Chron: Yao = $$$ For Rockets

And ClutchCity.net gets some love !!!


http://www.chron.com/cs/CDA/story.hts/sports/1476005

Drafting Yao Ming means big business for Rockets

By JONATHAN FEIGEN
Copyright 2002 Houston Chronicle

Every Rockets employee save the basketball staff was called into a mandatory meeting. As in now.

Roughly 80 members strong, they crowded into every bit of floor space of a Greenway Plaza conference room and were told that their lives, or at least the large part of their lives spent on duty, would never be the same. The Rockets had been reborn.

There was polite applause and confused looks, sort of like the crowd around the corner at Compaq Center last season. The NBA draft lottery had been held just five days earlier. The draft was still almost five weeks away. But by then, it was clear: Every corner of the organization had been transformed.

The Rockets had emerged from the darkness of a lost season into the glaring spotlight of international attention. The Yao Ming era had begun.

"This is the biggest individual sports story of all time," Rockets owner Leslie Alexander said. "When they drafted (Michael) Jordan, or Shaq (O'Neal), or all the guys in baseball, nobody had the aura around him that this guy does. This is an international story before he plays a (NBA) game. He will be the biggest sports story in the world for years to come if he can become a very good NBA player.

"It pumps life into the NBA and the Rockets. I think it makes us the most exciting team with the Lakers. It's unbelievable.

"Everybody loves being part of something the whole world spotlight is on. Now, it's bigger than ever. I like that. It makes it more fun. It makes it bigger than life."

Alexander said he rated Yao's story as sports' biggest with a simple head count of interested observers, beginning with 1.3 billion in China and moving across Asia before touching on the NBA's more familiar turf.

His was a measure that Jackie Robinson, Babe Ruth and Jesse Owens, in eras before television or the Internet, or even Muhammad Ali, Tiger Woods and Jordan could not match in terms of sudden explosion of attention.

But in that conference room on a Friday afternoon, business as usual ended. While Rockets coaches across town planned how to use Yao's unusual combination of size and skill, the business end of the Rockets went to work on plugging in to "the biggest individual sports story of all time" and letting that electricity light up its world.

Yao can earn as much as $3,858,240 from the Rockets next season and $15,690,219 over the four years before the first chance to negotiate a new contract comes.

But he could pay for next season's contract, and perhaps well into his first deal with the Rockets, before he ever sees Houston.

"Now that we have drafted him," Alexander said, "there will be an amazing economic impact."

From ticket sales to negotiations on a new local television contract, from deal-making on the naming rights for the new arena to sponsorships, the end of the talks to bring Yao to Houston became the start of the Rockets' planned business revival.

"In any organization, it's important for everybody to recognize a great moment and to be a part of it and to recognize what ... kind of opportunity is presented," Rockets chief operating officer George Postolos said. "We're very excited about the opportunity to bring Yao Ming to Houston and to have him play for the Rockets.

"We could see, and we believe, that this is a very significant moment in the life of the organization. We wanted to make sure everybody working here appreciates that and understands they're an important part of it, can do things to make it more special and they should enjoy the ride, enjoy this moment."

Every day on his way to his desk, Rockets vice president Tim McDougall must pass a reminder of the team's dramatic fall from grace. McDougall circled a paragraph in the morning newspaper, and Postolos hung it in plain sight:

"With a crowd of 12,096 on Saturday (Feb. 13), the Rockets' average home attendance of 11,665 ranks last in the NBA, passed on Friday by the lame-duck Charlotte Hornets' average of 11,888."

"It's there as a reminder," McDougall said. "Anytime anyone says, `This is how we used to do it,' it's there to say, `That's why we need to think about it and maybe do it differently.' "

Last in attendance in 2000-01, the Rockets slumped to an average of 11,737 last season. The Hornets actually finished last but were caught cheating on the numbers to make sure they would finish with worse attendance than the Rockets to help their argument that they needed to move to New Orleans.

The Rockets, however, had grown accustomed to their untouchable strength in the Houston market. From 1994-95 to 1998-99 they sold out 176 consecutive games (including the playoffs), a streak that at the time was the third-longest behind the Bulls and Knicks. They had grown accustomed to flying first class when they soon found themselves in the back of the bus.

Then, the Rockets won the draft lottery and the mood immediately changed. Ignored during the season, the Rockets were hot again.

"There's a palpable excitement," Postolos said. "It's apparent in almost every conversation we have almost every day. That's the great thing about this business. That's the great thing about this community. You can really tell, from day to day.

"When it's not there, you feel its absence. When it starts to come back slowly, you can feel it, too. When it's going full bore, that's something you can really appreciate. We've been at that boiling point for several weeks, and it doesn't seem to be getting less intense. It seems to be getting more intense."

Since the lottery, local talk radio that had generally ignored the Rockets during the season has been flooded with talk about Yao and the draft. The ClutchCity.net fan forum had to be limited only to registered members to handle the traffic load. Rockets general manager Carroll Dawson said he did more radio, television and newspaper interviews in the first few weeks after the lottery than he did immediately before and after the Rockets' championships.

