EXPANDING TO SEATTLE NHL EXPANSION TEAM PROPOSAL

Justin Behr Taylor Emody Seth Miller Robby Hanna Neil Williams

Date: To: From:

April 13th, 2013

MEMO OF TRANSMITTAL

Dr. Bradley Ridpath South Bend Catfish Justin Behr Taylor Emody Robby Hanna Seth Miller Neil Williams

Subject: NHL Expansion Team to Seattle As assigned by Dr. Ridpath, our team has compiled a schematic report explaining our recommendations for moving an NHL team to Seattle. The focus of our report is on marketing and demonstrates our ability to provide sound strategies in helping to grow a new franchise. -Industry/Market Overview -Key Economic Drivers -Target Market and Segmentation -Venue Proposal -Social Media Marketing Our recommendations will be an effective way of introducing several strategies for successfully establishing a new franchise in the NHL. Our research and suggestions are specific to the current time period and the area of Seattle. Thank you for the opportunity to handle such a report and provide you our services. Please let us know if we can answer any questions about this report, or if at any time we can be of assistance to you in evaluation of our analysis and conclusions. We can be contact via the email addresses listed below. Regards, Justin Behr justin.behr92@gmail.com Taylor Emody - te116309@ohio.edu Robby Hanna- rh306209@ohio.edu Seth Miller - sm390709@ohio.edu Neil Williams- koolaid.neil@gmail.com

Executive Summary

EXECUTIVE SUMMARY

The National Hockey League is currently looking for a buyer to move a team from Atlanta which formerly hosted the Thrashers. This report demonstrates why Seattle would be an ideal location as it examines the industry of sports altogether, the NHL market, and the Seattle market. In the report, the different markets are broken down using demographic and economic metrics to distinguish what makes Seattle so appealing. We firmly believe that investing in a team in Seattle will ensure financial success for those willing to take the charge. While there are risks such as NHL lockouts, market saturation, and rigid competition within in the industry; these risks can be mitigated by our team finding a place in the loyal Seattle fans heart. The report claims that in order to launch a successful marketing initiative, it is important to figure out what type of market your targeting. For Seattle, the market is one of die hard, loyal sports fans who are relatively wealthy and young. Capitalizing on research and analysis gives us an advantage as we look at past experiences in recent years dealing with expansion teams. The fact that Seattle just recently became home to the most attractive franchise in the Major League Soccer (MLS) lead us to indulge in a case study and not some key takeaways. Also, it is important to notice modern trends occurring within society when creating a marketing plan. This is why we heavily looked into the explosion of social media and provide suggestions on how to ride this massive wave of potential exposure and revenue. In fact, our marketing mix is centralized around social media because thats how important we believe it is today and even suggest denoting a whole department to keeping track and updating the teams social media platforms. The report also dives in to the logistics of hosting an expansion team. In order for the NHL board of governors to approve the movement, several different requirements must check out before getting the confirmation to go ahead and start creating a franchise. One of the requirements this report covers in the need for a new arena to support NHL and the future growth of the NHL. It is essential that a well thought and planned venue plan is in order to present to the NHL board before attempting to convince them Seattle would be the best home for the new team. In our report, we dive in to the temporary venue situation as well as the future venue situation with an interesting way to incorporate Fortune 500 companies that inhabit Seattle. The report is organized in a simple, logically flowing manner. Beginning with an analysis of the sport industry and the NHL industry leads into the breakdown of the Seattle Market. From there, we establish our target market as well as our different marketing segments. In addition, the team name, logo, and identity is unveiled. Then, the venue proposals and sponsorship deals are covered and lead into the quintessential social media marketing platform. Lastly, community relations and media relations are covered concluding our report. We feel as if this report will be beneficial in several ways as the recommendations presented in the report stem from rigorous 3 research and analysis.

TABLE OF CONTENTS

Industry Analysis

Economic Drivers

6-7

NHL Industry Analysis / Seattle Market Analysis

8-10

Situation Analysis - SWOT

11

Case Study - Seattle Sounders

12-13

Ticketing

14

Why Grunge?

15

Venue/Amazon Center

16-17

Ticket Pricing / Executive Sponsors

18-19

Promotions / Community Relations

20-21

Social Media / The Grunge App

22-25

Conclusion

26

Works Cited

27

Industry Analysis

INDUSTRY ANALYSIS

In order to support our proposal for a new NHL franchise in Seattle, it is important to analyze the entire sport industry before diving into the NHL market analysis. The sports industry in the United States continues to grow at an alarming rate. Fans and businesses continue to grow in numbers and the sport industrys worth continues to increase. According to IBIS World, a renowned market research firm, the sport industry grosses $23.9 billion in revenue annually with an annual growth rate of from 2008 to 2013 of 2.1%. There are many different products and services offered in the sport industry ranging from ticket sales and merchandise to concessions and sponsorships. Ticket sales are the biggest earners of revenue for franchises making up 38% of total revenue. Broadcasting and other media rights make up 31% of the total revenue so it is important to note that these two revenue streams are going to have to be a main focus of our strategy.

