This week
VOL. 25 NO. 38, NOVEMBER 29-DEC. 5, 2004
Pacers' next fight? Damage control
Team faces PR battle to keep fans, sponsors
By Anthony Schoettle
IBJ Reporter
What do you think of the response of the Pacers organization to the episode in Detroit?
Click here to join IBJ's disussion forum.
Surveying the damage inflicted by the Nov. 19 melee in Detroit to the Indiana Pacers' image, prospects for a championship, and potentially the NBA team's bottom line, team officials had one goal: perseverance.
"We owe that much to our players, our fans and our community," co-owner Herb Simon concluded in a statement Nov. 21.
There is much to mend in the relationship between those who consume the Pacers' entertainment and those who provide it after the team's three leading players waded into the stands at The Palace in Auburn Hills, Mich., and fought with fans. NBA Commissioner David Stern dealt those players the harshest non-drug-related penalties in league history.
"This is a brutally tough marketing challenge," said Richard Sheehan, a University of Notre Dame economist and author of "Keeping Score: The Economics of Big-Time Sports."
"I think the Pacers as a franchise this year are simply screwed," he said. "How in the world do you market this to the fan?"
For a team with championship aspirations and a fast start, the turn of events dismayed fans and riled pundits across the country. An already-injury-depleted lineup meant just six players were available for the Nov. 20 game, which the Pacers narrowly lost.
Three days later, the team handily defeated the Boston Celtics at Conseco Fieldhouse, but still faced a daunting schedule with Ron Artest, who led the charge into the stands, out for the remainder of the season. All-star Jermaine O'Neal and newcomer Stephen Jackson are out until mid-January.
"Going into this with the idea of just mitigating the damage is a flawed strategy. They have to take control of the situation and turn it into a positive" by taking more responsibility and being more upfront with fans, observed Dean Bonham, former Denver Nuggets president and founder of Colorado sports marketing firm The Bonham Group.
Certainly, the franchise has suffered a massive public relations black eye that could cost more than $1.5 million in lost ticket revenue and another $2 million in lost concession, parking and merchandise sales this season alone, sports business experts estimated.
NBA officials said the Pacers can't count on realizing any savings from players suspended without pay. Although league officials Nov. 24 were still trying to determine where the $11.8 million from suspended Pacers players' salaries would go, it won't end up in the team's coffers. The league will probably split the money among a number of causes, anti-violence charities among them.
For now, Pacers pillar sponsors such as Bank One and Sport Graphics have vowed to stay with the team, but several sponsors said they'll be watching closely how the team handles the situation in the weeks to come. The effects, as well as the event, are unprecedented.
"I'm not sure people understand the enormity of this situation," said Randy Schwoerer, president of Schwoerer & Associates, a local sports and marketing consultancy. "The Pacers are already marketing around this; you can see that by their public statements.
"I think players, coaches and executives need to be very, very careful here," he added. "This is already a defining moment in the team's history. How dark the moment is may depend largely on how they respond to this crisis."
While there's a groundswell of local support for the Pacers, detractors also are coming forward. Some fans who own season tickets and other ticket packages say they are not getting the product they purchased.
If the team can't maintain its winning ways, sports marketers said, the grumbling will become much louder.
"Certainly, there's no guarantee issued with these tickets and players do get injured," said Milton Thompson, president of Grand Slam Cos., a local sports marketing firm. "But people bought their tickets thinking the Pacers would be competing for an NBA championship. And to the extent that the players' absence is due to behavior that the team should have been able to control, that is a different scenario."
Emergency preparedness
Pacers CEO Donnie Walsh wasted little time pulling together the organization's legal team and public relations personnel immediately following the incident.
But Walsh wasn't alone in his effort. This nightmare was so real, and the ramifications loomed so large, normally hands-off owners Herb and Mel Simon also quickly became involved, sources close to the team said.
"The Simons are sharp businessmen," said Mark Rosentraub, a former IUPUI dean and author of "Major League Losers," a book about professional sports operations. "They understand what's at stake."
