Season Ticket Holder Angst
by Steve Perrin on Apr 9, 2009 11:37 AM PDT
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PrintPerhaps we need a new section of Clips Nation - or even an entirely new blog - dedicated solely to the rants of season ticket holders over the current situation with the Clippers. In case you've missed it (and it's hard to imagine that you could have), we've had passionate and extensive Fanposts and comments from several citizens of Clips Nation in recent days.
I mostly sit on the sidelines of these discussions. Why? Well, I just think fandom is too personal a question, I guess.
I am not a season ticket holder - never have been. In my current situation (a wife who doesn't like basketball, two kids who are in bed before 10 PM) it's not realistic. But it's disingenuous to suggest that I would buy season tickets otherwise. I wouldn't. I don't like subscription models. I enjoy going to the Ahmanson - but I wouldn't consider buying a season of five plays, because I just don't know if I'm going to feel like driving to downtown LA when that date comes around. And I've never much seen the downside in not subscribing; I go see the plays I want to (certainly less frequently than I might, and I suppose that's lamentable to some extent) and I go to many Clipper games throughout the year - more than the ClipperWidow would prefer, that much is certain.
And by the way, the Ahmanson's productions aren't broadcast on live TV in HD.
Does it make me less of a fan that I am not a Clippers season ticket holder? If you measure fandom by the money funneled directly into the coffers of the team, then I am a terrible Clippers fan. On the other hand, I think I can categorically state that over the last three years, I have written more words about the Clippers than anyone on the planet. Does that make me their biggest fan? I can assure you, the Clippers want all of their fans, even the ones who don't buy tickets. The NBA champion is crowned at the end of the playoffs. But there is no competition to choose the best fan. So do what you want to do - and please don't criticize others for doing what they do.
The question of whether the Clippers should be lowering season ticket prices for next season is interesting - I'm sure it would engender some lively debate in a B-school classroom. The economy is in recession, bordering on depression. The team has fewer wins over the last two seasons than any other team in the NBA. And the team has been offering deep discounts for empty single seats for months.
This last point would certainly be recognized by the MBA students. If discounts become the norm, you train the customer base never to pay full price. It's why no one pays sticker price for american cars (among other reasons); consumers know that sooner or later, big rebates will be available again, because they always have been in the past.
By the same token, I don't think you can point to other teams lowering ticket prices and conclude that the Clippers organization was flat wrong to not do so. (Actually, let's change the wording a bit - you certainly can't conclude that yet, not knowing the outcome of the policy.) There are only 30 teams in the NBA, and each one is in a unique situation. The Pistons are lowering ticket prices? Well, that's not very surprising is it? Given the economic situation in Detroit, and the fact that the Pistons have been to the Eastern Conference Finals or beyond for six consecutive seasons but will be below .500 this season. Milwaukee is lowering prices? Well, the Bucks franchise is in dire financial straits and may not be able to survive much longer: desperate times call for desperate measures. LA remains a great market and the Clippers franchise is rock solid financially - those are significant factors in this decision, not just the simple fact that the team has been terrible.
The Clippers clearly know how many wins they have, they know the economy is in the tank, and they nonetheless decided to sell season tickets for the same price next year. Will that strategy work? We'll see. There's little question that renewals are going to be disastrous this summer, certainly if the situation remains more or less status quo. But they may well have looked at the data and concluded that renewals would be disastrous even with discounts. Maybe they're confident that those that are lost are irrevocably lost, while the diehards will renew with or without discounts.
Was the letter from Roeser tone deaf? Perhaps a little. But if that's the decision that has been made - if indeed ticket prices aren't being lowered - the only way to spin it is to say "great news, prices aren't going up."
I think it's safe to say that the Clippers organization has more data points on this decision than we do. And while I don't think he's a good person, or that he's particularly smart about basketball decisions, Donald Sterling has been pretty adept at making money during his career. Put it this way - if the case were cut and dried that the best way to maximize profits was to cut ticket prices, don't you think he would have done that?
This isn't the first year the team has been bad. It isn't the first year that single seats have been discounted. It isn't the first year that fans of the opposition have flooded Staples Center. Far from it. In fact, the Clippers default advertising campaign for as long as I can remember has been to promote the stars of the other teams. So I think we can safely assume that Donald Sterling and Andy Roeser don't really care who the butt is rooting for, as long as the butt is in the seat.
Donald Sterling is one-of-a-kind. There is no other owner in professional sports like him. It's basically impossible to predict what he is going to do, or even to comprehend his reasoning after the fact. But unlike many other NBA owners, he has zero debt (which positions him well to weather the economic storm) and he has turned a profit for nine consecutive years, despite his team having a losing record for eight of those years.
