1/3 When you place a telephone call to the Dallas Stars hockey team, you get a package deal. 'Texas Rangers-Dallas Stars,' says the pleasant voice on the other end of the line.
It could be a preview of Minnesota's pro sports future.
Uniting the economic fortunes of big-league baseball and hockey in Minnesota may be the result of an agreement signed last week by St. Paul Mayor Norm Coleman and Minnesota Twins officials calling for Carl Pohlad to sell the team to new owners by Oct. 1.
The man Coleman has tapped to lead the search for new owners is Minnesota Wild president Jac Sperling, whose first stop is likely to be the group of wealthy Twin Cities-area residents who put up nearly $100 million to get the NHL expansion off the ground.
While Sperling called predictions of joint ownership of the hockey team and Twins 'premature,' there has already been some brainstorming in the Wild's offices about how a two-team operation would work. Among the scenarios are a possible hockey-baseball cable TV channel; shared mall retail stores throughout the metro area; maybe even selling naming rights as a package for the $130 million hockey arena under construction in St. Paul and the $325 million open-air stadium Coleman has proposed to build for the Twins.
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Adding value
In Texas, the sales and marketing offices of the National Hockey League Stanley Cup champions are in the Ballpark at Arlington, home field of the Major League Baseball Rangers. If you want, you can talk to one account executive from what's called the 'Southwest Sports Group,' who would be thrilled to sell you baseball tickets and a hockey luxury suite, not to mention advertising signs for the Mesquite Rodeo and commercials on Dallas Cable Channel 39 - all properties owned by Dallas investment mogul Tom Hicks.
'It's a symbiotic relationship,' said Charlie Seraphin, the Rangers' vice president for corporate sales. He had just returned from a lunch meeting where he pitched a Rangers client on the benefits of the Stars' new hockey arena.
'We know that at the end of the day all of the dollars go to the same bottom line,' said Seraphin.
Combining the operations of sports teams is a mini-trend as cross ownership proliferates. The New York Yankees and the NBA's New Jersey Nets are finalizing a merger. Atlanta cable TV mogul Ted Turner owns the baseball franchise there, the NBA's Hawks and the NHL expansion team, the Thrashers, although there have been limited joint marketing efforts. The Arizona Diamondbacks baseball team is operated by Jerry Colangelo, owner of the Phoenix Suns NBA team.
In addition to Dallas, there are already two other hockey-baseball marriages.
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The Disney deal
Bill Robertson, communications vice president for the Wild, learned the ropes of merged operations firsthand as an executive with the Disney Co., which owns the Anaheim Mighty Ducks of the NHL and baseball's Anaheim Angels. Robertson helped design the merger of the two teams under an umbrella company called Anaheim Sports Inc. And in Detroit, pizza mogul Mike Ilitch owns both the hockey Red Wings and baseball Tigers.
There's even a Minnesota precedent: When Calvin Griffith owned the Twins and George and Gordon Gund owned the North Stars, the two teams entered into a TV joint venture. It ended up in court after Pohlad, who bought the team in 1988, decided to pull out of the deal.
When Disney combined its hockey and baseball operations in 1996, it was the first experiment of jointly selling and marketing two facilities, two sets of suites, two universes of season tickets and two sets of corporate sponsorships. The idea was to simultaneously woo clients for both sports and both stadiums. Sales staffers tried to do too much and there was heavy burnout. The so-called efficiencies of combining some responsibilities took their toll on employees. Since then, Angels and Ducks front offices have gradually returned to relatively separate operations.
'At the upper management levels in professional sports, people who own two teams might say, `Oh, we can have less staff now,' but most sales and marketing of one team is a year-round operation,' said Susan Hofacre, chairwoman of the sports marketing department at Robert Morris College in Pennsylvania.
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Media revenues
The key to successful sports franchises today isn't ticket sales or stadium billboards, it's media revenues. If the Twins could get a new ballpark and increase stadium revenues, the next goal would be to increase local media revenues, which are also among the lowest in the major leagues.
Disney's combination of the Ducks and Angels was driven by an attempt to form a new regional cable sports channel in Southern California. It was to be operated by Disney-owned ESPN, the national cable sports channel. That didn't materialize because the existing regional Fox-affiliated cable outlet offered the teams such a lucrative broadcast deal in order to keep ESPN out of the market.
The Stars-Rangers operational merger is part of a larger business plan by owner Hicks; his company also owns Dallas' local rodeo and a broadcast TV channel. In the planning stages is a new regional Texas cable channel with the Stars and Rangers as the primary content.
'I think you'll see the continued collaboration of media buying teams or teams, perhaps, buying regional channels,' said Neal Pilson, former head of CBS Sports and now one of the nation's foremost sports TV consultants. 'The more channels there are, the easier it will be.'
'Talking about your own sports channel, that's always the grand theorizing,' said Timberwolves president Rob Moor, who is closely watching any Wild-Twins merger. A new sports cable channel could benefit the Timberwolves, too; if the Twins and Wild formed their own channel, the Wolves would have options to join the new station or leverage competing bids into increased fees from the Midwest Sports Channel, the only current cable outlet in the region. MSC officials were unavailable for comment late last week.
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Possibilities
Wolves owner Glen Taylor and Pohlad spoke casually about forming some kind of joint operation soon after Taylor bought the NBA team in 1995. That combination could also have issued a public stock offering, a possibility that could follow a Wild-Twins merger, as well.
Of course, there are risks. Hockey and baseball are the two sports that have no salary caps, making total operating costs uncertain. Whether two big-league teams can flourish if both are based in St. Paul also remains a question. Whether Wild managing partner Bob Naegele and his group can afford a baseball team on top of their hockey investment remains unknown; for now they're not talking. Both sports also face the possibility of labor unrest in the next three years.
But consider this: The Wild still hasn't struck deals for its new arena for a food and beverage concessionaire or for naming rights. So far, it's only signed one corporate sponsor, the team's official credit card. If a Twins stadium were to be approved, both teams could see the opportunity of managing two new buildings under one ownership group.
'You would have a heckuva lot more to bargain with,' said Moor. 'This is why Home Depot does so much better than Jack's neighborhood hardware store.'
