWNiNG tHE CUStoMER EXPERiENCE The Orlando Magic are using customer service standards, that earn the highest customer satisfaction ratings in the industry, to move its fans into the new Amway Center. BY JARED FRANK About the Cover: Madison Square Garden suites are slotted for a half- billion dollar renovation, a reflection of the evolution of the premium New customer service standards are key to the Orlando Magic filling the seating industry. Join the ALSD in New York City for its annual conference seats in the new Amway Center. See page 46. to learn about the industry’s new way of doing business. S E A T 7
  • 8. New ALSD Members ASSOCiATiON OF LUxUrY SUiTE DirECTOrS Chairman of the Board Bill Dorsey Executive Director Amanda (Kuntz) Verhoff President Jennifer Ark, Green Bay Packers VP, Business Development Pat McCaffrey Shaunna Richardson Joe Carvalhido Collin Wallace Director, Sponsor and Partnership Development Dene Shiels Chicago White Sox Tiger Athletic Foundation (LSU) FanGo Software Systems Manager of Guest Relations & Director of Operations and VP of Development Director of Finance Dan Lindeman Diamond Suite Operations Services 1176 Appian Crossing Way Financial Account Manager Vickie Henke U.S. Cellular Field PO Box 711 Suite 124 Director of Information Technology Sean Kellner 333 W. 35th Street Baton Rouge, LA 70821 Lexington, KY 40517 Editor of SEAT, Website Director Jared Frank Chicago, IL 60616 P: 225-578-0246 P: 859-608-4521 National Sales Manager Scott Hinzman P: 312-674-5101 F: 225-578-0184 cwallace@thefango.com Design Carole Winters Art + Design srichardson@chisox.com jcarva2@lsu.edu Adam Rector Rob Boaz Michael Shea FanGo Software Systems ExECUTIVE COMMITTEE Chris Bigelow, Bigelow Companies Chicago White Sox DWA Uniforms, Inc. Manager and Vice President of Brian Bucciarelli, Hershey Entertainment & Resorts Manager of Premium Seating 802 Canonie, Suite B Communications Greg Hanrahan, United Center Sales and Services Porter, IN 46304 1176 Appian Crossing Way tom Kaucic, Southern Wine & Spirits U.S. Cellular Field P: 900-343-0003 Suite 124 Pat McCaffrey, ALSD 333 W. 35th Street F: 865-398-9872 Lexington, KY 40517 Jamie Norman, Dallas Stars Chicago, IL 60616 mshea@dwauniforms.com arector@thefango.com Kim Reckley, Detroit Red Wings & Olympia Entertainment P: 312-674-5166 Karen Sisco Linda Whitteaker-Hanson rboaz@chisox.com BOARD OF DIRECTORS DWA Uniforms, Inc. Innovative Marketing Consultants Pam Benoist, St. Louis Rams Brett Zalaski 802 Canonie, Suite B 4284 Shoreline Drive Janie Boles, Auburn University Washington Freedom Porter, IN 46304 Spring Park, MN 55384 Natalie Burbank, Utah Jazz / Salt Lake Bees Director, Ticket Sales P: 952-252-1254 trent Dutry, US Airways Center Howard Kaplan 18031 Central Park Circle linda@imcsuccess.com Chris Granger, National Basketball Association Marks of Distinctions Patti Kimbrough, University of Arkansas Germantown, MD 20841 4263 Commercial Way Adam tschida Gerald Kissel, Ball State University P: 240-449-1613 Glenview, IL 60025 Innovative Marketing Consultants Phil MacDougall, Sacramento Kings/ARCO Arena F: 301-515-3806 P: 847-299-8800 4284 Shoreline Drive Debbie Massa, ROI Consulting brett.zalaski@washingtonfreedom. howard@marksofdistinctions.com Spring Park, MN 55384 Mike ondrejko, Madison Square Garden com Richard Searls, New York Red Bulls todd Schneiderman Shane Erickson tom Sheridan, Chicago White Sox Jennifer Hesekiel Marks of Distinctions Innovative Marketing Consultants Michael Smith, Philadelphia Union Graphic Image 4263 Commercial Way 4284 Shoreline Drive Peter titlebaum, University of Dayton 305 Spagnoli Road Glenview, IL 60025 Spring Park, MN 55384 Brian Varnadoe, Houston Texans Melville, NY 11747 Jon Vingas, Centerplate P: 631-249-9600 David Schneiderman Jeff Lundquist Bob White, Calgary Flames jhesekiel@graphicimage.com Marks of Distinctions Innovative Marketing Consultants 4263 Commercial Way 4284 Shoreline Drive SEAT IT Board Christine Mosslin Glenview, IL 60025 Spring Park, MN 55384 Christine Stoffel, S5 Enterprises / SEAT Consortium Graphic Image Chris Wood, APS 305 Spagnoli Road thomas Patterson Matthew Bown Melville, NY 11747 Jacksonville Jaguars Orleans Arena ALSD 2010 Conference Committee Senior Sales Manager, Season & Director of Corporate Relations Richard Dobransky, DNC Sportservice tom Glazer Premium Seating 4500 W. Tropicana Chris Gallagher, New York Yankees Graphic Image Pat Jones, New York Mets One Stadium Place Las Vegas, NV 89113 305 Spagnoli Road Jon Muscalo, Legends Hospitality Jacksonville, FL 32202 P: 702-691-5107 Melville, NY 11747 Richard Searls, New York Red Bulls P: 904-633-6317 F: 702-284-7778 Rob Sullivan, New York Jets Jason Racette F: 904-633-6338 matthewbown@boydgaming.com Anne Wheat, New Meadowlands Stadium Company Portland Trail Blazers pattersont@nfl.jaguars.com Corporate Sales Manager SEAT IT Division Steering Committee theresa Coscia One Center Court, Suite 200 Christine Stoffel, Committee Chairman Jacksonville Jaguars Portland, OR 97227 Chris Wood, Committee Co-Chairman Sales & Service Executive, Suites P: 503-963-3989 Chris Dill, Portland Trail Blazers & Premium Seating Sasha Puric, Toronto Maple Leaf Sports & Entertainment jason.racette@trailblazers.com One Stadium Place Mike Morris, Major League Baseball Nate Brown Jacksonville, FL 32202 Lorraine Spadaro, TD Banknorth Garden Portland Trail Blazers P: 904-633-5275 Wayne Wichlacz, Green Bay Packers Premium Sales Manager cosciat@nfl.jaguars.com Casey Bookout, University of Oklahoma One Center Court, Suite 200 Jim Darrow, Illitch Holdings, Inc. tod Caflisch, New Orleans Hornets Portland, OR 97227 Brett Michalak, Tickets.com P: 503-963-3971 John Pollard, IdentityMine nate.brown@trailblazers.com John Gallant, IDG Enterprise Published by Venue Pub. Inc. Copyright 2010. (All rights reserved). SEAT is a registered trademark of the Association of Luxury Suite Directors. SEAT is published quarterly and is complimentary to all members of the Association of Luxury Suite Directors. 10017 McKelvey Road, Cincinnati, OH 45231 • 513 674 0555 • amanda@alsd.com 8 S E A T
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  • 10. Editor’s Note SuStaining the SportS Facility Marketplace the vernacular of today is slowly evolving to include words and phrases like cap and trade, carbon footprint and leeD. What comes even slower is the understanding of these words and phrases. and what comes even more slowly is the delivery of green messages that do not sound dictatorial or exclusive to just a few groups of people. By Jared Frank T he conversation surrounding green to the idea, but now because eco-design initiatives is one filled with common and building principles and procedures are sense and stewardship or rhetoric and more refined and less arcane to architects agendas depending on the perspective. and construction managers, upfront costs While campaigning for the merits of either are competitive with similar plans simply side of the debate is futile and frustrating, built to standard code. Again, if we factor we can champion the middle ground by in both the operational cost savings and embracing a simple buzzword that ap- additional money generated over the long peals to both sides - Sustainability. term, environmental responsibility and fi- One thing we can all agree on, espe- nancial returns juxtapose. cially in the current economic state, is that saving money is good. Obviously, we are Moving ForWarD still focused on generating new revenues, Leadership in Energy and Environmental but there is an increasing acceptance of Design (LEED) is not perfect. It is currently cost savings as a viable part of the mix. a blanket rating system that does not take Sustainability provides a unique