The team's tactical response was led by a statement released late Nov. 21 by Herb Simon, within hours of Stern's announcement that Artest would be suspended for the remainder of the season, Jackson would be lost for 30 games, and O'Neal would be out for 25.
"While we do not condone some of the actions of the players involved, we do consider the action taken Sunday by the National Basketball Association to be unprecedented and inappropriate based on the circumstances," Simon said in the statement. "We believe that there was a rush to judgment and not enough opportunity for all sides to be heard."
The next day, Pacers Coach Rick Carlisle--along with players Reggie Miller, who received a one-game suspension for his part in the melee, and Austin Croshere--were brought in for a carefully orchestrated press conference. Walsh and Larry Bird, president of basketball operations, appeared immediately afterward in a separate press conference.
Later that day, the team issued statements from Artest, O'Neal and Jackson.
Meanwhile, Pacers officials were phoning and faxing their best season-ticket holders, suite holders and sponsors to reassure them of the team's commitment to winning games.
Tactical error?
Ernie Reno, a crisis communication specialist and president of locally based Avatar Communications Group, was not impressed by the Pacers' initial moves. With legal and marketing issues so tightly wound, any misstep could cost millions in lost fan and sponsor loyalty, in addition to lawsuits already being filed in Michigan courts.
"The response to this episode on the part of the Pacers represents a measurable lack of planning," Reno said. "The most glaring error in judgment that I perceived is the failure, by all parties involved, to accept their level of responsibility.
"The Pacers, along with the NBA and Detroit Pistons, are trying to spin this in their own way," he added. "The public will eventually see through it and all parties will have a bigger problem."
The Pacers may not value Reno's opinion on crisis management, but they'll likely be concerned about what he says as an avid sports fan and father. It's unlikely he will take his family to another Pacers game.
Fans' drunkenness, swearing and ranting are too prevalent at professional sports, he said, including at the Fieldhouse.
"It isn't just me saying this; it's many of my friends who have families," Reno said. "I can no longer justify subjecting my children to this."
This is a particularly important time for Pacers officials to reach out to individual fans. The corporate demand for tickets has fallen dramatically since the Fieldhouse opened for the 1999-2000 season. Average per-game attendance has declined from the capacity of 18,345 during the inaugural season to 16,558 last season.
The Pacers have made a concerted effort to attract more walk-up ticket sales to fill the corporate void over the last two seasons.
"The loyal, long-term fans will stay with the team, but the casual fans, which are so critical now, are at severe risk," sports analyst Bonham said.
The day following the Pacers press conference, sports marketers said Artest made matters worse by giving a rambling interview to Matt Lauer on "The Today Show." Artest not only deflected responsibility for the incident, but also took the opportunity to promote his music label.
The display showed just how little control the Pacers have over the situation, industry sources said, with one close to the team saying Pacers brass were upset by the interview.
"Artest's comments during 'The Today Show' interview shows he still doesn't get it," Reno said. "Despite all that has happened, Artest didn't miss an opportunity to use the folks at NBC to promote his rap album."
Reno added, "Perhaps Artest can take comfort in the fact that he has a kindred spirit in David Stern, who, while condemning the brawl, refuses to acknowledge any culpability on behalf of the NBA."
Stern, like Walsh, is an attorney.
With lawsuits already pending from fans who claim they were injured in the brawl, and appeals from the NBA Player's Association up in the air, Grand Slam's Thompson, who also is an attorney, said the team's marketing and public relations arms might be tied by the legal staff.
"Everyone will craft their statements to avoid legal liability," he said. "If you say it's our fault, you accept liability. I'm sure the Pacers want to be careful not to admit guilt in a civil or criminal way."
Bonham thinks compromising fan and sponsor communication to protect the team legally is a slippery slope.
