Business of Sport: Old Trafford cricket ground charting a new path

Denzil Pinto 19/07/2016
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Historic: Old Trafford cricket ground.

From Shane Warne’s “Ball of the Century” to Dominic Cork becoming the first Englishman to take a Test hat-trick in 38 years, and Sachin Tendulkar’s first Test century, the then-named Old Trafford boasts a rich history of magical moments.

Just like when the first Test was played in 1884, cricket has evolved dramatically since then and not more so than the stadium itself.

When Pakistan return to Manchester for the second Test against England on Friday – the first time since 2006 – not only will they be playing at the home of Lancashire County Cricket Club (LCCC) but also Emirates Old Trafford (EOT).

The 10-year sponsorship deal with the Dubai-based airline Emirates, believed to be worth £10million, in 2013, is no doubt one of the biggest signings for the club.

The announcement could not have come at a better time with the £44m redevelopment of the stadia already completed.

That saw a series of changes including a rebuilt pavilion, a new players and media centre, two new double tier stands, the opening of The Point Conference Centre as well as the turning of the square on the pitch by 90 degrees.

Unsurprisingly, after two profitable years in 2008 and 2009, the building works and lack of international cricket saw the club suffer financially with annual losses registered between 2010 and 2012. In the latter year, the figures looked pretty grim with an operating loss of £1.5m.

The figures, while substantial, at least showed the club were going in the right direction after a record loss of £3.96m in 2011.

The return of Test cricket was secured in 2013 with the biggest of them all – the Ashes – and that played its part in securing an operating profit of £3.5m.

“The years between 2009 and 2012 was a very challenging period for us and we had to do a lot of refurbishment on the ground,” said Daniel Gidney (pictured), chief executive officer at LCCC. “The phase development has taken the club forward and we are in a very strong period now.”

There’s every reason for them to be optimistic. In 2014 and 2015, net and operation profits of £793,000 and almost £763,000 were announced and with the Pakistan Test and the T20I in September, it’s likely there will be another positive result this year.

General admission tickets for the first two days of the Test have already sold out, while more seats have been added to the capacity to cope with the demands.

Gidney expects the Test will be very well attended on each of the five days after the club worked with South Asian communities as part of their marketing strategy.

“One of the biggest challenges in the game is trying to convert people who watch the Ashes, which is the biggest thing in cricket, to come to other Test matches at Emirates Old Trafford,” he said.

“There is a lot of interest in Test matches in England whoever the opposition is. But we have to understand what fans want when they come to a stadium.”

To ensure there are high attendances, Lancashire worked with US-based The Aspire Group in incorporating a ticket sales strategy for the matches.

“The club adopted the Aspire Ticket Marketing and Sale Strategy which focuses on greater pricing complexity,” he said.

“This approach stretches pricing so that the best facilities on the best days attract higher pricing. That enables a greater number of lower priced tickets than previously available. This year, on the Saturday of the Test match, the Pavilion Terrace tickets will cost £80 and yet a junior ticket in the family stand on the Monday will cost just £5.”

England and Pakistan will be just among a number of visiting teams at EOT this season.

As Lancashire’s home, the stadium also hosts their English County Championship games including the 50-over and NatWest T20 Blast encounters, with the latter hugely important.

Just like the internationals, the domestic ones are crucial for Lancashire. Last season, the Red Roses were crowned NatWest T20 Blast champions for the first time, often playing in front of big home crowds.

With the shortest format a big draw for families, tickets are available at affordable prices. For example, prices for a T20 begin at £8.50 for Under-18s, while they range from £12 to £17 for adults. Contrast that to the 50-over games, U-18 prices are £7.50, £8 for groups and £15 for adults.

“The English Cricket Specsavers County Championship is very important for us,” said Gidney. “We don’t get large crowds during the season but the T20s helps us. We work hard on our costs and give a good fan experience. The commercial model is based on T20 and when we play we always have a good crowd. From our experience, the matches have proved to be more popular on Fridays as you can get young professionals and families out.”

Unlike football or rugby, whose campaigns run for more than six months, the English cricket season is held from April to September during the spring and summer periods.

But at EOT, even if there is no cricket on the pitch, it’s still business as usual.

Over the years, it has established itself as one of the top music concert venues in the UK. Rihanna and Beyonce are just two of the high-profile artists to have performed in front of thousands of fans.

