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Click the image above to check out the Sharks Ice website!
Dear Faithful Readers,
It’s hard to believe we’re within a month of the 19th annual National Sports Forum in Dallas. Having taken the Forum to nearly 20 different cities over the years, we’ve been fortunate enough to have worked with dozens of sports venues across the country.
Though known mostly for the teams they house, the majority of these arenas, stadiums and ballparks also host numerous additional events in the off-season and throughout the year. Many are the perfect setting for concerts, youth tournaments and family entertainment; all of which bring in incremental revenue for venues on days when they may otherwise be left empty.
This week’s article showcases how Sharks Sports and Entertainment found a way to utilize additional facilities, including Sharks Ice, throughout their region to bring in secondary revenue streams. See how they are using these venues to host external events and tournaments, while cultivating their future fan base.
Enjoy the feature,
Erin
[email protected]
P.S. - Feeling creative? Send in your best marketing and advertising campaign from 2013 and your team could be the next feature in "Selling It"!
PROGRAM TITLE
The San Jose Sharks
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OBJECTIVES
Sports teams have a massive opportunity to capitalize on what other businesses don't have access to: their stadiums. Hockey teams have an especially unique situation in that they have a facility that cannot be easily duplicated. You can play football in any open lot, but ice hockey requires a rink. Ice skating facilities are expensive, hard to maintain and have small profit margins unless tied to a larger cause that can bring in events. With revenue streams much smaller than that of larger stadiums (17,500 seats available at the Sharks SAP Center vs. 80,000 at Lambeau Field), it becomes essential to find more creative ways to increase profits.
That’s why Sharks Sports and Entertainment (SSE, owners of the San Jose Sharks) have found a way to increase their bottom line and grow their fan base at the same time. Ancillary business and facilities are big ways that SSE is generating secondary revenue streams from events not directly related to the Sharks. Hockey teams across the world should take notice of the way the Sharks do business.
PROGRAM DESCRIPTION
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SSE's biggest facility - Sharks Ice - located in San Jose, is the largest ice skating facility west of the Mississippi with four ice sheets. It's used for the Jr. Sharks program, figure skating competitions, ice hockey competitions, public skating sessions and a practice rink for the NHL Sharks. Sharks Ice has the largest number of registered adult hockey players in the country – 4,800 – and is open 364 days a year. With over 1.5 million people going through the Sharks Ice Center every year, it is the largest contributor to hotel room bookings in San Jose only behind the Convention Center. Mind you, the SAP Center only draws 1 million people per year…. Sharks Ice hosts the Jr. Sharks program year round, has hosted the Girls National Ice Hockey Championships and will be hosting the 2014 Boys National Championships. As you can see, Sharks Ice gets a lot of play!
All this action has huge benefits for Sharks Sports and Entertainment. Firstly, they are building their fan base for the future. “It’s a vertical integration strategy, we are able to get kids and adults exposed to the sport on a regular basis. And when those kids become decision makers in homes, they are more likely to be Sharks fans and buy tickets,” said John Tortora, COO for the San Jose Sharks. Getting more people involved in Sharks related ice events is growing their fan base, and SSE has invested a lot of money into the Jr. Sharks and their younger fan base as future followers and potential players (as you will see in the results section)!
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Secondly, The revenue generated from Sharks Ice is unique in that it is not shared with the city. Unlike other funds generated from Sharks games like ticket sales and sponsorship deals, Sharks Ice revenue is strictly SSE’s. They do pay a rental fee to the city for use of the building, but earinings are not split up and shared. That’s money coming in from ice skating events, the Jr. Sharks program, competitions and public use. Considering that 1.5 million people come through the facility each year, sole access to that revenue is a huge benefit.
Click above to go to the San Jose Sharks Website
PARTNERSHIP
Sharks Sports and Entertainment partners with the city of San Jose for their ancillary businesses. San Jose city owns the Sharks Ice facility and the SAP Center, but SSE has full operational control over them. The city is more of a back seat partner with SSE doing all of the heavy lifting and hefting all P&L responsibility.
RESULTS
Sharks Ice has been a big success for SSE. “It has worked out well for us, people can identify with the sport more readily because they have been exposed to it more and it’s growing our fan base,” said Tortora. They have fans growing up in the Sharks community and families becoming more involved. But as mentioned earlier, the revenue generated from Sharks Ice is unique in that they don't have to share it with the city. The facilities are very costly, but the revenues and benefits heavily outweigh the operational costs.
The Sharks have also been able to capitalize on the program in ways much closer to home. One of their very own minor league players, Matt Tennyson, came up through the hockey ranks in the Jr. Sharks program. Both fans for life and prospecting players are coming from what SSE is doing with Sharks Ice.
LOOKING AHEAD
The Sharks have two other facilities, in Oakland and Fremont, but the Sharks Ice facility in San Jose is by far the largest. With four sheets currently, they are looking to expand to six sheets. Tortora simply said “The demand for ice is so large that we cannot accommodate all of those who want to use it. We are working on adding more sheets in the future." The problem is that ice rinks are tremendously expensive to build and maintain and the process is slow going. But the revenues offset the high costs so they are definitely looking at putting in more ice. “We move carefully and steadily, but it’s a slow process,” said Tortora.
The future may also hold an outside hockey match with the “NHL Stadium Series”. There have been talks with Stanford and the San Francisco 49ers and Giants about hosting a hockey game at their respective stadiums. Final decisions are waiting on the success of the Southern California game at Dogers Stadium between the Kings and Ducks. According to Tortora, “We are in a holding pattern until we see how the other games go, but if they go well it is a definite possibility.”
CONTACT
For more Information, contact:
Scott Emmert, Media Relations Director, San Jose Sharks
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