For New Arena, Fans Must Pay the Ticket
By Thomas Heath and George Solomon
In the past 12 months, MCI Center has risen from a hole in downtown Washington on its way to a scheduled fall completion; the Bullets have signed Juwan Howard to a seven-year, $105 million contract; and the Capitals have acquired several million-dollar players.
And last week in Washington it became clear just how much the fans will pay for these exciting changes.
The Bullets (soon to be Wizards) raised individual ticket prices to a range of $19 to $75 from a 1996-97 range of $12 to $50. The Capitals' prices went to a range of $19 to $60 from a 1996-97 structure of $12 to $45. Club seats at the new arena will cost $7,500 each (enabling each ticket holder to see all Wizards and Capitals games) and executive suites for all events cost from $100,000 to $175,000 per year.
"The price increase is the result of the cost of running two major league franchises in today's professional sports market," said Matt Williams, vice president for communications of Washington Sports, the umbrella group that runs the two teams, MCI Center, and USAir Arena, where both teams currently play. "We're trying to run the business and this is what it costs to do it."
Susan O'Malley, president of Washington Sports, said in a recent interview that the higher ticket prices are needed to cover ballooning player salaries and the 20,000-seat MCI Center that Abe Pollin, the owner of the teams and arena, is financing himself at a cost of about $175 million.
This season the Bullets had a payroll of nearly $35 million fifth-highest in the 29-team NBA and were $10 million over the salary cap, which can be exceeded when teams re-sign their own players (Howard). Still, that does not mollify the anger of many fans, who have seen the Bullets raise their top-priced single-game ticket from $37.50 to $75 in two seasons. With the recent player additions, the Capitals' payroll has climbed to more than $27 million, the sixth-highest figure in the 26-team NHL, according to the latest edition of Hockey News.
Though both teams are struggling to make the playoffs and have been disappointing much of the season, O'Malley is quick to point out that "the Bullets and Capitals are the best show in town." She said she is confident that most ticket holders will stick with the teams, predicting a season-ticket renewal rate of 90 percent for the Capitals and 95 percent for the Bullets. The Capitals have about 7,000 season-ticket holders, the Bullets about 10,000.
O'Malley said the teams will continue to offer discount tickets to groups on a single-game basis and give away some tickets to fans who cannot afford to buy them. Keeping the tickets affordable is a "concern of Mr. Pollin's, and it's why we give away tickets to every game . . . to offer opportunities for families to come," said O'Malley. She said she also understands the fans' concern over the price increase and the impending move from the 24-year-old USAir Arena in Landover to MCI Center next fall.
Several Bullets and Capitals fans interviewed at recent games expressed a variety of concerns about MCI Center, including parking and safety, and most said they were angry about the price increases. But they also said they would stick with the teams.
"The increase is a little hard to swallow, given the way [the Bullets] are playing," said Ron Dekelbaum, 27, a season-ticket holder from Rockville.
"They've got to charge more to sign scorers like [Capitals center] Adam Oates, but it's going to be unaffordable for a family of four," said Joe Moyer, 29, of Crofton.
"The [fans'] reaction is what we thought it would be," O'Malley said.
If MCI Center is not able to open in time for the start of the NHL and NBA seasons, which begin in early October and early November, respectively, and the teams start their seasons at USAir Arena, there will be a financial accommodation to season-ticket holders, according to O'Malley.
"The number one concern is people getting as good a seat in the new arena as they had in USAir," O'Malley said. "Everyone wants the best section. Folks get comfortable, they like their aisle seats but there's half as many aisles in the new building. If you're on the free throw line in the old arena, you want to be on the free throw line in the new arena."
O'Malley said planning for the change of venues has been in progress for some time and she has hired a Manassas consultant, Distributed Systems Architects, to help solve the puzzle. Example: The lower level at MCI will seat 2,000 fewer people than USAir's lower level, which means some fans will get moved to the upper level.
That happened to Gerry Mathews, 33, of Lanham, who has held Capitals season tickets for 10 years. "Even though we've been paying for 10 years, we [feel like we] are nothing," said Mathews.
O'Malley said the organization is trying not to slight any of its longtime customers. As part of the transfer to MCI, Pollin has instituted a hard-and-fast rule that VIPs should not get special treatment.
"People keep calling Mr. Pollin and saying they are friends and they need seats," O'Malley said. "Mr. Pollin has taken the position that not one single seat [will be] put aside for his friends. He has said, `Take care of those who have been with us first.' "
The Bullets' average of 10,000 season-ticket holders is below the NBA average of 11,159, according to Chicago-based Team Marketing Report, an industry newsletter. The Capitals' 7,000 season tickets per game is well below the NHL's 11,021 average.
Before last night, according to Washington Sports, the Bullets have averaged 17,017 fans a game this season, 12th among 29 NBA teams, with 18 sellouts in 37 games. The Capitals have averaged 17,171 fans a game, with 18 sellouts in their 37 games, 18th out of 26 teams. Capacity is 18,756 for basketball, 18,130 for hockey.
"There aren't enough hockey season-ticket holders," O'Malley said. "So we are going to make a big push there."
O'Malley has 60 sales representatives calling from Tidewater, Va., to southeast Pennsylvania in search of new fans. Result: orders for 1,000 new season tickets per team. Industry experts said a base of 70 percent season-ticket holders is usually enough to consistently sell out an arena.
Both teams might lose a few fans with the move, especially the Capitals with their large number of fans who live in Washington's Maryland suburbs.
Brian Hoek, ticket sales manager of the new American Hockey League team in Prince George's County, said fans calling for tickets complain about the Capitals moving downtown.
"I hear concerns [from fans] about location," Hoek said. But, he adds, the Capitals "will pick up in corporate dollars what they will lose in season-ticket holders."
O'Malley is also tapping Washington's lucrative corporate market. Many law firms and lobbyists and their guests are one Metro stop or a short cab ride from the arena.
Most of the corporate fans will be in the 110 luxury boxes and the 3,000 club seats that ring MCI Center 20 rows up from the floor. About 85 percent of the luxury boxes have been sold; about half the 3,000 club seats have been sold; and 2,000 new orders have been taken for season tickets.
"I'm pretty pleased with what's been sold," O'Malley said.
The club seats are more difficult to sell because they cost $7,500 apiece and cover both the hockey and basketball schedules. Some marketers questioned the effect of combining the seat for both seasons, but O'Malley said she based her decision on the experience of other teams.
"Combining the Bullets and Caps club seats is following the advice that everyone gave us," O'Malley said. She said the club seats are a "corporate buy," to be used as an entertainment resource by the dozens of big law firms and lobbyists that fill Washington's downtown.
O'Malley said it's working so far. She predicted the lower level, the club seats and the skyboxes (more than 10,000 seats) would sell out before hockey season starts next October.
Those are ambitious numbers, but industry observers said the arena will bring a big surge in attendance for a couple of years from curiousity seekers. Then it's up to Chris Webber, Howard, Oates and Peter Bondra.
© Copyright 1997 The Washington Post Company