Applied Strategic Planning for

The Verizon CenterSports-Related Special Event

Scheduling

Presented By Cameron UngarJuly 6, 2007

What’s Inside..?

Critical Issue? Situation Analysis

History Stakeholders

Environmental Scan Internal Industry Competitive Macro

Value Scan Mission

Statement Driving Forces

Performance Audit Desired Future Critical Success

Indicators Gap Analysis Solutions Recommended

Action Contingency Implementation

Critical Issue – Consistent Scheduling

Why This Issue? To maximize the facility’s psychic value to the

community by providing unique and entertaining programming.

To provide a platform to draw additional tourism revenue into DC, while showcasing the community to national audiences.

To serve as an additional revenue source for Washington Sports & Entertainment.

The Verizon Center seeks more consistent sports-related special event scheduling.

Today’s Situation – Irregular Success

The Verizon Center is owned and operated by Washington Sports & Entertainment (WSELP).

WSELP is the parent company to:

Washington Sports (Wizards)

DC Arena Limited

Ticketmaster

The Verizon Center opened in 1997 and is the only venue of its kind in the greater DC region.

The Verizon Center has been successful in bidding on several major sports properties, but those events have been irregularly scheduled.

Today’s Situation – Stakeholders

Washington Sports & Entertainment/ Lincoln Holdings

Washington Wizards (NBA), Washington Capitals (NHL), Washington Mystics (WNBA), Georgetown Hoyas (NCAA)

Greater Washington Sports Alliance Residents of Washington, DC Washington, DC business community

Environmental Scan – Internal

Change in ownership Facility Improvements +/ - Anchor Tenants Revisions to event content

standards Adaptability of facility

Competitive

Industry

Macro

Internal

Environmental Scan – Competitive

Governmental/ Tax incentives

New entrants into marketplace

Geography Seasonality Cooperation of related

industry segments Historical relevance

Industry

Macro

Competitive

Internal

Environmental Scan – Industry

New technological standards

Changing trends in event experience

Limitations on calendar due to anchor tenants

Amendments to safety & alcohol policy

Macro

Industry

Competitive

Internal

Environmental Scan – Macro

Technology Ticketing Viewing/ Interacting Modes of transportation Home viewing experience

Political Exposure to terrorism Community support

Macro

Industry

Competitive

Internal

Social NBA/ NHL/ WNBA Labor

Dispute New cultural demands based

on changing demographics Sponsorship reputation

Economical Increase in cost of living

Value Scan – Culture & Structure

Organizational Culture: Places people at the essence of

their business structure. Event Patrons Event Promoters Verizon Center Staff

Emphasis on Innovation In 1973, Capital Centre was

first computerized sports venue.

Hired Susan O’Malley as the first female president of an NBA franchise.

First private facility management company to manage a university-owned sports facility.

Organizational Structure: Product Organization

Arrangement into 3 divisions Specific Focus Quick response times Information sharing

Hierarchical Structure:

Tall Organization

Multiple levels of management

Areas of expertise

Top-down management

Spread decision making

Mission Statement

The Verizon Center’s primary goal is to facilitate the best live sport and entertainment consumer experience in an American sports arena. We intend to meet the recreational needs of residents and visitors to the Greater Washington, DC region along with the service requirements of event promoters by setting the new gold-standard in event customer service; accomplished through the use of cutting edge technology, innovative use of facility infrastructure and a staff-wide dedication to visitor satisfaction.

What?

Who?How?

Why?Residents & Visitors to

Greater Washington, DC and event promoters.

Residents & Visitors to Greater Washington, DC and event promoters.

By setting the new gold-standard in event customer service; accomplished through the use of cutting edge technology, innovative use of facility infrastructure and a staff-wide dedication to visitor satisfaction.

By setting the new gold-standard in event customer service; accomplished through the use of cutting edge technology, innovative use of facility infrastructure and a staff-wide dedication to visitor satisfaction. To facilitate the best

live sports and entertainment consumer experience in an American sports arena.

Purveyor of recreational experiencesPurveyor of recreational experiences

Driving Forces

Services Offered One of the Verizon Center’s goals is to Increase the quality and quantity of services offered to both event promoters and event attendees.

Operations CapabilityMaximize capacity. The Verizon Center is a purveyor of time. Time is perishable, therefore the Verizon Center aims to reduce the amount of inventory (dark nights) while simultaneously maximizing revenue.

Performance Audit – SWOT Analysis

Strengths

Location Transportation

alternatives Innovative and

open-minded ownership group.

Associations with all of the major sports leagues/ associations.

Highly integrated parent company.