variable into account regional environmental differ- which enables us to focus on both costs ences. But you have to start somewhere. and revenues at the same time. This flex- And many municipalities incentivize LEED ibility is very powerful for our community. construction with tax credits and exemp- So simply stated, sustainability is a vein to a healthier bottom line tions, which sweetens the deal for owners, so we all have a stake and necessary to preserve our financial models that depend great- in this ongoing movement. ly on the continued profits produced by our venues. Sustainable building concepts are still in their infancy, but certainly are crescendoing towards the status quo. Nationals Park, the caSe For SuStainaBility home of the Washington Nationals, became the first LEED Silver A little over 20 years ago, the era of new stadium construction ush- Certified professional sports stadium in 2008. Following suit, the ered in a new economic landscape, spurring urban development two newest buildings in the industry due to open shortly, Target as well as sports business revenues. Today, new venues, such Field and New Meadowlands Stadium, both have incorporated as the New Meadowlands Stadium, come with a $1.6 billion price green design elements. tag. Venues must be scalable to maximize return on investment The Minnesota Twins have taken things one step further by and must be sustainable in order to ensure profits well beyond 20 partnering with Pentair, a Minneapolis-based water solutions com- years. pany, and by establishing the first-ever eco-sponsorship in profes- Not all new builds are primarily financed through public funds sional sports. Pentair’s Rain Water Recycle System (RWRS) will any longer due to economic and/or political reasons. In those mar- reduce Target Field’s municipal water needs by 50% by catching kets where owners are footing a larger portion of the bill, making and reusing rain water. And saving water means saving money. their investment last is essential. And for those facilities still tap- While we should never view these savings as a means to mon- ping into public coffers, taxpayers will know their contribution has etize environmental ethics, saving, whether it be water or money, gone to an effort that nourishes the entire community and not only means sustaining future revenues for the sports facility market- sustains the sports facility, but the urban development surrounding place. # the facility. It is almost a sense of charity or source of civic pride What sustainable building or operational practices is your team in the least. currently employing? Clearly, this issue is not top of the mind just for the environ- Write to me at jared@alsd.com and follow me on Twitter mentally conscious anymore. We have all seen “Avatar” by now. @SEAT_Editor. It has taken time for technology and understanding to catch up 10 S E A T
  • 11. While your team is winning the game, Agilysys helps you win the crowd. Wants a beer but doesn’t want to miss the action. Use mobile POS to pre-order and bust the queue. Halftime starting in four minutes and stadium network has just crashed. Still serve three times as many customers off-line with easy-to-use POS. Pre-ordered four vegetarian plates for luxury suite. Automatically adjust catering inventory. Agilysys solutions provide you with total control of your retail and food & beverage operations—so you can simplify management and improve revenue stadium-wide. Provide faster, more accurate service in luxury suites and club sections with mobile POS devices. Speed up concession lines and increase sales volumes with easy-to-use POS terminals. Maintain accurate inventory of every concession, bar, restaurant, caterer and fan shop—in real time— during your events. And improve planning with in-depth analytics and superior reporting capabilities. It’s everything you need to simplify operations and boost your bottom line—only from Agilysys. Find out what Agilysys can do for you. Call 1-877-374-4783 or email hsgsales@agilysys.com | www.agilysys.com Agilysys solutions include:
  • 12. Industry and Association News plaStic BaSeBall capS are green? not the batting helmet albert pujols is wearing in the batter’s box, but the cap the beer man is sporting in Section 136. By Jared Frank D id you know you can wear a plastic bottle on your head? No prices. “The nice thing about this green product is the cost. It is really, you can. In fact, you can wear six bottles on your head near the same price, maybe four or five percent more at the very at the same time and still look cool. That is how many plastic most,” Patterson says. Even if there is a small increase in price, bottles it takes to produce one RPET baseball cap. RPET is thank- there are tax incentives that make up for those costs and then fully short for Recycled Polyethylene Terephthalete, the environ- some. “One of the things that is now being considered by the big mentally friendly molecular brother of polyester. players is taking advantage of the tax benefits of having employ- You do not have to be a chemist to understand the RPET ees wearing a green product,” Patterson continues. “There are tax process. It is actually very simple. It starts by taking plastic bottles incentives that are being offered for companies to go green. That and crushing them. The crushed bottles are then shredded into could be anything from changing their light bulbs to wearing a uni- tiny chips. Add a little heat and some pressure and voila, you have form that is green.” Some of the “big players” outside of sports and a polyester fiber that can be turned into caps, shirts, bags, even entertainment to fully embrace RPET include McDonald’s, Disney, jackets. Procter & Gamble and General Mills. Apparel products have been used in a couple different ways Another incentive for teams is the possibility of working with in the sports industry. The Atlanta Braves have done promotional sponsors. “There is an opportunity for sports teams to take their giveaways using 50,000 vendor of choice, whether it RPET caps made out of is a Pepsi product or a Coke 100% recycled plastic bot- product or Budweiser or Mill- tles. Consider again that six er or Coors, and co-brand plastic bottles are needed to an RPET product,” says make one cap and one bot- Patterson. While this is not a tle takes 450 years to break new idea, it is a new way to down in a landfill. Multiply sell the corporate partner on both those figures by 50,000 a giveaway. Sponsors, who caps, and 300,000 plastic are also trying to deliver a bottles are saved from land- green message and con- fills, and 22.5 million years nect that message with their of landfill decomposition are brand, can benefit greatly saved from one giveaway. from being associated with So the environmental ben- efits of RPET products are When you drink a bottle of water from now on, RPET apparel. RPET has gone through measurable. Other teams remember the next time you see it, every imaginable test to who have done giveaways check for color, washability, involving RPET products or you could be wearing it. crocking, twisting/turning, are currently involved in the abrasiveness and anything ordering process include the else that can be thought of Atlanta Falcons, Baltimore Ravens, Cleveland Indians, Los Ange- to ensure the fabrics do not harm people. So not only is it eco- les Angels, San Francisco Giants and New York Yankees. friendly, it is safe, versatile and reliable. “RPET keeps its color Besides promotional giveaways, some teams use RPET as amazingly well, and it can be dyed any custom color,” says Pat- the material for all stadium staff apparel. “The idea is to be able to terson. Additionally, fulfillment timelines are essentially the same wear a green product and also have that product perform,” says as cotton, polyester or blended products. The entire process of Bill Patterson, Vice President of Sales at HTT, an industry leader making to delivering a cap is 6-8 weeks. Shirts and jackets come in RPET products. “The apron the peanut vendor wears used to be with a 90 -100 day timeline. made out of polyester and cotton. Now it can be made out of 100% When you drink a bottle of water from now on, remember the RPET or a blend of RPET, and wear as well, if not better than the next time you see it, you could be wearing it. Plastic bottles turned last one. And it is eco-friendly.” Some stadium staffs currently out- into caps and shirts. What will they think of next? # fitted in RPET gear include the Atlanta Braves, San Diego Padres, Is your team using green products? Cincinnati Reds and Texas Rangers. Share them on our Association of Luxury Suite Directors The green benefits of minimizing landfill waste and conserv- Facebook page. ing oil, a chief ingredient in polyester, are not trade outs for higher 12 S E A T
