MORE VICTORIES EQUALS MORE FANS EQUALS MORE PROFITS, RIGHT? WRONG, WRONG, WRONG
Winning is everything. That has been the rallying cry in the front offices as well as the front lines of professional sports for so long that it is the turnstile equivalent of In God We Trust. And for obvious reasons. As any ticket taker well knows, more victories equals more fans equals more profits. Elementary, no?
No. Dumb, unimaginative and hopelessly antediluvian thinking, says Matthew Levine, president of Pacific Select Corp., a marketing consultant firm that specializes in the sports business. "Winning isn't everything," he insists. "In fact, only 25% of the fans come out solely because a team is winning."
Hold on. Is Levine suggesting that all those raucous, wild-eyed fanatics in the stands are just humble consumers in search of understanding? That they purchase tickets for a wide variety of reasons, including anxiety, escapism and sex appeal? That by analyzing and catering to their needs a team can lose on the playing field and still gain at the box office? And conversely, that fans taken for granted are capable of giving the cold shoulder to the hottest contender?
Yes. Marketingwise, as Levine is wont to say, the sports industry is no different from any other business that deals in consumer goods. People can be swayed by most any stimuli to buy most anything, be it a can of no-brand beans or a ticket to see the no-name Colorado Rockies. Winning is nice, says Levine, but it isn't the only thing or—Vince Lombardi preserve us—even the primary thing. "Most fans aren't involved in races and won-lost records," says Levine. "Three-fourths of them attend five or fewer games a season, and winning is not a major factor in determining how they spend their entertainment dollar."
The winning obsession loses on three counts, Levine maintains. First, it deters teams from practicing the kind of sound business policies that benefit both the fans and the club. Second, since there can be only one winner, it shortchanges the also-rans; "Wait till next year" isn't the kind of slogan that sets attendance records. And third, it obscures the fact that the sports public requires more than the usual amount of hard sell and tender loving stroking.
Symptomatic of the idiosyncrasies of the sports market are the New York Mets. Debuting in 1962, they drew so well in their early stumblebum years as to create the impression that losing could be both endearing and lucrative. "That was a figment of the media's imagination," says Levine, who conducted a three-month study of the Mets' market last fall on behalf of the team and major league baseball. The support of the fledgling Mets was not a result of any kind of blind love affair, says Levine, but of the "lingering appeal" of the old Dodgers and Giants, whose visits to New York accounted for 40% of the Mets' gate. When that allure began to fade, so did attendance.
The Mets' box-office slide began in 1971 and, though the team remained competitive through 1976, it grew more precipitous each season thereafter. The nadir was reached one day last week when Met attendance dipped to 2,052 for a game, an all-time club home low. Among other miscalculations, says Levine, the Mets somehow assumed that the bulk of their attendance came from the affluent suburbs of Westchester County and Connecticut, when in fact 80% to 85% of their fans are from the working-class areas of Brooklyn, Queens, and Nassau and Suffolk counties. As a result, "Their marketing focus was all wrong," says Levine, and so were their pinchpenny ways in the front office.
With the National League's smallest marketing staff in the nation's largest market, it was small wonder that the Mets were viewed as insensitive to their fans. Indeed, along with the Oakland A's Charlie Finley, the Mets' M. Donald Grant ranked as one of the most disliked owners in sports. Conversely, says Levine, "The Yankees' George Steinbrenner projects the same image that New Yorkers have of themselves—tough, opinionated, aggressive, hardened to the needs of survival—a fact that helped the Yankees draw more fans from the Mets' territory than the Mets did."
In a carefully plotted counterattack, Jerry Della Femina, head of the ad agency that the Mets hired to act on Levine's report, suggested that a trip to Shea was a safer bet because of the crime rate around Yankee Stadium. Moreover, he said, "This town has had to settle for Reggie Jackson too long," and insisted that the real "glamour player" was the Mets' Lee Mazzilli. "He's a handsome Bucky Dent who can hit, and he doesn't do fur-coat commercials."
Levine, who is negotiating his continued role with the new Mets ownership this season, feels they can prosper by enhancing Mazzilli's image as a teeny-bopper heartthrob and by introducing such innovations as a switch on the old Ladies' Day promo. Because 66% of the team's female fans are working women, the kind who are figuring more prominently in family decisions, Levine feels that they won't be able to resist a new offering: hey, gals, buy a ticket and drag along your husband at half price. He is confident that with sound management the Mets can triple their attendance to 2.3 million or so in the next three to five years.
