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Speaker 1: Hello, and welcome to the Bloomberg Business of Sports podcast,

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Speaker 1: if we explore some of big money issues in the

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Speaker 1: world of sports. I'm Michael Blarne, I'm Scarlett Poel and

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Speaker 1: Don Damien sass Hour. Oh my, we've got some power here.

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Speaker 1: As a guest, he is the vice chair of a

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Speaker 1: MB Sports and Entertainment. Uh. They're the guys. By the way.

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Speaker 1: They have this NFL team, the Advanta Falcons, and they

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Speaker 1: also play at this stadium, Mercedes Benz Stadium, and they're

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Speaker 1: just loaded. Folks. Say hello to Steve Cannon. Steve, Welcome

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Speaker 1: to the Bloomberg Business of Sports. Thank you, Michael. Great

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Speaker 1: to be here. I'm gonna start from the beginning here

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Speaker 1: is you know, when you talk about your stadium and

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Speaker 1: it is state of the art, I am amazed by it,

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Speaker 1: you know, compared to where the Falcons used to play. Uh,

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Speaker 1: tell us about how it has been is is compared

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Speaker 1: to be other stadiums, supposed to be one of the

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Speaker 1: busiest stadiums around period. Am I right? Well, when you

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Speaker 1: when you build a two billion dollar facility, right, if

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Speaker 1: you think about it as a factory, Michael, Um, it's

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Speaker 1: not doing anything. If it's if it's empty, so it's

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Speaker 1: our job to fill up that factory. And we've got

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Speaker 1: ten home Falcons football games. We've got around eighteen nine

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Speaker 1: twenty soccer matches with our soccer franchise, Atlanta United, usually

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Speaker 1: about half a dozen UH college football games. We had

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Speaker 1: the semifinals this this past year, and and then as

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Speaker 1: many concerts as we can possibly squeeze in that plus

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Speaker 1: private events. So we do our best to keep this

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Speaker 1: thing humming. And of course you're looking ahead to events

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Speaker 1: that will keep it humming as well, including the World Cup,

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Speaker 1: which I know are a couple of years away, but

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Speaker 1: the planning obviously begins now. UM. Mercedes Ben Stadium hosts

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Speaker 1: the Atlanta MLS team, so this is obviously of great

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Speaker 1: importance to you. Um what kind of steps have you

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Speaker 1: been taking or are you able to take right now

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Speaker 1: to put your of from position to host one of

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Speaker 1: the World Cup games. Well, we've already been named one

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Speaker 1: of the host cities Scarlet, so we've been has its

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Speaker 1: been probably a year process. We've had all of FIFA

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Speaker 1: come to Atlanta walk through Mercedes Ben Stadium and they've

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Speaker 1: all been wowed number one by the stadium. It's it

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Speaker 1: really is sort of globally represents the state of the art.

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Speaker 1: It's a phenomenal facility. But they were just as amazed

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Speaker 1: by the soccer culture that we've managed to create here

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Speaker 1: in Atlanta through Atlanta United. So some of these Europeans

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Speaker 1: they come to the US thinking, you know, soccer is

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Speaker 1: a second or third tier sport in the United States,

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Speaker 1: and and we sort of showed them what a whole

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Speaker 1: match for Atlanta United looks like and they are absolutely

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Speaker 1: blown away by the level of energy, the rituals, and

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Speaker 1: just the um the fanaticism of our fan base. So

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Speaker 1: that got I'm really excited, and it puts us on

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Speaker 1: a very short list for hosting for for the World Cup.

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Speaker 1: When you find out, by the way, we know that

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Speaker 1: we're a host city. Now the ushition is, you know,

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Speaker 1: we're will we be for the group stages or for

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Speaker 1: the semifinals or for the finals. So that's what we

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Speaker 1: don't yet know. Um So we're obviously looking to get

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Speaker 1: as much as we possibly can. And the back and

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Speaker 1: forth with with FIFA continues, Steve. You know, Michael thinks

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Speaker 1: he's taking you are taking our audience rather all the

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Speaker 1: way back to the beginning. But I'm really gonna take

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Speaker 1: you back to the beginning you grew up and why

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Speaker 1: Coff New Jersey. You know Scarlett lives in Scarsdale, New York.

