Facility Mangement

Sport Mangement - Period 2

History of Stadiums

 

History of Stadiums • As sports like football and baseball gained popularity,

open fields and parks became inadequate to handle the ammount of spectators

• The ballparks were too small so they had to be made bigger

• In the early 1900s baseball teams started to build large stadiums to accomidate all of the fans

• In 1923 after baseball, the NFL was founded and would also need a place to play

• They then joined with the baseball teams to play in the same stadiums

History of Stadiums • As the NFL grew, its need for larger stadiums grew• Early on NFL teams played in MLB stadiums, but since

these stadiums were built for baseball, it made poor sightlines for NFL

• In the 1960s and 1970s in a construction boom, sightlines for both sports were taken into consideration

History of Arenas

 

History of Arenas • Hockey owners followed in the footsteps of baseball

owners and built their own arenas to host events.o Did you know boxing championships were first held in

arenas?• NHL owners founded the Ice Capades- a large scale

annual touring ice show to create an additional source of revenue.o  Unfortunately these ice shows were taken over by

more specialized skating shows. (Disney on Ice)• The Ice Capades did not have a significant enough

impact on Arena profits.o Owners turned to basketball for more profits

Basketball's Impact on Arenas• Initially, arena owners focused mainly on college basketball games

for revenue.• Although many colleges started to build field houses, it became

necessary to host the big elite games in big cities in big arenas.o Double headers were a major event for arena owners.

The NIT(National Invitation Tournament) has been held in Madison Square Garden for decades.

o Arena owners now earned revenue from two associations. NHL and NBA

• In all, basketball owners paid rent to hockey owners.      this relationship still exists in some cities. (Boston) o The Celtics rent from New Boston Garden Corp. who owns the

Boston Bruins and the Fleet Center.  

Modern Era

 

Modern Era of Stadium and Arena ConstructionOld

• The trend was to have two tenants per venueo Single use stadiums

were previously popular 

o Old stadiums lacked wide seats, leg room, easy access to concessions and artificial turf 

• Stadiums and arenas were funded by owners 

New• Specialized stadiums

became popular (1 sport)o 1999 - first MLS only

stadium (Columbus Crew Stadium)

o Revenue not shared with another team

• Stadiums and arenas were funded by cities

• Modernization of turf o Field maintenance was

made easy 

Facility Financing

 

FACILITY FINANCING• there are a variety of ways to finance public assembly facilities • the specific financing decision is preceded by the question, will the facility be financed

privately or publicly?o public financing:

More and more professional sports teams are turning to their legislatures in order to secure funding for new stadiums.

owners generally contend that any public investment will result in significant economic benefits, particularly new jobs and increased tax revenue along with economic benefits in the community

the government first determines its expenditure (payment or promise of future payment) and then tries to raise the money for that expenditure

 generally long term financing (exceeds one year)  stadiums generate sufficient revenue to pay for themselves  examples: convention centers(they aren't intended to make money), Oriole Park @

Camden Yards, Jacobs Field in Cleveland, Gund Arena of the Cavaliers  

 

FACILITY FINANCING CONT.o private financing:

 budget is made based on the current income.  the purpose of private finance is to maximize the profits for the benefit =of the

concerned person/persons, organization, or group  examples: Joe Robbie's Orange Bowl of the Miami Dolpins and the Universtiy of

Miami, Detroit Piston's Palace of Auburn Hills

Bonds

 

Bonds• Since facility construction and

renovation are expensive, projects funding must be gathered from different sources.

• The amount of money needed to build facilities is usually obtained by issued bonds.o Bonds - a promise by the borrower

(bond issuer) to pay back the lender (bond holder) a specified amount of money, with interest, within a specified period of time

•  Bonds can be issued by local authorities (cities, counties, or states)

• 2 categories of bonds:o General Obligation bonds

Backed by local government's ability to raise taxes to pay off the debt

 Relatively safe investmentso  Revenue Bonds

Backed specifically by the facility's ability to generate revenues

Riskier because the facility needs to generate enough profits to pay off the annual operating costs and the annual debt payments.