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  • 14. Industry and Association News Salary Survey 2010 Despite the economy lagging, over one-third of those working in the premium seat industry saw their salaries increase over the past year. research by Colleen Gibson, Marketing assistant, alSD T he 2010 ALSD Salary Survey provides important information about the current premium seating industry working conditions Job Satisfaction and those operating in it. The categories that are covered in the survey are Demographics, Work Experience, Job Satisfac- tion, Economic Impact and Compensation. Demographics Gender age race/ethnicity Male: 50% Average: 37 White/Non-Hispanic: 90% Women: 50% Youngest: 24 African American: 6% Oldest: 61 Asian American: 3% Hispanic: 1% Marital Status Children education Economic Impact Married: 65% 1-2 children: 44% Bachelors Degree: 66% Single: 30% No children: 43% Masters Degree: 14% Divorced: 5% 3-4 children: 12% Some Graduate School: 7% Separated: 1% 5-6 children: 1% High School: 3% Associate Degree: 2% Work Experience years in Industry % of responses 0-3 22.1% 4-7 31.8% 8-15 21.2% 16-20+ 9.7% Are you curious to know how your total compensation package years in Current Position % of responses compares to the industry average? 0-1 11.5% 2-3 27.4% See Salary Survey on page 52 4-5 25.7% 6+ 35.4% For complete salary survey details and write-up, visit www.alsd.com. 14 S E A T
  • 15. NO MATTER THE SPORT, WE’RE IN YOUR LEAGUE Today’s premium seat holders demand more. They want to check fantasy scores, access stats in real time, and order concessions at the touch of a button. You can provide your guests with all this and more by teaming with Insight. Teams in every major sports league rely on us to deliver the game-changing technology solutions they need to streamline venue operations and enhance the fan experience. Let Insight get behind your team. Designed, deployed and managed by © 2008 Insight Direct USA, Inc. All rights reserved. Insight is a registered trademark of Insight Direct USA, Inc. 22 15 S E AS E A T T WWW.INSIGHT.COM � 800.INSIGHT
  • 16. ALSD Member Highlight a conversation with Michael Smith Manager of Suite and Premium Seating Sales, Philadelphia Union The man in charge of selling premium seating for soccer to a sports-crazy city for the first time recounts his path to the sports industry, shares why he jumped at the chance to work for an expansion franchise and invites the ALSD inside PPL Park. By ryan Mirabedini, Marketing assistant, alSD Q: You are becoming a seasoned opportunity to be a part of something new came up, I should defi- veteran in MLS circles having nitely take it. So it was definitely something I jumped on when the worked for D.C. United and now opportunity came. the Philadelphia Union. Have All of us here are learning the process. It’s two-fold. It’s an you worked outside of sports? education about soccer the sport. Then it’s explaining the team, And what has your path been to explaining what we’re about and what we’re looking to do. Obvi- where you are today? ously soccer is the world’s sport, but it’s not necessarily North A: D.C. United was the first loca- America’s sport. Getting them familiar with the sport in general tion I was involved with in sports. and then the team is our goal. We’re trying to break down walls I got my start in the finance back- of preconceived notions. That to me would be the hardest thing. ground. I worked for a financial It’s not a challenge marked by expansion, but by the challenge of servicing firm and then a mort- growing the sport. gage brokering firm. Obviously with the economy, that industry Q: Do you see the MLS taking that next step so it becomes the was in a bit of a tailspin. Since Big 5 instead of just the Big 4? the money was no longer there, I A: Absolutely. I see that happening, and I see it happening right Michael Smith at least wanted to do something now. Business in sport is key. That’s what we need to take it to I loved. So I went to Game Face the next level. It’s all about business and the revenue brought in (sport management school) in Oregon to help learn the craft. It by business. When you look at the NFL, a lot of the revenue is was a program that was a few weeks long, and then they set me brought in by businesses that spend money on the sponsorship up with D.C. United. Obviously I came in there with a sales back- side, the premium seating side. That’s one of the things Major ground, but I was definitely willing to throw everything out of the League Soccer has been lacking for a long, long time. If we’re window and learn how everything works in sports and go from going to be a successful league, that’s something you have to tap the bottom up. into. We’ve been around since ’96. Once those kids of ‘96 are Q:: So we spoke a little bit about your path to the Union. Would CEOs and Presidents, soccer will not be such a foreign thing, you say you have had any kind of a “eureka” moment where you and they will be willing to spend money on the product, or they’ll knew you had arrived on the sports business scene? be willing to have business during our games and treat their em- A: I don’t know if it was a “eureka” moment, but maybe when I ployees to our games as opposed to other sports. We need the first started as an inside sales rep, I knew what I wanted to do kids to get into positions of power, and it won’t be long until they and wanted to focus on. Mike Harloff (Director of Sales at D.C. are there. United) sent me on that path. Within the first 60 days or so, I was able to wake up and say I moved a couple of suites, and I knew Q: Moving on to PPL Park, what is the first thing you would that’s what I wanted to focus on. The rest was history. Once I saw say about the facility? What makes it unique? Sell the ALSD success, I decided to stay on that path. members. A: It’s a great facility. Just the other day Nick Sakiewicz, our CEO Q: Has your involvement with ALSD helped you with developing said, “Oh my goodness I think we may have built too small!” I and implementing procedures at the Union? think that’s one of the key selling points and a key to the success A: Oh, definitely. Some of the policies here were adopted follow- of the team- to make sure the stadium is intimate. You want a ing what is done by others in ALSD. One of the main things it’s stadium not to be cavernous like the one I came from before. done for me personally is created relationships with other people who I probably wouldn’t have had relationships with before, and we’ve been able to hold conversations about ideas and practices. turn the page to keep reading Michael’s highlight of ppl park.  Q: Obviously you are an expansion franchise in MLS. What are some of the positive and negative aspects of that process? A: Harloff always spoke of being a part of the league and the team. He would tell me about when the league first started back in ‘96, it was cool to be a part of something brand new and if an 16 S E A T
