Pack: Spurs: Guarding The Business

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For those that follow the business side.

Spurs: guarding the business
By William Pack - Express-News

After months of economic upheaval, even the kings of the high-flying sports world are getting nervous.

Attendance at Major League Baseball games may have slipped this season after four straight record years at the gate, and the NFL last month worked out almost $2 billion in financing to cope with the economic morass, Bloomberg News reported. The NBA commissioner, meanwhile, announced layoffs of roughly 80 jobs in that league’s U.S. work force just before the basketball season opened in late October.

And the ownership of the San Antonio Spurs, longtime heroes in a small-sized, sports-hungry market, has responded with a series of adjustments of its own.

From a reorganized, slimmed-down front office to a new advertising agency, a new ad campaign and a new focus on increasing the value and excitement of the games, the Spurs’ ownership team is recasting its business approach to maintain momentum in uncertain times.

“It’s a challenging year,” said Rick Pych, president of business operations for Spurs Sports & Entertainment, which owns the Spurs and three other professional teams. “We’re going to do everything possible to improve upon what we’re doing — no stone unturned to reach fans and to develop the best fan experience.”

Pych said the organization lost a handful of positions when responsibilities were consolidated. The restructuring was implemented because it made sense, Pych said, not because staff had to be cut.

The change began unexpectedly this summer when Russ Bookbinder, SS&E’s executive vice president and marketing guru with the organization and the team for more than 20 years, resigned.

Shortly thereafter, two more veteran executives, including its vice president of marketing, left the organization, and SS&E’s old ad agency, Creative Civilization, called it quits.

In mid-July, SS&E CEO Peter M. Holt announced a new organizational structure, with Pych filling one of three new presidencies that Holt believed would bring the organization “new energy.”

Then, The Atkins Group, a San Antonio firm, was retained to develop an advertising and market research plan for SS&E, and Frank Miceli was brought in from a sports franchise in Philadelphia as the company’s senior vice president of marketing and sales.

The team’s new promotional campaign — a key component of its business plan — is still under development, though aspects of it are surfacing. That includes billboards featuring the slogan “Come Together.”

Pych and Steve Atkins, president of the new ad agency, said “Come Together” is the theme of the new campaign, symbolizing how important fan and community support is to the team.

“Having four championships in 10 years has everything to do with the fans and the community,” Atkins said.

SS&E also plans to push value-priced ticket packages that combine food and beverage offerings with game tickets and, at times, Spurs merchandise for targeted audience groups. That is likely to include a Girls Night Out package, along with a separate offering for men only to go along with an expanded menu of Family Value Night packages this year.

Atkins said the packages respond more directly to the demands of specific demographic groups, while providing price breaks at a time when the community needs them.

“The Spurs are very dedicated to making the game experience available to everyone,” he said. Corporate sponsors are expected to participate in special ticket packages for specific games as well, as WOAI News Radio did on election night. It offered 1,200 tickets that normally would have cost $25 for $12 apiece, a subtle reference to the station’s position — 1200 — on the AM dial.

But Pych said sponsors are looking more closely at the benefits the sponsorships provide them. That could mean the Spurs players, coaches, team dancers and others in the organization will make appearances at sponsors’ events to create more business. It’s already happened in a series of activities at a new Frost bank outlet, an H-E-B store and elsewhere leading up to this season’s opening game Oct. 29.

“That’s likely to increase,” Pych said.

New events also are being planned to give fans more reason to support the Spurs. Bands will play after home games on the weekends — free for fans attending the games — in an event called Overtime. And the company is evaluating other activities to increase the teams’ drawing power, including tailgating activities and special gatherings with food and music on nongame days.

The team has a new host for in-house promotions while the game is not being played, a new team introduction routine and a group of people who will be positioned in the stands and around the court to boost energy. The purpose of the changes, Pych said, is “to provide a lot of new, different and fresh experiences when (fans) come to the game.”

“Our business is creating memories,” he said.

All the new events and value packages will be promoted through traditional newspaper, television and radio ads along with interactive, Web-based outlets where “micro sites” can be established online for a specific pitch.

Atkins said the online medium lets advertisers connect with an audience on a more one-on-one basis, allowing them to examine what the audience wants and how the campaign is working.

“We are working hard to push the envelope in that online environment,” the agency chief said.

Pych said he hopes the changes will increase ticket sales, but the economic quagmire will make it difficult.

“Right now, people are cautious. So we need to make sure we’re seen as the best place where they can spend their money,” he said.

The Spurs, which was estimated to be worth $405 million by Forbes last year and 10th best among NBA teams, has been in the top third of the league in attendance, Pych said. Some season ticket prices were raised for the current 2008-09 season, so fewer existing season ticket holders renewed.

The first home game of the regular season sold out, but attendance at each of the following three games was more than 1,000 short of capacity.

Still, corporate sponsorships are not expected to change much this year after experiencing a normal amount of turnover, Pych said. And the team has sold all but about two of the luxury suite packages at the AT&T Center. It also is in the midst of long-term deals for concession and television broadcast right.

Sports business analysts say the Spurs are doing the kind of things teams need to do in a down economy.

Marc Ganis, president of SportsCorp. Ltd. in Chicago, said most of the NBA franchises, and particularly the small-market teams, will have tough choices to make to stay afloat. The Spurs, Ganis said, may not feel as much fan backlash as other teams do because San Antonio has worked hard on building fan and business loyalty. But it also would help the bottom line if the team performs well on the court, Ganis said.

And that issue, like the economy’s eventual health, is far from decided.

[ploto]

Spurs kept jacking prices up for the best season tickets. I know a number of people who gave up season tickets or who now share sets of them instead of each having a set. The Spurs sell a greater percentage of season tickets to families and individuals than a lot of teams do. They assumed there would always be someone else who wanted them but that simply is not the case. I know it talks about promos with sponsors but sponsors are struggling themselves. I also have no clue why their season campaign is still not is place this late after the season started.