Client Situation
A Major League sports franchise was purchased out of bankruptcy by a new owner. Having been divested from a multi-sport operating entity and been under league control for two years, the club’s employee base was inadequate, the season ticket base had shrunk to less than 25 percent of stadium capacity and the team was losing tens of millions of dollars annually. Furthermore, the connection of the team and sport to the community had dwindled as other professional and collegiate sports were dominating the local landscape. The club had no executive talent in its ranks at the time of handover from the league to the new owner.
Solution
The owner tapped a seasoned executive of other industries, now a E78 team member, to be the Chief Operating Officer to “do the heavy lifting” of the internal re-build. The re-build involved restructuring all roles and operations, re-establishing internal financial controls, implementing proper corporate-level financial and managerial reports, and adopting metrics reporting disciplines. This reorganization was supported by conversion to enterprise systems including financial accounting, HRIS, CRM, and contract management. The E78 executive as COO also worked on re-branding the club and undertaking broad market initiatives to celebrate the heritage and tradition of the sport and the team’s great players and moments. In addition, he spearheaded the acquisition and construction of new training and development facilities across the club’s trade area to strengthen the fabric of the sport’s culture and extend the brand, including rebuilding trust and relevance with the business/sponsorship community. With his leadership in the development of a bank syndicate group that provided a $120 million re-financing, the franchise was able to attract and close an important multi-million-dollar sponsorship deal. Another element of this overall effort was successfully working with state and municipal governments to renegotiate long-term operating leases and gain valuable revenue-generating rights in the form of signage, land development entitlements and legislative changes to sports charity fundraising practices.
Results
- Negotiated a local broadcasting rights extension with Fox Sports that more than doubled the average annual value
- Created and delivered youth and community initiatives which impacted over 350,000 children each year
- Returned to the national stage by hosting a League-wide event
- Achieved positive cash flow with annual bottom line improvement in excess of $25 million
- Tripled the franchise value in five years
- Established a platform for the owner’s core business to significantly, and favorably, expand its operations into the club’s region because of the goodwill and brand power restored to the sports franchise
Soon afterward, the franchise achieved a winning record and advanced in the playoffs for the first time in over a decade