"Business has been a dirty word in sports for too long," says Levine. "Running a team is unique only in that the degree of complexity involved is five times greater than for a company with comparable revenues. While a widget manufacturer sells the same product over and over again to the same clearly defined market, in sports each game is a different sell to a highly fragmented audience, which varies not only from city to city but from household to household. As a result, the downside risk is much greater in sports. But so is the upside potential, and teams have to do a lot more than sit around waiting for a winner. Now more than ever, they have to listen and respond to the demands of their markets."
Nonetheless, the win syndrome persists if only because no one has yet heard fans chanting "We're No. 2!" What is heard is a lot of unsolicited advice from self-appointed experts, and over the years many team executives have developed an occupational disease called "hard-of-listening." After all, they say, who knows better what makes the fans happy than the men charged with the day-to-day operation of a club? The fans themselves, says Levine. Oh yeah, how does he know what they want? Simple. He asked them.
Over the past six years Levine and his Pacific Select associates have interviewed some 300,000 fans, beginning with the basic questions: Why do you go to a game? Why do you stay away? What can be done to make you attend more often? The initial response was, "Gee, I'm glad you asked"; the reaction to many of the results tends to be, "Gee, we never knew that." For example:
•More than half of the people who consider themselves loyal sports fans never attend a game.
•Sportswriters are much less influential than either they or the teams think they are.
•At any given game 15% to 20% of the fans are there to "relieve pressure and tensions."
•Today's young adults (18 to 30 years old) don't know how to watch a game.
•The free-agent shuffle is destroying the sense of stability and continuity that fans thrive on.
•The multicolor court had nothing to do with it; if managed properly, World Team Tennis would have succeeded.
•Bat Day or no Bat Day, baseball is not the big family sport of legend.
•What NFL cheerleaders are to many male spectators, NBA players are to many female fans: sex objects in scanty costumes.
More than illuminating, Levine's findings shed a damning light on an industry that is still in the Dark Ages of consumer awareness. Ignorance is no excuse for the fact that peddlers of dog food know and care far more about their consumers than do the moguls of the pro game. While the correlation between winning and attendance is clear, there are so many exceptions that only the most apathetic observer would be unaware that there is more to filling the stands than leading the standings.
In baseball, for example, anyone perusing the attendance figures would have no inkling that the current lords of their leagues, the Baltimore Orioles and Pittsburgh Pirates, have been top contenders for most of the '70s. Take the 1977 Orioles—please. That apparently was how their fans felt when, despite a slam-bang divisional race in which the Birds finished just 2½ games off the pace, they played before small crowds; indeed, the Toronto Blue Jays, who finished 45½ games out, drew 505,283 more rooters than the Orioles.
Likewise for the 1978 Pirates; though they came within 1½ games of winning the NL East, their gate dropped by 273,243 from that of the previous season, when they finished five games behind. And even last season no amount of belated we-are-fam-a-lee hoopla could disguise the mean fact that the No. 1 team in the majors was No. 18 in attendance.
Then there was 1974, the extraordinary season when it mattered not that the San Diego Padres could do no better than duplicate their woeful 1973 record (60-102) or that the Oakland A's won their third straight World Series. Padre attendance soared by 463,593 and the A's declined by 155,070—thus the phenomenon of the worst team in baseball out-drawing the best. The problem in Oakland was an old, jaded owner; the difference in San Diego was a new, energetic one, Ray Kroc of Big Mac fame, and the same kind of we-care, you-matter promotional hustle that sold all those hamburgers.
Similarly, while the Houston Astros were sliding from third place in 1976 to fifth in 1978, their gate climbed by nearly a quarter of a million. The result of an aggressive new marketing campaign, the support set the stage for last season when, with a bona fide contender to root for, Astro attendance jumped by a startling 774,167, the greatest gain last year by any team in professional sports.
It is not coincidental that the Astros are one of several satisfied clients of Pacific Select. Nor does their success mean that the neediest teams benefit the most from Levine's expertise. Too often, lulled by a kind of fat-cat complacency, it is the perennial powers who are the least attentive to their public and consequently suffer the most when they fall from grace. For instance, Levine estimates that two seasons ago Pacific Select could have helped the faltering Chicago Bulls cut their gate losses by at least half.
