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Speaker 1: This is the business of sports. Should Major League Baseball

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Speaker 1: shorten up the season? How do we present football to

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Speaker 1: the audience of the future. I don't think that most

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Speaker 1: players understand the power that they have. Michael. The future

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Speaker 1: of IndyCar racing is looking bright. Scott sash very basic

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Speaker 1: math here, more bidders means more money. Evan Nobody Williams,

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Speaker 1: the team value has essentially quadruples. And the leaders in

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Speaker 1: the sports industry. Time to bringing our guest al Stinbrunner,

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Speaker 1: National Hockey League Commissioner Gary Betman, Atlanta Braves president Derek Schiller,

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Speaker 1: Patriots President Jonathan Kraft. Bloomberg Business of Sports from Bloomberg Radio. Hello,

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Speaker 1: I'm Scott, I'm Evan, Nobby Williams, and I'm Michael Barr.

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Speaker 1: And this is the Bloomberg Business of Sports podcast, where

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Speaker 1: we explore the big money issues in the world of

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Speaker 1: sports today. We begin with how the San Francisco forty

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Speaker 1: Niners are trying a new business model. To see I

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Speaker 1: was doing you were doing your facenta thing again. Also,

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Speaker 1: it's Scott. We're joined by a very special guest. We

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Speaker 1: are chatting with Al Guido, president of the San Francis

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Speaker 1: forty Niners, Thanks for coming in Hut, thanks for having undefeated.

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Speaker 1: I gotta tell you the story my wife went. I

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Speaker 1: gotta I gotta tell you the stories that she went

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Speaker 1: to the FedEx and she is a huge forty Niners fan,

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Speaker 1: and I mean it's a monsoon that's there, nine to

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Speaker 1: nothing and she's out there and oh my goodness, she's

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Speaker 1: been bragging down my throat. Man. It's like, how her

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Speaker 1: team is great and my Detroit Lions stink. We won

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Speaker 1: the mudball. Yeah, we created the NFL slipping slide. That's

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Speaker 1: what That's what it was about. Give me a little

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Speaker 1: John for Sunday again, and then the yeah, here we go.

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Speaker 1: It was slushy. She'd be good at this and he's

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Speaker 1: so bad. You made me laugh, man. When you do it, man,

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Speaker 1: it's like, how can I ask him about food? Ask

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Speaker 1: him about food? How'd your wife like the food there?

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Speaker 1: She loved the food at Levi Stadium, And if she

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Speaker 1: was there instead of FedEx Field, she would have eaten

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Speaker 1: even more. So bad. He has this baritone you think

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Speaker 1: would be a good facenda and it's so bad anyway.

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Speaker 1: So you got a new initiative. Mom, the season ticket

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Speaker 1: holder for the Niners. I don't have to bring too

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Speaker 1: much cash these days because my non alcoholic beverages and

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Speaker 1: a host of your offerings hot dogs, fries, that sort

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Speaker 1: of stuff included in the price of my ticket, all

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Speaker 1: included for sixty season ticket hold. First team to ever

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Speaker 1: do it at this scale. So most buildings, as you

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Speaker 1: guys know, have always had sort of their most premium,

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Speaker 1: whether it be sweets or club tickets. Um, they've always

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Speaker 1: had general, all inclusive food and beverage. But no one's

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Speaker 1: done it at sixty. And there's a lot of reasons.

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Speaker 1: Most of it is probably operational nature, but it's also

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Speaker 1: technological in the sense of, you know, how do I

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Speaker 1: know who's the season ticket member who's not? Right? With

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Speaker 1: all those questions, how do we know? So mobile ticketing now,

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Speaker 1: I mean, given the fact that we now know exactly

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Speaker 1: the origin of where you got your seat, whether it

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Speaker 1: was transferred to you, whether you bought it on the

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Speaker 1: secondary market, whether you bought it from us on the

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Speaker 1: primary market, that gives us the ability to be able

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Speaker 1: to understand who you are. No different. Frankly, if you

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Speaker 1: think about airlines, right you go in, if you have

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Speaker 1: a mobile ticket, it will literally say t s a

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Speaker 1: pre check and they just do a visual check when

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Speaker 1: you walk to the line, and that puts you in.

