Eight alumni discuss the business of sports— and trust them, it's not all fun and games
By Phillip J. Hoying '09
As a boy, Merritt Paulson '95 had a passion for sports, and as he grew up, so did his dreams. Since last year, he's been living a distinctly adult-sized sports dream: He's the majority owner and No. 1 fan of Oregon's Portland Beavers and Timbers, a minor-league Triple-A baseball team and a United Soccer League First Division team, respectively.
President and general manager of PGE Park in Portland, Paulson is in the enviable position of being able to make "a positive impact on the organization, the business and the community" while doing a job he enjoys. "You're presenting a fun, family atmosphere.… You're putting smiles on people's faces," he says. It's "showing up for work every day and loving what you do. Nobody could ask for more than that."
Other alumni working in professional sports and related fields second that: Nothing beats filling a stadium or arena with excited fans, giving them a great game and a show to match, and sending them home happy. "Sporting events bring people together and create opportunities for face-to-face socialization," says Charlie Mierswa '84, chief financial officer of the NBA's New Jersey Nets. "In addition, sports are a source of personal and civic pride."
But they also say that there's a good deal more to that process than meets the eye. Professional sports teams are businesses, businesses need to profit in order to thrive, and the competition isn't only on the field or floor. Mierswa's Nets franchise, like others, "operates like any privately held, nationally recognized for-profit business enterprise, but has an additional obligation to comply with the oversight requirements of the NBA," he says. And in any sports franchise, "nearly every activity of the franchise impacts the finances of the organization." Neal Pilson '60 notes that this behind-the-curtain economic dimension of sports extends to the media as well. "Sports is not simply a feel-good kind of business," says the former president of CBS Sports, now an independent television and Internet sports consultant. "It is very much a dollars-and-cents, statistic-driven, research-driven enterprise that relies heavily on its statistical information about its spectators, viewers and subscribers."
Everything matters, from merchandising and ticket sales to public relations and fan development, so if one piece fails, it can seriously damage the franchise. Major league teams, with their greater resources, are to some degree insulated from the worst effects of failure, but lower-level professional teams can collapse under the strain. Just ask Kris Fudge '01 about the risks. He worked as vice president for basketball operations for the Charlotte Krunk of the struggling American Basketball Association before financial straits forced the team to fold in 2006. "Second-tier sports are more sensitive to entertainment options outside of sports — movies, restaurants, etc. — and therefore cannot charge premium prices like top-tier teams," Fudge says. "They are also less visible, as they do not receive the free advertising their top-tier counterparts enjoy. This means that both the teams and the players are not familiar to consumers."
Major leagues or minor, all professional teams must wage a constant battle to build loyalty and keep fans coming back. When a team is not competing at a top level — like hockey's Columbus Blue Jackets, who in their seven years of existence have yet to make the NHL playoffs from the league's strong Western Conference Central Division, home of the Stanley Cup-winning Detroit Red Wings — providing value to core fans is a difficult struggle. "You can pretty much control everything off-ice, but you can't control the on-ice product.… That's one of the realities of professional sports," says J.D. Kershaw '90, director of marketing and fan development for the Blue Jackets. "Even in down times, you have to find ways to retain your fans and to keep people engaged." Despite the obstacles, Kershaw has done a remarkable job of retaining fans and hooking new ones, placing the Blue Jackets around the top third of the NHL for single-game ticket sales. "We work really hard to do that," he says.
For most teams, innovative technology has become a key to adding value to both the game and the fan experience. The New England Patriots, for example, have led the technology curve in the sports industry, according to Jeff Cournoyer '99, corporate communications coordinator for the Pats; he notes that they were the first professional sports team to have an official Web site, to offer streaming video on the Web, and even to have a Chinese-language Web site.
"The Kraft family [ownership] is also investing more than $20 million in the Hall at Patriot Place, which is like a museum that consists almost entirely of interactive or immersive exhibits using the latest in video and audio technology," Cournoyer says. One promising attraction: an exhibit where the temperature plummets, and projections on the walls of a geodesic dome around you "will make you feel like you're in a snowstorm while you relive Adam Vinatieri's famous 'snow kick' to beat Oakland in 2002."
Digital technology not only amplifies fans' experience, it can also cut costs and expand a team's fan base. The social-networking dimension of Web 2.0 "allows us to stand toe-to-toe with the New York Yankees," says Pat Coyle '88, executive director of digital business for the Indianapolis Colts. Though Indianapolis is only the nation's 26th-largest market, "we are the sixth-most-popular pro sports team in the country," Coyle notes – due in some measure to the Colts' perennial success and high-profile stars, but also because "our fan base is a national affinity group" built through fan involvement on the Web.
Some teams are reluctant to relinquish control over their content and message on the Web, but others believe the benefits outweigh the costs. Coyle says the Colts have found that "the most popular elements on our Web site … are fan-generated," and Colts executives retain the ability to edit user-generated content. It ends up being a win-win situation for the team – continuing to shape the message while allowing Colts fans freedom of expression. Portland owner Paulson notes that the technology presents new opportunities at every level of the major and minor leagues for those willing to take advantage of it. "The new-media impact is significant in that it enables us to engage with our fans on a more personal one-on-one level, and the implications of that are quite significant," he says. "It's changing the way we market, it's changing the way we promote, and to some extent it's changing the way we produce the games as well."
Despite the inroads made by new technology, however, television remains the largest source of information for most major sporting events. For Pilson, the consultant and former CBS Sports president, this comes as no surprise. "When I started in the business 35 years ago," he says, "there were only three networks, and together they did about 1,000 hours of sports television a year.… Now you have hundreds of channels in the conventional sense, cable, satellite and over the air … all delivering sports programming."
With all that time on the screen, producers try to fill in spaces with personal stories, timely replays, informative graphics and insightful commentary. But, says Bryan Jaroch '97, an Emmy Award-winning associate producer at ESPN, it's easy to "lose the true nature of sports when you put too much of an emphasis on entertainment." And, he says, "we always need to make sure that our new technology enhances the experience for the viewer…. We need to find the right balance between respecting the sport and integrating new technology at the right time to enhance the experience."
So what do you show them? "Sports fans are very particular," Jaroch says. "They want to see the game."