 

Taxes

 

Taxes• Property Tax

o Paid by local homeownerso In order to be imposed, people must be give chance to

voteo Not likely to be passed

• Occupational Taxo Taxes anyone who works in the community regardless of

where they liveo Must be voted ono More likey to pass than property tax

• Hospitality Taxo Pass the burden onto out-of-town visitorso Example: Used in Atlanta to build the Georgia Domeo  

 

Taxes• Sales Tax

o Imposed on nearly all transactionso Food for at-home and perscription drugs are typically

exempt• Sin Tax

o Taxes only alcohol and tobacco products• Meal Taxes

o Placed on people who dine out• Transportation Tax

o Placed on bus and taxi travel • Must be careful about the amound of money you tax;

could effect business opportunities

Corporate Investment & Facility Revenues

Corporate Investment   • In addition to public sources of funding, there are a number of private sources a

sport facility can use to cover construction costsAn example of this is corporate sponsorship• The sale of naming rights for stadiums and arenas is a current trend

Examples: Coors Field in Denver                  Miller Field in Milwaukee                  The Trans World Dome in St. Louis                  The United Center in Chicago                  The Wachovia Center in PhiladelphiaThey all receive millions of dollars from naming rights• Coca Cola or Pepsi, and beer companies, such as Anheuser-Busch or Miller pay

considerable sums for facility pouring rights-this means being the facility’s exclusive soft drink or beer distributor

Also, corporations often make donations in exchange for the publicity and public relations  

Facility RevenuesMoney for construction may come directly from facility revenues. • The sale of personal seat licenses (PSLs) as well as luxury suites and club seating

make up a considerable source of revenue for stadium construction This money can be used to offset facility costs • A ticket tax may also be imposed on the sale of tickets to events at already

existing facilities.• An organization may also use other facility revenues, such as rent from tenants,

concessions, and parking, to pay for the cost of the facility. Depending on these revenue sources is risky; they are not ear-marked specifically for the facility and are not guaranteed in any way. 

Facility Mgmt. & Private Mangement Options

 

Facility Management

• Owners and Managers should have a good, close relationship

• Succes of the facility depends on a good attitude between staff that help run the facility and the managers that tell them what to do

•  Responsibilities of the management staff include; Serving tenants' needs, and providing a clean, safe, and comfortable environment

Private Management Options

• Private Management offers expertise and resources not usually available to individual venue managers

• Other benefits: increased operating efficiencies, purchasing leverage for supplies and maintenance items, and labor negotiation resources

• Spectator Management Groups (SMG’s) are offered by the larger private facility management companies, they offer a Global spectrum, a subsidiary of Comcast-Spectator; and Ogden Entertainment.

Career Opportunities in Facility Management

 

Marketing Director

• The marketing director has the responsibility of buying media (TV, Radio, Print, Billboards, etc.), coordinating promotions,and designing marketing materials.

•  To be a successful marketing director you have to have good people skills and sales ability.

• The marketing director has to consistently make money for promoters.

• A typical day in the life of a marketing director is creating a marketing plan and an ad budget for different events.

Public Relations Director

• Generally functions with a sport facility in order to handle the media.

• A well-trained  PR Director can control how the media looks at the venue, swaying their opinions to how they want, in order to make the venue look better.

• Can coordinate live TV broadcasts and things of that sort.  

Event Director

• Event Director- acts as the point of person for the facility during each show• Supervises a staff of ushers, police officers, firefighters, emergency medical

technicians, and private concert security forces• The Event director manages the show from begining to end• Must be able to deal with lost children, intoxicated patrons, and other

situations clamy and forcefully• Supervises and schedules traffic parking, and security personell to help

ensure• A regular day for as an Event Director might start as early as 8:00 AM • Event Director might work as long as 18 hours long

  

Booking Director

• Smaller facility events are booked by general managers or executive directors

• Larger venues with larger events have seperate positions devoted toward booking events

• A booking director negotiates contracts for shows or performances and getting them out in the mail completes

• Constantly on the phone or meeting with other concert promoters discussing deals for upcoming shows

• A booking director may choose to rent the facility to a promoter, co-promote an event, or purchase the show directly from an agent 

Booking Director-The 3 methods

Renting• Renting a facility to a

promoter is a risk-free way to increase events

• Renting also limits the amount of income a building might receive from an event

• Renting is the smartest method for events with limited income potential or risky track records

 

Co-Partner/Buying from Agent

• Good for potentionally high lucrative events

• More profitable strategy• Can also backfire if not

successful (loss in money)

Operations Director

What do they do?Operations Director supervises facility preparation for all types of events.  He or she typically spends the lion's share of a facility's annual expense budget on labor, maintaining and repairing all equipment, and purchasing all necessary supplies (toilet paper, cleaning materials, etc.) that events require on a weekly basis.     