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Speaker 1: I live in Ryan myself. But if if you take

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Speaker 1: steep Root nine just a little bit north past Austin

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Speaker 1: and Peaks Spill, you reach the Bear Mountain bridge across that,

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Speaker 1: and all of a sudden you're in West Point, New York.

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Speaker 1: Talk to us about your time at West Point, your

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Speaker 1: time and service to the U. S. Military. How did

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Speaker 1: that prepare you for your current role at A and

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Speaker 1: B Sports and Entertainment. You are taking me back, damon,

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Speaker 1: Thank you. M I attended West Point. I got to

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Speaker 1: go there with my brother. We spent three years together,

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Speaker 1: um and it was the most one of the most

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Speaker 1: significant experiences of my life. So it's not just the

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Speaker 1: college education. Felt like I went to the best leadership

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Speaker 1: school in the world, and it's it's theory and practice

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Speaker 1: that then you do that for four years and then

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Speaker 1: you go out and serve in the military. And I

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Speaker 1: got to do that from from platoon to company levels

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Speaker 1: of leadership and so all of those lessons on how

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Speaker 1: to take care of people, how to take care of

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Speaker 1: the troops, how their needs always come first. This notion

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Speaker 1: of servant leadership, where you know the organization doesn't work

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Speaker 1: for me. I work for the organism. I work for

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Speaker 1: the people that the associates, the soldiers, and my only

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Speaker 1: job is to make them successful. And I think that

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Speaker 1: mindset I've carried with me through my entire career, and

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Speaker 1: you know, I try to spread it as far as

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Speaker 1: I can, because, um, this notion of servant leadership. Once

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Speaker 1: you create a great system where people trust you and

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Speaker 1: they feel like they can be their best selves when

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Speaker 1: they show up for work every day, that unleashes a

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Speaker 1: power that absolutely generates economics. So Steve, just to follow

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Speaker 1: up on that. If you really believe that, you know,

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Speaker 1: Lamar Jackson needs to be playing quarterback for the Atlanta Falcons,

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Speaker 1: you can just go right into Arthur's office and just

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Speaker 1: let them know, right, I mean, that's kind of how

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Speaker 1: that works. I'm just kind I'm just getting listed. I

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Speaker 1: leave the I leave the personnel decisions to the people

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Speaker 1: that are experts at personnel discussions decisions. We've got some

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Speaker 1: amazing scouts that scour the country, They scour tape, they

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Speaker 1: analyze all the data behind that and then they make

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Speaker 1: those kinds of recommendations. Unfortunately, you know, I stay on

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Speaker 1: the business side of the Ledger, which is about pleasing

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Speaker 1: fans um you know, filling up that factory that I

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Speaker 1: told you about, the Mercedes Bend Stadium and making making

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Speaker 1: that a real engine in our community. Speaking of the

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Speaker 1: stadium first, by the way, before I asked this question,

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Speaker 1: and I always say this to all veterans out there,

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Speaker 1: including you, sir, thank you for your service to our country.

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Speaker 1: We appreciate that. The biggest, biggest honor of my career, Michael,

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Speaker 1: that I got to raise my hand and I swear

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Speaker 1: to protect our country. So that was that was a

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Speaker 1: unique experience and I'm just grateful I got to start

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Speaker 1: my career doing that. You're here a question on Mercedes

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Speaker 1: ben Stadium. You became the world's first true certified zero

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Speaker 1: waste stadium. What does that mean and and can you

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Speaker 1: tell us, uh what it took to get to that process.