Gidney admits it is a significant part of their operation as the club gets a big chunk of its revenue from the events business.

The Point centre celebrated its sixth birthday earlier this year and with a capacity of 1,200, it can host a wide range of events from banquets, dinners, conferences and exhibitions.

“The conference and business events can bring in around £5million a year, while day rates would be approximately £50 per head plus room rates,” he said. “For a large event over three or four days, it would be around £100,000 so it’s quite significant for us.”

Another new change will be the £13m Hilton Garden Inn hotel. Replacing the now-demolished Old Trafford Lodge, the brand new four-star 150-room hotel is due to open next summer and will be operated by the club. One of its biggest selling points is that five floors will oversee the pitch which can also be converted into hospitality boxes on matchdays.

“We want to increase our business and need a number of bedrooms on site,” said Gidney. “On its own, it will support events and grow our events. There are some companies who will not choose you if you don’t have any quality bedrooms on site.”

That project is not the end of the journey with EOT looking for more success off the field.

Gidney acknowledges the Emirates deal, whose logo is printed on Lancashire’s T20 jerseys, is of huge significance in ensuring business continues to go from strength to strength.

“They bring so much to us in terms of brand and their partnership is without doubt the best one we have had,” he said.

“It’s really helped us to get out there and create a non-sporting brand particular from the conference and events business.”

With international matches confirmed until 2019 including five World Cup matches in that year, it presents an opportunity for people to not only visit EOT but Greater Manchester as well.

“Prior to the World Cup, we’ll be working with the government funded tourism boards,” said Justin Hopwood, sales and marketing director at LCCC. “We have a role to play to make sure that people have the best experiences, not only with us but other places in the region.”

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New Michael Jordan store ensures strong UAE legacy

Jay Asser 12/07/2016
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Jordan-only store at Dubai Mall.

It’s been 13 years since Michael Jordan last played in the NBA, but you wouldn’t know it from the omnipresence of the Jumpman logo. The iconic silhouette of Jordan rising up for a dunk is not only a mainstay in the basketball universe, but in the cultural zeitgeist.

It’s found on the feet of people young and old, male and female, basketball-lovers and fashionistas everywhere. Such is the breadth of Jordan’s appeal that Dubai, a relatively small but diverse city, now houses a store dedicated to the brand.

The emirate joined New York, Chicago and Hong Kong as the fourth city and just the second outside of the United States to feature a Jordan-only store with the opening in Dubai Mall on June 30.

A store in New York makes sense. It’s where basketball culture was cultivated and continues to resonate. Similarly, Chicago is obvious because it’s the city Jordan spent nearly his entire career, while Hong Kong in many ways is the hub of Asia.

But why choose Dubai, of all places, to open the fourth store? Oliver Pressinger, head of sales for the Jordan brand and Nike Basketball in the Middle East, explained to Sport360 ahead of the Dubai launch: “I grew up in Vienna when the Dream Team with Jordan won the Olympic gold medal in Barcelona. In Austria in 1992, basketball was nowhere. No one played, there was no culture, but you had Jordan. Through his determination, passion and love of the game, he made you want to be like Mike.”

“In the same way Dubai, out of nowhere, has come up as not only an amazing city, but the diversity of the people living here, they have an amazing passion for the product.

“We’ve been tracking it over the past few years. Whenever there’s a Jordan release, or a sneaker culture with limited shoes, we’ve seen amazing passion for the product. To create such a setting, it’s also much easier to bring this product to this region and really celebrate this product.”

Nike hopes the popularity of Basketball in UAE will increase the brand's reach

Nike hopes the popularity of Basketball in UAE will increase the brand’s reach.

Fittingly, the store is located on the ground floor of Dubai Mall, opposite the Jordan brand’s parent company, Nike. Dubail Mall is one of the largest shopping destinations in the world and the city has shown that size certainly matters, but the Jordan store is surprisingly quaint, as far as square footage is concerned.

But while space is kept to a minimum, there’s nothing minimalist about the design. Herringbone hardwood floors make up the entire store’s floor, while the ceiling is covered in lighting options. Speaking of lights, the first direction your eyes wander to when entering the store is at the back, where a centrepiece of the original Wings logo is installed on the furthermost wall.