Operations Director

Most Important Aspects of the Job:Coordinating, scheduling, and supervising the numerous changeovers that take place each year as one show moves in and another moves out. Operations director faces logistical problems daily because the facility may change over from hockey to basketball, then to a concert, then to a broadway show, all in one week.

Requirement for the job:Mechanical knowledge of a facility's inner workings. Good operation director must be a expert on heating, ventilation, and air conditioning equipment, ice making, and structural issues such as how many pounds of pressure can be rigged to the roof without it collapsing.  Operation director must also possess superior people skills, because he or she is directly in charge of the majority of the facility's staff.  Staff includes: foremen, mechanics, laborers, stagehands, and the 50 to 200 part-time workers required to set up events and clean up after them     

Operations Director

Operation Director

Typical Day:Likely begins early in the morning with a check of the previous night's changeover from basketball to hockey.  Inspect overnight cleanup and the temperature and condition of the ice surface and discussing any problems with assistants.  All of that keeps an operator director busy throughtout the morning. The rest of the day is planning ahead for events from a week or two from now.     

Advertising, Sponsorhip and Signage Salesperson

Advertising and sponsorship revenue represent a significant total of a facility's annual revenue. Most facilities, depending on size, designate a staff person or an entire department to sell sidnage and event sponsorships to corporations. Salespeople must posses excellent interpersonal and presentation skills.  Sales is a numbers game, and only strong, thick-skinned personalities are successful in such an environment. A typical day in the life of an aggressive signage and sponsorship salesperson will include at least 25 cold calls to corporate decision makers, two to four face-to-face sales presentations, and plenty of writing.  

Group Ticket Salesperson

• Entry level position• college graduates typically start facility

management carreers in this field • sell large blocks of tickets to parties

• Typically paid on commision bases 10-15%• must be motivated/people skills

Box Office Director

• The box office is usualy the first impression people have of the venue.

• The box office director must be a people person, he/she must be a patient, understanding,and trustworthy person and have supervisory skills.They are responsible for the sales of tickets and the collection of all ticket revenue.

• If tickets for an event are going on sale the box office will be extremely busy.

• They also have meetings with promoters to set up scaling of shows and filling ticket orders for advertisers and VIPs, and schedule staff for all the shows and daytime hours.

Box Office Director

• They also deal with customers who have lost their tickets, are unhappy with their seats, or have other concerns.

• When the events is done they must count all the money,preparing settlement documents for the promoter's review, and other tasks.

Security

 

Security

• Area of security was propelled to highest level of importance of facility management after September 11

• Bag Checks, pat downs, and metal detectors are now used as regular functions in everyday operations

• Large stadiums have barricades and fences around perimeters of facilities to keep away any threats

• Facility managers must evaluate every event for its security risk

•  Must take account of the performer, crowd attendance, and anticipated media coverage profiles

Sercurity

• Best management tool for crowd management is Crowd Management Plan

• The plan encompasses 1.Categorizing type of event• Knowing surrounding facilities and environment• Rivalries• Threats of violence• Crowd size and seating configuration• Security personnel and ushers• Having an emergency plan

 

American’s with Disabilities Act

 

Americans wid Disabilities Act • To prevent discrimination against qualified people with

disabilities in employment, public services, transporation, public accommodations, and telecommunication services. o July 26, 1990 - George H.W. Bush signed

• The ADA law reguires new facilities to be accessible to people with disablilities so they can enjoy equal access to enterainment and leisure.

• If a promary function area is renovated, 20% of the total cost must be spent to improve access for those for disabilities. o Lowering paper towel dispensers, replacing steps with

ramps, and installing grab bars in the restrooms

• At least 1% of seating must be wheelchair accessible•  Wheelchair seating must be accessible from parking areas

and restrooms.• Wheelchair seating locations must provide sightlines

comparable to those provided to spectators without disabilities.

• The law requires that facilities adapt, but only to the extent that  the reasonable accommodation does not cause an undue burden on the facility.o Example: Cortez v. NBA, a group of disabled fans sought

to have the San Antonio Spurs provide live -time captioning at games.

o To provide live-time captioning, the Spurs would have had to provide a court reporter typing all that was announced in the arena onto the scoreboard.