"Communicating to fans and sponsors better be a front-burner issue," he said. "They can't afford any confusion right now about the future of this team. That will certainly multiply any losses."--
https://www.ibj.com/topstories.asp?A=16959
VOL. 25 NO. 38, NOVEMBER 29-DEC. 5, 2004
Pacers' next fight? Damage control
Team faces PR battle to keep fans, sponsors
By Anthony Schoettle
IBJ Reporter
What do you think of the response of the Pacers organization to the episode in Detroit?
Click here to join IBJ's disussion forum.
Surveying the damage inflicted by the Nov. 19 melee in Detroit to the Indiana Pacers' image, prospects for a championship, and potentially the NBA team's bottom line, team officials had one goal: perseverance.
"We owe that much to our players, our fans and our community," co-owner Herb Simon concluded in a statement Nov. 21.
There is much to mend in the relationship between those who consume the Pacers' entertainment and those who provide it after the team's three leading players waded into the stands at The Palace in Auburn Hills, Mich., and fought with fans. NBA Commissioner David Stern dealt those players the harshest non-drug-related penalties in league history.
"This is a brutally tough marketing challenge," said Richard Sheehan, a University of Notre Dame economist and author of "Keeping Score: The Economics of Big-Time Sports."
"I think the Pacers as a franchise this year are simply screwed," he said. "How in the world do you market this to the fan?"
For a team with championship aspirations and a fast start, the turn of events dismayed fans and riled pundits across the country. An already-injury-depleted lineup meant just six players were available for the Nov. 20 game, which the Pacers narrowly lost.
Three days later, the team handily defeated the Boston Celtics at Conseco Fieldhouse, but still faced a daunting schedule with Ron Artest, who led the charge into the stands, out for the remainder of the season. All-star Jermaine O'Neal and newcomer Stephen Jackson are out until mid-January.
"Going into this with the idea of just mitigating the damage is a flawed strategy. They have to take control of the situation and turn it into a positive" by taking more responsibility and being more upfront with fans, observed Dean Bonham, former Denver Nuggets president and founder of Colorado sports marketing firm The Bonham Group.
Certainly, the franchise has suffered a massive public relations black eye that could cost more than $1.5 million in lost ticket revenue and another $2 million in lost concession, parking and merchandise sales this season alone, sports business experts estimated.
NBA officials said the Pacers can't count on realizing any savings from players suspended without pay. Although league officials Nov. 24 were still trying to determine where the $11.8 million from suspended Pacers players' salaries would go, it won't end up in the team's coffers. The league will probably split the money among a number of causes, anti-violence charities among them.
For now, Pacers pillar sponsors such as Bank One and Sport Graphics have vowed to stay with the team, but several sponsors said they'll be watching closely how the team handles the situation in the weeks to come. The effects, as well as the event, are unprecedented.
"I'm not sure people understand the enormity of this situation," said Randy Schwoerer, president of Schwoerer & Associates, a local sports and marketing consultancy. "The Pacers are already marketing around this; you can see that by their public statements.
"I think players, coaches and executives need to be very, very careful here," he added. "This is already a defining moment in the team's history. How dark the moment is may depend largely on how they respond to this crisis."
While there's a groundswell of local support for the Pacers, detractors also are coming forward. Some fans who own season tickets and other ticket packages say they are not getting the product they purchased.
If the team can't maintain its winning ways, sports marketers said, the grumbling will become much louder.
"Certainly, there's no guarantee issued with these tickets and players do get injured," said Milton Thompson, president of Grand Slam Cos., a local sports marketing firm. "But people bought their tickets thinking the Pacers would be competing for an NBA championship. And to the extent that the players' absence is due to behavior that the team should have been able to control, that is a different scenario."
Emergency preparedness
Pacers CEO Donnie Walsh wasted little time pulling together the organization's legal team and public relations personnel immediately following the incident.
But Walsh wasn't alone in his effort. This nightmare was so real, and the ramifications loomed so large, normally hands-off owners Herb and Mel Simon also quickly became involved, sources close to the team said.
"The Simons are sharp businessmen," said Mark Rosentraub, a former IUPUI dean and author of "Major League Losers," a book about professional sports operations. "They understand what's at stake."
