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New rules in the game of sports marketing

The Sports Business Association is an undergraduate organization at the W. P. Carey School of Business dedicated to teaching students about the sports business industry. On April 10, a group of industry leaders came to campus for a day of discussion about the latest developments in the industry.

2015-04-20

When Jeramie McPeek, the Phoenix Suns’ vice president for digital media, started with the Phoenix Suns more than 20 years ago, the chief way to communicate with fans was a 15,000-circulation magazine sent to mostly to local season-ticket holders. Not so anymore.

McPeek was a speaker at the W. P. Carey School of Business’ Sports Business Association Second Annual Symposium. The symposium started with the Sports Business Radio Road Show, featuring Arizona Diamondbacks president and CEO, Derrick Hall, followed by panels with professionals from sponsorship, digital media and analytics. The topics covered — digital and social media, sales trends and marketing — are evidence of how much sports business is changing.

These days, Suns.com is visited by three million fans yearly. The team has attracted 1.7 million followers to its Facebook page, 400,000 to the Twitter feed and 200,000 to Instagram. Suns’ games also are streamed live on an app called Fox Sports Go.

The Suns are not unique in the use of digital media; virtually every team is using it in marketing and sales. At the symposium, some of the leaders in the industry shared what they’ve learned.

The new courtside seat

That Fox Sports Go app is part of the way teams responding to changes in fan behavior.

“A lot of people are going away from television,” said Brett Hansen, director of communications and marketing for Fox Sports Arizona. “People are looking for other ways to watch. People are busy. You can’t always be home to watch your TV. This gives you the opportunity to watch the Suns on your phone. You’ve got to give them the opportunity to watch on another device.”

Hansen said that Fox Sports would love to have something similar in place with the NHL and MLB: “That’s the next thing on the horizon.”

Other trends may include wearable apps — such as watches that will send fans data — and an increase in fan-generated content.

Said McPeek, “Now it’s really more about the mobile experience: making sure they’re getting the real-time stats, play by play, the shot chart and the radio feed, if they want to listen to Al McCoy while in their seats.”

For example, next season, the Suns plan to have in-arena highlights on demand.

“So if Gerald Green Jr. has an amazing dunk, within 10 to 15 seconds, you can open your app and see that dunk from four different camera angles,” McPeek explained.

A brand new season for marketing

“It’s an incredible time to get into sports marketing,” said Alan Young, who has been involved in the Arizona sports scene for decades and now heads the Arizona Sports and Entertainment Commission. “Sponsorship sales and sports marketing has probably never been at a higher level. There are so many opportunities.”

Greg McElroy, who led the negotiations for the Dallas Cowboys to name their palatial football stadium, told the symposium’s audience, “For nine years, I woke up every morning with the sole purpose of trying to make Jerry Jones richer.”

McElroy decided to try something else. A year ago he joined Arizona State University Athletic Director Ray Anderson, who had been a high-ranking NFL official. McElroy is now an associate vice president and chief business developer for Sun Devil Athletics. He recently negotiated a multi-million dollar deal for ASU with Adidas AG and soon will be pursuing an even bigger fish: naming rights for Sun Devil Stadium as part of the revenue drive to rebuild the stadium.

“Sponsorship,” McElroy told the audience, “is truly relationship selling. You can be book smart. But you’ve got to be able to relate to people, listen to people and build that rapport with your customer,” he said. “It’s just so critical because it is so competitive. We’re selling intangible stuff. We’re not selling the fastest car or the fastest computer.”

This is why ticket sellers sometimes have trouble making the switch to selling sponsorships, he said. “You’ve got to be able to sell conceptually. Being personable, having an outgoing personality, that you can tell people want to be around that person: those are the most important traits I look for.”

In Dallas, McElroy arrived in 2006 to find a mom-and-pop organization that had only two people in sales and marketing: “We built it to 67 people, from 20 sponsors to 280 sponsors.” At ASU, McElroy took over a situation where, as at most universities, a third party was in charge of sales and marketing. The relationship ended, with McElroy hiring his own staff.

“We are one of only two schools in America to do that. We’re going to control our future. We’re going to control the branding, the messaging, the relationships,” he said.  So far, sponsors like the change. “They want a direct relationship.”

Ray Artigue, an ASU graduate and former Suns’ official who now is a local advertising executive, advised, “The biggest challenge is getting in front of the right person, the decision-maker. You can spend a lot of time talking to the wrong people. Once you do, what are their hot buttons? What are their needs?”