Back in the day he faced operating losses as Clippers owner - big ones. So when the numbers are in assuming he is back in the red which he surely will be (if not this season then next), it's hard to say how that will effect him. It didn't seem to have much impact in the past. The value of the team is set at $297M; not bad for an investment he paid $13M for. While I admit that I don't understand him, I think he's a buy and hold guy and he's in it for the long haul. As such, it's possible he's feeling OK about everything despite the recession. He's no doubt snapping up new properties at depressed prices as we speak, looking at the current situation as an opportunity for his real estate business if not for his basketball hobby.
Perhaps the bigger question regarding renewals is the coaching situation. If the Clippers were smart business people, they put together at least four different financial models -
- A - renewals with current pricing and status quo;
- B - renewals with current pricing and a coaching change;
- C - renewals with lower pricing and status quo;
- D - renewals with lower pricing and a coaching change.
Obviously, there are myriad other permutations, but there is a point of diminishing returns. You can't forecast everything, and the quality of the model is going to suffer the more changes you make. There's also the question of what you can control. You could try to model what would happen if you acquire a new superstar, but you can't necessarily accomplish that. Firing MDsr is fully within the control of the team, and they'd be derelict in their duties if they didn't at least look at how that would impact the business. Bill Simmons wrote in a recent mailbag that someone within the organization is trying to make the case that retaining MDsr will cost between $8 and $10 million in renewals. If we believe Simmons on this, it means that indeed someone is looking at these models. Maybe the conclusion was that model B above was the best. We don't know. But hopefully we'll find out soon enough about the coach's fate. (By the way, if someone really did make a case that it will cost $8M to $10M and the case is realistic, then of course Sterling will fire MDsr - the conventional wisdom says he won't do it because he's cheap, so why would he keep the coach if it's costing him money? Of course this is just a rumor, and the case may not be credible even if it exists.)
If indeed the financial case has been made, there would be no reason to wait beyond next week to fire MDsr. The sooner the announcement is made, the sooner the message can be sent to the fan base that they are serious about trying to improve, the sooner a search for a new coach can be undertaken. Historically, taking the 'one more chance' approach has not worked; even if coaches are fired early in the following season, the season is usually already a lost cause as the new coach scrambles to put in his own system. If you want to conduct a proper search for a replacement (including top assistants around the league as candidates instead of just former coaches who happen to be available) and give that new coach a chance to shape the roster (even a little) and put in his system during a month of training camp, you have to make the decision sooner rather than later.
Regardless of what happens, I assume that season ticket renewals will be dismal for the Clippers, as indeed they deserve to be.
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"Donald Sterling has been pretty adept at making money"
With all due respect Steve, my response to this is simply – “So?”
What does that have anything at all to do with why fans are upset? Fans don’t care if Sterling makes money. The fundamental argument that fans are making to reduce ticket prices has nothing to do with trying to make DTS more money. It’s an appeal to show some appreciation to fans and some recognition of the civic duty that sports franchises should have. It has nothing at all to do with the economics of the team. Fans don’t care.
If making money was the sole objective of sports franchises, DTS wouldn’t be considered the worst owner in sports. He’d easily be praised and lauded as one of the best. Clearly, that shouldn’t be the sole objective. Running a sports team isn’t at all like running any other major corporation. There are roots within the community and civic responsibilities that a good franchise should respect.
Not dropping prices after this kind of season and in this kind of economic environment just reminds fans that the team cares nothing at all for its fans, season ticket holders or otherwise, and it just burns a little. That’s the bottom line.
I don’t think anyone expects the Clippers, or any sports team, to be this philanthropic organization that sacrifices for the people, but at least throw us a bone. At least pretend you care.
It’s incredible just how boldly and consistently this franchise slaps its fans in the face and then holds its hand out for more money.
Hmmm...
I guess I’m the one that is left to ask, “So?”
I don’t believe I said anywhere in my post whether or not fans should be upset. So when you ask “What does that have anything at all to do with why fans are upset?” I would have to say, I don’t know nor did I imply that I did know. In fact, I thought my point was exactly the opposite. I am specifically, pointedly, explicitly NOT telling people how to feel. I’m just describing what I see.
In this world, you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant. - Elwood P. Dowd
Really?
I know you’re saying that you didn’t have an actual agenda in your post, and maybe your intent was literally to just describe what you see, but the content doesn’t necessarily reflect a neutral post. Look at this whole paragraph:
I think it’s safe to say that the Clippers organization has more data points on this decision than we do. And while I don’t think he’s a good person, or that he’s particularly smart about basketball decisions, Donald Sterling has been pretty adept at making money during his career. Put it this way – if the case were cut and dried that the best way to maximize profits was to cut ticket prices, don’t you think he would have done that?
You’re essentially saying “they know more than we do, DTS makes lots of money so don’t you guys think they would have cut prices if that maximized profits?” The way you formulated that last sentence implies that they know what they’re doing so we shouldn’t question or challenge it.
That’s the whole reason of my “So?” What does that have to do with anything? That’s my question…why are you even talking about team profits in a post titled “Season Ticket Holder Angst”?
I guess I just don’t really get what you’re saying here and it starts coming off a little apologetic.
fair questions...