Fully Loaded facility

Weaknesses

Building/ city lacks significant sports history

Building lacks personality (limited architectural distinction, no endearing quirks)

Opportunities

Active regional sports commission

Success of anchor tenants, maturity of sports superstars

Popularity of city for non-sports activities including:

Tourism destination Media hotspot Popular culture icon Many existing sports

properties Tech savvy community Well-educated,

culturally aware Transplant city

Huge student volume

Threats

Seasonality (limited tourism presence in winter and summer)

Commuter City Tax/ Governmental

incentives offered by other communities to event promoters (financial incentive)

Limited sports identity- overshadowed by Washington Redskins.

Expensive

Where Does the Verizon Center Want to Be?

Maintain busy events schedule while hosting at least one sports-related special event annually.

Position facility to compete with other sports facilities on basis of cost to produce, event success, event production experience.

Implement strategy to regularly draw new sports properties.

STRUGGLING GROW STABILIZE

Busy events schedule

Irregular sports-related special events programming

Limited event procurement strategy

Increase number of sports-related special events produced.

Successful development of original sports programming.

Cohesive sports tourism business community.

New revenue streams for WSELP

(Current State)

(Desired State)

(Long-Term Vision)

Measuring Success Along The Way

Critical success indicators (CSIs) are tools to measure the Verizon Center’s success in reaching their desired

state.

Exposure Increase the number of sports-related special events the Verizon Center bids on by 10%.

Recognition The Verizon Center & Washington, DC garner more focus from national media sources.

Satisfaction Based on surveys, event attendees, event promoters and community members indicate an increased level of satisfaction with Verizon Center programming.

ProfitRevenues from sports-related special event programming increases 5% above the previous years cash flow totals.

What Is The Gap Between Now & Future?

The gap that must be bridged is to develop a strategy for differentiating the Verizon Center from other competing arenas in the pursuit of sports-related special events and to leverage that positioning into regular sports event scheduling.

Irregular sports-related special event scheduling (over 200 events in 2006, but only 15 (7.2%) were non-tenant sports events.

Limited value proposition.

No strategy for consistently marketing facility to event promoters.

GAPSTRUGGLING(Current State)

STABILIZE(Desired State)

GROW(Long-Term Vision)

Available Options To Close Gap

Pros

ConsOptionsExpand a sports-related special event currently being hosted by the Verizon Center in an effort to create a new, national sports property. (Ex. BB&T Basketball Tournament)

Eliminates bid process. Existing community support. Wider range of control.

Does not increase diversity of event programming. May damage already successful event. Requires support of existing sponsors.

Create partnerships with other arenas around the country to develop an event exchange/ rotation plan, thus creating discount incentives for event promoters.

Competitive advantage on basis of cost.Expanded network base.Referral opportunities.

Limited by constraints of partnering venue.Events limited to rotation, no potential for annual growth.

Create strategic partnerships with business leaders in industry segments that are relevant to event promoters. Through these partnerships value packages can be created to financially incentivize event promoters for bringing their event to the Verizon Center.

Allows Verizon Center to compete with other arenas on basis of cost to produce.Creates broader stakeholder base, thus generating more support for the successful event execution.A more cohesive sports tourism business community.Utilization of GWSA, a strong ally of the Verizon Center.

Involves high level of coordination.Requires out-of-the-box thinking from event promoters.May result in some loss of control for Verizon Center.

RECOMMENDED!

Recommended Action Plan Outline

1. Research Objective 1

2. Align Objective 2 Objective 3 Objective 4

1. Partner Objective 5 Objective 6

2. Strategize Objective 7

3. Implement Objective 8

Recommended Action Plan

Objectives Tasks & Responsibility Outcomes & CSIs

(2) Establish formal relationship with the Greater Washington Sports Alliance (GWSA).

Propose relationship to GWSA leaders

Draft agreement

Secure final approval

Outcomes: Strategic alliance agreement

CSIs: Executed agreement

(1) Gain a comprehensive understanding of competitive landscape.

Complete SWOT analysis

Draft pitch letter and sample survey instrument to be distributed to regional sports commission to learn about event procurement.

Propose research plan to the National Association of Sports Commissions (NASC).

Work with NASC to administer survey instrument.

Outcomes: SWOT Analysis Survey Instrument allowing for

better understanding of competitive environment

CSIs: Survey Instrument Survey Results

Action Plan Continued

Objectives Tasks & Responsibility Outcomes & CSIs

(4) Work with GWSA to identify and contact key business leaders in those industry segments.

Review roster of GWSA executive board & engage Chris Browne in discussions about businesses likely to be most receptive.

Receptive executive board members are paired with targeted industry segments.

Target board members are contacted to gauge interest

Farm for other business leaders who may be interested

Outcomes: Database created pairing executive

board members with industry segments.

CSIs: Database of 10 industry segments

and at least 20 business leaders > 50% of targeted business leaders

approached express some level of interest

(3) Determine what related industry segments would be most appealing to potential event promoters and create a working list.