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  • 18. ALSD Member Venue Highlight introducing ppl park: the new home of the philadelphia union With a scenic setting on the banks of the Delaware River amid a European flair and atmosphere, PPL Park is the new quintessential North American soccer venue. By ryan Mirabedini with Michael Smith O n the west side of London, there is a quaint soccer stadium love. Clearly, fans want to be a part of a special experience and known as Craven Cottage. Opened in 1896 as the profes- help contribute to its outcome. As Smith sees it, there is no need sional grounds for Fulham Football Club, it is conveniently to change a century’s worth of success. “If you are on the field as placed on the banks of the River Thames and still holds English an opposing team, you will hear our fans loud and clear. It is defi- Premier League (EPL) games to this day. With seats inches from nitely going to be a tough place to play.” the field and rain cover for most of the 25,700 supporters, it is a Such a fantastic ambiance is enabled by the fact that this classic example of viewing soccer in its purest form. stadium is soccer specific, which is now the standard in MLS. Now transport yourself over 3,500 miles across the Atlantic Many feel that new facilities geared directly towards MLS teams to Philadelphia, where the MLS expansion Philadelphia Union will help the league grow financially and competitively due to their is having a venue renaissance of sorts. The club’s new facility, ability to generate greater revenues, avoid scheduling conflicts known as PPL Park, is located right along the Delaware River and create brand loyalty. “It is cool to have the uniqueness that and has several other similarities to the aforementioned Craven I think MLS and the new stadiums are providing, such as up in Cottage plus the benefit of some cutting-edge seating options. New York (Red Bull Arena) and Rio Tinto (Stadium) out in Utah,” “It seats 18,500, which I think is a great number,” says Michael says Smith. “We have uniqueness in our stadium, and each one Smith, Manager of Suite and Premium Seating Sales. “The seats of them has something to offer.” Rio Tinto Stadium, which was are steep, and [the stadium] is basically one level so no matter opened in 2008, and Red Bull Arena, which opened just last where you are in the stadium, you will have a great seat.” month, provides PPL Park with some fantastic brothers in arms Likeness to EPL stadiums for PPL Park is not limited to ca- so to speak. pacity alone. Watch any European match and you will be sure to As an expansion franchise, the Union is attempting to cre- hear the home supporters singing with pride about the club they ate a positive buzz in the City of Brotherly Love. By indications club settings have a riverfront view of the Delaware just beyond the façade of ppl park. 18 S E A T
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  • 20. left: inside the suites at ppl park Below: a view from one of the 30 suites in ppl park of suite and ticket sales, they are doing just that. According to Smith, all signs point to soon reaching a full season sell-out at PPL Park. “We are at over 10,000 season tickets sold, and they are full season tickets, so we are well on our way to meet- ing a capacity number,” comments Smith. These numbers are impressive considering the struggling economy and the satu- rated Philadelphia marketplace. In addition to the beautiful sightlines for regular seating, suite just yet due to the economy, but they may want a sampling.” the premium options at PPL Park are truly fantastic, starting with For those Union fans that still want to be close to the action, the 30 corporate suites priced at $50,000 per year that sit just but may not desire an area with a table, there is an option for 27 rows from the playing field. “I would have to say 30 is a good them as well- 150 field level seats priced at $2,000 each. “Field number to provide maximum revenue. I can also tell you that the level seats obviously are a less expensive option that is not just 30 is expandable if needed,” Smith says. “We have room to grow married to a business or company,” says Smith. “Anybody that on all levels including the premium areas.” wants a field level seat can obviously have one if they are willing As an alternative to the suite option, the Union also offer to meet that price range.” ten field side tables with seating for four priced at approximately The Union additionally offers “super club” seats with VIP club $10,000 per year. According to Smith, this is one of their most access priced at $7,500 each. There are 28 of these seats with attractive items. “Our biggest success is with the field side table. 14 behind each bench. “(Super club seats) are for businesses Some of the mid-level companies here may not be able to do a that pride themselves on taking care of their employees. Some of the items in the Super Club include a trip to an away game, lodg- ing and access to the stadium. Food and beverage is also pro- PPL Park at a Glance vided for these seats. So when you want to reward employees, we do have some good programs,” says Smith. As the quality of soccer continues to grow in Major League Soccer, so does the clientele base and general fan fare. Some capacity: 18,500 (soccer) major local companies have noticed the great opportunity in 26,000 (concerts) Philadelphia, such as PPL Energy, who signed onto the naming rights of the stadium. The timing is perfect for PPL Energy with number of Suites: 30 energy being regulated at the beginning of next year, and for the Union, who share many of the same ideas with its new partner. club info: 11,000 SF full-service “They have a great green initiative, and one of the cool things club restaurant about the stadium is that it will be run completely green,” notes Smith. “It was almost like a eureka moment when we saw some- thing line up with exactly what we were trying to do. For us it was architect: rossetti all about timing and matching up with great partners.” As new generations of soccer players enter the business cost: approximately $120M world, we continue to speculate when the MLS will take the next step. But by comparing PPL Park to Fulham’s Craven Cottage, owner: Delaware county, pa it is comfortable to say that the MLS is taking it now. The Union have successfully gone back to the roots of attending soccer operator: city of chester matches but kept up with growing premium demands. Knowing this, we cannot blame Michael when he proclaims, “I think it is community: ppl park is the center going to be a tremendous place to play, and lord knows I cannot piece of a $500M mixed-use wait.” # development project. Highlight your venue by posting photos on the wall of the Association of Luxury Suite Directors’ Facebook page. 20 S E A T
  • 21. Innovative Elegance f o r [ l i n e n l e s s ] e v e n t s. Integrate flexible service options with the industry’s best design, quality, and durability. Southern Aluminum linenless banquet tables are made with 100% recyclable aluminum and are backed with a Lifetime Warranty. Southern Aluminum is your sustainable table and staging design solution. See us at the ALSD Tradeshow, June 27-30! made in the USA 1-800-221-0408 [cocktail tables] [serpentine tables] [folding base tables] [folding tables] www.southernaluminum.com Aluminum is a reusable resource.