The implication from some of the STH posts from others seemed to be that it was a no-brainer business case to lower prices. Other teams were doing it, the economic environment suggests it, why aren’t the Clippers? I’m saying I don’t think it’s that obvious.
As for questioning or challenging, go for it. The best challenge of course is to vote with your wallet and not renew.
Why am I talking about it in this post? Well, the latest bit of STH angst originated specifically from a ticket pricing policy decision, so it seems relevant.
If I’m coming off as an apologist for the organization… well, I don’t see that, but you’re welcome to your interpretation. This organization stinks and always has. If you’re suggesting that it’s an apology to say “This organization stinks and always has, so why are you expecting anything any different in April 2009?” – yeah, OK, but that’s a pretty backhanded apology.
In this world, you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant. - Elwood P. Dowd
Fair enough
I understand where you’re coming from. I guess I haven’t really focused on the STH arguments of it being a good business decision. I tend to think there’s very little point in making business decision arguments in sports. There are far too many teams that use that as an excuse, and often it’s the teams that don’t win.
Anyway, good debate. In the end, obviously I agree with your last paragraph. I have to say though, this season has been harder than most. The combination of expectations coming into the season, the desire to rebound from the Brand back-stabbing, the complete mess on the court and the make-up of this not so likeable team has been tough to take.
I can’t believe this team is worse than last year’s.
I have no problems with the pricing of the season tickets. Our tickets or priced pretty damn low compared to other teams in the leage. Season ticket holders also get a huge discount on tickets. My tickets in section 115 have a face value of $85. As a ticket holder my tickets cost me $90 for the pair. That’s an $80 discount to sit about 15 rows off the floor.
We all have to remember that this is a business and the team still needs to make money.
Maybe not the point you intended to make?
“By the way, if someone really did make a case that it will cost $8M to $10M and the case is realistic, then of course Sterling will fire MDsr – the conventional wisdom says he won’t do it because he’s cheap, so why would he keep the coach if it’s costing him money?”
When I first read that my thought was, so keep him and lose 8M up to MAYBE 10M or fire him and definitely lose 10M PLUS the cost of a new coach PLUS the cost of a new GM PLUS the cost of finding both. Assuming the numbers are as high as the folks with the agenda say they are, which they never are.
No wonder the organization keeps saying his job is safe.
Obviously I generally agree with the post since its mostly the point I made but better explained and more verbose.
Get me BD and 75 and I'm in
If anyone has an agenda here . . .
But I digress.
Just because management is saying his job is safe doesn’t mean it is. I think that most of us are not naive enough to believe that.
And there are some other considerations:
First, if MDSr is hired , anywhere, the damages are reduced from the firing.
Second, DTS could make a case, potentially, that MDSr breached the contract for various reasons (discussed ad nauseum, elsewhere).
Third, as I understand it, the financial case has been presented and is realistic. And I don’t think that they need to find $8 to $10 million – just a substantial sum to offset somewhat the cost of firing the one who has become a pariah.
What agenda?
Fantasy land…you could replace MDSr in that comment with any name and the analysis will be the same. But I digress (to making fun of Jax only because it is both so easy and so fun)…
Yes, obviously someone saying his job is safe doesn’t mean it is. Holy crap, the last time I made that point about a player you argued the opposite. Jax you are nothing if not consistently inconsistent.
So your points are: if, could and as you understand it. If I sat down to my poker hand and looked at my hole cards and considered if, could and as I understand it I would probably make bad decisions. The second point is especially weak. Its clear he showed up to work everyday and behaved generally as a NBA head coach. Sterling already went down that road once. What kind of coach will he be able to land while actively suing his former coach? You think that is in the best interest of the team? Wow.
The case has to be strong enough to get Sterling to eat $10M, pay for a new head coach and GM and their staffs, with no real proof that it would change their fortunes for the following year. It might or it might not. A continued economic downturn could have a much bigger effect than who the coach is. All of that mainly balanced against the potential write-down for when he signs a TV deal for probably like less than a tenth of his coaching contract.
None of that is an agenda. That’s just cold analysis. Replace the name with anyone you want. It plays out the same to me. Does it for you?
Get me BD and 75 and I'm in
Don't forget...
In theory that would be $8 to $10M next year, versus $11M owed to Dunleavy over two years. The assumption has be that it would be followed by a similar loss the next season, and/or that those losses would begin to reverse with a new coach.
In this world, you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant. - Elwood P. Dowd
The past few games I've gone to the silent auction and they haven't even...
been set up. What’s up with that? I used to buy stuff a few years ago and haven’t been tempted to get anything until EJ, DJ & MT showed up. I was hoping to get a cap signed by all three.
Maybe DTS doesn’t want EJ to get the publicity it would take for him to get ROY, that way he’ll be less to resign in a few years. Oh please, who am I kidding, does DTS even know who EJ is?
no
"This kid is the best new talent in the league right now, and I don't care who else you mention." -Suns Coach, Alvin Gentry, on Clippers rookie sensation, Eric Gordon.