The problem, says Levine, is that professional teams developed as the playthings of millionaires seeking relief from the pressures of the business world. Even today, with inflated salaries and soaring costs, many teams are still run like the corner grocery. "We're not as efficient as we should be," admits Billy Sullivan, president of the New England Patriots. "Football really isn't run like most businesses. Budgets are never done. Expense accounts are kept on the backs of envelopes. We don't set goals."
Matt Levine does. As a kid raised in the smoky arenas of Jumping Joe Fulks and the Philadelphia Warriors, and later as sports editor of the school paper at Trinity College in Hartford, Conn., Levine earned his stripes as a true-blue fan. After a tour at the Columbia Graduate School of Business, he joined the Scott Paper Co. and served in the combat zone of marketing, selling diapers, garbage bags and the like to supermarkets in the tough Bedford-Stuyvesant ghetto of New York City. Though he also engaged in more genteel pursuits—bank-loan officer, management consultant—Levine never lost his fascination with the wonderful world of packaged goods, and in 1971 he moved to San Francisco and founded his own marketing consultant firm.
Business was brisk but so was the competition, and Levine longed "to find a smaller industry with major problems, one in which we would be the leader in the field and not just one of many." Shortly after the 1973-74 NBA season, he chanced upon a newspaper account of team attendance and "ran some numbers" on his trusty pocket calculator. To his surprise he found that the league was playing to less than 60% capacity, a sales record that would embarrass any self-respecting diaper salesman. The more Levine investigated the possibilities of applying the sales techniques of packaged goods to sports, the more he was convinced that he had stumbled upon a virgin market. "Damn," he concluded, "we can do something to help these people."
But how to get through to the hard-of-listening? Levine contacted a number of teams, including the foundering Golden State Warriors and San Francisco Giants, but met with the same response given to fans: don't call us, we won't call you. Levine was about to write off the pros as incorrigible amateurs when the Warriors announced the appointment of Dick Vertlieb, a former stockbroker, as general manager. Levine recalls, " 'Ah, a businessman,' I said to myself. 'He'll understand what I'm talking about.' "
He did, thanks to an after-hours telephone call that Levine arranged with the help of a team secretary who let it drop that Vertlieb was in the habit of working late at night. "Picking up the phone is a reflex action with stockbrokers," Vertlieb explains. "It might be a sale." And so, after the two men talked for more than two hours. Pacific Select had its first professional-sports customer.
The prospects were bleak. Since moving from Philadelphia to the Bay Area in 1962, the Warriors had had more trouble reaching the fans than reaching the playoffs. In those parts, winters were for ski trips to Tahoe and money was for spending on Raider and 49er games.
A team on the make was the image that Levine and Vertlieb purveyed when they launched their full-scale marketing assault in the summer of 1974, a period when the Warriors customarily shut down their offices. "Can you imagine?" says Levine. "The most important time to sell season and group tickets, and they hung up their gone fishin' sign." By polling fans on everything from their preferences in starting times to halftime entertainment, Levine compiled a demographic profile of Warrior supporters and isolated them by Zip Codes for specialized promotions.
Direct mailings were sent to "target audiences." Public transportation was arranged for fans in outlying districts. Players staged clinics and appeared at charity functions to demonstrate that the Warriors were good citizens intent on giving something back to the community. Feature stories on new acquisitions like Center Clifford Ray, gourmet cook and clarinet player, were pushed to show that the players were colorful personalities. Appearances by the visiting stars named most popular by the fans—Kareem Abdul-Jabbar, Dave Cowens, Walt Frazier, Bill Walton—were promoted like movie premieres. "We worked 10 to 12 hours a day," says Vertlieb. "We went out to people on a one-to-one basis. We spoke before every group, answered every letter—even hate mail—and responded to every phone call. We wanted the people to know that we cared. Then we thought they'd care."
One slogan, the Year of Entertainment, was aimed at the 55% of adult fans who were under 35 and tended to view a game as more of a showbiz spectacle than a sporting event. Another pitch exploited the fact that basketball attracts a larger share of the female audience than football or baseball—38% of the gate in the case of the Warriors.