The barriers to entry for Sport Franchises are extremely high because of the initial capital investment that is required to successfully implement a new franchise in a new city. The most recent activity for the franchises in the NHL was the relocation of a team to Winnipeg, now known as the Winnipeg Jets. The reported purchase price is $170 million, with around $60 million going towards a relocation fee (TorontoSun Journal). The Winnipeg Jets is the most recent team in the league giving us the most recent estimates as to what to expect as Seattle plans to purchase a team. The last part of the industry analysis that will help us forecast the outlook of this potential forecast in the key drivers of the industry

Source:nhlnumbers.com

Key Economic Drivers for the Sport Industry

ECONOMIC DRIVERS

Per Capita Disposable Income The sports industry relies on people willing to spend their disposable income to attend events or in other cases pay to watch the event either on cable or on the internet. In order for the sports industry to continue to grow, the economy and the average disposable income per capita must continue to grow to keep up with increasing ticket prices. According to IBIS World, the projected growth in revenue for the sports industry from 2013-2018 is 2.4% which is optimistic news for new teams entering the market. One of the most challenging issues that are arising in sports is the increase in ticket prices which will be examined later in the report as it poses a serious challenge if the growth of the economy cannot be met with the growth of the sport industry.
Source: Business Insider

Number of Broadband Connections Another key economic driver is the number of broadband connections. The internet and the technological revolution have had a profound impact of the amount of reach sports has in America. The internet has given fans and business owners a chance to connect with sports franchises, buy tickets online, and stream live events. Live event streaming has seen a significant increase in the past five years as it gives users the ability to watch games that they do not have access to on their TV. It also gives events the chance to earn different revenue streams by getting users to pay for all inclusive access including all sorts of perks. One example of this is March Madness. The NCAA has provided packages in recent years to give users a chance to watch all the games online for a one time payment. Also, the explosion of social media has had a major impact on the avenues in which sports marketers are able to communicate with fans and other stakeholders. Teams are using social media to connect fans with players and various promotions. Social media will also be covered further in the report as it is going to play a key part in promoting the new team in Seattle. The estimated amount of broadband connections in 2012 was 237.2 million, estimated to grow to 326.5 million in 2017 according to IBIS World. Getting more people online with the ability to do several different activities related to the new team is going to be crucial for sustained growth.

Source: Wirelessmapping.com

Competition

ECONOMIC DRIVERS

The sport industry is technically part of the overall entertainment industry since the main function is to provide entertainment for its customers. Therefore, the sport industry must compete with other types of entertainment because people choose to spend their discretionary income on entertainment that will provide them the most satisfaction. Some examples of competition would be the movie industry, performing arts industry, and the music industry. The sports industry must compete with other forms of entertainment as they fight for the time people spend outside of work. In order to stay competitive sports franchises have pursued many strategies to differentiate themselves as the most enticing form of entertainment. One example is the historic push to portray sporting events as family bonding experiences. Promotions and ticket sales often have different facets of offerings to appeal to families such as family ticket packages and family nights.

Athlete/Ownership Conflict
The sport industry has seen an increased amount of disputes occurring between the owners and the athletes. In recent years, the NHL, NBA, and the NFL have all seen lockouts occur. Lockouts refer to time periods, in which the league operations are halted due to failure between the two parties to agree on collective bargaining agreements. The main conflict surrounds the issue of the division of revenue the league is bringing in as well as other issues with revenue sharing and franchise/league obligations. Players are getting more aggressive on the legal front declaring that they deserve more than the current percentage they are getting. Owners continue to claim that they are the investment and main reason why these leagues are able to operate on such extreme levels. Mitigating the risk that these lockouts present is huge for the future of the industry. The NHL missed a whole season due to these disputes and thus set the growth of the league back and had another small lockout that nearly cut this years 2012-2013 season in half. This simply cannot happen again in the NHL; they incurred too much damage from the past one to recover from another one. Another lockout would be quite dangerous to a team that just entered the market and therefore, Seattle must be prepared to be a forerunner is preventing these types of disputes.
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NHL Industry Analysis

NHL INDUSTRY ANALYSIS

After exploring the different components of what makes up the sports industry, it is now appropriate to break down the hockey industry. Some key statistics are presented below: The league has 30 teams, all of which experience vastly different amounts of success. There are several teams have tremendous attendance and revenue figures yet there are a chunk of teams that are struggling to even stay afloat. The teams in Canada are faring significantly better than team in America with the Toronto Maple Leaves being the first team to be worth a million according to Forbes. Presented below is a quote taken from another market research firm, Plunkett Research: The average NHL team as of late 2011 was worth $239.9 million, up 5% from 2010s $228.1 million. However, operating incomes averaged $4.22 million, down from $5.3 million in 2010 and $6.1 million in 2009. Overall operating incomes for the NHL in 2011 fell 21% from 2010 to $126 million due to increases in player costs (up 11% in 2011 to $59 million). Of the Leagues 30 teams, 18 lost money in 2011 (Plunkett Research Online). As stated above, the NHL is going through a relatively stagnant period. It doesnt help that the NHL had another lockout at the beginning of the year to accompany the uncertainty of the market. However, throughout our report we present various ways in which to propel the Seattle franchise to become one of the top-tier operating franchises in the league. Due to the advance in technology, and the ripeness of Seattle itself we believe that investing in a Seattle franchise poses manageable risk with premium returns.