Data rules

Students attending the symposium heard a ringing defense of the value of data by W. P. Carey Sports MBA alum Amin Elhassan, who drew laughter by poking fun at (Charles) Barkley’s recent attack on analytics’ growing influence in sports.

Elhassan (B.S. Management and Marketing ’05, MBA Sports Business ‘07) got in on the ground floor of analytics when he worked for the Phoenix Suns from 2006-12. Now he writes for ESPN, explaining why teams make decisions based in part on stats.

Barkley had blasted the Houston Rockets for playing poor defense. But Elhassan explained that Rockets’ games are high scoring because they play at a fast pace.

“Does that mean they’re a bad defensive team? No. Now we go by points per possession. If you go that way, Houston is a great defensive team.”

Career paths

Students attending the conference also heard inspirational stories about how local sports executives reached their current positions.

Leonard Edwards, who sells corporate sponsorships for the Arizona Coyotes, grew up in one of the roughest parts of Chicago’s south side. Among his four closest friends, one is in prison and the other three are dead, he said.

Edwards got a football scholarship to Eastern Illinois University, then managed to land internships and jobs working on the business side for sports teams.

Though he couldn’t afford to go to pro sports events as a kid, he had a valuable person in his corner. His late grandmother “was the first person who told me, ‘You can be whatever you want to be.’ She wrote a letter and gave it to my mother, told her to give it to me after she was gone.

“A lot of the things she outlined in her letter was essentially what I’m doing now. ‘You’ve always been passionate about sports. Continue to go after that dream.’ If you just work hard and show what you are able to do, people will believe in you and take chances on you.”

Derrick Hall, the president of the Arizona Diamondbacks, had planned to graduate from Ohio University’s sports administration program. He was a finalist for a spot there after graduating from ASU, but — much to his shock and dismay — the school declined his application.

He and his wife had little money, but he scraped up enough to buy a plane ticket to Miami to attend baseball’s winter meetings.

Hall, interviewed by Brian Berger for Sports Business Radio, told the SBA conference, “I stand in a room with 300 people like me trying to get jobs. We’re wearing bad suits. They’re posting jobs, we’re crawling over each other. It’s an assistant groundskeeper (for a minor league team) for $3,000 a year. I said I’m not doing this. I’m really dejected. I walk out of the room.” Then he sees a sign in the hotel lobby telling of an alumni reception for Ohio University’s sports administration graduates.

“I said, ‘That’s a party I’m going to crash. I walked into that room and went up to the director, ‘Do you remember me?’”

“’Not really.’”

“I was a finalist that you interviewed. You turned me down. You made a mistake. Let me tell you why. I chewed his ear off for about an hour.”

Hall got a spot in the program. Now, he runs the D-Backs, a team that has been recognized as one of the best places in sports to work by a host of media outlets, including The Wall Street Journal and Yahoo Sports. The team also has been named for nine straight years as having the most affordable prices for tickets, concessions and team shop items in MLB.

It all started by landing that spot at Ohio University, then winning the lone internship that was offered among the 19 students in his program by the Los Angeles Dodgers. He started at Class A Vero Beach for $16,000 per year.

“The best thing I could have done was start in minor league baseball because you really get a sense and a feel for the fans,” Hall said.

“I had to pull the tarp before it rained. I had to stock the shelves. I knew the fans’ preferences. I knew them all. I had to sell tickets. I had to stamp the programs with lucky stamps to win a free car wash. Doing it all was so great for me. It gave me a sense of what’s important for fans and to know the fans firsthand.”

Leadership award

Marketing Department Chairwoman Beth Walker noted ASU’s new Master of Law in Sports and Business and the rebirth of the sports MBA program, and said the W. P. Carey School is building “a sports presence in the country that’s second to none.”

The school’s profile certainly has been helped by the success of one of the panelists at the SBA conference: A.J. Maestas (MBA Sports Business ’05), who has been named one of the top 40 leaders under 40 years of age by the Sports Business Journal.

Maestas is the co-founder of Navigate Research, which Maestas said has been named one of the top 101 best-and-brightest companies to work for in the United States.

For these accomplishments, Professor Michael Mokwa gave a leadership award to Maestas at the SBA conference. “You are one of the most special students we have had at the W. P. Carey School,” Mokwa told Maestas.

Navigate does extensive consumer research for sports leagues, notably the NFL, and media companies, notably ESPN.

Said Maestas, “There’s no Navigate if there was no sports business program at the W. P. Carey School of Business. That’s where I met my business partner. That’s where the concept was born.”

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