I'd pay to see EJ and DJ
"This kid is the best new talent in the league right now, and I don't care who else you mention." -Suns Coach, Alvin Gentry, on Clippers rookie sensation, Eric Gordon.
Interesting thread...
It simply comes down to taking care of your regular customers, not ones who are there every so often (and there’s nothing wrong with that). It’s a huge blunder. I’ve offered various suggestions on this topic so I won’t repeat them. But there isn’t a business model that exists where you maximize profits by pissing off the people that contribute the most to your business.
If DTS can’t figure out that it just might be a good idea to do something for the STH’s after the disasterous Dunleavy era (damn, you mean we’re still in it?), so be it. He might want to try to do something positive for his teams image, but if it cost’s him money, maybe not.
If I ran my business this way I’d have been out of business long ago. There is a real disconnect between DTS and the fans and as an organization you would think they would try to remedy that.
It's not a normal business
Part of the problem here is that this is not a normal business by any means. There are wage controls, barriers to entry… basically, there’s very little normal about it.
When I looked at the question of marketing the Clippers for a journalism class, I began to wonder if DTS isn’t crazy like a fox. He’s got a seat at the table, and then NBA has never forced any one out. He gets 1/30th of the National TV deal. He gets merchandising money. He gets a local TV package that, while it’s certainly worth less because his team sucks, it’s still in the second largest market in America. Whether he actually has a strategy is debatable, but to spend as little as possible and simply reap the inherent benefits that come from owning an NBA team in the LA market would certainly be a good (money-making) strategy.
As for the ‘regular’ customers… I think he thinks he can put plenty of people in Staples Center, even if most of them are rooting for the other team. Again, not a bad strategy. As long as some of the other 29 NBA organizations are competent, superstars will be coming to town to play – his little Washington Generals outfit is just the price of admission to the NBA club.
Again, I don’t know what he’s thinking. But I just don’t think the standard b-school rules apply here.
In this world, you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant. - Elwood P. Dowd
Steve, I know "real world" business principles don't apply. That's whats so frustrating.
I totally agree with your second paragraph in that Sterling paid 13m for the team and is content to let it grow in value with the least amount of investment possible.
Without knowing the numbers it’s hard to guess if the loss of STH revenue is offset by fans of out of town teams, especially when the prices are so low. I would think not, but who knows?
On a parallel track here...
Retail numbers today were horrible…and the company that reported the most catastrophic numbers were Abercrombie & Fitch with a 34% plunge in revenues. Interestingly, they were one of the few retailers who refused to slash prices, trying to maintain the “high value” of their brand. Well, consumers stayed away from their stores in droves in an environment where discretionary spending is shrinking. It will be interesting to see if they can clear their inventory without slashing prices going forward…and whether their brand is irreparably damaged from this strategy. Will their customers be back when this recession is over after they have gotten used to shopping at other retailers?
Steve might be right in that the NBA is not like a normal business. But consumer discretionary spending is still constrained by economic factors. Loyalty to a sports franchise is an interesting thing. Are there more potential new fans here in LA that Mr. Sterling can afford to burn his existing ones and hope that he can bring in new STH in the future? There are disreputable companies out there that can maintain that for a limited amount of time before their reputation destroys their chances of winning any new business/clients. Of course, Angelenos have an infamous reputation of having very short term memory and being band wagon jumpers, so maybe banking on the goldfish mentality of LA residents/consumers is a viable strategy for Mr. Sterling. But in a town where the Clippers is clearly the red headed step-child to the Lakers, I doubt that Mr. Sterling has a large pool of potential STH to choose from.
In all my years as a Clippers fan, I have never talked to so many other STH who are as livid as this year….and I’m afraid that once they’ve canceled their seats, they’re gone for good. And some of these folks have been around since the Sports Arena days. I think that it will be extremely difficult for Mr. Sterling to replace these fans.
So many questions...
so many ways to look at it. If luxury brands are likely to suffer the most, then surely the Clippers are well-positioned – the Lakers are the luxury brand in LA basketball, right?
As for the question whether it’s a good long term strategy – DTS hasn’t really cared a lot about the product for 28 years… but the league grows and so he profits. That’s a big part of why it’s not normal. If there were a competition for the top 30 NBA owners, he wouldn’t be one of them. But it’s not a competition, he’s in.
In this world, you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant. - Elwood P. Dowd
Competition
There’s been a lot of rumbling this season that the Kings are going to have to move once their bid for a new arena fails and that Anaheim is at the top of the list.
I’ve got to wonder what that will do to the Clippers. Yes DTS has a sweet deal with Staples, but I suspect he could potentially lose a lot of season ticket holders if the Kings settle in Anaheim. A lot of season ticket holders don’t even love the Clippers. They just prefer them as a Lakers alternative. Even the most die-hard fan has felt a twinge of conflict at one point or another as this franchise continues to embarrass. I could easily see a good chunk moving on to a new franchise right in their back yard.
