Meeting quotes, part 3

Here we get more into the question-and-answer part of the meeting, in which the execs talk about why the price increases had to happen now, and if they’re prepared for the inevitable backlash from the fans…

———-

Question: Why do the price increase this year, after a terrible season, and not wait until things have improved a bit?

(McGowan:) “The assumption is that never is pricing really going to be taken well. So we wanted to do this in a way where we found that fine line. It’s all about, `What do we think is fair?’ and then we need to be prepared to deal with what season-ticket holders say. We wanted to go into this process and kind of have the (price) analysis drive where we’re going. We went into it open-minded, to where we would have potentially frozen, or maybe in some areas we would have lowered. The process drove our strategy, and that’s why we decided to do what we did, on the 5.66 percent increase.”

(Robitaille:) “The other thing is, from a business standpoint we knew (prices) needed to go up. You can go up a huge bump next year or do it slowly but surely. Knowing that, we want to be as fair as possible, and that’s why we went through this whole process, of making sure that everyone has the opportunity to either stay at the same price or, if they want to stay where they are, (prices) might go up a little bit. But at the end of the day, to make our business better, (prices) need to go up, for everything that’s going to happen for us in the next two or three years.”

—–

Question: When, inevitably, you get a call from a season-ticket holder saying, “Why are you raising my prices when you finished last?”

what do you tell them? How do you make them see this long-term vision?

(McGowan:) “I think you can do a lot of things. I think a lot of our season-ticket holders know that our pricing is a lot more affordable than a lot of other organizations. They go to a lot of games, and they come back and they tell us that. `Wow, I can’t believe how much tickets are in Dallas. We’re lucky in L.A.’ So we’re dealing with some people that are definitely informed here. But, as we talked about a little earlier, we want to have an option for those people. `Yeah, it’s more (to sit) here, but have you considered moving here? It’s the same as you paid last year.’ So as long as we’re giving our sales people, and our people handling the season-ticket holders, those type of options…we may lose the argument, and someone may not come back to us because of the pricing.

“We obviously don’t want that to happen, but we know that’s the potential. We can go statistics with people all day long, because the statistics don’t lie. But do people really care that our prices have only gone up an average of one percent over the last 10 years? We have lots of supporting statistics that our organization will know when they get into these conversations, that will be used, but I don’t know if people want to get into that, because it never really wins the, `Well, you were 29th last year (argument).’ But we do want to have options for people. So we’ll probably handle it with some statistics and options to pay the same amount of money and go from there.”

(Robitaille:) “We’ve been below inflation for the last 10 years. That’s just the reality of it.”

(McGowan:) “We’re also $12 under the NHL average.”

(Altieri:) “The bottom line is, their prices are going up and they’re going to be upset. They’re going to communicate with us and we’ve got to give them all the information that we can, that’s going to help them make an informed decision on whether they want to renew, first and foremost, and then in what manner they can renew that can renew.”

(McGowan:) “We handle the pricing the best we can and spend a lot of time with our customers working through this process. Then the question also is, `Are you getting value in other ways?’ Probably not, as it relates to the team’s performance, but what we’ve heard is that there’s an optimism, from our fan base, about what’s around the corner. Then we want to really focus on that added-value stuff, access and events. That’s going to be our approach.”

(Robitaille:) “We’re working real hard on services. We want to make sure we’re servicing our fans well. We’re hiring people just to do that.”

(McGowan:) “Our sales staff used to be comprised of a manager and about eight or 10 people who just sold season tickets, sold mini-plans and managed our season-ticket base. We’ve just launched a service-retention department. So we’re going to have a manager over four or five people, with the sole job to just service the heck out of our season-ticket base and provide events and experiences for these people. We’ve kind of split sales and services. It’s all under the same roof and run by the same person. We’re taking the approach of dedicating a 100 percent dedicated, service-oriented resource for our season-ticket base. We’re going to do new programs and new access-based things.”

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  • Mark

    The more I read the less I want to renew my tickets next season. They should have just said it and left it alone. Why can’t we get this much interaction with management when it involves hockey? If I wanted to sit through another statistical lecture I can pay attention at meetings at work.

  • shadowalk

    I love the company line ” Wow I can’t believe how much tickets are in Dallas, We’re lucky in L.A.” Dallas has won the Cup, Dallas is in the playoffs year after year, “we are lucky to be in LA” Indeed.

    My question for these company men is this, If we finish last again next year, how much more will you charge us loyal fans?

  • Anonymous

    (McGowan:) “We’re also $12 under the NHL average.”

    Yet your team was 20 “points” below the league average of 91. Strange juxtaposition isn’t it?

    I think people would feel better about your price increases if the team wouldn’t mismanage the percentage of said increases that go to the piss pour Free Agents they sign.

  • Captain Material

    Frankly, I think this stinks. When they say the business is losing money, what does that really mean?

    Anschutz is not a hockey owner primarily. He is in real estate. Owning this team is a means to an end for him, so I really don’t think it’s unfair to look at the whole of the business ventures that ownership of the Kings happens to fall under.