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Speaker 1: So it was something I'm super proud of, Michael. The

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Speaker 1: whole organization kind of came together and said, we want

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Speaker 1: to set a standard. We don't want to just be

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Speaker 1: the best facility, but we want to operate in the

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Speaker 1: best possible way. So one of our core values inside

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Speaker 1: of our company is to is to lead by example,

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Speaker 1: and you know we started that way. We were the

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Speaker 1: first Lead Platinum certified stadium also in the world, and

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Speaker 1: that's a build standard that that we achieved. But true

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Speaker 1: certification is an operating statement standard. It means that that

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Speaker 1: we divert of all the waste, the refuse that gets

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Speaker 1: created inside of Mercedes ben Stadium. It gets diverted from landfill,

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Speaker 1: which means it either goes to get recycled or it

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Speaker 1: goes to compost and less and of everything created inside

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Speaker 1: of our building, and it's a lot of stuff, um,

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Speaker 1: we'll go to landfill. So it's a commitment to the environment.

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Speaker 1: And what we're trying to do is demonstrate kind of

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Speaker 1: what good looks like. We're putting a playbook together on

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Speaker 1: on the economics behind it, the operating um parameters that

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Speaker 1: it took us too in order to accomplish that, and

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Speaker 1: we're going to share it across the entire sports landscape

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Speaker 1: in in in the hope that other buildings are inspired

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Speaker 1: to do the same thing, like a best practices essentially, absolutely, Steve,

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Speaker 1: I want to ask you about something else that Mercedes

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Speaker 1: ben Stadium has been UM experimenting with which is new technology,

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Speaker 1: A new facial recognition ticket system. Apparently you've started doing

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Speaker 1: that over the summer in two and it is for

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Speaker 1: season ticket holders. I bring this up because there's a

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Speaker 1: certain arena in New York City that also uses facial recognition.

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Speaker 1: But in the case of what's happening here in New York,

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Speaker 1: Madison Square Garden has UH barred entry to critics UM.

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Speaker 1: For instance, lawyers who work at a law from that

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Speaker 1: might have sued UH MSG the company for something separate

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Speaker 1: from the venue UH and event that they're trying to attend.

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Speaker 1: I just want to get a sense from you, how

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Speaker 1: what is your thinking on facial recognition and some of

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Speaker 1: the tricky questions that it raises regarding how a company

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Speaker 1: can use it against people who want to attend events. Well,

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Speaker 1: our our commitment is to creating the best possible fan experience, right,

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Speaker 1: and if there's a way for us to ease entry,

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Speaker 1: to get people in and out of clubs with less

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Speaker 1: sort of I D checking, etcetera, that's the whole purpose.

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Speaker 1: But you have to be very very careful. So our

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Speaker 1: attitude has been relative to facial wreck is kind of

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Speaker 1: a crawl walk run. UM. We we piloted, We piloted

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Speaker 1: with a few hundred people. We got their feedback. We uh,

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Speaker 1: it's an opt in only than we expanded it to

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Speaker 1: our clubs, and frankly, we have not yet expanded it

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Speaker 1: beyond beyond to our club capacity, which is about people

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Speaker 1: out of the sort of seventy thousand sized building. Um.

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Speaker 1: The feedback has been fantastic. It's an excellent, excellent experience.

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Speaker 1: And that's the way we're looking at it right. We

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Speaker 1: don't even we don't hold the data. It's you walk

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Speaker 1: up facial wreck um, and then we've got that linked

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Speaker 1: to your ticket account and we can ease your entry

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Speaker 1: into the building and into clubs. That's the only reason

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Speaker 1: that we use it. We would never use it to

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Speaker 1: to deny entry, because then you really are leaning into

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Speaker 1: all the worst fears that people have about Big Brother

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Speaker 1: having too much information about you. So we're still in

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Speaker 1: that let's call it crawl to walk phase of its implementation,

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Speaker 1: and if we believe we can implement it more enterprise wide,

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Speaker 1: we'll we'll do that, but only at the pace that

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Speaker 1: our customers are fans are comfortable. I understand UM. MSG Entertainment,

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Speaker 1: by the way, has defended its its policy of using

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Speaker 1: facial recognition, saying it's good policy to keep uh it's

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Speaker 1: legal adversaries out of its venues. UH. And this is

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Speaker 1: of course in response to UH some legislation proposed legislation

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Speaker 1: that would UH prevent a company like MSG from using

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Speaker 1: this kind of technology to bar people from entering the venues.

