Net Gains

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In a professional sports world where attendance has declined across the board and player lockouts have become dinner-table discussion topics, the Seattle Storm has experienced an increase in attendance and season-ticketholder retention. According to the organization, gross revenues have risen 76 percent in three years. Corporate sponsorship of the team has similarly increased, and the organization touts strong community partnerships. But the real thrill and challenge in the niche-market Women’s National Basketball Association—since its teams already play the best women’s basketball in the country—is to make the league a viable, respected, enduring business.

The women-owned Storm franchise is pulling its share of the load. And, says co-owner Dawn Trudeau of the organization’s business model, “It’s working.”

Having recently completed its 15th season, the WNBA, for better or worse, is stepping from the shadow of its fostering organization, the NBA. Even with big brother’s backing, the story of the league has been one of indigence and impermanence. Six WNBA teams have folded and three others have relocated as the league expanded from eight teams to 16 and then contracted to the current 12. Franchises shift regularly, often resulting in diluted talent and weak footholds in the cities where the teams play. Only three franchises—the New York Liberty, Los Angeles Sparks and Phoenix Mercury—remain in their original cities from the eight-team league that began play in 1997.

According to Jim Copacino, the Seattle-based ad wizard whose firm Copacino + Fujikado is behind much of the Seattle Mariners’ popular television advertising, the biggest challenge to the Storm’s future is the financial stability of the WNBA as a whole. “If every team were in Seattle’s position,” Copacino says, “I think you’d have a healthy and viable league. But we know that isn’t the case.” The WNBA’s new president, Laurel Richie, is optimistic, however. “When we have teams that are strong and steady and stable and growing,” she says, “then, by definition, so goes the league.”

The Storm’s business leadership understands and embraces this mandate. “Our goal is to play our part, however small or big that may be, in securing the financial viability of the WNBA,” says Storm president and CEO Karen Bryant, who was named Executive of the Year by the Seattle Sports Commission at the group’s annual Sports Star of the Year event last January. “And we think the most compelling way for us to do that is to build the model and make it happen.”

From the beginning, Force 10 Hoops, which bought the Storm from Clay Bennett in 2008 for $10 million, has strived to operate in the black. While it also measures success through ticket sales, sponsorships and fan engagement, its ultimate goal has always been profitability. “In order for our team to survive long term,” says co-owner Ginny Gilder, “it needs to be an operable, viable business.”

Still, while the Storm is seeing increases in almost all of its major metrics, Bryant says the team is two to three years away from profitability. This, she adds, puts the company slightly “ahead of schedule” for operating in the black by 2014, which the ownership group had been told was a reasonable expectation when it bought the team from Bennett.

One way Bryant and Force 10 hope to grow revenue is by generating income in the off-season. Because the WNBA season runs from June through September (and into October if the team is in the playoffs), the Storm’s revenue flow fluctuates greatly. Bryant, confident in the Storm’s popularity on and off the court, is trying to figure out ways to market the team year round.

The recent history of that team is familiar to many Seattleites and fans of Washington basketball. In 2008, as the Seattle SuperSonics picked up and moved to Oklahoma under new owner Bennett, four women calling themselves Force 10 Hoops stepped in to assume ownership of the local WNBA franchise—and keep it in Seattle. Dawn Trudeau, Lisa Brummel, Ginny Gilder and Anne Levinson—Levinson is no longer with Force 10—bought what was then an 8-year-old team.

When Force 10 acquired the Storm, it avoided the bare-bones, cost-cutting model typical of many WNBA franchises. It also made Bryant the CEO. Bryant had been with the Storm since its inception in 1999 in advance of the 2000 season, first as vice president of business operations and then as chief operating officer. Before joining the Storm, she had been assistant general manager of the Seattle Reign in the now-defunct women’s American Basketball League.

From the beginning, Bryant and the owners agreed that hiring talented staff was the key to success. “You have to execute,” notes Trudeau. Bryant says that in three years, she and Force 10 have effectively doubled the staff of the organization from its original complement of 16.

Next, the Storm amped up television coverage by negotiating deals with local broadcasters in 2010. While WNBA games don’t generate NBA-type dollars, the Storm benefits from dial position when its games are on KONG-TV and from the ability to control content by producing its own broadcasts. Seeing the Storm on TV allows someone to sample the team and decide whether to attend a game, says Bryant, who believes TV coverage is “the single biggest thing in terms of the long-term success of women’s basketball.”