  • 22. Food and Beverage 2.0  Roots and Wings  With declining occupancy rates and lower per caps, there is a feeling that “something has to give” in a business looking for cost certainty in uncertain economic times. It appears that Big F&B may be willing to change how it operates. But will the teams go along? By Bill Dorsey, Chairman of the Board, Association of Luxury Suite Directors I s food and beverage on the premium levels an art or a business? Food is one of those rare things that people need every day that Have rights fees gotten so high that everything has become too can’t be manufactured in Japan or China, even if people love Su- much about maximizing revenue and not enough about quality shi and Moo Goo Guy Pan. But food is “Made in America,” and in the age of the $50 six pack? Can Big F&B win a contract anymore that comes with a high price. F&B companies love the big spend- on just the quality of the food served? Or has food and beverage ers. They love to please people, and a good chef works with food on premium levels become commoditized by the customers, i.e., do like Michelangelo works with paint. There is the pride in “exceeding they only order enough food and beverage not to be embarrassed? Is expectations” and if given a chance, F&B companies will bend over everything about increasing per caps? Or squeezing out value with backwards on top of their carving stations to produce the kind of every food order? Is F&B in suites passe anymore…nothing really experience that keep the customers coming back. That’s how many special about the service? What are the new trends in F&B? Why of the F&B guys got started…they love food the way so many of the are the margins getting lower? Or is this what the F&B companies people in the suite business love sports. The top chefs receive awards merely claim and have done so for a long time? What can F&B com- the way directors win Oscars. That’s the way some of the more suc- panies do about propping up profits? cessful caterers cut their teeth in the business…by providing quality All good questions. Maybe not so many answers for the state the owners of the teams demanded. Time was. of F&B in 2010. This is a roots and wings business if ever there was The business, when done right, can rise far above the madding one: as bottom line and hard-nosed as any you will want to find, but crowd. at once, one that aspires to soar and to serve and be proud of great When it becomes bottom line, corporate F&B on hospitality cuisine. levels becomes well…not an art, but a science. F&B for the big com- On the premium levels, the big F&B companies – and there panies competing for big bids becomes “all about the math.” How are about a half-dozen left – hire great chefs and can provide almost much investment should be made? What is the market potential? anything you ask for…at a price. A steep price. A good meal for four Does the company have other accounts in the vicinity so it can get with a good bottle of wine or two can cost about as much as a flat an economy of scale? Is it tied to the concession contract? How long screen TV. So, you can go out and have a great meal or order in and is the contract? Does the team owner require the F&B company to watch your new TV. build out its own space? What kind of edge does one company have over the other? Does all the owner care about is how much money he or she can make on the deal? More good questions. Everything inevi- tably is factored into the bottom line equa- tions: Cost of Goods Sold (CGS); New Products; Increase in Revenue Opportuni- ties, etc. Yes, it’s a business. And the business is tied not just to the concessionaire, but also the caterer on the premium levels. It’s important for Big F&B to understand the premium space. Such as? How many suites and club seats? What sport? What are the estimated per caps? How many games are played and in what venues? Can the F&B company rely on volunteers, or are there so many events that a large daily staff is needed? What are the liabilities these days for serving minors? Club Cambria at PNC Park 22 S E A T
  • 23. The new Club Cambria at PNC Park in Pittsburgh is an example of a new premium seating option with all-inclusive pricing. The Occupancy Question There is a new factor in 2010 that has reared its ugly head that is truly changing the business. And perhaps in 2010, this factor above all is changing the game. The dirty little secret is not so secret anymore: It’s called Occupancy. Or some call it Utilization. Same thing. There is an occupancy problem on the premium levels that is creating havoc What the Down Cycle Might Lead To: on the business right now. There are no customers to eat the food 1) F&B companies pay too much for rights fees to get the that is available. work and keep their large labor pools occupied. Where rights fees were calculated and created for contracts that 2) The economy falters. are sometimes several years old, most of the “math” was created with 3) Corporations, which are laying off people, cut way back higher occupancy levels in mind. That’s because the occupancy rates on F&B and hospitality expenditures, not just because they in the four major sports were between 10% and 20% higher than can’t afford it any longer, but because it is politically correct they are now. to do so. No more. No-shows in club seat areas are sometimes 20%. Per caps have dropped, and a per cap in which no one shows up is pretty 4) F&B companies, not making the money on per caps and low unless Casper the Friendly Ghost likes beer and has a credit card. losing revenue on no-shows, try to make up for the differ- So the math does not work anymore in many places. ence by charging more for less or by cutting quality, going to It also does not work for many F&B companies in suites, where smaller portions, etc. utilization curves have also dropped. When some of the big corpora- 5) Corporations, the buyers, recognize they are not getting tions are only using their suites in some cases 60% of the time, it what they had been accustomed to paying for. They start ques- can translate to serious lost revenue. One large customer with mul- tioning things like the restocking fees, the nightly tipping, the tiple suites has claimed that they are using suites only 55% of the general loss of quality. They begin to complain to their teams. time, and that it saves them millions of dollars in F&B costs. When They order less food, or they no longer show up for the game companies don’t use suites, because the F&B cost cannot justify the so they are not billed. usage, then the industry has a problem to solve. 6) Teams have unhappy customers. Renewals decline. Teams In the four major leagues, with caps ranging from $40 for MLB receive less revenue, because they are no longer providing the to $75 on average for the NFL (with $50 to $60 caps for NBA and experience that keeps their customers happy. NHL), lost F&B revenue costs, for any given suite that is unoc- 7) Teams receive less revenue in renewals, in part because cupied, around $650 for MLB and $1250 for the NFL. The cost of F&B companies can’t provide the kind of corporate hospital- F&B in the minor leagues and colleges, as a percentage of the cost of ity expected. the suite in terms of revenue, is even higher than those figures. This is because the cost of beer can still stay high in lower priced boxes. 