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Speaker 1: We can do it in a low tech way, the

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Speaker 1: same way we can say season ticket member, low tech

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Speaker 1: go to the all inclusive stand. We can have non

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Speaker 1: all inclusive stands. So for us, it's about driving membership

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Speaker 1: value for the season tickets. So it's only on the

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Speaker 1: sixty season tickets that we sell. Anybody who buys an

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Speaker 1: individual ticket or on the secondary market still has to

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Speaker 1: pay at the concession stands. You know what you should

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Speaker 1: call it, fans, It's food's gold. See come on, everybody,

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Speaker 1: come on, work with hate before the show. It's it's

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Speaker 1: really difficult, come on, go. So whose idea was it?

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Speaker 1: It was our ideal along with our concessionaire, Levy so

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Speaker 1: Leavy last year or two years ago now, I guess

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Speaker 1: Mercedes ben Stadium. So Arthur Blank went to what he

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Speaker 1: calls street fair pricing. And I had worked for Arthur

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Speaker 1: in my consulting days at my past job. And Arthur's

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Speaker 1: whole thought was, you go to the masters, right, you

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Speaker 1: pay for that experience. But why should a hot dog

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Speaker 1: be any different than it is on the street versus

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Speaker 1: where you get it into. Somebody has got to answer

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Speaker 1: this question for me. Every time I go and I

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Speaker 1: see a water is eight bucks of beers twelve bucks.

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Speaker 1: The pitchforks aren't out yet, but I've always said they're

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Speaker 1: coming only because you're holding me hostage and I need

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Speaker 1: it and I wanted my kids. You're screaming for popcorn.

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Speaker 1: I've got to pay the price. Man. It just never

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Speaker 1: made sense to Scott. That's exactly what went into our

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Speaker 1: rational So we had six years worth of surveys and

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Speaker 1: focus groups and and everybody will tell you the same thing.

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Speaker 1: You can you get super smart operations or retail or

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Speaker 1: everything else, But honestly, it comes down to really four factors. One,

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Speaker 1: it's performance on the field, obviously that matters when you're

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Speaker 1: buying a season ticket. Then it's some sort of price sensitivity.

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Speaker 1: And then the two variables. One is operations that you

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Speaker 1: need to do a good job is parking. It's always

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Speaker 1: a mathematical equation that's hard in any venue. But food

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Speaker 1: people exactly what you thought they thought they were getting

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Speaker 1: galus just because you could, and Arthur really changed, you know,

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Speaker 1: sort of the dynamic in that front, and we felt

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Speaker 1: like that's the right way to go as we think

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Speaker 1: about having only ten games, um. But for us, it

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Speaker 1: was removing the friction of having the checkout if you

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Speaker 1: think about queuing lines and all of those good things.

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Speaker 1: We really felt like this was sort of the next

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Speaker 1: wave of what's going to happen. Certainly in our opinion

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Speaker 1: in Stadia. Arena might be different, ballpark might be different

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Speaker 1: because of the quantity of games, But when you're talking

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Speaker 1: about ten games, it's it's Frankly, I don't want to

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Speaker 1: say it's easy to pull off. It's just easier than

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Speaker 1: some of those other buildings. And give us a sense

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Speaker 1: what this looks like on your balance sheet. You mentioned

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Speaker 1: the Falcons with our blank You know, they cut prices dramatically.