“Once people see us, they like us and they want to come back,” adds Trudeau. Season ticket figures don’t lie: The Storm’s season ticket retention for 2011 approached 90 percent, having exceeded 80 percent in each of the previous two seasons. (The NBA pushes for retention rates of 85 percent with its franchises.)

Of course, it helps that the Storm captured its second WNBA championship in 2010, winning every game it played at home and generating the sort of community buzz most sports-team owners only dream about. The Storm caters to a primarily female and family-oriented demographic, but it hopes to expand its fan base through continued marketing. “The fact that we’ve really built this business from the fan’s point of view, I think, is extremely noticeable,” says Bryant. Copacino and Gilder agree, pointing to a widespread sense that Storm players are not that far removed from the general public, and that there’s a feeling of intimacy and excitement generated inside KeyArena, the team’s home court.

The enthusiasm of the fans is what drove the Storm’s latest ad campaign and website redesign, developed by Wunderman Seattle. The ads feature photos of players and fans caught up in the fervor of a game. Each photo is labeled with words like “Pride,” “Drive” and “Yours.” “The biggest business challenge is simply getting new people to come in and experience a game,” says Sean Howard, Wunderman’s global client services director. “Once you go to a game, most people are really kind of hooked.”

Howard believes that attracting fans to KeyArena goes beyond ticket sales. He says Force 10 and Bryant have a “level of sophistication of how they think about their particular brand and what they are trying to do with it, [and] what they are trying to inspire in the community.” Promoting those ideals, he says, shows “a level of thinking and leadership that is league leading within the WNBA.”

This level of thinking includes early decisions made with long-term goals in mind. “Our goal is eventually to make money,” says Brummel, “but our goal [was] to get the team here [in Seattle] and sustain for the long term, more than anything else.”

Bryant shares the belief. “The Storm will live on long past us,” she says, “and we have the pleasure and privilege of being stewards here and now. But long after that, the relationships that we have are really what’s priceless.”

The real drivers of success, Bryant believes, are quality basketball and an enjoyable fan experience. “We’re all just working on packaging,” she says.

The product is exceptional in all 12 WNBA markets, she adds. The Storm is merely one of the first franchises to invest so heavily in it and to be “nimble” enough to take advantage of its independent ownership.

“When the owners bought the team,” Bryant says, “they said, ‘We want to be a model franchise to illustrate to other teams that if you invest in this business, the return [on investment] is there.’”

Having won a WNBA championship in the third year of Force 10’s ownership, the Storm clearly demonstrated the sort of ROI that not only builds balance sheets, but also fan engagement. And having weathered a much more diffcult year this past season—at press time, the Storm was battling just to make the playoffs—Bryant and company know full well that true success in bringing women’s sports into the mainstream is as much about winning converts as it is about winning games.

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Sponsorship and success

The Seattle Storm has seen a 32 percent growth in sponsorship dollars year over year. Its sponsors include such local icons as Alaska Airlines, Virginia Mason, Seattle Children’s, Group Health, PCC and Ivar’s.

The Storm is one of five teams in the WNBA with a “marquee partnership,” something common in professional soccer but unusual in other American professional sports. Under the team’s agreement with Microsoft, the jerseys that Sue Bird, Swin Cash, Lauren Jackson and their teammates wear sport the logo of Microsoft’s Bing search engine. Ad executive Jim Copacino sees the brand association as particularly fitting. “The league and the Storm’s brand fit well with the Bing brand,” he noted. “It says, ‘We’re an alternative. We’re not the biggest. We’re scrappy and you should pay attention to us.’”

The Storm’s corporate sponsorships are steeped in community building. Storm players, coaches and staff make more than 100 appearances each year. Many players partner with nonprofit organizations in Saettle. The team carries out its multiple annual community programs under the banner of the Seattle Storm Foundation. —S.D.

Seattle Storm point guard Sue Bird is a fan favorite. Photo by Neil Enns/Seattle Storm

WNBA BY THE NUMBERS

12: teams

6: teams owned independent of NBA teams

3: teams with predominantly female ownership groups

3: teams operating in cities without an NBA franchise (Seattle, Connecticut, Tulsa)

1: team that has turned a profit (Connecticut, 2010)

$852,000: Team salary cap (NBA cap: $58 million)

$35,880: Starting Salary

$103,500: Maximum salary

The Outsider’s Perspective at Bartell Drugs

The Outsider’s Perspective at Bartell Drugs

Brian Unmacht, the first non-Bartell to run Bartell Drugs, knows his mission is to keep the family-owned business relevant in the face of stiff competition.
FROM THE PRINT EDITION |
 
 

Brian Unmacht spent six years working at his father’s drugstore company and, after college, 27 years at REI, before becoming only the fourth CEO in Bartell Drugs’ 126-year history. Now he’s intent on using local partnerships to make Bartell a strong competitor to the national drugstore chains. 