I really can’t see Southern California sustaining 3 basketball teams long term. Especially one as embarrassingly bad as the Clippers. I always thought Sterling should have moved this team to the Honda center and it almost happened back in 1999. In the OC the Clippers would have had a chance to really build a loyal fan base. Instead, DTS wanted the short term bucks of Staples and the closeness to home (can’t blame him for that second part).
I see the OC as a huge untapped potential fanbase. If the Kings do move there, with owners as good as the Maloofs, I can easily see the Kings becoming very popular. That leaves the Clips as the odd team out. Gotta wonder what that will mean long term.
Interesting, I've been considering Kings tickets as an alternate to the...
Clippers. Speaking of stadiums/arenas, there’s been alot of talk about a new football stadium in Walnut or something like that. That location really doesn’t make any sense. For my money I’d build between the 15 on the east and the 215 on the west, the 10 on the north and the 60 on the south. Now that’s what I’d call access.
Just to clarify
I was talking about the Sac Kings (basketball team) and not the LA Kings (hockey team).
Anaheim Kings would change the equation
Currently, the Clippers can count on a couple of things without lifting a finger:
- They have first dibs on LA transplants who like basketball but hate the Lakers (and that’s a big number of people, in a metro area of 17M where many are transplants and the Lakers are widely hated out of LA)
- They are the inexpensive alternative to see LeBron, DWade, etc. in LA.
A third LA team would force the Clippers to work much harder. It would no longer be enough to be the anti-Lakers.
In this world, you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant. - Elwood P. Dowd
My thoughts exactly
A lot of transplants would love to adopt a team that isn’t the Lakers. The problem is, very few of those fans can stomach adopting the Clippers. I can’t tell you the number of times I’ve heard the story of transplants who say they tried to support the Clips for a few years when they first moved out, but couldn’t stomach it.
I actually don’t think there’s any way SoCal supports 3 teams. Especially when one or two are as bad as the Clippers. What I could envision happening is DTS reverting back to his absolute bare minimum spending ways just so he can sit on the team as the value increases, while spending virtually nothing in operating costs. That means cheap coaches, cheap staff, minimum player contracts, etc.
In a way...
I supposed that if you pretend that the Lakers are A&F and the Clippers are Walmart, people with less discretionary income will be forced to buy their clothes at the discount store, so they would switch to the Clippers when money is tight (On a side note, even Target and Walmart numbers disappointed today, with the rise in revenues going to Dollar Value stores…which might be a bad sign for consumer spending overall…as consumers are beginning to downgrade even from Wal Mart). But going to basketball games, unlike shopping for groceries or clothes is different in that it’s a complete discretionary spending and not a necessity. So if people assume that the value of entertainment is not worth the premium expenditure, they might just do without instead. I brought up the retail numbers today mainly because I was reading about it before I came onto the site this afternoon…and I think that macro-economic factors do play a part in people’s decision to spend money on things like vacations, sportcoats, and basketball tickets.
The other thing is, I’m not sure that Lakers fans who can’t afford Lakers tickets would buy tickets to Clippers games en masse if Sterling cut prices enough for single game seats but kept STH prices high and opening up more seats by driving those STH away. Obviously we see many more Lakers fans in the Staples Center during Clippers home games, but we don’t see an abundance of Kobe jerseys at regular Clippers games. I’m not sure that impoverished Lakers and Kobe fans would embrace the Clippers, no matter how low we slash our ticket prices.
With regards to your comment about Sterling’s reputation for squeezing out profits out of the franchise, Steve, this is true in the past. But as you know, he has never paid $5 mil a year for a coach before; a coach who talked him into opening up the wallet for the highest paid free agent in Clippers history: Baron Davis, as well signing Kaman to a long extension, and also taking on Zach’s bloated contract. So in a way, the salary of the team is probably higher than what he is used to paying, and he is doing so at a time when the economy is clearly in dire straits and people are cutting their discretionary spending heavily. This pressure on the bottom line might have played a role in his decision to keep STH prices the same, as he is clearly betting that most die-hard Clippers fans would rather lose their home to foreclosure than lose their season seats and he needs every dollar right now to be in the black.
Madglove also brought up a good point in that team revenues are heavily dependent on STH and luxury box sales. I think if you take those two streams out of the equation, no NBA team, even the Clippers, can survive solely on broadcasting rights, percentage of concession, merchandise sales, and luxury tax revenues from other teams. It is for this reason that after losing 40% of their STH base from last year, they aggressively created a new Inside Sales Executives force over the summer to aggressively court lapsed STH back into the fold. Of course, with the Clippers, it’s always one step forward and two steps back. And in this case, it’s more like four steps back.
I still believe that the letter Roeser sent out to STH is a huge mistake, in light of what other teams like Detroit and Milwaukee are doing…as dire as their economic conditions may be in their metropolitan area compared to LA. But I’ve talked to many friends and colleagues over the year who are extremely worried about their own financial situation here in the southland. We’re not exactly immune from the recession here in this city, though some of us might be doing slightly better than others. The wretched performance of the team this year, combined with Sterling’s fiscal strategy for the coming season might just break the back of this franchise at last.
