Atlanta Hawks

NBA Hawks profit from fresh start

This article originally appeared on SportsBusinessDaily.com by John Lombardo.  You can read the original here.

The Atlanta Hawks have been in the NBA since 1968, but the team’s CEO, Steve Koonin, a veteran of local institutions Coca-Cola and Turner, has adopted a startup approach in overhauling the franchise.

“It’s like a 48-year-old expansion team in the way we have reimagined it,” Koonin said.

Two years ago, the Hawks were a franchise paralyzed by feuding former ownership and racially charged controversy. But since being sold to a group headed by Tony Ressler in 2015 for $850 million, the Hawks this season are setting some all-time-high business marks.

Sponsorship revenue has doubled to record levels, while ticket revenue is also spiking to new heights. Over the past two seasons, full-season-ticket sales have grown by 72 percent and are nearing the 10,000 benchmark, a level once unheard of for a team that for years was known for underperforming in its market.

“We are now in the top 10 in the NBA’s sponsorship business,” Koonin said of the Hawks’ corporate base, which for the first time has cracked into the league’s upper echelon. “We have an attractive audience. It is a millennial, diverse audience that is very elusive to hit through traditional media.”

Those metrics, combined with the recent announcement of a $193 million major renovation of Philips Arena, the purchase this month of a D-League team to start play in 2019 and construction of a new $50 million practice facility to open next year, are part of the Hawks’ fast and furious turnaround. It’s also taking place in an ultracompetitive market, as the Braves build their new ballpark in suburban Cobb County while the Falcons build a downtown stadium near Philips Arena.

The new buildings mean fierce competition for fan dollars and corporate sponsorship, but it’s a laser focus on marketing to millennials that Koonin sees as the way to cut through the clutter.

One of the strategies introduced this year to appeal to younger ticket buyers is the team’s new mobile-friendly option Hawks Season Pass, which for six monthly payments of $67 or a single payment of $399 gives buyers seats to all home games excluding when they play the Golden State Warriors and Cleveland Cavaliers. The digital season-ticket plan does not assign a seasonlong seat. Instead, fans are notified through their mobile device of their seat location 15 minutes before a game.

Other millennial-targeted marketing efforts include Tinder Night promotions, and this week the team will host its first in-game concert with a halftime performance by rap artist Gucci Mane. These moves follow the Hawks’ next-generation uniform design featuring patterns and bold color schemes new to the NBA.

Overall, the focus on the young, spontaneous buyer has worked, as more than 40 percent of Hawks single-game ticket buyers are between 18 and 34 years old, compared with 31 percent during the 2013-14 season, according to team executives.

“The Hawks are extremely progressive and creative, and a lot of the efforts have resonated,” said Amy Brooks, executive vice president of the NBA’s team marketing and business operations department. “They have seen tremendous growth in ticket sales and sponsorships, and a lot of that is largely a result of engaging with fans in new and different ways.”

Koonin points to new sponsorship deals with Cuervo 1800, Crown Royal and Planet Fitness as evidence of increased corporate interest in the team.

“These are lifestyle brands who have come to us because of our audience,” he said.

The Hawks also are filling more traditional categories with new deals with UPS, Delta Air Lines and Kumho Tire. The team now has more than 100 deals, with more expected. But there are still some glaring omissions with the luxury auto and banking categories unfilled.

“The luxury auto is something a lot of people are looking at with the Mercedes-Benz Stadium next door,” Koonin said, referring to the Falcons’ new facility set to open next year. “We have a significant credit union partner but not banking.”

Koonin, who recently received a new three-year contract, has bolstered the front office to help push the transformation.

In the past year, the Hawks hired former AT&T Center vice president and general manager Brett Stefansson as general manager of Philips Arena, added Atlanta sports veteran Andrew Saltzman as chief revenue officer, and named former Los Angeles Clippers executive Pete Thuresson as senior vice president of corporate sales. In addition, Thad Sheely, the team’s former chief financial officer, was promoted to COO. The Hawks also are the only NBA team to add a chief diversity officer, hiring Nzinga Shaw last year to fill the position.

It’s a front office that still has a lot more work to do.

Despite the hot start with a 9-2 record through Nov. 17, the Hawks are looking for a boost at the gate.

In seven games at 18,047-seat Philips Arena, the team drew an average of 15,808 fans per game, ranking 25th in the 30-team league and up slightly compared to the first seven home games last year. For the 2015-16 season, Atlanta averaged 16,833 fans per game, 23rd in the NBA.

To date, television ratings on Fox Sports Southeast are flat.

But it’s the prospect of the brand’s growth that is drawing interest.

One of the Hawks’ newest and most lucrative sponsors in Emory Healthcare, which bought naming rights to the team’s new practice facility, had no previous major sports sponsorships until this year’s agreement with the Hawks.

“Ownership and management have sent a clear message that they are serious about investing in the community and having a championship-caliber team, and that starts with improving the facilities,” said Dr. Scott Boden, director of Emory Orthopaedics and Spine Center. “Traditionally, Emory had not been bullish on sports sponsorships because our brand is strong. But I thought it was a great opportunity to partner.”

Koonin has his sights set on far more than just a run-up in season-ticket sales and sponsorships. With the planned Philips Arena renovation coming after the opening of the new NFL stadium next door, the Hawks are looking to profit from an effort to revitalize the city’s downtown entertainment district.

“We think we are in the growth part of the city with significant plans to redevelop and expand into Atlanta’s version of L.A. Live,” Koonin said, referring to the entertainment district anchored by the Staples Center in downtown Los Angeles. “We are working with partners and the city to try to make the area more vibrant.”

It is an eye-opening approach for local business leaders.

“They are interested in partnering with other institutions that we have never seen before,” said A.J. Robinson, president of Central Atlanta Progress and the Atlanta Downtown Improvement District. “They are really making an effort to improve their overall product not only as a basketball teams but as an organization. They are setting a new bar for teams here.”

Image caption #1:  CEO Steve Koonin: “It’s like a 48-year-old expansion team in the way we have reimagined it.”

Image caption #2:  The Hawks have focused their ticket sales strategies on millennial buyers.

Image Credits:  Getty Images

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