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Speaker 1: They sold a lot more goods, but the margins were

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Speaker 1: a lot smaller and they didn't make more money, at

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Speaker 1: least not in your one of that experiment. Is this

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Speaker 1: a situation where you're willing to make less money on

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Speaker 1: food to be a better experience, or do you think

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Speaker 1: this actually makes more money in the four years. It

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Speaker 1: depends on if you include alcohol. We we've gone upwards

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Speaker 1: of twenty dollars. Sometimes we go down to ten dollars

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Speaker 1: if you remove sort of the alcohol portions of it. Um,

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Speaker 1: it depends on each individual event. Concerts are better than football,

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Speaker 1: so call it anywhere every teen, ten and twenty bucks. Right,

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Speaker 1: So evan to answer your question, Um, we don't believe

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Speaker 1: it will make any more money on this. Frankly, we

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Speaker 1: might make less. And truthfully, if you think about it,

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Speaker 1: this is not a big line item as an NFL

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Speaker 1: football franchise. And we all talk about sort of the

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Speaker 1: four big line items, right, it's media, it's tickets, it's sweets,

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Speaker 1: and it's sponsorship. How food, I mean, depending upon your

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Speaker 1: cogs or labor, it might be a couple of million

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Speaker 1: dollars right in the grand scheme of things backup per year,

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Speaker 1: per year, and so you know, for our for our,

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Speaker 1: for us, it's all about value of as a season

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Speaker 1: ticket member. And in Levi Stadium, we have stadium builders

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Speaker 1: license or seat licenses. Most people report them on and

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Speaker 1: so what is going to continue to make fans make

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Speaker 1: that commitment to buy the annual license p PUS black

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Speaker 1: by every single game. We felt like this is one

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Speaker 1: where we should give on and if it ultimately also

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Speaker 1: increase the experience or remove some of the again the

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Speaker 1: friction of the operational challenges that we have, we think

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Speaker 1: it's a win win, And how much more valuable for

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Speaker 1: you for the forty Niners is a season ticket holder

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Speaker 1: versus a more casual single buyer. I mean I covered

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Speaker 1: Nike for example, Nike members on their app spent three

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Speaker 1: times more than non members on Nike dot com. How

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Speaker 1: much more valuable is the forty Niners season ticket holder

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Speaker 1: than a than a single game buyer. I mean, without

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Speaker 1: without giving the actual number because it's hard, I mean,

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Speaker 1: it's so much more valuable in the season ticket base.

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Speaker 1: We have one of the largest percentage of the capacity

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Speaker 1: of season ticket holder members out there. So you can imagine,

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Speaker 1: right if it's a supply demand issue, if all of

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Speaker 1: a sudden we had ten thousand individual game tickets to sell,

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Speaker 1: our prices might be different. And so for us, I

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Speaker 1: think in the NFL, see all of our teams are

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Speaker 1: probably a little bit better off maybe than somebody that

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Speaker 1: has a larger quantity of tickets to sell. Um, but

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Speaker 1: we start off every year with sixty with literally over

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Speaker 1: of our building fully sold before the year even starts.

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Speaker 1: And so what that means from an operational perspective. What

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Speaker 1: that means from a content perspective, it makes our business

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Speaker 1: a lot easier to manage. Right now, I'm gonna let

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Speaker 1: you get off on this one and let you brag

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Speaker 1: a little bit. The retention rate for your season ticket holders.

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Speaker 1: I was shocked. I didn't know it until your man

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Speaker 1: extraordinary behind your Roger Hacker sented over. But ninety percent

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Speaker 1: is your retention not for season? What are the two

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Speaker 1: percent unhappy? Well, listen that we uh they call themselves

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Speaker 1: a faithful for a reason, and they've proven it. I

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Speaker 1: mean we have not, as you guys know, in the

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Speaker 1: six years we well this is your six in the

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Speaker 1: in the years in which we've operated in that building,

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Speaker 1: we have not been great on the football field. That's

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Speaker 1: the one thing you can't guarantee. I would never ever

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Speaker 1: sell success in the sporting arena. You're gonna come, You're

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Speaker 1: gonna have a good time. Can you can promise atmosphere,

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Speaker 1: You can promise entertainment. You cannot guarantee wins. That's exactly right.

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Speaker 1: And look, that's all I can do is focus on

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Speaker 1: areas in which we can improve off the field, and

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Speaker 1: then hopefully Kyle and John Lynch and all those guys

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Speaker 1: focused on on the field. So I mean our fans. Look,

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Speaker 1: we have one of the largest fan bases in the

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Speaker 1: entire National Football League. We have season dignalres in every state.

