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Hawks CEO: Philips Arena Upgrades Target Millennials

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Copyright 2016 The Atlanta Journal-Constitution

The Atlanta Journal-Constitution

 

It used to be that the kids would get their own play room. Now, as they've gotten older, it looks like they're going to get their own sports arena.

Boosted by Mayor Kasim Reed's promise to kick in three-fourths of the upfront cost, leaders of the Atlanta Hawks are planning a $192.5 million renovation of Philips Arena aimed at wooing more young adults.

"This will be the first arena designed for a millennial audience," Hawks CEO Steve Koonin told me.

Millennials, schmillennials. They're the golden ones now, not just for a basketball team anxious to sell more tickets and beer but also for most any marketer, retailer, techie or employer nervously eyeing the future.

The Hawks have become a hotter ticket the past couple years but still lag the average for NBA attendance.

So what does "designed for a millennial audience" actually mean? I asked the 59-year-old Koonin.

In part he envisions borrowing ideas from other places. Lots of bridges and walkways, for example, a la Ponce City Market. Plenty of standing room where people can hang out. Unique combinations of seating.

"This isn't going to be stack 'em high and load 'em in, but very much about social engagement," he said.

There will be everything from clubs to white-tablecloth restaurants in the arena. "We are going to have a whole litany of amenities that talk to today's fans."

The makeover also will include things not done before in arenas, Koonin assured me, though he declined to get specific.

Also, apparently, in Future-world the high-class folks may be mingled with me and the rest of the riffraff, rather than being largely walled off.

Want your shorts pulled down?

That's way different. Now, if you try to walk near the premium seating areas with their premium clubs and upgraded food, a friendly but stern attendant will find a way to pull your shorts down around your ankles. Because there's no such thing as a free lunch. (Well, unless you're owner of a major American sports team and you want a partial government handout -- er, I mean, partnership.)

The current setup at Philips Arena includes more than 100 suites stacked atop one another like a moldy layer cake you can stare at but not eat. The higher up you go, the harder it is to find someone willing to pay for the distant view. It's a design innovation I'm told was meant to serve the competing interests of basketball and hockey, which are best viewed at different levels. (Too bad NHL hockey long ago melted away from Philips.)

Koonin is eyeing renovations that could cut the number of big suites by about half -- they each fit 20 people -- and scatter what remains along with new, more-intimate premium seating around the arena.

"We know our customer wants to make this a social occasion," he said.

Koonin is kind of a quote machine.

"In today's world it's not about isolation; it's about inclusion."

"We are getting rid of all the haves and have-nots."

We'll see. After all, he recently added a fun, behind-the-scenes gathering area just for top-paying fans -- those with exceptional seats in the first three rows on the floor. They go in there to chat and load up on food. Which maybe isn't over the top considering their seats can go for more than $1,000. Per game.

Having people willing to spend big bucks in downtown Atlanta is a great thing. And I can see why city leaders would want to encourage it.

We should be wary of government shovels

But we should be wary any time government wants to shovel big public money into for-profit ventures. It shouldn't be done unless there's clear evidence that the public good will be greater than the public dollars at risk.

I spoke with fans at a recent home game. (I hadn't been in years. Bad, Matt.) Most were upbeat about the team (it's generally been winning) and the energy in the arena.

Shannon Moses, a fan from Alpharetta, seemed befuddled about why an arena renovation is needed.

"I can't imagine what they can do to perfect it," she told me. "I just think it's a waste of money."

So I asked Koonin: What's wrong with Philips?

"It was designed in the '90s, and I think a lot of the pieces are antiquated," he said. "It is not a top-tier arena, which makes it very difficult to capture the best fan experience."

OK. But Philips is one of the nation's top 10 top ticket-selling arenas for concerts, according to Pollstar.

Koonin, who joined the Hawks in 2014, sharpened his marketing chops at Turner (where he oversaw revitalization of the TNT and TBS TV networks) and at that little red marketing machine called Coke.

A rare born-and-bred Atlantan and basketball fan in football country, Koonin said the team's image and customer base are already morphing.

He told me the average age of fans at Hawks games has dropped from 47 to 34 in recent years.

Koonin also has focused on attracting more African-Americans and Latinos. That's a twist, since the team's former controlling owner, Bruce Levenson, sold his stake in the team after disclosure of an email in which he wrote "My theory is that the black crowd scared away the whites and there are simply not enough affluent black fans to build a significant season ticket base."

The Hawks had a particularly good run a couple of seasons ago. Attendance dipped last season but was still second-highest in a decade.Annual revenue increased 51 percent compared to two years ago, Koonin said. Season ticket holders have jumped from 2,500 to nearly 10,000.

Multi-sponsors, multi-millions

And three more major companies -- Delta, UPS and Kumho Tire -- have signed on as sponsors with multi-year contracts worth multi-millions of dollars, Koonin said.

The Hawks still have challenges.TV ratings for home games logged the sharpest annual decline of any NBA team measured, according to Sports Business Journal. Average home attendance ranked 22nd out of 30 teams last season, according to ESPN.

On the bright side, it's nice to have room to grow.

Koonin said research shows three reasons fans don't attend more games: Traffic. Inconvenience compared to staying home. Shortage of food, drink and entertainment options nearby.

So, while the big makeover gets underway, executives already have added things to draw young hoopsters. Hence, the hip-hop organist, cool graphic projections on the court and a chance to tweet selfies shown to the entire arena.

Every moment that the game isn't displayed on arena screens is scripted. The kiss cam? Some fans are coached in advance for a comedy act. And about 80 tickets are given to pre-selected fans who agree to spend most of the game standing and hyping up the crowd.

"Everything is produced," Koonin said. "Because we compete with your sofa, with no traffic and no expenses. So this experience has to be rather extraordinary."

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November 13, 2016
 
 
 

 

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