National Hockey League (NHL) NHL League Revenue Overall Operating Income Number of NHL Teams Average NHL Game Attendance (82 Game Season) Average NHL Team Value

3 127 30 17,455 240

Bil. US$ Mil. US$ Teams Spectators Mil. US$

2010/2011 2010/2011 2010/2011 2010/2011 2010/2011

PRE Forbes NHL ESPN Forbes

Seattle- Market Analysis

SEATTLE MARKET ANALYSIS

Seattle is our proposed destination for a new NHL franchise. Seattle is located in Washington, with a population of 620,778 and a median household income of $61,856 according to the Census Bureau. The median age of Seattle citizens is 36.1 years with 80.1 % of the population is over 21. When comparing Seattle to other cities who were given expansion teams such as Columbus, Phoenix, Dallas, and San Jose, Seattles demographic make up is relatively similar. There is evidence to show that Seattle residents have the income to attend professional hockey games. With the exception of San Jose ($80, 764) Seattle has a higher median household income then Columbus ($43,348), Phoenix ($48,596), and Dallas ($42,259). Seattle has the income for fans to support a professional hockey team; it is a matter of whether or not citizens would have the interest in attending hockey games. The chart below shows the amount of interest that adults in Seattle have in the NHL.

Source: Seattlebubble.com

Majors in Seattle How interest in the NHL compares to other major pro sports in Seattle: League NFL MLB MLS NBA NHL WNBA Team Seahawks Mariners Sounders FC None None Storm Pct. 42.0 33.0 17.2 12.5 9.2 5.9

SEATTLE ANALYSIS

NHL interest Comparing the percentage of adults in the Seattle area who said they were somewhat or very interested in the NHL to three cities with NHL teams, with year the team came to that city: Metro area Seattle Phoenix Dallas-Fort Worth Bay Area Source: Scarborough Pct. 9.2 10.4 13.2 17.2 Team None Coyotes Stars Sharks 1996 1993 1991 Year

Source: http://seattletimes.com/html/hockey/2019441232_hockeytown16.html

These results show that even without a NHL franchise planned for Seattle there is a comparable interest to other NHL cities. Based on the popularity of Seattles other professional sports franchises it is safe to assume that with the announcement of a NHL team fan interest would skyrocket. Seattle has frequently been referenced by bloggers and sports publications as one of the most viable places for any professional sports team relocation. The buzz about an NHL team has already begun and the Grunge coming to town is going to excite the Seattle population.

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Strengths
Wealthy Population Young Population Relatively close to Canada Seattle/Tacoma is the 12th largest TV market in the US Passionate fan base Has some of the highest participation in youth and adult hockey(12th nationally) High percentage of people consider themselves very interested in hockey

Weaknesses
Failed once already Currently do not have a quality arena Large investment High barrier to entry Hard to be competitive early

SITUATIONAL ANALYSIS - SWOT

Opportunities
Potential new NBA team could mean a new arena Currently have no other winter sports in the city other than WNBA Numerous large companies in the Northwest No NHL hockey team in Washington Diverse culture could lead to potential new market Natural rivalry with Vancouver People that would normally travel to Vancouver for hockey would no longer have to cross the border

Threats
Would have to win over hockey fans who already have other hockey allegiances If Seattle gets an NBA team they would have to compete with them for fans Less than 3 hours by car from Seattle to Vancouver

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Case Study: Seattle Sounders

Seattle welcomed a Major League Soccer team in 2009, the Seattle Sounders. The Seattle Sounders had a record breaking opening year for any expansion team in any sport. They won the Lamar Hunt U.S. Open, clinched the playoffs, and most importantly sold out every single home game with 30,000 plus fans. They topped the MLS in attendance in their first year. This has never been done before in the history of the expansion teams. Historically, expansion teams struggle out the gate and usually have subpar seasons early on. This was not the case for the Sounders, and now that the Grunge is going to be an NHL expansion team in the same city, it is important to analyze what made the Sounders so prominent in Seattle and what the Grunge can learn from their phenomenal existence.
Source: jmeyers.blogspot.com

CASE STUDY SEATTLE SOUNDERS

A recent case study analysis by Blaine Uhlman and Galen Trail was published in Sport Marketing Quarterly that looked at the motivators of Seattle Sounders FC Season Ticket Holders. Blain Uhlman is a ticket operations manager at University of Washington and Galen Trail is an associate professor in Sports Administration and Leadership at Seattle University. They surveyed first and second-year season ticket purchasers to using metrics such as sport attachment, attachment to community, team identification, and fan superiority. Results indicated that sport attachment predicted team identification in those individuals who bought season tickets. (see chart on next page)
As the chart above shows(2011), the Sounders are even in the top 12 attendance average for the most popular league in the world

Source: Seattle.Theoffside.com

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Team Identification and Fan Superiority

SEATTLE SOUNDERS

The team identification and fan superiority components are the most important metrics to establishing a loyal fan base. The team identification factor refers to a person who identifies themselves as part of the team and also identifies the team as part of their own identity. Fan superiority refers to people becoming fans and staying loyal fans because they believe they are the best in the league. Fan superiority is such a strong factor for the Sounders and is going to be one of the main focuses of the Grunges plan to establish a similar fan base. In fact, the Grunge is so impressed with the Sounders fans that we are going to try and merge their fan base into our own using a variety of strategies rather than reinventing the wheel so to speak.

Partnership with Seattle Sounders

The case study and recent research has shown that the Sounders did an excellent job in every facet of establishing an expansion team. Rather than competing with the Sounders, the Grunge seeks to enter a friendly partnership. Not a binding partnership where the teams executive boards combine investment and engage in activities as one but a relaxed partnership in which the two teams help each other out using several beneficial promotions and ticketing methods. Listed below are several ways in which the Sounders and the Grunge can combine forces.