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Speaker 1: We have one of the largest social digital following of

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Speaker 1: the people inside of Levi Stadium on every given Sunday

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Speaker 1: are actually new and so look, it's not just in

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Speaker 1: Levi Stadium. If you look at what we did in

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Speaker 1: l a couple of weeks back, when we went to

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Speaker 1: that building, you know, I don't know how many fans

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Speaker 1: were there, but it felt like of that building with

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Speaker 1: San Francisco for and that you know, if you if

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Speaker 1: you follow the team in the eighties and obviously in

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Speaker 1: the nineties, we were the team that everybody looked at.

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Speaker 1: And look, I think the Rams are doing a great job.

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Speaker 1: The charges are getting there, but they were without a

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Speaker 1: football team for a long period of time, and so

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Speaker 1: there was a lot of people in southern California that

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Speaker 1: ultimately deferred to being a San Francisco forty Niner fans.

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Speaker 1: We have a lot of fans there, but even this

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Speaker 1: past weekend in d C. Or in land Over, Maryland,

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Speaker 1: there was a ton of faithful in that building, and

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Speaker 1: so Candlestick Park, whether we were good or at the

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Speaker 1: very end they're um not so good, it was always

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Speaker 1: full with season ticket holders. Like the San Francisco Bay Area.

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Speaker 1: I mean, if you look at the Warriors, if you

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Speaker 1: look at the Sharks, if you look at the Giants,

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Speaker 1: all the teams that are located there, and even now

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Speaker 1: the A's who've had a couple of good years, it's

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Speaker 1: really a tremendous market for sports fans. My old the

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Speaker 1: sister still funds over Montana. Yeah, I mean, I think

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Speaker 1: there's something to be said. I mean, my mother, you know,

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Speaker 1: all of those things sort of combined into this large

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Speaker 1: in that market, whether it's Bill Wallace, John Lynch, We've

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Speaker 1: it just, you know, creates this inertia. Frankly, that's above

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Speaker 1: and beyond what's already there for the forty nine. Tell

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Speaker 1: your mom too simple, Yeshiva basketball. I think you're like all.

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Speaker 1: The one to say is I bought my wife one year,

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Speaker 1: a forty nine years helmet signed by Joe Montana for Christmas.

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Speaker 1: Best Christmas I ever had in my life. Man, my

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Speaker 1: son doesn't listen to the show. But I'm gonna tell

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Speaker 1: you really quickly, like he loves hockey obviously, so I

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Speaker 1: buy him all the jerseys of his favorite players, and

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Speaker 1: I get them. I'm air quoting signed. I got my

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Speaker 1: nice goldpen. I look on the web to see what

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Speaker 1: it looks like. He thinks Patrick Kane signed his jersey.

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Speaker 1: He'll find out it was dead. But whatever, his teammates

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Speaker 1: are pulled the OKI dok on your son. I'm not

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Speaker 1: paying that stuff. The one thing you got like. I

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Speaker 1: talked to Darius Casper right this the other day. Oh yeah,

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Speaker 1: And I had to mention I grew up a born

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Speaker 1: and raised Phildelphia Flyer fan. And so there's this hit

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Speaker 1: on Eric Lyndross that arguably could have ended all his career.

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Speaker 1: Most people of view Scott Stevens hit ending Eric Lindos

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Speaker 1: care so as typical fanhood. Even though I'm in the business.

