San Jose Business Journal Article on Sharks

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kdb209

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Jan 26, 2005
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Interesting article in the San Jose Business Journal concerning the Sharks and the upcoming season.

http://sanjose.bizjournals.com/sanjose/stories/2005/09/12/focus2.html

The Sharks still expect to lose money, largely due to increased marketing costs to try to get fans back. The Season Ticket renewal rate was higher than I expected (90%), but Luxury Box sales and Local TV revenues are soft.


While the Sharks expect to lose money in 2005-2006 season, it will be nowhere near the $15 million annual loss club officials announced after each of the past two regular seasons, Mr. Jamison says.

...

With a 90 percent season ticket renewal rate, the Sharks expect to work off a base of 11,000 or so fans, while relying on group sales and single-game purchases to fill the 17,500-seat HP Pavilion as best they can, club officials say. The Sharks play 41 games at home, not including pre-season.

...

Corporations, too, are playing harder to get, especially with luxury suite purchases, says Robert Tuchman, president of TSE Sports & Entertainment, a New York-based sports management firm.

The Sharks expect to have as many as 12 of 64 luxury suites unsold at the beginning of the season along with several more set aside for prospective customers to try out, says Malcolm Bordelon, executive vice president of business operations for Silicon Valley Sports & Entertainment, the business arm of the San Jose Sharks.

As late as 2002, the Sharks had a waiting list for full-season luxury suites. Today, the Sharks are offering partial-season and time-share packages to fill their suites.

With price tags ranging between $125,000 to $145,000 a suite, they have become a major source of revenue for any NHL team, Mr. Tuchman says.

"Businesses are getting smarter about luxury suites anyway," Mr. Tuchman says. "They know they don't have to buy the whole package anymore. They are all about getting the most bang for their buck."

...

Most of the team's deficit will be based on higher marketing costs as the team starts to beat the drums, reminding fans and corporate sponsors alike that the team is back.

The Sharks are reaching out to the San Francisco and East Bay markets like never before, both in print and radio advertisements in order to tap into nearby population centers that have yet to embrace professional hockey, Mr. Bordelon says.

...

Season-ticket prices were dropped an average of 10 percent and single-game tickets have been cut an average of 6 percent. Single-game Sharks tickets range from $17 to $115 per person.

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On the local level, Fox SportsNet Bay Area will televise 70 home and away Sharks games this year.

Fox SportsNet pays a small undisclosed fee to show Sharks home games and sells advertising for those games. For the Sharks' away games, Silicon Valley Sports & Entertainment basically buys time on Fox SportsNet and sells advertising itself.

Advertising for the team's 2005-2006 package has had trouble generating interest, says Ted Griggs, vice president of programing and operations at Fox SportsNet. The team averaged about a 0.9 Nielsen rating in 2003-2004.

Before the player lockout, Fox SportsNet was expecting a big ratings boost based on the Sharks regular season success and extended playoff run, Mr. Griggs says.

"We were looking forward to it," Mr. Griggs says. "Now, it's tough to sell the Sharks. We're in a-wait-and-see mode."
 
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