The Georgia Alley Cats Tim Mosser stood up from his desk and walked to the window in his office. He stared for a moment at the parking lot outside that served as the main parking area for the civic center where the Alley Cats, the professional hockey team he worked for, played their games. It was six-thirty on a Thursday evening, only a hour before a home match for the Alley Cats. He wondered whether there would be any more cars in the lot tonight then there had been for the team’s last home game. Tim was the director of sales and promotions for the Alley Cats, a franchise in the East Coast Hockey League. The Alley Cats had been in the league for four years and Tim had been with the team from its inception. The team was located in a central Georgia city with a population of 50,000 residents and the surrounding metropolitan area had a population of 170,000 residents. A minor league baseball team was the only other professional sports franchise in the city at the time the Alley Cats started operation. Two major investors, Ron Sharpson and Steve Bouton, owned the franchise. Sharpson was the owner of two successful auto dealerships and had always wanted to own a professional sports franchise. Football was his favorite sport, but he enjoyed the contact in hockey. Although he had not played the sport, he liked to watch it and to entertain his friends and business clients at the games. Steve Bouton, his co-owner, had grown up in Michigan with hockey in his blood. He had played hockey in youth leagues and high school. After college he had moved south and enjoyed great success in the construction business. He never lost his love of the sport and had convinced Sharpson to join his efforts to bring professional hockey to his new home town. Major league franchises in baseball, basketball, football, and hockey had all enjoyed large increases in attendance during the sports boom of the 1990’s. Minor league hockey was no exception to this success and included the East Coast Hockey League, of which the Alley Cats were a member. Minor league baseball had grown the fastest of all these sports, with new leagues in medium sized and even small cities once considered too small to support a professional team. The success of these leagues encouraged other investors to attempt the same strategy with hockey. Minor league hockey already existed in the colder regions of the country, but the southeast was an untapped market. There had been little interest in the cold weather sport among sports fans in the southeast. Football was the favorite sport of this region, particularly college football. The state of Georgia had two highly successful Division I college teams and a Division I AA team that had won several national championships. The league had to educate fans about the nuances of the game of hockey and they had to promote it as more than simply a sport. Professional hockey had to be sold as a form of entertainment. In New England and the upper Midwest, the winters were cold enough that hockey could be played outdoors. Boys had grown up playing hockey and it was a popular sport in the colleges. The southeast did not have that tradition and the Alley Cats could not draw from that fan base. Promotions and the concept of offering an evening of entertainment for the family and not just for avid hockey fans were keys to the success of the franchise, despite the fact it was far removed from its Canadian origins. These factors made Tim’s position more important to the financial success of the team than in a northern city of similar size. This fact had actually been appealing to Tim when he had taken the position. He viewed it as a challenge. He felt that if he was successful in a small city in the southeast then he would certainly be able to move to a larger minor league franchise in the northern portion of the country and eventually to his ultimate goal of a general manager’s position with a National Hockey League team. When he was first approached about the position by a representative of the owners, he was reluctant but had eventually recognized the opportunity. Also, the challenge of working at a brand new franchise appealed to him. Tim had met the challenge of providing entertainment for the casual hockey fans. He had a special promotion for every home game and had actually been voted the best promotions manager in the league by his peers for the first two years he was with the Alley Cats. Attendance, however, started to fall after the second year and Tim felt it was due to several factors. CIVIC CENTER A critical factor in the franchise’s success was the lease arrangement the Alley Cats had with the city’s civic center. The first year of the team’s existence saw them play their home games in the Berk Auditorium. This building was over twenty-five years old and better suited to concerts and plays than to hosting hockey matches. It was not built with hockey in mind and had a poor ice making system. It also had a capacity of only 5,000, which was considered too small by the East Coast Hockey League officials. City officials had promised Sharpson and Bouton that they could move their team into the new downtown civic center which was being built. It was designed to accommodate hockey and had a seating capacity of over 8,300. In their second year of existence the Alley Cats moved into their new home. Initially they were quite happy with the facility. They paid only a nominal rental fee, had total control of all food and beverage concessions at games and received half of all parking fees. Unfortunately, the city council, which supervised the facility, quickly realized it had vastly underestimated the cost of maintaining it. In their eagerness to attract a professional hockey franchise to the city, they made a far too generous arrangement with Alley Cats management. The lease arrangement was tied to game attendance. The Alley Cats were required to pay the city only a nominal fee for rent. Any ticket revenue above an attendance figure of 2,500 patrons per game was to be divided equally between the Alley Cats and the civic center management. For the first two years of the team’s existence, attendance averaged over 4,200 patrons per game. In the past two years, however, attendance at games rarely exceeded 3,000 fans. This figure was enough to barely cover the city’s cost of maintaining the facility. The decline in attendance for the past two years had placed a financial strain on the city. Also, to worsen matters, the situation had become a public relations nightmare for city officials. The local newspaper had given the financial problems extensive coverage. There had been a bitter fight to win approval for the construction of the civic center. Many people, including a portion of the city council, had not been in favor of the construction of the facility. They felt that the bond issue required to finance it placed the city under too heavy a debt load. Several members felt the city had been too eager to get the team as a tenant at the facility. When the financial problems surfaced, one of the members contacted the local newspaper, which was more than willing to provide detailed coverage of the problems to its readers. Several council members were quite sensitive to the criticism they had received from citizens over the matter. The major argument voiced by these members against the center was that it was a huge financial obligation to incur for a city which with a declining population. The latest census confirmed this fact. It showed that the population within the city limits had fallen by over 7,000 residents since the previous census was taken. Council members pointed to a decline in the services provided