8) Eventually, teams will receive lower concession rights fees, So F&B is not just an issue for the four major sports. because the premium seat asset is no longer as valuable to the It has been calculated by the ALSD that a 10% decline in oc- team itself. cupancy for all 30,000 suites in all four major sports leagues plus all other sports including MLS, colleges, racing venues, minor leagues, In other words, in some way, the F&B industry is in the midst of a etc. costs the F&B industry more than $100 million dollars (See declining spiral. Unless they change the way they do business. chart on Total Lost Revenue on page 24). That’s a lot of hot dogs. In an individual sport such as baseball, which has a lot of games, the math is also ominous (See chart on MLB Lost Revenue on page 24). Which gets quickly to the next point- something has to give. To make up for the lost revenue, F&B companies have had to raise prices to levels that have corporations, who buy the food, fuming. The result: A kind of self-fulfilling down cycle. S E A T 23
  • 24. TOTAL F&B LOST REVENUE AS A RESULT OF UNSOLD SUITES & NO-SHOWS Unsold Lost No-Show Lost Total NFL $4,044,384 $817,864 $4,862,248 There is meaningful lost revenue for F&B NBA $15,698,183 $11,496,610 $27,194,793 companies as a result of unsold suites and NHL $13,881,780 $9,485,883 $23,367,663 no-shows. When you include additional events MLB $25,587,900 $20,470,320 $46,058,220 and sports, this number grows even larger. $59,212,247 $42,270,677 $101,482,924 MLB Regular Season Length Teams Home Games Total Games 30 81 2430 Team Inventory: Average # of Unsold Suites/Team/Game* Direct Suites/Venue Sold (%) Sold (#) Unsold/Game Unsold/Season Avg. Price Suite 78 80% 62 16 38,880 $2,700 Revenue *Source: Suite Model v01 (BR); ALSD Lost Revenue as a Result of Unsold Suites Unsold Lost $104,976,000 Value of F&B Per Caps/Suite *No-Shows Per Cap Range $/Person Avg. # of People Value/Suite No-Show % $40-$50 $45 15 $675 20% F&B Suite *Source: The Bigelow Companies; ALSD Revenue Total F&B Lost Revenue as a Result of Unsold Suites & No-Shows Unsold Lost No-Show Lost Total $25,587,900 $20,470,320 $46,058,220 Changing the Paradigm years to not make this an issue. As long as the teams did not see a de- That cycle appears to be what is beginning to happen in this roots cline in what customers were willing to pay (as evidenced by high re- and wings business. Interviews with multiple high-level executives in newal percentages), then there was no need for this kind of thinking. the F&B business indicate they are willing to change the way they Now though, that appears to be changing. Some teams are be- do business. ginning to look at this as an option in the name of keeping their One popular method that is finally gaining momentum is in- customers happy and their renewal percentages higher. One price cluding the cost of F&B in the price of the suite. On nightly rentals, options have shown real promise in new charter clubs. this practice is fairly common, especially in venues such as the home Greg Hanrahan at the United Center in Chicago tells us that of the Utah Jazz, EnergySolutions Arena, a building that is inde- the members of the Harris Club love the all-inclusive pricing. We’ve pendently run. Big F&B has wanted to do this for years and years, heard the same thing at various other member clubs, such as Club because it creates cost certainty, but the teams have resisted to date Cambria, which started at the Target Center in Minneapolis and has because a la carte pricing brings in higher prices (F&B companies moved on to various other venues in the U.S. and Canada. have known about the secrets of individually pricing items for years, Chris Bigelow, President of Bigelow Companies, Inc. in Kansas and that’s why food can cost so much at a nice restaurant). Nightly City, believes the reason these clubs with all-inclusive pricing work is rental companies don’t understand how F&B is ordered in some cas- because they cater to smaller groups – only two to four people – and es and merely order “packages.” This may start to happen more and these groups tend to be small businesses or professionals such as law more on a leased basis, according to several F&B companies who are firms with tickets. Occupancy is higher, and the buyer does not like looking at ways to improve the bottom line. being billed nightly. Occupancy rates for teams were high enough until the past two Filling up a 16-person suite is not so easy. Corporations might 24 S E A T
  • 25. It has been calculated by the ALSD that a 10% decline in occupancy costs the F&B industry more than $100 million dollars. be hesitant to have an F&B charge included if they do not use the What an Increasing Business Model May box. Again though, this might change. Lead To: The feeling in talking with food and beverage executives is that 1) Lower the cost of F&B, and include it in the price of the they would be willing to charge less for food with a subsequent low- leased suite. ering of the rights fees. Big F&B would have cost certainty, and the suite holders would no longer be asked to pay on a nightly basis for 2) Offset the lower revenue F&B companies make with lower the cost of F&B. rights fees. But what about the teams? Why would owners want to risk rais- 3) F&B companies have cost certainty because they no longer ing the suite’s base price and except lower rights fees? To date, they have to factor in occupancy and no-show issues. have been unwilling to do so, despite pleas from nearly all the Big 4) Corporations will also have a cost certainty and will no F&B companies. longer have the incentive not to use their boxes, because they But there comes a point in time when that might change. Again, will be charged for the F&B. Utilization will go up, and cor- it’s all about occupancy and/or utilization. If renewals drop to a cer- porations will have one bill to pay and one check to write each tain level, in part because of high F&B prices and lease prices, which year. have not dropped substantially despite a poor economy, is there not 5) Teams will initally “eat” some of the costs in lower F&B a point in time when filling the boxes is more important than retain- rights fees (which will eventually go lower anyway when the ing higher F&B rights fees? next contract comes up). But like the Laffer Curve, teams will It appears to be getting to that point in 2010. have happier customers, who will renew their suites at a higher renewal percentage. The Laffer Curve: Maybe It’s Time for Team 6) One price options become the standard in the industry: very similar to the way it is in Europe, where the price of cor- Owners to Pay Attention porate hospitality is included in the price of the suite. In the 1980s, Arthur Laffer, a professor and advisor to Ronald Rea- gan, made the argument