Scheduling
With the Grunge coming into Seattle, scheduling conflicts are imminent and could restrict both teams from missing a chunk of fans on a night both teams play. For this reason, management from both teams needs to meet regularly to establish their schedules and schedule around each others games. This will actually not be that difficult because teams in the MLS play one time a week either on Saturday or Sunday and occasionally Wednesday so it should be relatively easy to ensure that the Sounders and Grunge alternate home games each week or play on different nights.

13

Ticketing

TICKETS/TARGET MARKET

Due to strategic scheduling, it is possible to work out a ticketing scheme in which Seattle fans will have a home game to go to every weekend. For this reason, the Grunge wants to offer season ticket schemes that allow fans to be able to afford season tickets.

Segmentation

Season Tickets Buy One Get One Half Off

If a fan is a season ticket holder of the Sounders, he/she can become a season ticket holder for the Grunge at half price! This promotion is reciprocal and applies to Grunge season ticket holders who want to become Sounders ticket holders as well. This promotion will do nothing but add incentive to fans who are already season ticket holders to become ticket holders of another team as well. Bring Sounders Ticket off Grunge Ticket In addition to incentivizing season ticket packages, the Grunge is going to reward Seattle residents who pay money to see the Sounders by giving them a chance to come to the Grunge games for half off if they can provide the stub from the most recent Sounders game. This also makes it more affordable for Seattle fans to attend both games. Also like the season ticket offer, this promotion is reciprocal meaning Grunge ticket stubs would merit half off into the Sounders game. Target Market When starting a franchise in a new city it is important to identify your target market, or the group of people who you will advertise to. If you look at hockey fans as a whole, according to SBRnet, males, aged 1849, earning over $50,000 are the most likely to attend a hockey game. If you were to compare those figures to the city of Seattle you would find that half of the population is males. Then, exploring the age range of Seattle habitants, you would find that 75% of the population is between the ages of 18 and 65. Finally, the median household income of Seattle is $61,856. Looking at all these figures, the Seattle market demographically provides a good match with the demographics of those who attend hockey games.

Established Hockey Fans with Current Affiliation in NHL There is undoubtedly a following of the NHL in the state of Washington. The only problem is that since Seattle has not had a team they have a current affiliation. Most commonly, those in Seattle support the Vancouver Canucks. Seahawks/Sounders/Mariners Fans It is going to be important to get fans of Seattle teams to support the Grunge. Pushing for community identification is going to be a major part of the Grunges marketing plan. Families Families are a great target market segment for any sports team to focus on. Family bonding is a good connection point for sports teams hence why so many teams focus some of their pricing and promotions to entice this group. Families are good for business because they often buy concessions and merchandise for their kids.

14

Why the Grunge?

GRUNGE

We believe is appropriate to have a team name that has a strong connection to the city the team calls home. Good examples of meaningful team names include Milwaukee Brewers, Pittsburgh Steelers, or the Portland Trailblazers. Rather then chose a generic name such as the bears or wildcats, we wanted a truly unique name to the city of Seattle a name that no other city could possess. Thus, we chose the name the Seattle Grunge. Grunge rock originated in Seattle and the music scene is something that the city takes pride in, such as jazz in New Orleans. Big name influential bands such as Nirvana, Pearl Jam, and Soundgarden originated in Seattle and helped create the grunge rock movement. Therefore, we want to pay homage to the grunge scene and the city of Seattle with our name. While the word grunge to some may possess a negative connotation which makes sense since it is defined as dirt; filth; rubbish, we still want to present it as a positive, celebrating the great music of Seattle. Even the negative aspect of the word can be used to our advantage; hockey is a fast paced aggressive style of sport similar to the style of grunge music. Hockey players are known as some of the toughest athletes in the world, they are not known for their soft play and good looks. Hockey players hit hard and even fight during games. Dirty is an appropriate way to describe the style of play in hockey. In any other sport, the name grunge probably wouldnt fit, but in hockey it suits the style of the game. Grungy is a fair adjective to describe a tough hard-hitting hockey player. Therefore we believe grunge is an appropriate name for a hockey team. We believe fans will get on board with the name as we will market ourselves as the toughest team in the league, every hard hit and fight won will justify our name. For this reason, an aim of the teams management is going to revolve around embodying the team name by the players selected. The Grunge is going to try and sign players that will provide entertainment through their aggressive play and the team will try and establish itself as the toughest team in the league, providing a thematically fan connection and identification point. The other Seattle sports teams have nautical themed names; Seahawks, Mariners, Sounders rather then continuing this trend we want to stand out from the others with our unique name. Also a name like the Grunge is going to get a lot of media attention and bring in earned media to the expansion franchise. The combination of hockey and being located in Seattle creates the perfect scenario for a name like the Grunge. The color schem e will be green, white, and silver. All of Seattles professional teams have green in them and Seattle is known as the emerald city so we want to incorporate green. The Seahawks have neon green in there jerseys and neon has been very popular lately with the Seahawks jerseys and in general. Because of this trend we want to incorporate neon green , white, and silver.

Logo showing Seattles most profound landmark with Grunge type lettering incorporating hockey sticks in the back

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Venue
In order for the NHL Board of Directors to agree to relocate a team to Seattle, there needs to be a NHL ready venue that can support future growth and meet the standards the NHL has recently raised. While they realize that the team must use an existing venue temporarily, they want proof that a new venue will be under construction and done in a timely manner.

VENUE

Key Arena

Temporary Arena Key Arena at Seattle Center

The Key Arena was opened in 1962 and was renovated from 19941995. While it used to be the NBA team Seattle Supersonics home, it is currently home to the Seattle Storm of the WNBA and Seattle Universitys Mens Basketball Team. The capacity the arena has for hockey is 15,177. The NHL does not feel that an arena with a capacity this small is suitable for a new franchise because it does not allow for projected growth.

