New Ticket Offers: Innovative or Another Reason to Worry?

In this blog, I’ve previously lauded the Cleveland Indians for cross-marketing deals with the Browns and creating ancillary revenue streams by hosting dinners on the field and additional events outside the game. However, after the Tribe recently announced another cross-marketing deal, this time with the Blue Jackets, a few weeks after owner Charles Dolan claimed the team would lose $15-20mm this season, I’ve started to question how far teams should take these off-field deals.

Cleveland is not alone, as most major league teams are trying creative ways to move ticket inventory – and many continue to struggle as much or more than the Indians, notably Pittsburgh, San Diego, and Tampa Bay. When evaluating company stocks, I always feel that when a company starts introducing products or services it has maxed out a saturated market (i.e. Coke/Pepsi moving outside Colas) or its struggling and started to scramble. The day the ice cream shop down the block started selling potato chips and sandwiches, it was clear the ice cream business was not doing well and the store was doomed. Best Buy selling outdoor patio furniture is another example of a sign that a company may be struggling with its core competencies and in for a rough patch.

It’s no secret Cleveland is struggling, but have they become desperate? Running cross promotions with the local hockey team a month after trading away your two best players for financial reasons may come off as more gimmicky than value-add to fans and customers. I’m sure team management asks these questions of themselves before embarking on these initiatives – does it align with the brand, what is the benefit to the fans, what does the cost-benefit trade-off look like, etc. In addition to the quantity of these non-baseball deals serves notice that the team is really struggling, the totality of the deals also serve notice with fans, and can dilute the brand as it becomes less about baseball.

The Indians face a tall order. The region has a number of cities struggling due to the recession (a recent news publication listed 8 of 10 top struggling cities in the Rustbelt area) and due to its on-field struggles Cleveland unloaded its most recognizable stars at the last two trade deadlines. Now its left with a team of disappointing signings (Hafner) and many unknowns, struggling to sell tickets, bleeding money, and no saving grace evident. It’s somewhat haunted by signing Fausto Carmona and Hafner to early contracts with the good intention of locking them up, but the lasting effect of clogging payroll on two underachievers.

They can’t blame the ballpark like a Florida Marlins or Minnesota Twins, though the Twins don’t have the same attendance problems. At this point, do these additional business deals risk diluting the baseball brand and losing more core fans, while not attracting new fans who view the promotions as gimmicky. Or can the team actually use these marketing deals and promotions to remain sustainable while rebuilding the team? An interesting question that will play itself out in baseball over the next season or two in cities like Cleveland and San Diego, with business savvy staffs and struggling teams.

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Smart Trend: Intra-City Team Business Partnerships

It makes so much sense you wonder why it didn’t happen sooner. Yet, its still an odd pairing that could be viewed as befriending the competition. Last week in Cleveland, the Indians and Browns announced a ticket partnership to bundle suite sales for baseball and football games into a few select packages. That followed the joint marketing effort started a few months ago in St. Louis that had the Blues and Cardinals providing each other signage and in-stadium promotion to help push ticket sales.

Though teams in the same city compete for the same entertainment dollar from mostly the same fan base, a partnership opens the door to add more value for both parties than could be done alone. First, it creates new ticket bundling plans that combine games in both sports, similar to the Browns-Indians deal. It’s a value add for customers who may only attend a few games per year, particularly family plans.

As the Cleveland package does, it’s a way to sell suite inventory for individual games, which I’d assume is tough inventory to move since it does not appeal to the everyday fan, and most corporations and wealthier fans probably opt for season packages.

Intra-city partnerships also open the market for road trip packages, currently sold mostly through ticket brokers and sports travel companies. While teams probably would not earn any additional revenue for selling directly relative to through a sports travel firm, however if the teams create the offer they have more marketing muscle to put behind the initiative, which would likely increase sales and the teams can easily add more value to make the package more appealing.

Another benefit, teams immediately double their ticket sales staff. I know that’s a bit of a stretch, but in essence you now have another entire sales staff pushing tickets to your game. More manpower never hurts.