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Speaker 1: I'm just curious, is there do you have a take

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Speaker 1: on whether there should be any legislation to protect potential

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Speaker 1: customers from from entering venues or is that something that

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Speaker 1: you don't have a uh, you know, a specific position

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Speaker 1: on because you're not using the technology like that. I'll

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Speaker 1: I'll bypass that scarlet only because that's never been part

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Speaker 1: of our discussion. Our discussion has only ever been how

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Speaker 1: do we make the best possible seamless entry customer experience

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Speaker 1: fan experience for our building. UM, How how they decide

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Speaker 1: to operate up there in New York, and how how

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Speaker 1: that brings legislation into the into the picture. UM will

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Speaker 1: let them sort of be the test case for us.

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Speaker 1: We're gonna we're gonna just do our best to implement

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Speaker 1: this at the speed that our fans are comfortable. Well, Steve,

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Speaker 1: you can't miss me if I walk in Mercedes Benz

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Speaker 1: and all of a sudden security saying, oh look, shruck

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Speaker 1: is here. Sorry alright, your voice would give you away. Michael,

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Speaker 1: I'm sor you know, I'm just saying no, no, no, no,

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Speaker 1: I I Michael. But please feel free to jump in

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Speaker 1: anytime you like. I mean, Steve, you know I just

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Speaker 1: have one question for you, and it's an important one. Right.

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Speaker 1: You know that that that Bill's Bengals game was canceled

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Speaker 1: at the end of the NFL season, right, And so

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Speaker 1: there was a chance that if the Bills didn't indeed

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Speaker 1: play the Chiefs, it would move to a neutral stadium,

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Speaker 1: and Mercedes ben Stadium was named to be that stadium, right,

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Speaker 1: and so that would have been I think there was

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Speaker 1: more than fifty tho tickets sold for that game if

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Speaker 1: it were to take place in Atlanta. Obviously, the Bengals

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Speaker 1: upset the Bills, so it's not talk to us about

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Speaker 1: that process. How did the NFL approach you? How did

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Speaker 1: you secure um the rights to be that venue, should

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Speaker 1: indeed the championship game have taken place? Good question, Well,

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Speaker 1: we've a fit fantastic stadium first and foremost, and we've

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Speaker 1: got a city like Atlanta with the busiest airport in

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Speaker 1: the world, so they're thinking about how do we import

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Speaker 1: to fan bases that are not local and bring them

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Speaker 1: in as efficiently as possible. So hearts Field Airport and

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Speaker 1: are are set up, which UM which shined really really

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Speaker 1: well for the Super Bowl that we had back a

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Speaker 1: couple of years ago. Atlanta is a city that's able

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Speaker 1: to accommodate big events like this in college football and

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Speaker 1: World Cups, so we were kind of at the top

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Speaker 1: of the consideration set. And for us, it's in a

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Speaker 1: a bit of an endorsement of the efforts that we've

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Speaker 1: made the stadium that we've built, that they would look

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Speaker 1: to Atlanta and Mercedes ben Stadium as that alternative venue

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Speaker 1: like this is a one in a million thing. This

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Speaker 1: may never happen again, but the fact that it came

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Speaker 1: our way, we did a lot of work preparing for it.

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Speaker 1: That UM but happy it goes to it's going to

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Speaker 1: Kansas City and a normal home field advantage, but we

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Speaker 1: were prepared and ready to execute in case anybody didn't

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Speaker 1: catch it. A m B, which stands for Arthur m. Blank,

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Speaker 1: who is also the co founder of home Depot. Of

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Speaker 1: course he has the falcons. Can you take us through

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Speaker 1: what it's like to work under Mr Blank? You can

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Speaker 1: tell Lucy, we won't tell anybody gohead. It's been really

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Speaker 1: one of the neatest chapters of my career. UM. I

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Speaker 1: really do consider Arthur one of the best owners in sports.