I was under the impression
that luxury boxes are sold for “seasons”, not events. So in that vain, companies or people who purchase the rights to the luxury boxes (and the PR seats as well I think), get them for virtually every event at staples (ie. Lakers, Clippers, Kings, Sparks, concerts). If this is the case, then Sterling will continue to get the revenue from the luxury boxes matter if they are used at Clippers games or not. We all know the Lakers fans will continue to purchase the luxury box rights even in this economy. I think this is one of the main reasons the Staples Center deal for Sterling is so enticing. The Clippers get automatic revenue stemming directly from the popularity of their co-tenants.
So, the Clippers may well be heavily dependent on the revenue from the STH, but I am not sure it is as much as we might think it is. Can some one confirm this?
Do or do not. There is no try.
I believe you are correct as well
Also, there used to be an option at Staples called “Senate Seats” which worked the same way yet weren’t in the box. They were primarily designed for corporate customers who wanted to buy 4 seats (or any number really but less than a full box) and they were granted those same seats to Lakers, Kings, Clippers, Sparks and concerts (though I’m not sure how concerts work now that Nokia has opened.) Essentially a corporation (or family I guess if they are willing) buys seats, and it doesn’t matter if the all star game, WWE, or motorcross shows up to Staples—- those seats are spoken for.
by Michael White on Apr 10, 2009 11:50 AM PDT up reply actions
Thanks
and I think the PR sections are those “Senate Seats” you are talking about. This was probably the main reason Sterling decided to re-up the lease at Staples Center. Automatic revenue based NOT on his team’s performance, but that of his co-tenants.
Do or do not. There is no try.
Only a small percentage....
of luxury boxes or seats are taken up by those senate seats (corporations have access to all Staples Center events except for certain concerts). Sterling do get a percentage of those sales and they do help his overall revenues, and that is why he is insistent upon staying at the Staples Center and not moving to Anaheim. But STH and team luxury box sales for each individual franchise account for a much greater percentage of a team’s revenue….if most of the revenues are generated from these “senate seats” then the Sparks would be able to pay their players almost as much as NBA players or would be raking in a tremendous profit….which is obviously not the case.
Do you
know the actual breakdowns of the senate seats and luxury boxes? I am just curious as to what kind of cut the Clippers are actually getting? I was unaware that they sold luxury boxes for specif team events, but I guess that makes sense if the luxury boxes aren’t sold out every year (though I find that hard to believe).
My cousin’s company has owned a box for a while now, but I keep forgetting to ask how much they pay per season/year. I know they get all the seats in the box (12 I think?) for all the events at Staples Center (save a few). I am not arguing that season ticket holders are not the bulk of the revenue. I was just wondering how much of the pie the STHers actually account for.
Do or do not. There is no try.
Count me as one who's been around since the Sports Arena.
I actually liked going to that dump. It reminded me of a small time college arena. It seemed no matter where you sat you were never far from the action.
Relating to your post. I don’t know why every one here thinks L.A. is so much better off than Detroit. I’m not sure, but certainly Detroit has been one of the hardest hit citys. For reference, the 3rd or 4th quarter of last year (I don’t recall, maybe both), San Bernadino County had The Highest Unemployment Rate in the U.S. Take that into account with homes that are worth 70% or less what they were, businesses going out everywhere you look, retailers, wholesalers, just everything,
I think DTS should take this into account when he’s considering his pricing for next year.
Good point
But keep in mind (per Wikipedia) the Los Angeles Combined Statistical Area (CSA) has 17,775,984 people.
The Detroit CSA has 5,405,918.
So even split amongst the two sports teams, the Clippers are still drawing from a significantly larger pool.
by Michael White on Apr 9, 2009 3:32 PM PDT up reply actions
They are drawing from a much larger pool, and that pool includes many more people...
from out of town than Detroit (I can only assume). However, of those who identify themselves as basketball fans I’d bet they line up about 100 to 1 in favor of the Lakers. Also, Detroit is the only basketball team so if you are a fan it’s your only option.
I’m not sure where any of this shakes out. It’s just of everyone I’ve met in LA , I’d bet I’ve met more people who are Laker fans (I’d guess 100 to 1).
Ya, you are probably right....
Finding Clipper fans around here is incredibly rare (that’s why this blog is so popular!)
by Michael White on Apr 9, 2009 3:43 PM PDT up reply actions
There was actually a similar conversation about this over at the Dodgers blog. The theme was more discussing the level of “fandom” in LA compared to Boston. The consensus there was that the Lakers were not just the most popular basketball team, they were the most popular team in the LA (by far.) So, I think the Lakers are fairly well positioned for the downturn (as well as possible I guess.) Whereas the Clippers would be in a much tougher spot. Clippers fans are more in a niche (as are LA Kings fans) so while that would genuinely be a good thing in normal times— it doesn’t work for the Clippers since (if this board is any indication) the STH are very angry. Therefore with the Clippers being in a niche, there is a smaller pool of fans to fill the tickets lost by the STH’s, as you point out.