Through in-depth discussions with groups of women fans, Levine ascertained that their appreciation of the game is more "interpersonal." For instance, where male spectators see exciting matchups on the court, female fans see attractive young men performing a kind of sensuous ballet. The resulting billboard campaign was about as subtle as a slam dunk: WE HAVE 12 GUYS IN THEIR SHORTS WHO WILL GO ALL NIGHT. "It was our way of telling folks that we were going to be exciting, entertaining and hustling every minute," says Vertlieb.
Sure enough, once the season got under way the fans started showing up in inspiring numbers. The Warriors, who had averaged a lonely 6,465 fans a game the previous season, sold out the 12,787-seat Oakland Coliseum for a game in the notoriously slow month of December. A week later they had another full house. Then another and another. Levine's studies showed that efforts to broaden the team's drawing base were paying off; for each game 5,000 fans poured across the bridge from the San Francisco side of the Bay, and one-third of the arrivals hadn't attended a game the season before.
It also didn't hurt that the Warriors started winning in bunches. In fact, there was every evidence that their newfound togetherness proved Levine's point that business is not only compatible with sports but it can also be a formidable unifying force. In an era when the lowliest bench warmer has a stock portfolio and a battery of financial advisers, Vertlieb agrees that "modern athletes understand and respond better to the businesslike approach than they do to the old family approach."
Something was contagious, for what began as a rash became an epidemic of avid support as the Warriors set new attendance and gross revenue records for the season and then roared on to win the NBA championship. For their parts, Vertlieb was named NBA Executive of the Year and Levine became MVP—Most Valuable Prophet—for a host of new converts who, miracle of miracles, had suddenly regained their hearing. Always a believer, Vertlieb subsequently spread the gospel in Seattle and two years ago, after serving as executive director of the Mariners, he joined Pacific Select as a management troubleshooter.
In addition, Levine employs what sounds like a lineup of corporate hit men: new venture start-up experts, facility turnaround specialists, focus group moderators, marketing strategists and organization analysts as well as plain old polling and pay-TV whizbangs. Developing "good numbers"—reliable research—is only the beginning of Pacific Select's services. Many teams have dabbled in market research, but their efforts are mainly what Levine calls "quick and dirties," sketchy or misleading studies done on the cheap. Even when certifiably "good," the numbers must add up to a positive answer to Levine's favorite question: So what? "There is lots of information around," he says, "but none of it tells a team what to do tomorrow."
Pacific Select does, integrating recommendations for everything from parking and ticket pricing to program design and budgeting into a detailed marketing plan. For the San Francisco Giants, who engaged the firm in 1976 to help resuscitate the franchise, Levine's directives, outlined in a report titled "Strategic Opportunities and Next Steps," conjure up visions of Knute Rockne rallying the boys in the boardroom: Recapture Short-term Defectors. Hammer Out Improved Transit Service. Fight Conversion to Grass. Sell the National League and Willie Mc-Covey Hard. Rejuvenate West Bay Fan Base. Galvanize Children's Support.
The latter proposal seemed less compelling in light of Levine's discovery that, contrary to time-honored belief, baseball is not the big family sport overrun by daddies and their kids. At Astro games, surprisingly enough, couples over 45 dominate, and in San Francisco 53% of the fans are from households with no children. "Ever since Veeck started giving free pickles to kids 25 years ago," says Le-vine, "baseball has been 90% oriented toward children. But now we find that attendance is more and more dominated by singles."
Mostly young adults from 18 to 35, the singles multiplied into the thousands at Candlestick Park when the Giants gave them postgame rock concerts and their own version of Bat Day. "Singles get off on T shirts," Levine says. Getting the homebodies off their duffs required "media blitzing." Levine explains, "The best time to sell people tickets is when they are watching a game on TV." Between-innings promos for the Giants' new telephone credit-card service resulted in the sale of 170,000 tickets the first year.
Levine has high regard for the promotional powers of TV. "Think the unthinkable—manage your press personnel," he advises in Sports Management Review, a "market development and problem solving quarterly" that Pacific Select circulates among some 600 sports executives. "Be alert to an outmoded orientation to print media at the expense of television and radio, especially the former." In directing the Giants to ration and refocus their media relations with an eye toward "profitable results" rather than "volume," he contends that "The guy who does the 6 p.m. and 11 p.m. sportscasts has more impact than all the newspapers combined."
