Jags vs. Jets

I had the opportunity to attend the Jets game this past weekend in person to watch our exciting victory. I did not watch the game from a suite or the press box, but was in the upper deck of Giants Stadium with my sister and her family, and about 40 other Jags fans. This was about the fourth Jaguars vs. Jets game at the Meadowlands that I have viewed from that section of the stadium.

An incident at a Jets game in 2007 (http://www.nytimes.com/2007/11/20/sports/football/20fans.html?_r=1&ref=football) prompted in large part the NFL's effort in 2008 for each team to adopt a Fan Code of Conduct. At this Sunday's game there was some good natured banter between the Jets and Jaguars fans in our section, but nothing that got out of control. I must tell you that I noticed a significant improvement in fan behavior at this Jets game compared to prior years, and attribute it to the Fan Code of Conduct initiated in 2008.

I think the Commissioner was correct in making this a point of focus for each team. Even before the bad economy, we had to compete harder for the fan's entertainment dollar to purchase a ticket to a game. A survey done by the NFL across all 32 markets showed that 52% of the fans on average said that negative fan behavior could affect their decision to purchase tickets to future NFL games. In the Jacksonville market that number was 60%.

Fortunately for Jacksonville a combination of southern hospitality and promoting a family friendly environment from the inception has made it easy to implement our Fan Code of Conduct. For some teams where the culture did not discourage negative fan behavior, the change has been more difficult, but it is working based on my experience this past weekend.

Clearly alcohol consumption is a major contributor to negative fan behavior. That is why at JMS there are policies that limit the number of alcoholic beverages that can be purchased at one time, and a cut off of alcohol sales at the end of the third quarter for day games and at the end of halftime for night games. Interestingly, we did a survey of people attending Jaguars games and found that 81% on average consume 2 or fewer alcoholic beverages while attending a game, a key contributor to our overall good fan behavior at JMS.

The Budweiser Good Sport promotion has been a program that has promoted responsible drinking at our games. Participants pledge to be a "designated driver" and are entered into a drawing to win Jaguars merchandise for that game, and a chance at the end of the season to win a trip to the Super Bowl. On average we have over 500 fans per game pledge to be "designated drivers."

At this Sunday's game we will be filming a public service announcement highlighting the importance of responsible fan behavior, and the PSA will feature our fans. If you would like to participate in the filming come dressed in your best Jaguars gear, go to the Pepsi Plaza and look for a large black backdrop with a Jaguars logo. They will be filming from 10 am until kickoff.

As an organization we recognize the importance of the Fan Code of Conduct, and its enforcement, and we appreciate the way Jaguars fans conduct themselves at JMS.

Bill

The ESPN Generation

We had the opportunity to celebrate my oldest son's 30th birthday this weekend. It was a time to reflect over the past 30 years. Sports has always been a common bond between us, and fortunately I like to think through no small influence on my part, we have the same favorite teams. As someone involved in the sports business, it has been interesting to watch the change of how he consumes sports compared to when I was growing up.

In my era, your loyalty to was to your team and the players on it. I could tell you the starting lineup for my favorite team, and my favorite player was always on that team. The team and player were synonymous with one another. Enter free agency and all that has changed. My son was playing Madden one weekend as the Jaguars. I was watching him play and quickly realized that most of the players he had on the Jaguars were from other teams. When I asked him why it was not the same players as the Jaguars roster, he informed me that he had traded or signed free agents to strengthen his team. This was when I realized his loyalty was more to the logo of the team than the players on the team.

On the rare opportunity I got to attend a sporting event in person growing up, it was all about the game and the people around you. The section that you sat in was its own little community. My parents were season ticket holders to the NY Giants. The people that they sat with were from all over the Tri-state area and they only saw each other 8 or 9 times a year at the game, but they knew everything about each other and their families. Their level of participation in the game was rooting with their section for the home team.

For my son's generation the level of participating at a sporting event is more than being in your seats reacting to what is happening on the field. It is also about visiting your friends in areas like the Bud Zone, it is texting friends who may or may not be at the game about what is happening at the game, and it following on your cell phone what is happening around the league or with your fantasy players. He is participating as much as I did at the event, if not more, but just in a different way.