The St. Louis deal focuses more on promotion and marketing, and what better way to reach your target market than at another major sports event in the same city. While every fan may not cross-over between sports, it’s certainly a high correlation. Advertising during a game (in arena or on radio/TV) probably reaches a higher percentage of potential fans relative to the overall reach of the message than any other advertising, other than during a team’s own games. Given the current state of advertising, if exchanging some ad time and in-arena signs can help sell some season-ticket packages and suites, it results in a net revenue gain. Plus, new customers have higher expected future revenue and ancillary in-arena revenue opportunities that far exceed advertising revenue.

Don’t expect the Mets and Yankees to start jointly selling tickets, or maybe any New York teams to partner, but teams in many markets can mutually benefit from this arrangement, particularly smaller-market, lower-revenue teams, such as Cleveland. And it makes more sense to partner with teams that have opposite seasons – for example baseball and football, or baseball and basketball or hockey. Teams like Pittsburgh or Kansas City would likely benefit from the strength of the football team, while a place like Buffalo with only two professional teams is also a logical spot. The possibilities are endless, the benefits definitely tangible.

Joba Fist Pump

David Delucci doesn’t like it. Frank Thomas could care less. Yankee fans say its pure emotion, Yankee haters claim its bush league. One thing seems clear, the Joba Fist Up is here to stay.

After a key strikeout of Dellucci in Thursday’s game to end the eighth inning, Chamberlain gave an emphatic fist up, yell, and half pirouette. Two nights earlier Dellucci deposited a Chamberlain fastball into the right field seats to beat the Yanks. He felt the mound histrionics on Thursday were retaliatory, and blatant showmanship.

Many agree, arguing, a mid-May Thursday afternoon game, with a 3-run lead does not warrant that type of emotion. Those same people that lit up talk radio and print media after the game, were talking about how important this game was for the Yankees, following two straight losses, with the up and down Mussina on the mound, before heading to a weekend series where the legendary Kei Igawa would take the mound. Somehow the game went from important to a ho-hum when someone showed emotion, and played like it was important.

The fact I’m even writing about this is almost comical. How many pitchers, especially often eccentric relief pitchers, put on a mound display after clutch strikeouts. Papelbon and Franky Rodriguez to name a few of the more prominent. Tom Gordon points to the sky after he completes an inning, does that get under anyone’s skin? Ugueth Urbina used to put on a complete show, worthy of judges and a Dancing With The Stars appearance. Is Manny Ramirez still watching the last home run he hit, or is it finally time to break into his walk around the bases – calling it a trot is a slap in the face to leisurely runners across the world.

Why pick on Chamberlain? Because he’s a Yankee – markedly, easy targets – or because he’s not Mariano Rivera, the stoic, emotionless robot on the field that he’s most compared to. Joba’s not calling out people in the media, he’s not pointing directly at other players, or staring them down, his antics are not directed at other players. Fact is, the media and fans have built up the phenomenon that is Joba Chamberlain and the 21-year-old is feeding the hysteria.

Maybe ten or twenty years ago dancing off the mound is unacceptable, not anymore. I prefer old-fashioned baseball, but if you want to start cleaning up showmanship, Joba is at the end of a long line of culprits still awaiting criticism.  By the way, did Manny start running yet?

Sponsorships That Caught My Eye

Crawling out of bed, still groggy, a simple radio sponsorship read caught my attention this morning on ESPN’s Mike and Mike in the Morning radio show. Progressive Insurance, a Fortune 500 company based in Cleveland, bought naming rights for the former Jacobs Field in Cleveland before the season started, also buys ad time with ESPN radio. In a smart move, it created an ad integrating Progressive Field as a place to catch a game, and ESPN where you can hear the games – all of it brought to you by Progressive. Not sure it sold any product, but it certainly reminded me that Progressive is now the Indians home field.

On the topic of Mike and Mike, they continue to do a great job integrating sponsors and taking advantage of marketing opportunities. They turned a silly little wager on the NCAA tournament into a full blown annual event, tagged with a new sponsor each year. Buffalo Wild Wings brought you the Golic Eating Competition this year. Broadcasting on ESPN2 and live on ESPNRadio.com, Buffalo Wild Wings had logo and sign presence on TV the entire 15 minute segment, received countless radio mentions the past few weeks through today, and it was the focus of the competition. Having the professional eaters tout how good the wings are helps immeasurably. Great job by ESPN, great opportunity for Buffalo Wild Wings.