The logo is LED backlit and designed to change colours. On one side of the store is a three metre-high LED screen showcasing the latest Jordan brand products, while the opposite wall has a digital touch screen, allowing visitors the chance to dive into the brand’s history.

As for the store’s products, there are four categories available: basketball, training, sportswear and young athletes. The performance basketball products are at the front of the store for a reason, as at the core of the Jordan brand is innovation in the sport.

Even the most hardcore of basketball players, however, will have a hard time resisting what is really the venue’s main draw – the legacy pieces and retro styles. Displayed in a glass case are six of Jordan’s most iconic models: VI, VII, VIII, XI, XII and XIII.

The significance of those six shoes is that Jordan wore each one during his six championship runs. In addition to the famed originals, the store is stocked with the “hottest” retros of the past 12 months, according to Pressinger.

These include the Jordan V Neymar collaboration, which has No23 on one side and No10 on the other, as well as the 24k gold-plated Air Jordan 1 Pinnacle. The legacy items won’t stop there though. Pressinger said the store will also feature exclusive product launches, basically bringing Jordan shoes to the emirate you won’t be able to find elsewhere.

“The community in Dubai are basketball-crazy and sneakercrazy,” Pressinger said. “What can you do for them to bring this experience to the younger generation? You and me, we maybe grew up with Michael Jordan, seen him play and idolised him.

“Most of these kids have never seen him play. They’ve seen YouTube videos, but to keep that experience alive, of course we need special product launches. They’ll be coming in a monthly cadence product-drop. We’ll let all the people know who are waiting for that stuff through social media.

“They’ll know when the release is and they’ll be outside waiting for the product.”

It’s fair to ask, however, whether Jordan’s presence in Dubai caters mostly to a niche market, rather than mainstream consumers. The brand dominates in North America with Jordan claiming 58 per cent share of the $4.2 billion U.S. basketball shoe market in 2014, according to SportScanInfo, while Nike (Jordan included), owns a 55 per cent market share among athletic footwear makers, according to NPD Group.”

“In terms of current NBA players, the footwear battle is between Nike’s LeBron James and Under Armour’s Stephen Curry, but Jordan’s sales still dwarf both. Over the years, the brand has also branched out to American football, baseball, track and field, Paralympics, NASCAR, boxing, golf and football, but remains most associated with basketball, which is far down the list of most popular sports in the UAE.”

“There is room for basketball to develop in the region though and Nike are partly banking on unlocking that potential to increase the brand’s reach. One thing we really do focus on is how do we grow that culture of sport and bring that to this region?” said Nike’s Megan Saalfeld, senior director of communications – Central, Eastern Europe & Middle East.

“If you look at some of the stuff the [Nike] teams have been doing here, it’s really interesting. Look at the popularity of running and how many people are coming out to events like ‘We Run DXB’. They also recently launched the ‘Nike Training Club’ in Arabic and seen people pick that up.”

“I think there’s really a lot of love for basketball here. I’ve been really surprised. I obviously come from the U.S. so it’s such a deeply ingrained thing, but here you really do see and feel a love for basketball that you don’t often feel on the other side of the world.”

“For us, it’s about how do we foster it, how do we give people more access to sport and how do we help grow the game?”

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#360business: How Audi sell a winning dream with R8 LMS GT3

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The car during a build.

Audi know a thing or two about winning races. They have been hugely succesful in the German touring car championship DTM, are Le Mans legends and the awesome Audi R8 LMS GT3 has taken the world by storm, lapping up GT endurance victories around the globe.

And since 2009 Audi have been using their expertise to give private teams and individuals a chance to share in their success by buying the R8 LMS GT3, which is the track version of the stunning Audi R8 V10 Plus road car.

It’s not the sort of adventure you would set out on unless you have considerable wealth as the car itself will set you back more than ¤300,000 but if money is no object Audi Customer Racing will provide you with all you need to set up, run and enjoy success on the track in a truly astonishing car.

I visited the Audi R8 LMS GT3 production line in Biberach in Germany which is responsible for the manufacturing of customer race cars for international races, and the machines for Audi factory entries. This is also where customers can send their cars to be repaired after crashes.