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The Amazon Center

The Amazon

Amazon, founded in Seattle is one of the biggest companies in the world and exemplifies the culture of Seattle. Seattle is one of the technological hubs of country and provides a wonderful setting for companies in the tech industry to thrive. Amazon, along with Microsoft has enormous campuses in and around Seattle and employ a lot of people that fit into our target market. For these reasons we have decided to give Amazon exclusive naming rights to the new arena. Also, Amazon will be an executive sponsor that will play an enormous role in the teams operations. Amazon is the pioneer of e-business and provides multiple platform solutions for e-business processes the Grunge plans to initiate. We want the Amazon Center to differentiate itself from other hockey arenas in the same way Amazon set itself apart from the rest of their competition years ago.
Specifications of the Amazon Center Ground Break Date May 1st, 2014 Projected Open Date May 1st, 2016 The building dates are estimated after looking at recent multipurpose arenas that have been built in the last five years. The Consol Energy Center broke ground in 2008 and opened almost exactly two years later in 2010. The cost of the Consol Energy Center was $321 million in 2008 which is about $345 million in 2014. The arena is home to the Pittsburgh Penguins and holds a capacity of 18,387 for ice hockey. Capacity - 21,000 Montreal has the largest capacity out of the NHL teams at 21,273 and New York Islanders has the smallest capacity at 16,234. The median and estimated average capacity of the arenas in the league is 18,000. With rumblings and a definite possibility of Seattle making a bid on an NBA team, we are taking into account the possibility of an NBA team using the Amazon Center as well. With a capacity of 21,000, the Amazon Center would be second in both the NHL and the NBA in capacity. Ticketing through Amazon Amazons ability to provide web services to companies to handle all transactions relating to their e-business models can be used to add value to the relationship between Amazon and the Grunge. In order to further integrate the two brands, we are going to have our online ticket sales system powered by Amazon Web Services. This will not only drive traffic to Amazon but will strengthen the relationship between the Grunge and main sponsor. The tickets will be bought through our website, powered by Amazon and also have the ability to be bought through our app. The app is going to be a major part of the technological marketing push the Grunge is prepared to launch.

THE AMAZON CENTER

17

Ticket Pricing
Looking at the pricing strategy for the Grunge there were a lot of things to consider. The first thing to consider is that there is a fair amount of disposable income for the households in Seattle. The problem with this is that there are numerous other sports in Seattle to spend that money on including the Mariners, Seahawks, Sounders, University of Washington athletics, and potentially the Sonics if they return. What we decided was to create a wide range of price options. The thought behind this was that our low end seats would be attractive to the University of Washington and Seattle University students. We set the price of these seats at $15. These are obviously the worst seats in the arena, the top of the sections behind the goal where the Grunge shoot once. We then set our price of our best seats, the seats near the center of the ice on the glass at $85. These would be focused on businesses trying to impress clients or the wealthy citizens of Seattle who are big hockey fans. We also would offer discounted tickets to large groups. We think with the popularity of youth and adult hockey leagues that they would be very interested in these offers and it would get groups in the building and hopefully they would come back and buy full priced tickets. We are also aware we would have to reevaluate our ticket pricing if we get a new arena but we still think it would be important to keep a wide range of ticket prices. Fan Cost Index The Fan Cost Index is a measure to identify how much it would cost to take a family of 4 to go to a game. It includes 4 tickets, 2 beers, 4 soft drinks, 4 hot dogs, parking for 1 car, 2 programs, and 2 hats. When you look at the NHL, the average FCI is $328.81. With this thought in mind we decided to set our FCI below league average. We decided on this because we are an expansion franchise and we want to try to get people into the arena and have a good experience once they get into the arena. We do realize that the Seattle market is a fairly wealthy one and that they can afford to pay more but the market is saturated to the point that they have a lot of sports options to choose from. We decided to make our average ticket price $50 per ticket, $4 per beer, $3 soft drinks, $3.25 for hot dogs, parking $20, caps $15 and programs free. All of these are below league average, except for parking. Parking is something that had to be set above league average due to the lack of parking in Seattle. We set the beer price lower because when people remember a cost they remember the beer cost. Setting it low will get people into the arena, even if they arent a huge hockey fan. To make up for the giving away of programs we plan on selling ad space in the programs. We believe this will improve in game experience while still bring us revenue. We believe that positioning ourselves as a low priced hockey game we can bring in a lot of fans who may just be casual fans.
Upper Half 218-224 Lower Half 218-224 Upper Half 204-210 Lower Half204-210 Upper Half 201-203, 210-211, 225-228 Lower Half 201-203, 210-211, 225-228 $ 15.00 $ 25.00 $ 27.50 $ 30.00 $ 32.50 $ 35.00

TICKET PRICING/FCI

117-125
103-111 Upper Half 101,113-115,127-128 Lower Half 101,113-115, 127-128

$ 50.00
$ 60.00 $ 70.00 $ 85.00
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FCI
Average Ticket Beer Soft Drink Hot Dog Parking Program Cap FCI Grunge $ 50.00 $ 4.00 $ 3.00 $ 3.25 $ 20.00 $ $ 15.00 $ 283.00 NHL AVG $ 57.39 $ 6.80 $ 3.91 $ 4.19 $ 14.40 $ 2.70 $ 16.73 $ 328.81