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Speaker 1: He cares about the fan deeply. That's why we implemented

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Speaker 1: this food policy that doesn't overcharge fans. That came straight

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Speaker 1: from Arthur, and it's set a standard in the industry

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Speaker 1: where you know, a coke costs two dollars instead of

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Speaker 1: another venues that costs you six dollars. That's purely out

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Speaker 1: of respect to the fan. Arthur is signed the Giving Pledge,

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Speaker 1: so he's given of everything back to through his foundation,

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Speaker 1: to society to make the world a better place. So

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Speaker 1: he's a unique, unique individual, you know. For me to

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Speaker 1: come to work for a guy who's one of the

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Speaker 1: most iconic entrepreneurs, you know, creating that segment busting Home

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Speaker 1: Depot business model, and then to be able to work

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Speaker 1: directly together with him for him across these amazing platforms,

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Speaker 1: what what a neat neat UM chapter that it's been.

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Speaker 1: I still kind of get up every day, sort of

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Speaker 1: pinched myself that I get to work in football and

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Speaker 1: soccer and stadium and concerts and and and golf through

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Speaker 1: our PGA Tour superstore. Yeah, the PGA Tours super store.

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Speaker 1: Let's not forget golf, right. Golf has been exploding since COVID.

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Speaker 1: You know, it was that perfect socially distanced alternative for

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Speaker 1: folks that we're feeling pent up and indoors, and it

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Speaker 1: really created a growth moment. It bought millions of new

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Speaker 1: people into the game of golf. So golf is experiencing

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Speaker 1: a little bit of a boom right now, and obviously

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Speaker 1: being the biggest golf retailer in the United States with

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Speaker 1: the BJA Tour superstores has been a great ride over

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Speaker 1: the last several years. And you know we're expanding nationally.

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Speaker 1: Uh and really do in the same way represent that

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Speaker 1: standard within a fan experience, customer experience within the golf business.

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Speaker 1: So we the businesses sound different, but but they're united

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Speaker 1: by a common theme. We take care of our fans,

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Speaker 1: our guests, our customers. If we do that better than

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Speaker 1: everybody else, the revenue will follow. I want to go

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Speaker 1: back to something you mentioned, which is the pricing of

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Speaker 1: your food at Mercedes Bend Stadium, which is something that

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Speaker 1: from the get go, when the stadium was first constructed

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Speaker 1: and when it first opened, was a selling point. How

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Speaker 1: does that work now with inflation where it's at? And

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Speaker 1: I know that we've seen inflation um no longer rise

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Speaker 1: eight nine percent a month, but costs have gone up incredibly.

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Speaker 1: How has the stadium, the venue adjusted for that? Have

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Speaker 1: you raised prices? Do you consider raising prices and let

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Speaker 1: the fan base know that you're going to do that.

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Speaker 1: You have to shrink the size of portions. We have

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Speaker 1: nominally nominally raised prices on on a on a number

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Speaker 1: small number of items across the portfolio. But if you

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Speaker 1: if you did a comparison of when we launched to

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Speaker 1: where we that was in to now, um, you would

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Speaker 1: see a very very small increment. So can you give

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Speaker 1: me an example. So hot dogs still cost two dollars.

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Speaker 1: We launched it, it it was two dollars, it's still two dollars.

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Speaker 1: A pretzel is three dollars, a slice of pizza pizza

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Speaker 1: is three dollars. So all of our costs of goods

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Speaker 1: have gone up. Had that discussion with Arthur and said, Arthur,

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Speaker 1: are the margins are shrinking? Should we increase price? And

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Speaker 1: his commitment is to the fan and said, I am

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Speaker 1: gonna look at this in a long term way if

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Speaker 1: I delight fans every time they step up to a

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Speaker 1: concession stand and they don't feel like they're taking advantage

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Speaker 1: of the likelihood of them going to the merchandise and

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Speaker 1: spending some money there or renewing their season tickets. So

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Speaker 1: it's really about looking at the whole the whole fan,

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Speaker 1: and not just trying to maximize sort of share of

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Speaker 1: wallet at every single touch point that you have at

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Speaker 1: the customer. So deep commitment to the consumer. Our margins

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Speaker 1: have shrunk because we haven't commensurately increased prices and we

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Speaker 1: haven't touched a portion size at all. Let me add

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Speaker 1: I have a lot of family that lives in Georgia,

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Speaker 1: and back in the day you had obviously the big one,

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Speaker 1: the Masters that was in Augusta. Uh of course, the

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Speaker 1: Atlanta Braves, and then you know, you have the Atlanta Falcons,

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Speaker 1: and if you are also a college fan, you're rooting

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Speaker 1: for the Georgia Bulldogs. But Atlanta has exploded when it

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Speaker 1: comes to sports growth, and can you take us through

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Speaker 1: that and what it is meant for Mercedes ben Stadium.

