Taking Care Of Business

[January 18th, 2006] Consider a traditional pro sports startup like the Trail Blazers 35 years ago: Rich, middle-aged men came up with a team name, then found a coach, players and a place to play. Their marketing plan for that basketball franchise: sell tickets to a well-known sport and make some cash.

Portland's new team in the indoor National Lacrosse League, the LumberJax, shows how much things have changed.

The 25-year-old female owner had never even been here before buying the franchise. Few Portlanders have ever seen indoor lacrosse played.

Advertising blanketed billboards and TV. A website, including a fan forum and replica jerseys for sale, went up weeks before the first game was ever played. And everyone involved freely admits that winning is secondary to getting good corporate sponsorships.

"Sponsorships are the most important part of running the franchise," says Angela Batinovich, owner of the LumberJax, whose home opener is Saturday, Jan. 21, against the Colorado Mammoth at the Rose Garden (the team lost 12-7 to the Sting in its season opener on Friday, Jan. 13, at Arizona). "Even if you pack the house, if you're not getting the sponsorships you need, if you're not doing the marketing...and selling the merchandise, then you're dead in the water."

Welcome to the modern sports business model, where the action on the field is consistently referred to as a "product."

League officials, other owners and sports-marketing experts say the Jax are off to a solid start from a business perspective. The team contracted with Global Spectrum, operators of the Rose Garden, to handle marketing and promotions. They signed deals for all home games to be on radio and eight games to be on TV. They have assembled a team which many agree will be competitive in its first season.

"We're going to compete for a playoff spot right off the bat," says LumberJax coach Derek Keenan.

Winning would be nice, of course, but it means nothing if nobody shows up. Wells Fargo, Comcast, Scion and the other sponsors want to know how many people will see their logo at the games, since they're kicking down as much as $70,000 to put it out there.

"Winning really doesn't attract more people, like in the four major sports," says league commissioner Jim Jennings. "Winning helps, but it's more marketing."To make it work, the Jax—according to both Batinovich and Jennings—need to average about 6,000 paid attendance per game. In 2005, the minor-league baseball Portland Beavers averaged 5,229 over 72 home games, and minor-league soccer's Portland Timbers drew an average of 6,090 over 14 games last season. The average in the 11-team lacrosse league is just over 10,000.

Jennings says Batinovich is spending about the same amount of money as other franchises and credits her for "some pretty aggressive marketing," especially her decision to give out free tickets to a December intra-squad scrimmage—the first time an NLL team ever did that. More than 10,000 people showed up to sample the product.

Edmonton, Alberta, the league's other new city this year, is perhaps a good comparison point. It's smaller, with a metro-area population just under a million people (half the Portland metro's), and it has an NHL team that sells out plus a football team that averages 36,000 per game. The new lacrosse team, the Rush, drew nearly 12,000 to its first game on Jan. 6.

A week before the home opener, Jax PR coordinator Danielle Pakradooni said the team had sold just over 1,000 season tickets at $90 to $450 (single tickets cost $10 to $50) and expects 4,000 to 6,000 people on Saturday.

Batinovich says she and the rest of the ownership group are prepared to lose money for three years but expect to break even after next year. She and Jennings both say many startup expenses—marketing, the turf, uniforms and so on—add up to about a $2 million budget for the first year, after which expenses can be cut by as much as a half.

A collective-bargaining agreement with the players is in place for two more years, so labor costs won't change soon.

"True success," says Drew Mahalic, CEO of the Oregon Sports Authority, "is that they build and continue to build a steady fan base each week of the season."

All in all, and strange as that may sound to traditional sports fans, that seems very much within reason.