Watching sports on TV when I was growing up was confined to watching your home team play, except for the playoffs. Your information for your home and other teams was limited to newspapers and the local news stations.  I saw a glimpse of how this was all going to change in the 80s when George Michael's Sports Machine debuted late on Sunday night featuring highlights of what happened in sports that week. It was ESPN SportsCenter before its time.

I often tease my son that he is part of the ESPN generation, sports 24/7. No longer is he limited to watching the home team and local media to get information. He has more games available to watch, but even more changing is that he is part a generation where the highlight reel is the preferred way to consume sports on TV. In a short timeframe you get to see the best plays, biggest hits, key mistakes for every team in every sport. It is no longer about watching a game in its entirety, but making sure you see all the key plays; think Red Zone Channel. His participation with the sports media is not only traditional media, but digital media including websites, Facebook, Twitter, and new sources that are constantly evolving. He controls when, where, and how much sports content he wants to consume.

The reason I bring this up is that like all businesses we must adapt to changes in the marketplace, and for us we need to include in our business model a plan to cultivate the fans of the ESPN generation.

Bill

Local Economics

When people hear that the NFL receives over $3 billion in media broadcast fees that are shared equally by all 32 clubs (approx. $100 million per team), I am always questioned on why the Jaguars are not extremely profitable when it receives that amount of revenue. What they do not understand is that with the current salary cap system it all comes down to local economics, and not the amount of national revenue received.

The salary cap for the players is calculated based on 57.5% of the revenue of the NFL and its teams. This is the national revenue, the majority of which is the media broadcast fees, and all the local revenue of each team. The total revenue is multiplied by 57.5%, and the product of that calculation is divided by 32 to determine the salary cap for each team. If the national revenue was 57.5% or more of the total revenue, then a team's share of the national revenue would cover the team's player costs, its largest expense. Then all the revenue that was generated locally would cover the team's other expenses for football operations, front office, and sales and marketing. These are all expenses controlled at the local level that can be managed by the team based on its local revenue.

However, with national revenue less than 57.5% of revenue of the NFL and the local revenue of all the teams, the national revenue that each team receives does not cover its player costs. As such each team must use of portion of its local revenue to cover the player costs not funded by the national revenue. Since small markets typically have less local revenue than other markets, a greater portion of their local revenue must be used to fund player costs.

For this reason small market teams must maximize their local revenue to be able to cover player costs in excess of national revenue and operating expenses. For the Jaguars, 80% of our local revenue is derived from ticket sales, which is why it is always our primary focus. That starts with making tickets affordable, and continues with providing a great game day experience. It is also why a long term trend of distributing only 47,000 tickets in a 67,000 seat stadium is so concerning.

Text Messages

The play on the football field at the St. Louis game may not have been pretty at times, but we recorded our second home regular season win. This equals all of our regular season home wins last year, and we have five more opportunities to increase that number. I was hoping the crowd would exceed that of the Arizona game, but we fell about a 1,000 short. The crowd that we had a the stadium was outstanding once again, and we only had one ejection which was alcohol related.

We tested last season, and rolled out this season, a text messaging system for use in the stadium for multiple purposes. The first purpose was to give fans the ability to contact us if they needed assistance for any reason, but primarily for bad fan behavior. We know that a fan can be placed in an uncomfortable situation of having to point out someone to a police officer or security guard for unruly behavior. With the text messaging system, a fan can anonymously let us know of unruly fan behavior by sending us a text message from their phone. When we receive the text, we can use the camera system in the stadium to observe the fan and dispatch the appropriate personnel to deal with the situation.

The system also allows us to communicate back to the fan who sent the text message if the behavior is not violating the fan code of conduct, such as standing at appropriate times. For the St. Louis game we  received nine text messages and responded accordingly. Yes we do get some prank messages about the performance on the field, but we send a warning to that person, and if they continue to send the prank messages we can block their number.

What is even more exciting about the text messaging system besides assisting with fan behavior, is that it allows more fan interaction on game days. Fans can send pictures or text messages from their cell phone for display on the video boards, they can vote for what song they would like to hear at the start of the 3rd quarter, and participate in trivia contests. In addition, if they sign up for specials we can send them digital coupons for unique concession and merchandise discounts on game day. I think that we have only begun to scratch the surface of how we can use this technology to enhance the game day experience of the fans.