The Rockets keep track of newspaper coverage and where stories are played as a marketing department barometer of media attention that most professional franchises watch closely. Since the end of the season, the Rockets have had 22 stories on the front of the Chronicle Sports section, four on the front of the paper. In typical professional sports offseasons, only a handful of stories other than news of player acquisitions will run on the front of a sports section.

But though the buzz is unmistakable, it can be ephemeral. There will be similar attention paid to Yao when he actually plays. But deals are made and tickets are sold in the offseason, with negotiations and sales calls typically beginning now and coming to a head in August and September.

In the days following the lottery, the Rockets received a call from an Asian businessman asking about the cost of 500 season tickets. They have already received more deposits on new tickets than typical in June. But most new ticket sales don't begin until August, after current season-ticket holders have their chance to renew.

"We have seen on the ticket side that there has been significant interest," Postolos said. "Prominent members of the Asian community, business leaders, people with entertainment needs have been calling. Individuals, that's not going to start before you draft the guy.

"There's no doubt in my mind, it's going to have a dramatic impact on ticket sales."

That impact is expected to be throughout Houston. But there is no question that there has already been a tremendous upsurge in interest among Houston's large Asian community.

"We've been trying to develop a relationship with the Asian community since Les bought the team," Postolos said. "It's something he's always recognized as an important goal to pursue. But we made more progress over the last 30 days than over the previous five years. The reason we had this great catalyst to do that is Yao Ming and the great interest in the community in Yao Ming."

Postolos said there could be a similar effect on sponsorship deals. Typically, the Rockets will have between 12 and 20 sponsors. But sponsorship success is judged not in the number of sponsors a team has but in how many ways sponsors invest, from television commercials to arena signs.

Though not as easy to measure as attendance, Rockets sponsorship has also slumped in recent years. But Postolos expects a turnaround in sponsorships similar to the upsurge he predicted for ticket sales.

"I think we will add new companies," he said. "More than that, the companies we have, we'll be able to do much more with them. They're going to look to take advantage of this.

"We have an added dimension. This venue and this team are taking on more international significance. There's much more significance in Asia than you would have imagined before we had the opportunity bring Yao Ming here. All that attention is something marketers focus on. They know something they can take advantage of. We're seeing signs of that. The quality of the conversations has changed.

"When you win the draft the lottery in a year Yao Ming is coming out, that is something they appreciate as a difference-maker. China's a very important market for any global marketer. It's a reservoir of 1.3 billion people. It's a market that is receiving more and more attention. If you're any kind of a global marketer and you're looking to grow, China is an important market. It's an important market for the NBA. It's an important market for our corporate sponsors."

The biggest difference might be seen in the search for a company to purchase the naming rights on the new arena. Postolos believes companies that market internationally will find added value in having their name on the building in which Yao plays. Western companies have begun infiltrating the Chinese economy, and the potential for growth is considered among the greatest in the world.

"There are some companies that are global marketers that we might not have had the relationship with before because Houston was not a critical market," Postolos said. "Now they'll take another look because Asia is an important market. By doing something in Houston, benefits can carry over to Asia.

"People appreciate Yao Ming is going to bring incredible attention to the venue. Hundreds of millions of people in China are going to be watching our games for the next decade. They are very focused on that this is the place Yao Ming plays most of his games in the NBA. It's going to bring incredible attention to our team, our city and our venue. Somebody is going to put their name on it. They're going to have an immediate association with our team and a player that is a huge star in Asia and will become a huger international star."

The staff meeting never quite became the pep rally that Postolos planned. As with the fans in the front row, it can be difficult to be raucous while wearing a coat and tie.

But the cloud that had hung over the franchise was gone.

"I don't like losing," Alexander said. "We lost badly. We were a lottery team. It wasn't pleasing. It was tough watching the games. It made my stomach gnaw. I couldn't read the sports pages."

It still comes down to what happens for 48 minutes a night. And even Alexander said it will take Yao time to have the effect the Rockets predict.

The mood, however, has already radically changed. Business almost certainly will improve, and, as with the performance of the team, will be conducted with greater public scrutiny.

Eventually, for all of the interest internationally, all the board-room decisions and marketing efforts of corporations seeking to ride the wave, the success and reputation of the Houston Rockets comes back to Houston.

If the Rockets' image has already begun to change, Postolos said so might Houston's.

"One of the questions you have as a Houstonian is, how does what's important to me relate to what's important to the rest of the country, the rest of the world," he said. "One of the interesting things about sports is if our team does particularly well, or does incredible things or wins championships, that's something that's talked about all over the country. This story lends itself to that and takes it to another level because of the international flavor.

"On the community level, it's getting to know the people in the community that are the most passionate about this event. That's basketball fans. That's Rocket fans."

 

I'm just glad I'm a long time registered member! I would have gone nuts if I couldn't have gotten into the forums.


os

 

Hey Clutch...

See if the new visits count rises dramatically tomorrow after the article comes out and let us know.


os