The team's tactical response was led by a statement released late Nov. 21 by Herb Simon, within hours of Stern's announcement that Artest would be suspended for the remainder of the season, Jackson would be lost for 30 games, and O'Neal would be out for 25.
"While we do not condone some of the actions of the players involved, we do consider the action taken Sunday by the National Basketball Association to be unprecedented and inappropriate based on the circumstances," Simon said in the statement. "We believe that there was a rush to judgment and not enough opportunity for all sides to be heard."
The next day, Pacers Coach Rick Carlisle--along with players Reggie Miller, who received a one-game suspension for his part in the melee, and Austin Croshere--were brought in for a carefully orchestrated press conference. Walsh and Larry Bird, president of basketball operations, appeared immediately afterward in a separate press conference.
Later that day, the team issued statements from Artest, O'Neal and Jackson.
Meanwhile, Pacers officials were phoning and faxing their best season-ticket holders, suite holders and sponsors to reassure them of the team's commitment to winning games.
Tactical error?
Ernie Reno, a crisis communication specialist and president of locally based Avatar Communications Group, was not impressed by the Pacers' initial moves. With legal and marketing issues so tightly wound, any misstep could cost millions in lost fan and sponsor loyalty, in addition to lawsuits already being filed in Michigan courts.
"The response to this episode on the part of the Pacers represents a measurable lack of planning," Reno said. "The most glaring error in judgment that I perceived is the failure, by all parties involved, to accept their level of responsibility.
"The Pacers, along with the NBA and Detroit Pistons, are trying to spin this in their own way," he added. "The public will eventually see through it and all parties will have a bigger problem."
The Pacers may not value Reno's opinion on crisis management, but they'll likely be concerned about what he says as an avid sports fan and father. It's unlikely he will take his family to another Pacers game.
Fans' drunkenness, swearing and ranting are too prevalent at professional sports, he said, including at the Fieldhouse.
"It isn't just me saying this; it's many of my friends who have families," Reno said. "I can no longer justify subjecting my children to this."
This is a particularly important time for Pacers officials to reach out to individual fans. The corporate demand for tickets has fallen dramatically since the Fieldhouse opened for the 1999-2000 season. Average per-game attendance has declined from the capacity of 18,345 during the inaugural season to 16,558 last season.
The Pacers have made a concerted effort to attract more walk-up ticket sales to fill the corporate void over the last two seasons.
"The loyal, long-term fans will stay with the team, but the casual fans, which are so critical now, are at severe risk," sports analyst Bonham said.
The day following the Pacers press conference, sports marketers said Artest made matters worse by giving a rambling interview to Matt Lauer on "The Today Show." Artest not only deflected responsibility for the incident, but also took the opportunity to promote his music label.
The display showed just how little control the Pacers have over the situation, industry sources said, with one close to the team saying Pacers brass were upset by the interview.
"Artest's comments during 'The Today Show' interview shows he still doesn't get it," Reno said. "Despite all that has happened, Artest didn't miss an opportunity to use the folks at NBC to promote his rap album."
Reno added, "Perhaps Artest can take comfort in the fact that he has a kindred spirit in David Stern, who, while condemning the brawl, refuses to acknowledge any culpability on behalf of the NBA."
Stern, like Walsh, is an attorney.
With lawsuits already pending from fans who claim they were injured in the brawl, and appeals from the NBA Player's Association up in the air, Grand Slam's Thompson, who also is an attorney, said the team's marketing and public relations arms might be tied by the legal staff.
"Everyone will craft their statements to avoid legal liability," he said. "If you say it's our fault, you accept liability. I'm sure the Pacers want to be careful not to admit guilt in a civil or criminal way."
Bonham thinks compromising fan and sponsor communication to protect the team legally is a slippery slope.
"Communicating to fans and sponsors better be a front-burner issue," he said. "They can't afford any confusion right now about the future of this team. That will certainly multiply any losses."--
https://www.ibj.com/topstories.asp?A=16959
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