A relatively small team of around 30 people deals with everything from pre-assembly of the brake discs, pedal mechanism, suspension, steering, doors, perparation of body kit, engine, geabox and electrical components to the finished article ready to hit the track. The mechanics even give the cars they are putting together female names, so they treat them the kind of attention they would give a lady!

Chris Reinke, who took over as head of Audi Customer Racing at the beginning of March after working as part of the works motorsport operation taking care of LMP and DTM racing, explained how his division of Audi works and what they offer to a growing client list.

How many customers do you currently have?
We are currently assembling the 200th car, 137 of those sold were the first generation of the R8 LMS and the rest are the new car.

Are these being raced in Europe mainly or around the world?
All around the world. We supply the R8 to the Asia Cup which is run mainly in China and we are strong in Australia where we have more than ten cars running. We also have quite a few customers in America but the main competition field for new cars is in Europe.

If someone comes to you and buys a car, what is the support you give these people?
It depends what you want. You can have the complete all round support package, or if you just want to buy a car and run it yourself, then you can bring you own mechanics in and assemble your race car together with our experts who will train them on the job or you can just pick up the car, if that is what you want. We can offer you support with our people at the race track, spare parts, and even drivers and when structural repairs are required the car can come back here to be fixed. Whatever your business model is we can supply the missing bits.

How many of your customers are gentleman racers?
Most owners of the cars are competition team orientated but there are a few gentleman owners who tend to buy the used cars. The older the cars get the more gentleman owners we see, because of the price of the car.

Reinke with one of the cars.

Reinke with one of the cars.

If I was a businessman who wanted to use the R8 LMS GT3 to increase the awareness of my company could I come to and say all I wanted to do was buy the car but wanted you to provide everything else, could you do that?
We would provide a package but if, for example, you wanted your car to race in the 24 Hours Nurburgring or a race in Japan, we would recommend one of our partners in that part of the world who would be willing to extend their team by one car and they will run it for you and recommend a driver. We have a huge network to offer assistance in this way. We also have professional drivers who are contracted to Audi.

Could give me some idea of the cost involved here, from an entry level upwards?
Again, it depends on your business model. To buy the car itself costs ¤359,000. We also offer a parts package which would cover most of you primary needs and that is how you leave our yard, so to speak. Then it is really down to your set up and the cost will be directly related to that.

Have you see a slow down in people coming to you for what is an expensive project because of the state of the economy?
For sure, we are influenced by the worldwide economy. But for us the guide parameter is more to do with the race series that are available in the world where you can enter our product. At the moment there is a healthy number of races which is increasing at the moment. If the economy was better this would probably increase again and the spin off would obviously mean more business for us.

It is also important that we are the product leaders. Last year we made a big investment into the development of this car, successfully entered a couple of races which acted as showcases and so we had a very well developed product ready to go into the market and win races while our main competitors were still developing so we had a jump start.

How important is the Middle East to your business?
For the road car it is very important and that in turn should go hand in hand with racing and there are some races there which we are involved in like the 24 hours of Dubai. We are not directly involved in any series, like we are in China with the Audi R8 LMS Cup, but we do have customers who use our product. We are always looking at opportunities but it has to be right for Audi.

How different is the race car from the R8 V10 Plus we see on the roads?
The chassis is very similar but the differences are that we have a roll-cage and some parts to make the chassis stiffer. All the other body parts around this are all special for the race car. The V10 engine is very similar – in fact the one used in the race car is 99 per cent the same as the one used in the production car. There are different bearings for the crank case because of the durability required in racing. Overall, around 50 per cent of the original parts in the road car are shared with the R8 racing car.

There was no Audi works team in the Dubai 24 hours this year. Will you be changing that?
We are Audi Sport Customer Racing so we supply cars to give clients the possibility of winning and this will always be our main objective. If we had a works entry in the Dubai 24 hour race we might be taking that possibility to win away from our customers. That can’t happen.

We hear you are going to be involved in the Gulf 12 Hours in Abu Dhabi. Is that correct?
We are racing 200 cars around the world so I would hope we would be involved in every major event but with customers not a works team. I will not put our customers second.

As I have already said, if we entered a works team the intention would be to win and to do that we would have to beat our customers.

From a business point of view can you tell me what Customer Racing is worth to Audi?
I cannot give you any financial figure but my job is to run this as a profitable operation and everything else comes on top.

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