    Take Staples, revenues from three pro teams going toward rent, parking, consessions, the increased property value of his holdings around Staples based on the development that Staples and the Kings are part of…take all that and you tell me this is a losing proposition? Ridiculous.

    I mean, before the lock-out the team claimed to be losing money, but if you looked at the numbers and understood what “loss” was, it’s not what it appears. The payments on the loans taken out to build Staples are considered “loss”.

    Now, me and you, when we pay our car payment every month, do we say we lost that amount every month owning and running that car? Of course not, we are basically getting transportation for that money; we basically consider it an investment in order to gain some end (transportation) and gain ownership of the vehicle.

    Staples is in many ways the same thing for Phil and what he wants, yet it’s called “loss”. He’s “losing” all this money…but at the end he owns Staples, right? I’d say that’s worth something and that money was invested, not lost, but that’s just me…

    (Hey, I’m a technical guy, not a finance expert, so if someone can explain how I’m getting that horribly wrong, feel free to enlighten me.)

    Having said that, I do like the concept of what Luc was saying about keeping tickets open for every budget.

    There are three hockey buildings in this state with NHL teams, and I’ve seen games in all of them. For my money, as someone who goes to games to watch the hockey and not for the amenities and spectacle the building offers, and who can easily afford the lower bowl but prefers the cheap seats on an aesthetic basis, Staples ranks last.

    Now, I do have to pretend the Ducks fans don’t exist and I’m just talking the building and view of the game from the rafters, but SJ comes in first, ANA #2, and Staples dead last.

    Staples only seats about 600 more people than the Shark Tank, yet you could fit the HP Pavilion under Staples roof.

    The reason I mention this is because the building was clearly made with luxury box revenues much more on the minds of the designers than how good it was to watch hockey in from the cheap seats. I mean, you have to look DOWN from the cheap seats to see the jumbo-tron.

    And that’s fine, don’t get me wrong, but that being the case, when ticket prices go up, it better be almost entirely the burden of those people (or corporations) in the luxury boxes and premier seats.

    If they work price increase that way, I’m not nearly as upset. If they can maintain a good number of tickets priced at $10 up in the rafters, hey, thats fairly acceptable. They just better actually do that…

    Also, I do think weighted ticket pricing is fair. Charging marginaly more to see the Kings attack twice, or better yet charging marginally more to see games against teams that are popular (DET, NYR, etc.) and less against those that are not (NSH, CLB, etc.) I think is fair.

  • JW

    I wonder how much of an advertising price increase the sponsors will be getting? If they team is really losing money shouldn’t it be looking at reasons why besides ticket prices? I know the league’s biggest revenue is gate driven, but maybe it needs a better business model? I bet the department that sells ad space at Staples Center for hockey games has a very tough job, because lets face it Hockey in LA is a niche sport and it’s just not worth it if the price is too high.

  • PSP

    (McGowan:) “We’re also $12 under the NHL average.”

    For what? The price of a hat?

    According to TMR, the Kings are $2.75 below the NHL average for regular tickets and a little under $7 under the NHL average for “premium” tickets, but are the most expensive in the league in almost everything else – parking, beer, soda, hot dogs, etc

    Do these people have any idea what they are talking about or were they given talking points before the press conference? There is so much misinformation, disinformation, and outright lies that it’s hard to tell if they are delusional or just horribly ignorant of the facts

  • Crash Davis

    Memo

    To: Chris McGowan
    CC: Dean Lombardi
    Luc Robitaille

    Fr: Crash Davis
    (19 yr STH)

    Re: Ticket Increases

    Chris, please interact with Dean whenever possible as player contracts come due, extensions are considered and FA signings are imminent.

    Thought: If we discontinue signing for millions marginal/hurt players that we eventually have to buy out (McCauley, Cloutier) or overpay for (Stuart, Calder, Handzus, Nagy) we will save at least $10-12 mil per season. This will help us significantly on the business side to hold ticket prices in place. For 1 Handzus we can sign 4-6 young, hungry, promising players with speed and motivation.

    Crash

  • Anonymous

    PSP where did you get this info? Who is TMR?

  • PSP

    Sorry – I forgot to put the link to TMR http://www.teammarketing.com/

    Take a look at Fan Cost Index. It lists the prices of tickets, concessions, parking, souvenirs for each team for the last 10+ seasons with league averages for each.

  • Anonymous

    This team is going nowhere.
    For you delusional DL fans
    look at his drafting record
    in San Jose and some of the
    idiotic moves and signings he made there that wound up
    costing him his job there.
    Now look at his great job
    of signing FAs here.

  • Dan H.

    “Wow, I can’t believe how much tickets are in Dallas. We’re lucky in L.A.’ ”

    Rich please tell me that’s the same quote from the blog a few days ago. After Dallas just made it to the Western Conference Finals that quote just seems weaker and weaker as time goes on.

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