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Speaker 1: I had to bring it up to him on the

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Speaker 1: phone call that was pretty unhappy with the Hitta nobody

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Speaker 1: else ever talks too. And then and then I was

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Speaker 1: happy to help him with his sports business class that

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Speaker 1: he wanted to bring to leave Oz, but I had

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Speaker 1: I had to give him a shot. You know that

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Speaker 1: story reminds me of that I just sti't remember there

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Speaker 1: was an old leave it to Beaver and Beaver destroyed

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Speaker 1: his dad's baseball that had Babe Ruth on it. So

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Speaker 1: he tried to fake the ball and instead he put

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Speaker 1: Baby Ruth on it. Yeah. Alright, Al Quado, President of

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Speaker 1: the forty Niners, thanks so much for coming to Thanks guys,

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Speaker 1: and now for some other topics this week, and let's

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Speaker 1: start with the Zion Williamson injury. Now, the Pelicans, they're

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Speaker 1: willing to wait. They don't want to push, you know,

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Speaker 1: the brand new acquire But you know what, I'm excited

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Speaker 1: to see them when they played because when they played

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Speaker 1: for their opener, uh Tuesday, they looked pretty good. In fact,

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Speaker 1: they had they took it to overtime and before Toronto

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Speaker 1: could beat him. Are you talking about like on the

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Speaker 1: court basketball stuff. We're talking about the business of Zion.

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Speaker 1: But couldn't you just see when when they put out

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Speaker 1: the press release that Zion was out for six to

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Speaker 1: eight weeks with knee surgery and the little meniscus tear

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Speaker 1: repair exclusive sound. Couldn't you just see though the face

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Speaker 1: palm of all the TV executives the Pelicans who are

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Speaker 1: without Zion. Let's just say, I know they played well

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Speaker 1: in the open, YadA, YadA, but not exactly. Wow. I

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Speaker 1: got to see this team draw. They've got thirty national

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Speaker 1: TV appearances this year because of one person, Zion Williamson.

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Speaker 1: So here are Opening Night. You want the sizzle, you

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Speaker 1: want all of it, and the main attraction playing the

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Speaker 1: defending champions is not there because he's injured. And they've

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Speaker 1: got a bunch more coming up where you're just not

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Speaker 1: going to see the kid on court. Yeah, to put

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Speaker 1: those thirty in perspective, I believe it's the tenth most

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Speaker 1: of any NBA team. And as you said, Scott, I

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Speaker 1: believe Halloween they're in national prime time. They've got a

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Speaker 1: few kind of right around the Thanksgiving area, which Zion

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Speaker 1: may or may not be back for. And it's not

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Speaker 1: just TV. I mean, if you look at the visiting

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Speaker 1: ticket marked ticket prices for the Pelicans, you know when

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Speaker 1: he feel if you bought those seats right now, I'd

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Speaker 1: be frustrated if I was in Denver and I had

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Speaker 1: paid for to see the Pelicans come because I wanted

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Speaker 1: to see him when he the Pelicans played the final

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Speaker 1: preseason game here in New York. He didn't end up

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Speaker 1: playing in that. That That was the first game I think

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Speaker 1: he missed. But there was buzz here in New York

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Speaker 1: for a preseason game just because Ziam Williamson was going

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Speaker 1: to be playing at the Garden. So, you know, I

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Speaker 1: think it's a lot more than just the TV. It's

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Speaker 1: a lot of people around the business right here that

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Speaker 1: are a little frustrated that that the guy everyone wants

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Speaker 1: to be watching isn't on the court. I wonder how

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Speaker 1: much people paid for those seats moving ahead, you know,

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Speaker 1: on the secondary market, if they were available, and what

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Speaker 1: they think they can unload them for anybody wanted to

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Speaker 1: imagine has dropped for some Pelicans, Pelicans visiting tickets, anybody wants.

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Speaker 1: That's the big rallying cry now, yes, moving right alone. Hey,

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Speaker 1: there's some big CEO departures at under Armour and at

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Speaker 1: Nike Boom boom poor. I don't say this often because

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Speaker 1: I sit next to the guy and he doesn't deserve

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Speaker 1: any sympathy. But poor Eben nov underscore Williams. It covers

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Speaker 1: these companies and you know, bam, it's Kevin Plank is

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Speaker 1: leaving his CEO. And then that's the jab jab and

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Speaker 1: then the right hook comes later in the day, Mark

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Speaker 1: Parker is leaving his CEO of Nike and Portovie Williams

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Speaker 1: was left little bleary. Pretty remarkable that that the two,