by the city as the primary factor for this decrease in residents. Residents who had the income to do so had fled to the suburbs. It was the opinion of these council members that the city had more pressing problems than constructing a sports and entertainment facility to further the economic and political interests of a few individuals. More pressing problems such as adequate housing for the poor, funding for schools and improvements in the highway system needed to be addressed first. They contended that the mayor had pushed through the bond issue because it would be good for his political career. These council members claimed he had aspirations to, at some point, run for the governor’s office and it would be beneficial for him to state that during his administration the city built a civic center and brought professional hockey to it. City council had gone back to Alley Cat ownership and asked to renegotiate the terms of the lease. Sharpson and Bouton stated that they had entered into the agreement in good faith and they were not interested in discussing any changes until the end of the agreement, which would not occur for another four years. Tensions had only increased between the two owners and the city council. The newspaper coverage of this strife served only to add to these tensions. COMPETITION The first two years of the franchise’s existence had been successful. With no other professional sports competition during the fall and winter months, the Alley Cats had the city to themselves. In any city there is a core of individuals who are willing to pay to see professional or college sports. Since there was no Division I college team in the city or even within a fifty mile radius, the Alley Cats’ only competition was the class A minor league baseball team. That team was affiliated with an American League team and since most of the fans in the area were National League fans, the local team enjoyed only a moderate following. . The Alley Cats had been able to appeal to the businesses in the city who were interested in using the team’s matches as a means of entertaining business clients. Also, they appealed to the sports-minded segment of the population who wanted to view a professional sporting event in the fall and winter months. These two market segments were large enough to sustain the Cats for their first two years of operation. In the third year of their existence a major change occurred. An indoor professional football team established operations in the city and also played their games in the civic center. This football league was attempting to cash in on the same fan euphoria and economic prosperity that fueled the expansion of professional sports in the 1990’s. Very quickly, it became clear that the city could not adequately support another professional franchise. Though the Stallions, the new football franchise, played their games in the spring, they proved to be a major competitor for the sports entertainment dollar in the city. Almost overnight, Tim saw season ticket sales for the Alley Cats start to decline. This was particularly true among businesses which had previously supported the team. Though this was indoor football, with its shortened field and unique rules, it was still football, the game which most of the city’s sports fans had grown up with and was their first love. Economic analysts of sports are aware that there is a finite amount of sports dollars in a city. Only a fraction of the total population is willing to spend discretionary income to attend sporting events. Tim had done a good job of appealing to that segment of the population by actively promoting the Alley Cats and attempting to educate sports-minded consumers about hockey. When the Stallions arrived, many of these fans shifted their loyalty to the new team. They wanted to support professional sports, but when faced with a choice between the new sport of hockey and the sport they had grown up with, football, they chose the familiar one. Another factor that contributed to the decline in attendance was the novelty of the Alley Cats had worn off for many. It had been a new product when it first came to the city with exciting game promotions. After a point, however, it was difficult to come up with new promotions and fans had looked elsewhere to spend their sports dollars. Added to that was a decline in the team’s on-ice performance. The team had been reasonably successful their first two years, making the playoffs each year. The last two years, however, had seen the team post a poor winning percentage and fail to make the playoffs. DEMOGRAPHICS One other factor that Tim had to deal with was the demographic makeup of the area’s population. The city that the Alley Cats were located in had a large African American population. Within the city, this ethnic group represented almost seventy percent of the total population. In the surrounding metropolitan area, that percentage declined to less than forty percent. Hockey was not a popular sport among African Americans. Very few actually played the game and only a few African Americans had ever played in the National Hockey League. Only a handful of this minority group attended any of the Cats games. When population figures were evaluated in terms of the size of a metropolitan area needed to support a professional hockey team, total population for the city and metropolitan area had been used. In reality, these figures should have been reduced drastically. Instead of a metropolitan area of 220,000 potential customers, the franchise was really located in a market of under 120,000 individuals, a small population base from which to draw. LOCAL ECONOMY One final factor that presented problems for the Alley Cats was the local economy. The unemployment rate had been below 4 percent when the franchise had started operation in the late 1990’s. By 2001, that figure had ballooned to over 7 percent. Several large textile firms had closed their doors or severely reduced their workforces. The local economy felt a ripple effect. A large military base, one of the linchpins of the local economy, had reduced its military personnel by more than 30 percent with a subsequent loss of civilian jobs. As a result, the Alley Cats were faced with less discretionary income among its customer base. With these problems in mind, Tim Mosser needed to develop a marketing strategy to bring fans back to the civic center to support the Cats. He knew he could not have any influence on the local economy and he could not just hope that the Stallions football team would go away. He also knew a mistake had been made by the owners in determining the size of the fan base, but he could not change these conditions. His bosses, Ron Sharpson and Steve Bouton expected an increase in attendance very soon. Tim knew that his position with the team was in jeopardy if he could not produce this increase and few alternatives were available to him given the present environment. QUESTIONS 1. Discuss the alternatives available to Tim Mosser to reverse the trend of declining attendance. 2. What influence does the level of discretionary income among consumers in a community have on the success of a professional sports franchise? 3. What factors contributed to the success of professional sports franchises during the second half of the nineteen nineties? Elaborate. 4. What changes could be made with the city council to make the lease arrangement of the civic center a more agreeable one for both parties? Explain. You are to read the attached case, and then answer the questions that appear at the end of the case. Your responses should total no more than 2 pages,
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