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Keeping score

By Chris Atchison | January 13, 2014

Long-time fans of the Toronto Maple Leafs might remember the experience of attending a game at the old Maple Leaf Gardens. It was simple: fans paid for tickets, sat in their seats, bought hot dogs and beer from concessions in jam-packed concourses and were focused on the game, and the game only. Once it was over, they bolted for the exits.

That all changed in the late 1990s and early 2000s when a new trend, driven by the NBA and the NFL, saw live sporting events shift into entertainment experiences. Fans wanted more than hat tricks and slam dunks; they wanted to be wowed. Maple Leaf Sports and Entertainment Ltd. (MLSE) – the parent company of the Toronto Maple Leafs, the Toronto Raptors, the major league soccer franchise Toronto FC and the American Hockey League’s Toronto Marlies – responded to that shift with multisensory experiences, including video, light shows and live dancers.As MLSE CFO Ian Clarke notes, it’s all part of the increasing sophistication that’s driving the business of sport in North America. “Because of the risk-reward nature of the business in terms of the cost base – the investments that owners have to put into their facilities and what they have to pay players – if you don’t operate properly, you could lose a lot of money,” he explains.” With few exceptions across the continent, the days when an owner could run a sporting empire, while micromanaging everything from concession sales to player contract negotiations, are gone.Nowadays those empires are highly diversified corporate machines, and executives such as Clarke are charged with ensuring their bottom-line performance. “My job is really to help us run the business efficiently, so we can have the resources to support our teams,” says Clarke. “There are no discussions where requests from [team] GMs are turned down. We try to take away the excuses and barriers that hold our teams back from winning.”When veteran sports executive Tim Leiweke took the MLSE helm as President and CEO early last year, his message was clear: success for Toronto’s sports teams will be measured in championships. MLSE may be highly profitable and regularly sell out its Leafs and Raptors games, but championship seasons have been non-existent for nearly half a century. That, Clarke concedes, is bad for business. “We have loyal fans for all three sports, but we haven’t given them the teams they deserve. When we do, the city’s going to go crazy. When you win, the hot dogs taste better, the beer is colder … everything is better.”While the CFO can’t control the number of game-winning goals scored by Leafs sniper Phil Kessel or predict the number of field goals Raptor shooting guard DeMar DeRozan might make on a given night, he can help improve the experience for fans and drive stronger return on investment for sponsors and partners. But revenues achieved by the teams help improve the game, by giving them fat budgets to sign elite players, for example. MLSE owns the four sports teams, the Air Canada Centre (ACC), Ricoh Coliseum and BMO Field and their respective practice facilities, six restaurants, three television stations and several merchandise stores, not to mention event, and food and beverage divisions. Those diverse business lines have driven the organization’s market valuation to more than $2.2-billion, according to recent reports.Clarke’s winning strategy is to constantly share ideas on best practices with his MLSE peers and implement new ones, while staying abreast of the latest and greatest technology to give fans an unforgettable experience. That starts with making constant improvements to the organization’s facilities.MLSE is currently in the midst of a $15-million upgrade project with San Jose, Calif.-based network equipment maker Cisco Systems, Inc. (and aided by new ownership partners, tech giants Rogers Communications Inc. and BCE Inc.) to retrofit the ACC with Wi-Fi technology, allowing up to 10,000 fans at a time to live-tweet, participate in contests, watch replays or order food or beverages from their mobile phones. Wi-Fi will not only boost fan engagement, but also the long-term plan is to capture user data the organization can use to improve services and enrich advertiser and sponsor returns. As Clarke points out, simply buying rink boards or stadium advertising is no longer enough: MLSE’s clients want direct access to consumers, particularly MLSE’s many highly sought-after corporate customers.Facility improvements don’t end with technology. Across town, MLSE is examining options to add more seating and possibly a roof to BMO Field. “We had 16 of 19 [Toronto FC] home games this year that had inclement weather,” Clarke points out. “That’s not the ultimate fan experience.” Neither is having a core groups of fans (namely families) shut out of a Leafs or Raptors experience due to the increasing cost of tickets. MLSE is currently exploring ways to auction cheaper seats to families and ensure that subsequent generations of Toronto fans remain passionate about their hometown teams.Clarke is interested in using technology to make fans part of the team and deepen their ties to MLSE’s franchises. “It’s about the stratification of [customer] affinity,” according to the CFO. That means using data gleaned from surveys or point-of-sale transactions to develop direct understanding and communication with customers. That could involve using data to feed specific content to hard-core fans or providing other loyal customers with discounts on merchandise through loyalty reward programs.While the specific fan-interaction strategies still need to be defined, what’s clear is that today’s MLSE has evolved light years beyond the days when ticket and beer sales were the primary drivers of revenue.  “The experience of premium seating, extra service and more specialized service, that’s the sophistication of our business now,” Clarke explains. “It’s about understanding what we’re doing now, and how we can do it better.” 

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