In the not to distant future I can see where a fan's cell phone will allow them to customize their experience on game day from watching stadium replays, choosing a camera angle to watch a play, or getting real time game stats.

This is one example of a way to use technology to be at the stadium on game day, and not in front of your HD TV.

Innovation & Quality

I just returned from the NFL Fall Owners Meeting in Boston. A number of topics were covered, many of which I cannot discuss here. The Commissioner's major theme for this meeting was how do we use innovation in a quality way to enhance fan engagement. That includes our TV broadcasts, digital media, and the stadium experience.

A prime example of this is the NFL Red Zone Channel, which is currently available in Jacksonville if you have Comcast digital cable. This past Sunday I had the opportunity to watch the NFL Red Zone Channel since my father-in-law was in town and is a die hard Broncos fan, and the local team was not playing very well in the second half.

The NFL Red Zone Channel takes you around the league on Sundays and shows you live game action when teams are in the red zone, or games where the scores are tight. It beats having to flip channels to keep abreast of the games around the NFL, or to wait for the ticker to give you an update. My father-in-law a former purchaser of Sunday Ticket thoroughly enjoyed the channel, partly because we saw almost the entire second half of the Patriots/Broncos game. I am sure that he will be tuning in to the Red Zone on Sundays. The quality of the production is very good for the show's first year.

Starting next year the NFL hopes to roll this out as part of a mobile application. It is a great way if you are travelling to keep up with your favorite team, or to keep up with games around the NFL on one channel.

Check it out on channel 741 in Jacksonville on Sunday, a great way of using innovation for fans wanting something more than the traditional TV broadcast.

Our Team Off The Field

I decided to start writing this blog because I am asked by a lot of fans about what goes on the business side of the Jaguars, and what is like behind the scenes at Jacksonville Municipal Stadium (JMS) on game day. In addition, based on my speaking engagements and our marketing focus groups, I think there are a lot of misconceptions about the game day experience from fans who have never attended a game at JMS, so here is a little about the Titans game.

This Sunday's game was a great game for our fans who were in it from the opening kick-off to the last play of the game. Our fans really needed a home win and the team delivered. I think that only winning 2 of our last 9 home games had an affect on our tickets distributed. The other interesting fact from this game was that since 2005, this was our third lowest no-show rate. Only our home games in 2005 and 2007 against the Colts had lower no-show rates. Our fans who had tickets to the game used them.

As I said the crowd was into the game, but as usual the fans were well behaved. We had 0 arrests and 4 ejections.  Of the 4 ejections none were alcohol related, one was for throwing a towel onto the field, and the others were for using foul language.

You may find it of interest that on game day we have over 3,000 employees here to work the game outside of our staff. They work for various companies, have duties that range from housekeeping to security guards, and are both behind the scenes and interacting with our fans. We know that regardless of who they work for that if there is a service error it is ultimately a reflection on the Jaguars. That is why the management team of each company has worked hard over the last several years to make these employees part of the Jaguars family, and they now truly are "Our Team Off The Field".

Each team member takes pride in delivering a great game day experience, but inevitably service errors occur. That is why we encourage our fans to let us know when this happens. We view this as an opportunity to correct the situation and demonstrate the customer service we all strive for. Our ushers have fan feedback cards, and there are guest comment cards at the concession stands and guests services booths for fans to give us feedback. If fans want to give us feedback after the game they can go to jaguars.com/my experience. For the Arizona game we received feedback from over 300 fans, and of the 30 service errors that we heard about, we followed up with each guest who gave us their contact information. The majority of the problems we will correct, but for those that we cannot, the guest heard first hand the reason for a particular stadium policy.

We know that fan conduct and the guest experience is important to fans attending games, and that is why we take it very seriously. I know that the game day staff and myself are looking forward to our next home game against St. Louis to try to equal the number of home wins of last year, and then adding on from there with the remaining home games.

My First Blog

I have been thinking about, and have been encouraged to write a blog.

My role at the Jaguars encompasses not only the business side of the franchise, but also stadium operations on game day. I will try to give you some insight to what happens at Jacksonville Municipal Stadium on game day outside the field of play. To the extent possible, I will give you my perspective on topics that affect the Jaguars and the business side of sports.

Look for my first entry next Wednesday after the Titans game. I look forward to your feedback on my entries.

Bill Prescott

CFO & SVP of Stadium Operations