Moreover, I don’t think the Clippers would be better positioned than the Lakers despite Clipper tickets being cheaper. Tickets to professional basketball games, across the board, would be considered a high priced discretionary item. I doubt (but I could be wrong) that a Laker fan would say, “I can’t afford Laker tickets, so I’m going to buy Clipper tickets.”
However I guess there is a possiblility that young fans whose allegiances aren’t as formed yet could be taken (by their parents) to a Clipper game next season rather than Lakers. If the kid is say 6 and a huge sports fan and the parents can’t afford taking their kids to a Laker game, the Clippers would be the alternative—- and a 6 year old going to their first game wouldn’t care what the end result of the game was.
There are clearly several different angles here, my opinion is by no means formed. Just trying to talk it through…
by Michael White on Apr 9, 2009 3:51 PM PDT up reply actions
I heard the average cost for a family of four to go to the new ...
Yankee Stadium is $485. I think that’s kind of low, I saw on 60 minutes where tickets that were $20. twenty years ago, went to $40. to $120. and those seats are now about $1000. Thank god I’m not a Yankee fan.
Addressing your post, last game (I mustered up the strength to go) my row had entirely new people in it. They must have all bought single game tickets. That’s a good sign for DTS, but I’m sure those seats must have been $20. or so.
It's actually not a good sign
Because they don’t make nearly as much money on single game tix as they do on idiot season ticket holders like me. I paid full price and got locked into 41 games. These guys come and go as they please and pay a fraction of what I paid.
It’s really nothing more than a bandage on a bullet wound.
That's what I was thinking and virtually everyone here states...
otherwise. I don’t know, maybe if all the STH’s drop and Sterling charges $50. high ticket, $5. low ticket and fills the arena it would even out. No that’s crazy, I just did the math in my head.
Why are there so many people who think the low prices are o.k. and we disgruntled STH’s should just go away?
They don't
They’re just trying to rationalize what they really can’t – that the season ticket holders spend the most money and thus are the most important fans to the team.
by Jax on Apr 9, 2009 4:23 PM PDT up reply actions
Honestly
There’s no question about this. From a business standpoint ONLY, STHs are easily the most important people for a spots franchise. It’s not even close. Everyone else doesn’t consistently bring in enough money to match those of STHs.
STHs represent premium money paid, up front and locked in for the full season. That’s cash in hand for the team. Why do you think teams reward STHs more than the average buyer? STHs get special parties, autograph signings, gifts, etc. It’s all to encourage more and more people to be STHs and to keep the ones they have. If teams made as much money off of individual buyers, they wouldn’t spend the extra money trying to lure STHs. It’s a no brainer.
Just look at what the Clippers call STHs – “Clippers MVPS.” March wasn’t the Clippers’ “MVP Month” for STHs for nothing.
Do you spend anytime whatsoever on the Abercrombie & Fitch fan site?
I sincerely doubt it. The reason being that the Clips (warts and all) and every other sports franchise have something that relatively few products/services have – tremendous brand equity. It’s what keeps customers coming back – even when the product is inadequate, fails, falls short, disappoints, etc. at a given point in time. So your A&F analogy is quite limited in its usefulness.
Steve is right – the normal rules around pricing elasticity i.e., the trade off between price/margins and volume, don’t apply here. Or to any sports franchise. Every owner knows it and they act accordingly.
Brands can be damaged in either strategy scenario – lowering prices that can never be raised because the customers revolt is suicide. That said, I don’t think that general principle applies here either, since the anecdotal evidence suggests many fans will gladly pay for increased ticket prices if the team is winning…. but I always hear those customers complain about it as they reach for their credit card to renew.
"Not everything that can be counted counts, and not everything that counts can be counted" – Albert Einstein
by Another son of Mike Smith on Apr 9, 2009 5:08 PM PDT up reply actions
i hate when season ticket holders complain. They have the time and money to buy tickets to every single game and to watch every game in person. They should be happy. Stop complaining about these things. IF you guys think it costs too much it is easier to just not buy them for the next year. Be happy with what you have
Hello Clipper Myth,
Depending on the section season tickets are pretty cheap, you should look into getting some. If not, just buy individual games because they are about 70% cheaper.
I've posted some amazing Dunleavy stats today, here's more.
Only three other teams in the history of the NBA kept a coach with such a horrible winning percentage for six full seasons. Others may have been worse (I didn’t go there) over a shorter period of time.
The point was for a coach this bad, how has he been able to keep his job so long, and have there been any historical comparisons. Here goes,
The Philadelphia Warriors, 1949/50 – 1954/55, total wins 173, coach: Ed Gottlieb. He finished his eight year career 43 games under 500. Much Better than Dunleavy.