that lowering taxes would actually increase revenues to the Federal Government. It was in a sense a counter-in- tuitive argument, but one that ultimately proved to be true. Letting Inevitable Resistance people keep their money resulted in higher employment, more rev- There will be inevitable resistance for the above scenario for some enue to the government and more money spent on consumer-related poor reasons and some compelling reasons. goods and services. This allowed private companies, who had more Here are some of the arguments against this scenario: money and more customers, to hire more people, who paid more 1) Teams will be resistant to anything that initially lowers taxes and had more money to spend in the economy. This resulted their revenues. After all, why should they take the risk? in the longest post-war economic expansion this country has ever 2) Corporations won’t like paying for a product that they seen- something around eight years. don’t always use (there still will be a cost for F&B, but it Maybe something like the Laffer Curve would work on the pre- won’t be nearly as high as it once was). mium seat levels. 3) Anything new in the slow-adopting business that is the sports world will probably not receive immediate traction. Are you interested in interacting with buyers, sellers and Is There a Metric That Can Be Developed? suppliers all at the same time to understand how business Is there a metric that can be developed to demonstrate what will on the premium levels is changing? Plan to attend the first- bring in the maximum revenue to the teams, the corporations and the F&B companies? Probably not, because sports is bought and ever Premium Seat Summit at the ALSD Conference. sold not so much as a commodity, but as an emotional purchase. When teams are doing well, people will apparently still pay high prices to maintain their premium seats. At least that is the theory of the Hero Business, i.e., the Business of Sports. Unfortunately, in sports there is always a winner and a loser for every team against team event. It’s a zero sum game. Someone wins and someone loses every time (with the exception of a few ties). Realizing this is important, because it means that it is very, very rare 25 S E A T S E A T 25
  • 26. At what point does a lower occupancy rate suggest a change in how the teams do business? 70%? 50%? indeed that one team can always win or even win significantly above A Discussion, a Future and a Pro-Active Solution: the 50/50 ratio, especially in pro sports with salary caps (all but ALSD Premium Seat Summit baseball). The ALSD is going to conduct a Premium Seat Summit at its An- In other words, if teams base their pricing on the fact that they nual Conference this June 27-30 to talk about these issues. The will be a winning team, in most instances they will be right...about premium markets are in a correction stage. They need to re-invent half the time. Teams might want to adjust their pricing models for themselves or else, the downward spiral previously discussed might the time when teams are not winning, which is also, in most cases, occur. about half the time. And the corporations, who buy suites on an an- This will be a kind of suite holder focus group, but one which nual basis and for multi-year deals, cannot expect the suite they lease is far more interactive and greatly expanded. We will bring in F&B will be for a team who wins much more than half the time. and Ticketing Executives; Team Presidents; Big Corporate Buyers The emotional buy goes both ways…about half the time. Bas- and have them interact with many of the Team Executives. ing a business model on winning, for most teams this side of the The result? We don’t know. At best, it’s the start of a dialogue. wealthy baseball teams, is probably not a good idea. And a dialogue that is much needed and long overdue. # How Business on the Premium Levels Should your team reevaluate how it does business with F&B companies is Changing on the premium levels? I am not going to argue here and go into the details of creating an actual mathematical formula or algorithm that will locate the exact Write to Bill at bill@alsd.com price point that maximizes revenue. The purpose of this article is for buyers, sellers and middlemen (such as F&B) to at least begin to look at how business in conducted. And I’m here to suggest business is changing on the premium levels in the following manner: Are you interested in learning more about F&B/team rela- 1) Pro Formas: Teams are building half the number of suites, tions? Plan to attend the combined session at the ALSD but charging four times as much on the theory that big cor- Conference, “Bridging the Gap: The Partnership Between porations have deep pockets and will pay any price. Not true anymore. F&B Companies and Teams/Venues.” 2) F&B companies, to get business, pay enormous rights fees. To pay for the business, they are charging very high fees to the corporations. This is a scenario that is no longer working like it did in the past, and it probably will have to change. One A per cap in which no one shows up is pretty low price, all-inclusive F&B is an option that should be seriously unless Casper the Friendly Ghost likes beer and looked at. 3) Teams are fine when occupancy rates are in the 90% range. has a credit card. They are not anymore in most venues. At what point does a lower occupancy rate suggest a change in how the teams do business? 70%? 50%? There is probably a number here in which it will be smart for teams to make sure these premium seats are filled. What number? 4) Corporations: The large buyers own too many suites and are going to start offloading them (and already are). The age of the per-event suite is ahead of us. The 8,000 companies that own the 12,000 suites will start to be expanded to the hundreds of thousands of customers needed to fill up the per- event inventory. But to do so, teams will have to change the way they do business by hiring more people on the local level to market their suites or rely on outside, third-party vendor services. Probably a combination of both. 26 S E A T