EXECUTIVE SPONSORS

Executive Sponsors
Microsoft is a multinational computer software corporation that has been instrumental in the technological revolution the world has seen. Microsoft is headquartered in Redmond, Washington and managed by one of the worlds best CEOs, Bill Gates. We believe the mission of Microsoft symbolizes the Seattle community and their ability to adapt to new technology. Microsoft is known for their operating system, Windows and their video game console, Xbox. Also, they offer the most popular business suite applications and recently grossed $73.72 billion in 2012. One reason why we feel Microsoft is the perfect fit for our second executive sponsor is because they are already involved in sponsorship with the Seattle Sounders. The Sounders jerseys have the Microsoft Xbox Live logos on them and Microsoft is heavily involved in other avenues of the Sounders operations. The two have experienced a wonderful and beneficial relationship which is what we strive to achieve in joining forces with Microsoft. We have a strategy to partner with the Seattle Sounders and having a joint sponsor would help our relationship with the Sounders as well. Here are ways in which we plan to utilize our executive sponsorship with Microsoft. Software and Operating System The Grunge plans to install Microsofts Windows 8 and Office 365 Suite for all the computers used in the franchise. Also, Microsoft will provide the Grunge will a series of their recently released tablets with Windows 8 so the Grunge employees can work on the fly when traveling. Microsoft 720 Screen To increase our sponsors visibility in the arena, we are going to have a video screen that will be below the scoreboard. The scoreboard will rotate with our sponsors logos throughout the game. We will name it the XBOX 720 screen to promote the new Microsoft 720 that will be coming out. We will be giving Microsoft increased advertising in the arena and thus make our partnership more appealing to the Microsoft executive staff. Along with our social media emphasis we decided to dedicate a section of scoreboard to a Twitter feed which will be controlled by our social media department to screen out any potential inappropriate tweets. This screen will help increase our social media presence and keep people engaged in the game. This could also lead to Grunge related trending topics trending worldwide which would create some earned media for the team.

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In Arena Promotions
The in arena experience is essential to the overall experience of a fan. We have a lot of different ideas for how to improve this experience. First is the increasing importance of social media and cellphones in todays world. T-Mobile Charging Stations T-Mobile is currently undergoing a major push to stay competitive in the crowded cellular phone industry. Theyre spending tons of money on marketing initiatives to reestablish themselves as a major provider. One of their newest promotions is that they are going to offer phones and plans with no binding contracts to differentiate themselves from companies like Verizon who lock their customers in for two years. Through a partnership with T-Mobile we will have mobile phone charging stations throughout the concourse. This will allow fans who like to stay up to date on social media to not have to worry about their phones dying. Also, we plan to have USB ports under every seat. USB ports are relatively cheap to put in and most people nowadays carry their Iphone charger with them. This will allow the fans in the stadium to plug in their phone right at their seat. Game Day Promotions Promotions are very important to getting people into the arena. Promotions are great ways to either decrease costs or increase value. Here are few promotions that are going to be initiated for our inaugural season. Student ID Night On student ID night, students can get the $15 and $20 tickets for half off. Also beer would be half price from gates open until the puck drops. We believe that this could be successful because the University of Washington and Seattle University are both within 30 minutes of the arena. The University of Washington has an enrollment of 42, 570 and Seattle University has an enrollment of 4,589. This means that we have nearly 50,000 potential customers who could take advantage of this offer. Double Header University of Washington Also an idea that could be beneficial for both parties would be to host a double header with the University of Washington having a basketball game after. Fans would be able to buy one ticket for both games. This would be beneficial because the Grunge could bring in fans that may have never been to a game and for the University of Washington they would be able to host a game in a bigger facility than their campus site that only holds 10,000 fans. The University of Washington basketball team averages around 8,000 fans per game so thats a potential addition of at least 8,000 fans that the Grunge could capitalize on. It would be especially successful if the University of Washington were able to host a big non-conference game such as Gonzaga, a fellow in state opponent, or a major non-conference game such as UCLA or Washington State
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PROMOTIONS

Grunge Revival Night Also we believe that in this era of alternate jerseys that the Grunge needs to be involved as well. What we would recommend it to have a grunge revival night. Fans would be suggested to dress like grunge rockers and the Grunge would introduce a flannel alternate jersey. This would have multiple benefits. First, with the prominence and love of the grunge movement in Seattle a lot of people would come out to the game to support the music they love. Second, the Grunge would get a lot of earned media from a promotion like this. We believe that this is not only a great way to drum up talk about the Grunge but also a great design that fans will enjoy. Goal for Beer Promotion Finally a promotion that would be more of an in game promotion would be that before the game we would designate a player that if they were to score a goal beer would be $1 for 15 minutes after the goal. This promotion is done a lot by minor league teams and it is usually very successful. We believe that this will keep fans engaged in the game even if the team is far behind because they will be hoping for that player to score. Also, with all of the players being new to the team and city, fans will try to find out information about the player who is designated. Finally, for those 15 minutes beer sales would increase by huge amounts and while revenue per sale wouldnt be as much we would still be making profits. Community Relations An engaging community relations platform is going to be a big part of our plan to establish a solid foundation for the Seattle Grunge. We have several ideas that will involve the team and communities of the Seattle region. We plan on being involved in a variety of different programs that have already been established by the NHL. These organizations include: Hockey Fights Cancer, Hockey is for Everyone, Teammates for Kids, and NHL Green. In addition to these programs, we will also host events of our own. We plan on hosting fantasy camps for a variety of age groups, including adults. Our players will be involved in these camps and be expected to reach out to the participants with positive enthusiasm. Along with the camps, we will send out players to schools throughout the Seattle region in order to interact with the youth. Our involvement in these programs will establish a positive, community-oriented reputation throughout the greater Seattle region. Giving back to the community is very important to our organization and this mind-set will be heavily emphasized throughout our franchise. We understand that our fan base is going to be comprised mostly of people who live in the Seattle region and we want to make sure that we are doing our part to be a positive, contributing member of the community.
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PROMOTIONS/COMMUNITY RELATIONS