The Cleveland Cavaliers, 1970/71 – 75/76, total wins 188, coach: Bill Fitch. But Fitch increased his win totals almost every year as follows: 15, 23, 32, 29, 40 and 49.
The Washington Bullets, 1988/89 – 1993/94, total wins 172, coach Wes Unseld.
The Los Angeles Clippers, 2003/04 – present, total wins 193, coach: Mike Dunleavy.
For his six years as coach the Clippers have finished 102 games under 500.
It looks like Ed Gottlieb wasn’t that bad (in comparison). Fitch actually brought a new team to respectability, so that only leaves Wes Unseld as a worse coach in the History of the League.
Doing my work for me
I’ve been researching similar stuff. Good stuff. To me, the more amazing thing would be if he survives two season in which he will likely win 41 games total. That’s a .250 winning percentage over two full seasons – and it’s only happened four times before – three of those on expansion teams (one of them being your Fitch example).
In this world, you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant. - Elwood P. Dowd
OK... comments on the precedent question...
Gottlieb and the Warriors is apples to oranges. The NBA season was shorter in those days, so while he won fewer games over 6 seasons, he also made the playoffs half of that time, and only had one team under .400. On a winning percentage basis, Gottlieb is not in this category. Oh, and a few years before that 6 year span, he won a ring with the Warriors, so he gets some good will also.
Fitch, as you mentioned, was building something positive for an expansion team. It’s reasonable to consider not just the total wins over 6 seasons, but also the trend. We can clearly see why Fitch kept his job in Cleveland.
Unseld is the most interesting certainly. Of course, this is a commentary on the organization not making the change, not on the coach. Why do they stick with a coach that is not producing wins? And Unseld’s case is the exact opposite of Fitch’s the trends are all down – 40, 31,30, 25, 22 and 24 wins. Wow. Consider this though – Wes Unseld was a hall of fame center he played his entire career with the Bullets organization. So there’s a loyalty factor there. They no doubt stuck with him longer than they should have, longer as we see here than any team has ever stuck with a losing coach.
Until now.
In this world, you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant. - Elwood P. Dowd
by Steve Perrin on Apr 9, 2009 10:44 PM PDT up reply actions
How many teams have kept a GM with such a poor record for so long?
Likely answer: 0
Not sure who you mean here...
Are you talking about Baylor or MDsr? Obviously the clippers kept Baylor than anyone in history. And MDsr is ostensibly in only his first year as GM.
In this world, you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant. - Elwood P. Dowd
by Steve Perrin on Apr 10, 2009 9:44 AM PDT up reply actions
MDSr
He’s been the GM for several years both in practice and by contract
Even so...
If you give MDsr the GM title for all 6 years he’s been here, then the Clippers come in first and second on the ‘losing GM tenure’ race; Baylor was still the GM for, what, 16 years before that? With 1 winning record in those 16 years.
In this world, you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant. - Elwood P. Dowd
by Steve Perrin on Apr 21, 2009 10:11 AM PDT up reply actions
I've been wondering what was wrong with Unseld as a coach, do you have any idea?
I’d actually like to say Dunleavy’s the Worst Ever, but he may only be the second worst.
I think they drafted terribly
I’m trying to remember any player from that time period, the only one I can recall is Never Nervous Pervis Ellison.
They turned it around a little after that I think when they added Cwebb, Sheed and Rod Strickland.
FA in 2010.
Actually I just remembered Bernard King and Jeff Malone
So they did have some talent, they ended up trading Malone to the Jazz at some point but its all blurry now.
FA in 2010.
The Bullets had Bernard King, Jeff Malone, Michael Adams....
Ralph Sampson, Tom Gugliotta, and Kevin Duckworth. Not on the same team but all All Stars at some point in their careers. The only ones who were All Stars in the years in question were Bernard King, Malone, Adams and Duckworth.
In the Dunleavy years we’ve had All Stars Elton Brand, Glen Rice, Kenny Anderson, Vin Baker, Sam Cassell and Baron Davis. The only one who was an All Stars while on the team was Brand.
Don’t know what that means, it’s just something I’ve been doing today.
I've got tickets and it seems pointless
of the 20 games I have, I went to about 5. Tonight will be the last one if I even decide to go. So many times at the last minute I’ll just give them away. With the recent tragedy of Nick Adenharts death at the hand of a repeat drunk driver offender I’m going to find it even harder to go to a game and root for our best player. I’m just a little tired of of the people who kill innocent people day after fucking day paying little price for the consequences of repeated unacceptable behavior. Someone is lucky that weren’t near Randolf during his drunken driving. Next time someone may not be so lucky.
The Clippers might actually have a bright future. I’m not sure I care anymore.
Patience is for those who die waiting for something to happen
re:
This was the story I wanted to link not the one I did.
Patience is for those who die waiting for something to happen
by Phil Gurnee on Apr 10, 2009 10:11 AM PDT up reply actions
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