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Speaker 1: Atlanta is becoming a sports town. It's you know, the

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Speaker 1: sports scene grows as as Atlanta grows. And Atlanta has

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Speaker 1: grown enormously since Arthur came here back in nineteen seventy

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Speaker 1: nine and set up shop with with four stores and

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Speaker 1: the home depot, and it's gone from you know, several

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Speaker 1: hundred thousand too. I think it's the number seven or

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Speaker 1: eight measure meter market in the country. So it's seen

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Speaker 1: some phenomenal growth and as more folks come to live

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Speaker 1: in the city. You know, the quality of life is

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Speaker 1: dictated by the number of options and and and entertainment

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Speaker 1: options that are available. So in seventeen when when we

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Speaker 1: opened our stadium, the Atlanta Braves, you know, cut the

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Speaker 1: ribbon on their stadium. So just think about between those

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Speaker 1: two buildings, that's three plus billion dollars of of of

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Speaker 1: investment in infrastructure in the city of Atlanta. It makes it.

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Speaker 1: It makes Atlanta a great place to live, work, play,

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Speaker 1: and at the end, that's what attracts new people live, work,

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Speaker 1: and play. And along with that we've seen you know,

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Speaker 1: the Bulldogs repeat. We've got an MLS championship for Atlanta

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Speaker 1: United UM and the Braves one. So that's that's four

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Speaker 1: championships in the last five years. So for the narrative

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Speaker 1: that says Atlantis the snake bittens sports town, UM, that

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Speaker 1: that's going away in the future. And we've seen other

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Speaker 1: stadiums do this where they become a sports betting hub

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Speaker 1: where people can go and do this and that whatever.

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Speaker 1: I'm not sure yet if Georgia has online sports betting. Uh,

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Speaker 1: but in the future, where do you see Mercedes bens

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Speaker 1: with we go where the citizens of Georgia vote for

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Speaker 1: us to go. So we are not yet legalist sports

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Speaker 1: betting state. It's come multiple times through our state legislature,

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Speaker 1: has not passed. It will come again this year. We've

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Speaker 1: seen some great success across the country in sports betting.

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Speaker 1: It brings in new fans, it increases levels of engagement.

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Speaker 1: It obviously drives revenue, It drives tax revenue and takes

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Speaker 1: things that were offshore and brings them on shore. So

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Speaker 1: when this when if this comes to to Georgia, we

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Speaker 1: will be ready it. And whether that's an in in

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Speaker 1: venue kind of infrastructure, we think it's mostly going to

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Speaker 1: be online. That's what most of the early data the

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Speaker 1: last couple of years has told us. We see fewer

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Speaker 1: sort of in venues betting parlors as opposed to most

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Speaker 1: people just doing that through an online portal. So that's

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Speaker 1: the way we probably see it going, but we'll wait

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Speaker 1: for Georgia to adopt that if it. When it does,

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Speaker 1: we'll be ready to respond. Steve Cannon, Vice chair of

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Speaker 1: a MB Sports and Entertainment, thank you so much for

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Speaker 1: joining us, sir on the Bloomberg Business of Sports. Thank you, Michael, Scarlett,

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Speaker 1: Damian appreciate talking to you. This has been the Bloomberg

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Speaker 1: Business of Sports podcast. We explore some of the big

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Speaker 1: money issues in the world sports. I'm Michael Blar, I'm

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Speaker 1: Scarlett Poe, and I'm Damian sas Hour. By the way,

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Speaker 1: we're on every Monday, Wednesday and Thursday. You can download

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Speaker 1: this show wherever you get your podcast.