Season Tickets Could Be a Tough Sell for Capitals
Saturday, October 1, 2005
Four days from the start of the NHL regular season, the Washington Capitals have sold fewer than 7,000 season tickets, a nearly 40 percent drop from two years ago, and are just now beginning a major marketing push to woo back fans who gave up their tickets because of last year's canceled season.
Team owner Ted Leonsis acknowledged that ticket sales are lagging below expectations.
"I know we have work to do," Leonsis said in an interview this week. "My goal is to get back to 10,000 or 12,000 season ticket holders in two to three years and to run the team as a break-even proposition, have fun and build a team that can compete for the long haul."
During the 2003-04 season, Washington had the 10th-highest average ticket price in the NHL, at $43.85 per ticket, according to Team Marketing Report. Leonsis said he has reduced prices for season tickets this year by 16 percent.
The team's season ticket sales peaked at nearly 12,000 three years ago, when the Capitals featured stars such as Jaromir Jagr, then declined to around 11,000 after the Capitals failed to make a run at the Stanley Cup.
The Capitals say they have sold thousands of single-game tickets for this season.
Leonsis predicted the team will lose $5 million this year -- he called this "gentleman's losses" -- compared with $30 million three years ago. This is the first season under which the NHL will operate under a $39 million-per-team cap on player salaries, part of the agreement between owners and the players' union that led to the resumption of play this year.
"From an economic standpoint, the league is much healthier, so as you grow your revenues you can proportionately grow your payrolls," Leonsis said. "The business model has been right-sized. We are not stressed now about the economics. Now we have to go about reselling the game."
Since the league and players reached agreement last summer on a new labor contract, the Capitals have been relying on database research to target Internet advertising, as well as affiliate marketing. The team is employing direct phone sales and direct mail, and has been advertising ticket plans in newspapers such as Express, which is popular with Metro riders and is owned by The Washington Post.
"From a budget standpoint, we had allocated more this year into nontraditional advertising streams, organic searches," said Kevin Morgan, the Capitals' vice president for sales. "We are really putting time online in pulling up Capitals searches and targeting those people. If somebody is doing a search in Washington, D.C., and they type in 'Chinatown,' 'MCI Center,' 'things to do in Washington,' they are going to get Caps advertisements."
Capitals marketers are particularly targeting residents of Northern Virginia, Montgomery County, Northwest D.C. and Howard County with e-mails and links to the team's ticket sales department. "We are fishing where the fish are," Morgan said.
The sales staff charged with signing up new customers has nearly doubled to around eight employees, Leonsis said.
The team has increased its advertising budget 10 percent, and will soon start a campaign broadly targeted at informing the public that the Capitals are back. That advertising will include a billboard in downtown Washington, ads in The Washington Post and on Metro, and corporate partnerships.
Morgan said the team sold a record 6,000 tickets on Sept. 15 when individual game tickets went on sale. The Capitals have sold nearly 10,000 single-game tickets online so far.
Morgan said revenues from corporate sponsorships will increase over the 2003-04 season, with new sponsors such as General Motors joining longtime Capitals partners such as Anheuser-Busch, Pulte Homes and Chevy Chase Bank. Experts estimate the Capitals earn between $5 and $10 million a year from corporate sponsors.
Leonsis said he is hoping that once the team starts playing, fan excitement will add several thousand ticket sales per game. If the team can reach 7,500 season tickets sold, he said, the team hopes per-game sales will double that, so that, depending on the game, attendance might approach 15,000 -- 3,277 fans short of a sellout.