To prosper these days, says Levine, sports entrepreneurs have to develop the killer instincts of defensive tackle-. "Look at Steinbrenner in New York. He's succeeded in the free-agent market because he ignores the old gentlemen's-club approach." Going for the A's jugular, Levine recommended that the Giants send a "task force" across the Bay Bridge to open a ticket office in the shadow of the Oakland Coliseum. Result: 270,000 tickets sold, or more than half the A's 1978 attendance.
Noting that fans are turned off by the high turnover rate of players, Levine advocated special treatment for the two Bay Area players who scored highest in projecting stability, continuity and "top-of-mind awareness." The Giants signed Willie McCovey to a long-term contract and needed no prodding to pursue Levine's recommendation for the A's Vida Blue: get him. They did in 1978.
All told, with McCovey rivaling Coit Tower as a city monument, and Blue holding forth as of old, Giant attendance shot from 700,056 in 1977 to 1,740,477 the following season, a stirring gain of 150%. "People are looking for stability," says Levine. "If they don't get fun and entertainment out of a sport, they say the heck with it. There are too many problems with everything else in the world. They don't need it in sports, too."
The affections of fans are not only highly volatile but, left unattended, can sour with alarming rapidity. While the Giants held their own at the box office last season despite a slump on the field, the Warriors have fallen on hard times. Their new front-office team employs many of the policies instigated by Vertlieb and Levine, but, Levine says, "They fail to realize that it doesn't work forever. The team has lost the confidence of the fans because they didn't constantly monitor their behavior and attitudes, which is a molten mass of change. You have to keep in touch."
After the Oakland Raiders lost touch by attempting to defect to Los Angeles, Levine was called in to assist in the resulting "Super Bowl of litigation." His findings: "Losing the Raiders will have a detrimental effect on the community and the Oakland Coliseum far beyond the loss of revenues." In another study Levine concluded that Finley's Oakland A's qualify as the "worst-run business operation in sports."
In 1978 Pacific Select was called in to assist in a last-ditch stand to save World Team Tennis. Levine's firm determined that, among other miscalculations, the league had put franchises in the three worst tennis markets (Indianapolis, New Orleans, Cleveland) and none in the three best (Miami, Dallas, Atlanta). "The market was much smaller than they thought," says Levine. "They figured on capturing 30% of the 20 million tennis players in America. They got the heavy tennis players, all right, but only 30% of them had ever seen a live professional match before, and it was like asking them to eat frogs' legs once a week. You have to cultivate a taste for it. They would have in time, but it would have taken five to seven years of hard work and $2 million in losses for each team."
Whither the spoils business in the 1980s? "The big challenge will be to keep the lid on ticket prices," says Levine. "Already we're seeing that households making $15,000 and under can't afford to go to a ball game anymore." A remarkably large number of fans, from 50% to 60% in most markets, haven't attended a game in three years or more.
Curiously, the young adults who will continue to invade the stands in increasing numbers might just as well be watching a cricket match; they are perhaps the least knowledgeable fans ever. "They have little understanding of the nuances of a game," says Levine. "By and large they've been raised in front of a TV set with lots of competition for their interests. They don't get involved in any one sport the way their parents did. They go to a game more for the emotional experience than for giving support."
Fans over 35, the crowd that puts a lot of stock in old-fashioned virtues like loyalty, will be less inclined in the future to make an emotional investment in a team. "The free-agent movement comes at a time when fans are looking for islands of stability in an unstable world," says Levine. "They want to feel, in effect, that they own a piece of the Rock." Thus, when players leave, older fans are just as likely to head for the exits.
The burden of adjustment is on the players. "They are on trial," says Levine. "They are viewed as taking the money and giving nothing back, and it's up to them to prove otherwise. They have to learn to relate with the fans, to communicate that they are giving 100% all the time. They have to understand where all that money is coming from."
While the changes and imponderables that lie ahead in the 1980s will be many, one thing is certain: it won't be business as usual at the corner stadium.
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Levine, who once boosted Warrior attendance, checks a fan to see what went sour.
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Marketing keyed to middle-aged Astro fans like this couple hiked Houston's gate by 774,167 in '79.
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To the Giants, Levine said, "Sign McCovey, get Blue," to give Bay Area fans a sense of continuity.
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Padres owner Ray Kroc sank his teeth into some juicy attendance figures after a high-powered promotion campaign assured fans they mattered.
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Sex sells seats, be it cheerleaders or NBAers.