Social Media

SOCIAL MEDIA

Social media is quintessential for any business in todays world. Social media is a cost effective way to increase fan awareness, communicate with the fans, and allow the fans to interact with each other and players. Social media is especially popular with teens, according to staticbrain.com, 98% of 18-24 year olds use social media. Due to social media being the centerpiece of our marketing push, the Grunge is going to create a whole separate department devoted to social media marketing. Facebook Fan Page The Grunge will have a Facebook fan page where fans, players, and anyone else can go to and like the grunge. Building up likes is a big phenomenon in social media marketing today. The amount of likes is even factored in to the value of companies today and their ability to connect with the public. Contests Our marketing department will think of several different contents to constantly be posting on our Facebook page. Contests for tickets will happen every week and it will be up to our innovating marketing department to constantly keep fans engaged and interested. Sponsorship Recognition Our Facebook page is going to be a prime location to promote our upcoming sponsorship and promotions with companies the Grunge is in business with. Letting fans know about new products our partners are releasing will be a good way to get our fans interacted with our sponsors.

Instagram Jersey Contest Due to the explosion of the photo sharing app, Instagram and the extreme social media push the Grunge plans to initiate, a jersey contest is going to be held on Instagram for companies specializing in graphic design and jersey design. Contestants will submit Instagram photos of their jerseys mockups to the Grunges Instagram account. The Instagram photos will be posted on Facebook and Instagram and will give fans and major companies a chance to compete to have their uniforms selected for the Grunges official uniforms. The only rules that apply is that they must use the team colors of emerald green, white, and gray. Home and alternate jerseys must be selected so both are up for the contest. The contest will give the enthusiastic, tech savvy community in Seattle a chance to help select their teams future jerseys as well as a chance to connect with the new organization. Also, the jerseys must be within the NHLs regulations and must include the Grunge Logo and NHL logo.

100 million monthly active users

1.06 billion monthly active users

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Twitter

TWITTER

Twitter is the biggest form of social media in the world. There are over 500 million total users on the social network today. The worlds biggest stars and companies amass millions and millions of followers every day and Twitter provides a platform for the public to connect with these stars and stay up to date with them.

500 million users

@theGrunge This will be the teams official twitter handle and will be managed by our Social Media department. Tweets will be occurring constantly and will provide news to our fans on an instantaneous basis. We will use twitter to launch several different contests and promotions and also to promote our own players and coaches. Our players twitter handles will frequently be referenced in our tweets and in game updates will be referenced as well. #GrungeBoard This is going to be the hash tag fans use to connect with our Twitter board in the arena. Our Social Media department will monitor the tweets to ensure that no vulgar language is used and any sort of profanity is kept from being posted for the whole arena to see. The Grunge Board like the the Xbox 720 will rotate around 360 degrees so everybody in the arena can see it. Throughout the game there will be several contests using the board to get several free giveaways such as autographed hats, concessions, etc. Team Motto Contest - #GrungeMotto / @theGrunge As for our team motto, we are going to let our fans decide what it should be using #GrungeMotto or tweeting @theGrunge. We want our motto to embody our fan base and Seattles culture so what better way than to let the fans decide. Mascot Name Contest Also through twitter we are going to let our fans decide the name of our mascot. We will provide an image/sketch of our mascot on our Facebook, Twitter, and Instagram page. Our mascot depicts a grunge rocker with a guitar and hockey stick on his back and gives off a tough guy impression. Giving these rocker a name is going to give fans a neat way to get involved on top of all our other promotions. We are going to announce a month long period before the season in which fans continually tweet in/comment in different names for our mascot and different mottos for our motto contest. Then, we are going to take the top four mascot names and top four team mottos and have fans vote on these for the following three weeks. The top mascot name and motto will be selected and the Grunge will be ready to don them in pride.
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The Seattle Grunge App

In order to differentiate ourselves from other teams in the NHL, the Grunge is going to release a mobile application. Mobile applications are growing at exponential rates and provide a great avenue of interaction for sports teams. Today, the U.S. consumer spends an average of 2 hours and 38 minutes per day on smartphones and tablets. 80% of that time (2 hours and 7 minutes) is spent inside apps and 20% (31 minutes) is spent on the mobile web (blog). According to Gartner Research, the global apps business is expected to make $25 billion in revenue this year. Currently, there are 800,000 apps available on Apples App Store and 700,000 apps available on the Google Play store. The mobile app market is booming and the Grunge joining the fun will give us a competitive edge over other teams in the market. Surprisingly, many teams in the four biggest leagues in the US (NHL, NBA, MLB, and NBA) have failed to keep up with this trend and do not have mobile applications to support their business. Toronto Maple Leaves, the most profitable team in the league do not have a mobile app. Columbus Blue Jackets and the Cleveland Indians join Toronto in lagging behind without mobile app support. Apps give fans a chance to stay up to date with when games are and what channel they are on. In addition, it provides fans a platform to view team-specific highlights and gives them access to a mobile fan base community. Most official team apps have included in their app connections to Twitter and Facebook linking their star players and coaches with their fans. Below is an example of how an app simplifies a fans experience.