  • 27. 20TH ANNUAL ALSD CONFERENCE AND TRADESHOW June 27 – 30, 2010 We are less than two months from the ALSD Conference in the Big Apple. Sessions are taking shape; many are set. All sessions include strong panelists and experienced presenters. Find the most fitting sessions that will help you meet your professional objectives. Schedule of Events Please note: The schedule of events is simply a meeting and traveler planner, and the conference program will be updated continually. Sunday, June 27 7:00 a.m. – 6:00 p.m. Conference Registration Open 8:00 a.m. – 3:30 p.m. Exhibitor Set-Up 2:00 p.m. – 3:00 p.m. Board of Directors Meeting 3:00 p.m. – 3:30 p.m. New Attendee Welcome Meeting 4:00 p.m. Welcome Address: Scott O’Neil, President, Madison Square Garden Sports 4:00 p.m. – 6:30 p.m. Exhibit Hall Open; Schedule Monday Meetings; Cocktails in Hall 7:00 p.m. – 10:00 p.m. Yankee Stadium Tour and Reception Monday, June 28 7:00 a.m. – 6:00 p.m. Conference Registration Open 8:00 a.m. – 9:00 a.m. Optional Exhibit Hall Appointment Hour All Day Leagues to Visit Madison Square Garden Presentation Center 9:00 a.m. – 12:00 p.m. League Meetings (continued after lunch) 12:00 p.m. – 1:00 p.m. League Lunches or Lunch on Own 1:00 p.m. – 4:00 p.m. League Meetings (continued) 4:30 p.m. – 6:00 p.m. Exhibit Hall Open; Cocktails in Hall 6:00 p.m. Keynote Speaker 6:00 p.m. – 9:00 p.m. Exhibit Hall Open; Dinner and Reception in Exhibit Hall Tuesday, June 29 8:00 a.m. – 3:00 p.m. Conference Registration Open 8:00 a.m. – 11:00 a.m. Disney Institute Seminar “Disney’s Approach to Quality Service” 9:30 a.m. – 11:00 a.m. Other Sessions 11:00 a.m. – 1:00 p.m. Exhibit Hall Open; Lunch in Hall 1:00 p.m. – 4:30 p.m. Sessions; Premium Seat Summit 6:00 p.m. Welcome Address: Mark Lamping, President and CEO, New Meadowlands Stadium Company, LLC 6:00 p.m. – 9:00 p.m. New Meadowlands Stadium Tour and Reception Wednesday, June 30 8:30 a.m. Keynote Speaker 9:00 a.m. – 12:00 p.m. Sessions 1:00 p.m. – 4:45 p.m. Sessions 6:30 p.m. – 8:30p.m. Red Bull Arena Tour S E A T 27
  • 28. ALSD Conference and Tradeshow: Detailed Schedule of Events and Sessions Please note: The agenda detailed below is subject to change. A comprehensive Conference Program will be distributed at the ALSD Conference with rooming assignments and final sessions and presentations. Sunday, June 27, 2010 ed around the shared mission of becoming better leaders through education and idea exchange. O’Neil dedicates his time to working 7:00 a.m. – 6:00 p.m. with a number of non-profit organizations, including serving as a Conference Registration Open Board Member for the Garden of Dreams Foundation, the non- profit charity that works with all areas of Madison Square Garden 8:00 a.m. – 3:30 p.m. to “make dreams come true for kids in crisis.” In addition, he is on Exhibitor Set-Up the Advisory Board for the Each One Counts Foundation and a 2:00 p.m. – 3:00 p.m. Board Member for the TRU Foundation. Board of Directors Meeting He holds a degree in Marketing from Villanova University and 3:00 p.m. – 3:30 p.m. M.B.A. from the Harvard Business School. O’Neil resides in New New Attendee Welcome Meeting Jersey with his wife and three daughters. Led by: Jennifer Ark, Director of Premium Sales 4:00 p.m. – 6:30 p.m. & Guest Services, Green Bay Packers Exhibit Hall Open; Schedule Monday Meetings; Cocktails in Hall 6:30 p.m. Buses Depart for Yankee Stadium Jennifer Ark 7:00 p.m. – 10:00 p.m. Tour and Reception at Yankee Stadium Sponsored by: Legends Hospitality; New York Yankees; Southern 4:00 p.m. Wine & Spirits; Corona Welcome Address: SCOTT O’NEIL PRESIDENT MADISON SQUARE GARDEN SPORTS Scott O’Neil was named President, Madison Square Garden Sports in July 2008. In this role, he oversees all aspects of business operations for the Monday, June 28, 2010 three professional sports teams, the New 7:00 a.m. – 6:00 p.m. York Knicks, Rangers and Liberty, as Conference Registration Open well as the Sports Properties area, which 8:00 a.m. – 9:00 a.m. includes college basketball, boxing, ten- Optional Exhibit Hall Appointment Hour nis and all other sports events. He also 9:00 a.m. – 12:00 p.m.; 1:00 p.m. – 4:00 p.m. manages marketing partnerships and League Meetings suite sales for the soon to be renovated NHL, NBA, MLB, NFL, F&B, Minor Leagues/Racing, Garden. Soccer, College, IT Scott O’Neil Since joining Madison Square Gar- den, O’Neil has attracted premier talent 10:15 a.m. – 11:15 a.m. from around the sports world to lead the Tour Madison Square Garden Presentation Center business in establishing an innovative, passionate and results-orient- Leagues: College, Minor Leagues, Racing, Soccer ed culture. He has directed a refocused commitment to providing 12:00 p.m. – 1:00 p.m. first class service to fans, subscribers and marketing partners, result- Sponsored Lunches; Specific Leagues TBA ing in growth across all areas of the division. O’Neil comes to Madison Square Garden from the National NBA Basketball Association, where, as Senior Vice President, he oversaw NHL: Lunch compliments of Ovations Management the league’s team marketing and business operations, advising NBA Minor Leagues: Lunch sponsored by Hershey Entertainment and WNBA teams on ticket sales and service, sponsorship develop- and Resorts ment and marketing. He also managed the NBA’s Canadian busi- 1:00 p.m. – 2:00 p.m. ness and the NBA Development League. Prior to joining the NBA, Tour Madison Square Garden Presentation Center he oversaw the launch of HoopsTV, and honed his sales and mar- Leagues: NFL, MLB keting expertise with the Philadelphia Eagles and New Jersey Nets. 3:00 p.m. – 4:00 p.m. O’Neil was named to Street and Smith’s Sports Business Tour Madison Square Garden Presentation Center Journal Forty Under 40 Hall of Fame and was named one of the Leagues: NHL, F&B nation’s top marketing executives under 40 by Advertising Age in 2006. He is also a member of Young Presidents’ Organization 4:30 p.m. – 6:00 p.m. (YPO), a not-for-profit, global network of chief executives connect- Exhibit Hall Open; Cocktail Hour 28 S E A T
  • 29. Monday, June 28, 2010, cont. 6:00 p.m. Keynote Speaker: To Be Announced Sponsored by and Presented by: Motorola 6:00 p.m. – 9:00 p.m. Exhibit Hall Open: Dinner Served, Reception Sponsored by: ALSD, Southern Wine & Spirits, Corona Madison Square Garden Presentation Center LEAgUE MEETiNgS Tom Sheridan Scott O’Connell Jeff Morander Beth Conroy Cari Maas Jennifer Ark MLB LEAGUE MEETING MINOR LEAGUE MEETING Moderator: Tom Sheridan, Director of Ticket Sales, Chicago Moderator: Brian Bucciarelli, Director of Corporate Partner- White Sox ships/Premium Seating, Giant Center/Hershey Bears Moderator: Scott O’Connell, Director of Suite and Premium Seat Sales and Service, Minnesota Twins COLLEGE LEAGUE MEETING Moderator: Janie Boles, Director of Donor Services and An- NHL LEAGUE MEETING nual Giving, Tigers Unlimited, Auburn University Athletics Moderator: Jeff Morander, Vice President, Ticketing Strategy, Department National Hockey League Moderator: Patti Kimbrough, Director of Guest Services, Uni- Moderator: Beth Conroy, Manager, Integrated Marketing, Na- versity of Arkansas Razorbacks tional Hockey League SOCCER LEAGUE MEETING NBA LEAGUE MEETING Tentative Moderator: Rich Searls, Director of Sales & Fan Moderator: Chris Granger, Senior Vice President, Team Market- Services, New York Red Bulls ing & Business Operations, National Basketball Association Moderator: Caryn Dolich, Manager, Team Marketing & Busi- FOOD AND BEvERAGE LEAGUE MEETING ness Operations Tentative Moderator: Chris Bigelow, President, Bigelow Companies NFL LEAGUE MEETING Moderator: Cari Belanger-Maas, Senior Manager, Premium Seat SEAT-IT DIvISION MEETING Services & Guest Relations, Arizona Cardinals Football Club Moderator: Christine Stoffel, Business Development Director – Moderator: Jennifer Ark, Director of Premium Sales & Guest Connected Sports/Entertainment, Insight Networking Services, Green Bay Packers Brian Bucciarelli Janie Boles Patti Kimbrough Rich Searls Chris Bigelow Christine Stoffel S E A T 29