FAMILY: My father had been an executive at the Bon Marché. In the 1970s, he formed his own chain of small drugstores in rural areas. I spent six years in high school and college working for my dad and eventually managed one of his stores. We were a $20 million business and I computerized the record keeping and did the finances and everything. It was a sort of love/hate thing because you could never separate the business from the family. But I appreciate having had a chance to work with my dad. In 1980, 19 percent interest rates and the recession did us in. We had loyal customers, but customers still went for price and selection when grocery stores started competing with us.

TRAVEL: After college, I spent a year backpacking in Nepal and Pakistan and skiing in Europe. When I returned, I had no money, so I went to work for REI. They had seven stores and a catalog and were beginning to expand beyond the Northwest. I managed the Tempe store in Arizona, opened the Chicago store and then worked on the store in Japan as vice president of international. That was an exciting time.

RETAIL: In the ’80s, it was Walmart that dramatically changed retail as it sourced overseas. In the last 15 years, it’s been Amazon. You’re always going to have disrupters. It comes down to how do you keep yourself relevant? In the recession of 2009, the number of paddling and canoe shops in the country dropped to 1,500 from 2,500. With fewer distribution points, vendors like North Face were trying to increase web sales. At REI, our value proposition was to provide expertise and credibility. North Face would give REI an exclusive for a certain time because of that. It was a win-win.

BARTELL DRUGS: I’ve come full circle. Now I am back in the drugstore space. We are up against $120 billion retailers like Walgreens and CVS. How do we find unique products and services that they can’t carry in their 8,000 stores? We offer assortments of local candy like Theo or Seattle Chocolates. We partnered with Snoqualmie Ice Cream to sell our own brand. At our Bellevue store, we offer scooped ice cream. If you go to Fourth and Madison downtown, we have a partnership with Caffé Vita for the espresso, and with other local vendors for sandwiches and other food offerings.

BEER: Bartell always sold beer but it tended to be Budweiser and Heineken. We put in a beverage buyer who had a passion around craft beer and empowered him to form partnerships. Now we have a partnership with Two Beers Brewing Co. to do a Tangerine IPA limited run. Last year, we did Bartell Spring Elixir with Fremont Brewing. We have 150 partnerships with other locally owned firms.

FAMILY BUSINESS: There have only been three top executives [before me] at Bartell’s over 126 years and they were all named George Bartell. Being family owned, we’re part of the community and take the long view. I tell employees that’s not enough to be relevant. There are a lot of family-owned businesses that fail. 

OUTSIDER: The family put together an outside board five years ago to get a wider point of view and I was put on the board. The family recognized there was going to be a gap before the five cousins in the fourth generation were ready to manage the company. That’s why they brought me in as the first outside manager. With revenues of $500 million and growing, management was also getting more challenging. Evelyn Merrill, the oldest of the cousins, is senior marketing manager. She has a lot of good ideas and is challenging the third generation in terms of her view of the brand.

STORES: We have 62 stores. We are talking about adding two to three stores a year. Today, we’re primarily in King and Snohomish counties, but I want to look at Whatcom [County], Bellingham, Poulsbo, Bainbridge Island and potentially farther south. With the Walgreen/Rite Aid merger, some Rite Aid stores will probably be divested. If the right stores came on the market, we would be interested. The Greater Seattle area is still booming, and with more density there is room to put a lot more drugstores in convenient places. 

HEALTH CARE: We do flu shots now, but we are looking at providing other immunizations as well as testing for strep throat or flu so that you don’t need to go to your primary care doctor every time. Because of our concentration of stores in Greater Seattle, our share of the pharmacy business is right up there with Walgreens. It’s important that we have that scale to work with the insurance plans. We had a pilot program to have Group Health clinics in 25 of our locations, and Kaiser [which is acquiring Group Health] seems interested in continuing the concept.

COST OF DOING BUSINESS: I worry that in five years, if Seattle’s not booming anymore, what does it mean if you’ve raised the fixed cost [by raising the minimum wage]? But I worry less about the minimum wage than the growing congestion issue. I have 2,000 employees who live all over the Puget Sound region. We have to move freight around. Congestion is a bigger and bigger issue. 

EXECUTIVE Q+A RESPONSES HAVE BEEN EDITED AND CONDENSED.