THE SEATTLE GRUNGE APP

Before App Process Flow

The process diagram to the left breaks down the most popular processes a fan would go through when engaging in various activities revolving around their team. It must be noticed the fan must go back and forth between Twitter and FB apps and scroll the different feeds to find the news they are looking for. To find the schedule, the fan must go online to theGrunge.Com or NHL.com. Also, when buying tickets, the fan must go online at a computer to buy the tickets through Amazon. Our goal of the app is to simplify all these processes and make all of these activities have the ability to occur all at once saving the fan time and trouble and enhancing the fans connection with the team.

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Process with App

SEATTLE GRUNGE APP

Launch Grunge App

Twitter/FB automatic feed

Schedule Recent News Updates

Buy tickets directly on App

The ability to do all of these activities relating to the Grunge shows how much value can be added to our organization developing an app. Everything one needs to know, see, or purchase from the Grunge can be done all in the same place. Also, just having an app gives us an advantage over many other organizations in the NHL because not many teams have apps. We have decided that we want to have Yinzcam, a mobile application development company develop our app. Their apps for sports teams have seen tremendous results and ratings. They have done apps for the Philadelphia Eagles, the Pittsburgh Penguins, the Capitals, and many others. Below are some screenshots of the apps they have designed.

Yinzams Portfolio

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Conclusion
This report provided a detailed analysis of the viability of investing in an NHL team if it were to move to Seattle. After providing documentation on the current industry and market makeup and outlook, it is safe to say that the sport industry altogether continues to grow at an alarming rate amassing more and more revenue each year. The NHL has had some recent rough years but the outlook is still positive for new teams given the right execution. This is why our report includes several ways in which to build a loyal fan base. The Seattle Sounders served as a perfect case study because their expansion team occurred in the same city and was arguably the most successful expansion movement in the history of sport. Being able to capitalize on the ripeness of Seattles young, tech savvy market is instrumental in having a successful investment. The Seattle population has also proven over and over again that they are major sports fans and loyal ones as well. The case study exclaimed why Seattle fans are so enthusiastic and one of the main reasons was fan superiority. Thus, it became a focus of our recommendations to include fans in nearly everything we do. Our fans are a major part of the team as they will be involved in logo design, jersey design, motto creation, and several other ancillary activities. Our social media platform will ensure that the fans are connecting via Twitter, Facebook, and Instagram. There are always risks when investing large sums of dollars into an expansion team but our report has done a sufficient job of providing suggestions to mitigate those risks. However, it must be understood that there are some risks in which marketing cannot solve. One example is the recent lockout this season which had a devastating impact on NHL business. We do suggest the representatives from the new team do everything they can to prevent these owner/player disputes. With the recent Collective Bargaining Agreement signed by both parties, the NHL looks to be in good shape for a while so this risk can be deemed long term and dealt with on a long term basis rather than an immediate risk. The recommendations are a sound start to launching a successful marketing campaign. It is important to pay attention to the key themes behind the marketing initiatives and not just whats on the surface. For example, our several contests on social networks may sound fun and a cool way to connect with fans, but behind the scenes, every time somebody follows @theGrunge or connects on Facebook, our database is concatenating with all sorts of data the users account provides and organizes it in a manner that can be effectively used later to lure in potential ticket buyers. If the marketing initiatives are carried out correctly and efficiently, they will bring results and we hope you take the step in doing so. Sincerely, South Bend Catfish
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CONCLUSION

Works Cited

WORKS CITED

Florida, R. (2011, December 23). The U.S. cities with the most leftover to spend..after paying for housing. Retrieved from http://www.theatlanticcities.com/housing/2011/12/us-cities-with-most-spend-afterIBISWorld. (2013, April). Sports Franchises in the US Report. Retrieved March 10, 2013, from IBISWorld database. Khalaf, S. [Flurry five-year report: Its an app world. The Web just lives in it]. Retrieved from http://blog.flurry.com/default.aspx?Tag=Usage Statistics Obermeyer, J. (2006, March-April). Seattle and the NHL. Retrieved from http://www.seattlehockey.net/Seattle_Hockey_Homepage/Seattle_and_the_NHL.html Seattle city council meets over plans for SoDo arena. (2013, February 24). Retrieved from http://www.kirotv.com/news/news/seattle-leaders-meet-over-plans-sodo-arena/nWYjS/ Smith, C. (2013, April 3). [How many people use the top social media, apps & services]. Retrieved from http://expandedramblings.com/index.php/resource-how-many-people-use-the-top-social-media/ Sports Business Research Network. (2012). Statistics Retrieved March 7, 2013, from Sports Business Research Network (SBRnet) database. The Gale Group, Inc. (2012, September 27). Advertising agency industry statistics. Retrieved from http://www.statisticbrain.com/advertising-agencyindustry-statistics/.

Tmlfever.com. NHL, hockey history. Retrieved from http://www.tmlfever.com/thegame.html U.S. Census Bureau. (2013, January 10). State & city Quickfacts: Seattle, WA. Retrieved March 2, 2013, from http://quickfacts.census.gov. Wiebe, K. (2011, May 24). NHL announcement in next few days "realistic": Katz. Retrieved from http://www.torontosun.com/2011/05/24/nhl-announcement-in-next-few-days-realistic-katz
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