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Speaker 1: i mean, two of the biggest companies in that sneaker

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Speaker 1: in sports apparel space made essentially the same announcement, their

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Speaker 1: longtime CEOs stepping aside, continuing on to manage the board

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Speaker 1: as executive chairman. UH made essentially the same exact announcement

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Speaker 1: within five or six hours of each other. Um and

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Speaker 1: two two pretty big pieces of news, right, And if

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Speaker 1: you look at the way the market reacted, it seemed

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Speaker 1: like under Armer investors were a little happy. Um, the

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Speaker 1: stock popped a little bit on the news the Patrick

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Speaker 1: Frist who who had been under Armurs president for a

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Speaker 1: couple of years now he was taking over. And then

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Speaker 1: for Nike, you know, kind of status quo there wasn't

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Speaker 1: there wasn't a big jump either way, jump or drop

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Speaker 1: either way on the news that John Donahoe, who's a

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Speaker 1: tech guy, is taking over for Mark Parker in case

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Speaker 1: anybody does. And no flank who's stepping down. He started

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Speaker 1: that whole thing in his garage and all of that

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Speaker 1: in basement and whatever, and very similar to Phil Knight

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Speaker 1: his car, very very similar. But even after reading your story,

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Speaker 1: what I'm taken by is the fact that this sort

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Speaker 1: of plants Nike as a technology company. I found it

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Speaker 1: varyanting for folks don't who don't understand why or what's

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Speaker 1: happening in their retail Why don't you explain? Yeah, everything

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Speaker 1: Nike does right now is tech and mobile and digital related.

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Speaker 1: Right if you give rates, that give me that grates

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Speaker 1: that you said yesterday about the Nike members versus non Yeah,

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Speaker 1: so Nike members spend three times as many as much money.

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Speaker 1: And we talked about it with Al earlier as well,

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Speaker 1: they spent three times as much as as non members do. Right,

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Speaker 1: So Nike knows that once it gets you in its ecosystem,

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Speaker 1: once it knows a little bit more about you, it

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Speaker 1: can get you to spend more money. Right, So, if

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Speaker 1: you go to their new stores the new retail stores.

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Speaker 1: It is pushing the app and phone experience. I want

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Speaker 1: you to walk around the store with with your phone.

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Speaker 1: They want you scanning QR codes. They want you when

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Speaker 1: you're checking out to do it on your phone. They're

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Speaker 1: buying small tech. You know. They bought an Israeli computer

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Speaker 1: vision company that turned into Nike Fit, where you measure

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Speaker 1: your shoes with the app. They just bought a consumer

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Speaker 1: metrics company that's going to help them get more insights,

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Speaker 1: predictive analytics into what consumers want. Nike is, I mean,

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Speaker 1: is a shoe and apparel company, but it is also

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Speaker 1: a tech company. Pointing a guy who ran a cloud

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Speaker 1: computing company as their new CEO is exactly along. They

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Speaker 1: know what size and with vapor fly Michael Barr is

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Speaker 1: going to wear in the marathon. They don't but Michael,

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Speaker 1: that do they know? Michael pon vapor Fly. I wasn't

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Speaker 1: making any jokes, but for those of our listeners who

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Speaker 1: don't know, occasionally Michael Barr creams his feet. Yes, that's

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Speaker 1: out there now at the at the behest of his wife.

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Speaker 1: It's almost went to time. Get your cream ready. This

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Speaker 1: podcast is over. This is the Bloomberg Business of Sports

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Speaker 1: podcast Michael Barlong and Scott Sasterday and Evan Nolbie Williams

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Speaker 1: out there every Monday, Wednesday and Thursday exploring the world

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Speaker 1: of money sports and foot print. Turn us again at

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Speaker 1: the end of the week when we speak with Sal Galacyoto,

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Speaker 1: founder of Galaxyoto Sports Partners. You're listening to Bloomberg Business

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Speaker 1: of Sports on Bloomberg Radio around the world and online

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Speaker 1: and wherever you get your podcasts and foot print