Engage staff in brainstorming session to determine what partnerships to pursue.

Survey event promoters

Develop list of potential business partners

Outcomes: Survey Instrument Working list of potential business

targetsCSIs: Completion of survey instrument Survey Administered (response rate

> 80%) Revised list of business targets

Action Plan Continued

Objectives Tasks & Responsibility Outcomes & CSIs

(6) Formalize agreements with businesses that choose to participate.

Collaboratively draft agreement detailing responsibilities of Verizon Center and the Value Package partners.

Secure final approval from WSELP and execute agreement.

Outcomes: Executed agreement with

value package partners.CSIs: Value Package partnerships

are drafted and executed.

(5) Prepare informational literature and pitch the value package opportunity to targeted business leaders.

Create a fact sheet detailing: (A) Why it is difficult for DC to compete with other markets in event procurement (B) The impact major sports events can have on the DC business community (C) Details of what is expected from value package partners.

Circulate fact sheet for editing

Pitch to targeted business partners

Outcomes: Fact Sheet

CSIs: Pamphlet completed 75% of business leaders express interest in partnership as result of pitch

Action Plan Continued

Objectives Tasks & Responsibility Outcomes & CSIs

(8) Develop marketing material/ communications plan to promote the benefits of the value package to potential event promoters.

Provide fact sheet and summary of value package benefits to Washington Sports marketing and PR staff.

Marketing material/ communications plan to be developed by Washington Sports.

GWSA, Verizon Center staff and WSELP to approve materials.

Communications plan to be implemented by Washington Sports marketing and PR department.

Outcomes: Marketing Material

WebsiteMedia Kit

Communications plan

CSIs: Marketing materials created and

communications plan implemented.

(7) Establish an events committee to discuss the types of events the value package partners might be interested in bringing in.

Invite value partners to join an events committee, to provide partners with a stake in the success of the events to be produced, while providing the Verizon Center access to a broader communications network.

Empower GWSA to oversee the events committee.

Draft events committee procedural manual.

Outcomes: Procedural manual created.

CSIs: First meeting of events committee. Draft of procedural manual created. Procedural manual finalized.

Strategic Alliance Summary

Action Plan – Resource Requirements

Staff

Full-Time Events Assistant at the Verizon Center

Volunteers 1 intern (Verizon Center)

1 Intern (GWSA)

Appreciation Gifts

Equipment Additional Computer & Color Printer $2,000

Other

Consultant (Legal Counsel)Approximately 10 hours to review partnership agreements

Misc. (print materials, marketing budget)

$20,700

Annual Salary

$20,000- $30,000

Contingency-Planning Matrix

Internal

Op

port

un

ity

External

Vu

lnera

bilit

y Loss of available inventory Loss of touch with needs of

community Key employee turn-over (David

Touhey) Verizon Center staff fails to

collaborate with value package partners

Anchor tenant moves Terrorism Economic recession Establishment of a competitive facility/ event More stringent civic policy with regard to

tourism development Key employee turn-over (Chris Browne) GWSA is unable to balance commitment to Verizon Center with needs of

overall sports community Washington business community is unwilling to

partner with Verizon Center.

Lincoln Holdings assumes majority interest in WSELP and integrates new innovation.

Development of new career positions in response to expanded procurement processes.

Team successes expose facility to greater national recognition

Expanded communications network Greater collaborative input from

sports community

Planning For The Unexpected

Best-Case ScenarioTrigger Point: 85% or more of potential value package partners approached choose to align themselves with the Verizon Center and GWSA as a value package partner.Meet with GWSA management to discuss what businesses best fit the needs of the potential event promoters.Create guidelines to filter out the best suited value package partners.Implement plan to designate sub-event committees in order to feed event leads to the event committee.

Worst-Case ScenarioTrigger Point: 35% or less of potential value package partners approached refuse to align themselves with the Verizon Center and GWSA as a value package partner.Meet with GWSA management to discuss effectiveness of pitch materials.Survey business to discover what their expectations are when entering into a partnership with the Verizon Center and how sports tourism fits into their overall business plan.Analyze survey results and make a determination if the business community’s lack of interest is a result of poor delivery of the strategy objectives or if the Washington, DC business leaders fail to see the benefit in such a partnership.If there is a miscommunication in the message delivery, the material and pitch should be realigned with the survey results.If the business community is uninterested in a partnership relationship, the Verizon Center and GWSA must hold a strategy session to determine what they can do better as a unit to reach the area businesses.

Implementation

Project Timeframe = 12-16 months

Requires increased cooperation between the Verizon Center executives, the DC business community facilitated through the Greater Washington Sports Alliance.

Accountability: The formal partnership creates accountability profiles for GWSA, the Verizon Center and the local business who choose to become value package partners