Wolves team president Chris Wright (bio) was kind enough to take a few minutes to sit down with us yesterday to answer a few questions. In lieu of simply transcribing a word-for-word report of the call, I thought I'd take the following approach to relaying the information from the interview to you, our dear readers: I will write down my entire primary question followed by Chris Wright's response followed by my overview of his answer and a quick bit of commentary (in italics) at the bottom of the page. Follow up questions and responses were integrated into the main answer as best as possible and notations were made when this happened. Mr. Wright is very conversational and I thought it would be too hard to follow the tone of the conversation had I simply thrown in all of the follow up questions in order. The interview is below the thread:
#1 ME: First of all, I want to say thank you as a fan for the fantastic season ticket offer the team has put out there in March. There are some really wonderful deals available to people who want to come and watch the NBA. Why did the team choose this approach as opposed to other teams like Philly and Memphis who seem to have done nothing more but hold the line on ticket prices?
CHRIS WRIGHT: Our business operation has done a tremendous amount of research around nearly all of our major decisions. We recently completed something we call a flight survey, that we put together with the NBA, to all of our season ticket holders probably about three months ago now where we really started to test the waters relative to renewal intent and to see what our fans thought were the issues facing our franchise going forward. The backdrop to this survey is that, in the past, the issues our season ticket holders talk about are typically related to the team while very little of their feedback, in the past, was related to their level of investment. Whether it is the economy or whether it's the fact that maybe we've had an under-performing team now for really 3 years, and it's been sliding since 2003/2004, the majority of the push-back was around a sort of value proposition, and the equation between team performance and cost. This relationship, especially with our season ticket holder's investment cost really came through loud and clear... [After reviewing the data] we said it was obvious that we've got to do something that fans can relate to in terms of where we are taking our product. I think that everyone believes in the product. I think that everyone believes in the vision, but we're over-valued in terms of investment level right now. The research also told us there was the potential of renewing somewhere in the area of 65-68%. We also knew that in order to advance our business, that really we needed to renew somewhere in the neighborhood of 85-90% [which was common back in the playoff days--answer taken from in-answer follow up question] and in a difficult year where we've currently won only 14 games, you know, that's hard. We are always building back that part of the business; before you grow the business, you have a margin that you have to grow back, so what we wanted to do was #1 was to build something that really increased the renewal rate and that those 65% we saw in the research were those "definitely likely to renew" and "most likely to renew". We took a look at the other 35% and said that they are in play. So we need to influence that 35% in some way shape or form. Secondly, to build the business, we are looking at the assets that David and our Basketball Operations staff have accumulated on the basketball side--$20 million off the cap, 3 draft picks, etc, etc--and we said the good news for us is that there is the likelihood of 3-4 new players on this team; potentially 2 game changers, at least, in terms of what we can accumulate here. Let's use this [the off-season] as a spring board to build us back up again to a home court advantage [and increased revenue, etc]. With $20 million coming off the cap and with the massive free agent market--both restricted and unrestricted-- we really feel we can make some noise in that market as well.
Long story short, we then focused on a four phase marketing campaign and the first phase of that is what you are seeing right now in that let's make the decision obvious for the consumer and offer them something that no other NBA franchise ever has--you know, up to a 50% discount in a very narrow window [and] if you really believe in the product, in the vision, in the blueprint, in our potential in free agency, if you get in now you will be rewarded with the best deal. ..and to be honest with you, the expectations have been met. We are at just below 60% renewal today...we believe that we can get to 80-85% by the end of the year [based on historical data]...our new season ticket orders just went over 850 new orders. Our goal for the month of March was 600. We think we can eclipse 1000. Already the 1st phase is...it is the body play. This is the basic building block of putting bodies in the stands. To create the atmosphere for the fans. No one wants to drink in an empty bar, let's fill the bar. Let's make it a place where people want to be downtown on a Friday night. Long story short, the first phase is reduce prices and make it affordable. The body play.
The 2nd phase is the revenue play; pricing will go up on April 1st and people who bought their tickets in March will see the benefit of their investment. We plan on doing this on April 1st...The 2nd phase is built around the lottery; it is more geared towards people who have a passionate interest in basketball, because it will be right in the window where we know who we will definitively pick in the draft...whereas the first phase is for people who are reacting to the economy as a consumer concerned about where they are going to spend their discretionary dollars. The basketball purists who are waiting to see what we do in the lotto [and in free agency and the draft] are the focus here in phase two and phase three...The neat thing here is that there were about 1,200 seats available to be bought for $10 and that if you buy one of these tickets, you will be treated to all of the benefits of a season ticket holder
#2 ME: I really appreciate the team investing in its fan base like with what you have done with ticket prices. Another investment that I think fans would like to see has to do with a recent front office trend around the league. Last year, the MIT Sloan Sports Analytics conference had something like 200 openings for attendees. This year, they were booked full, with a Wolves rep in attendance according to our sources. That's wonderful to hear and I hope the team continues these sorts of outreach efforts. What is disappointing was to learn from the Wall Street Journal that the Wolves were in the 1/2 of the NBA who does not employ a full time stats guy, or that does not subscribe to a stat keeping service like Synergy Sports. Is this an investment that the team is willing to make on behalf of its fans? There seems to be a very strong correlation between the teams that do employ a full time stats guy and service and winning in the NBA. This seems like a solid business decision with a strong return on investment, especially if the team can turn a $100,000/year service into a 2nd round draft pick that picks up rotational minutes. Is this investment in the team's future and why hasn't it been made?
CW: I think so. We get that there are so many things that we could invest in and we are trying to be careful with the dollars we have and that goes to any level of the fan experience, whether that is on line to the TV/radio broadcast to the in arena experience. The unfortunate piece of where we're at today is that because of the last 6 years, our revenues are down. The investment levels we are making today are substantially less than they were 6 years ago and we need to get that back. Part of getting that back involves what do we do with our current revenues and that's where we're putting our focus right now. We want to put the fan at the center of our decision making process right now. [In response to a follow-up question about whether or not fans have asked about the team building a stats operation]....There hasn't eben a lot of external fan input for this; it's more internal. There is a definite internal push for this sort of thing and when we get revenues back up to where we want them to be I think this is where you will see more investment.
#3 ME: How does the team plan to capitalize, if at all, on the Twins' new ball park. Are their opportunities for increased advertising and fan development?
CW: As you know we have a lawsuit [with the management of Target Center] and we expect a judgement by this Friday. We believe that we did well in presenting our case and that we will prevail and that we will be able to develop some level of signage on the backside of our building. We are going to be very careful with what we do there because the naming rights for the Target Center are up on September 30, 2011 and we may do something that gets us to that date rather than investing in some massive singage system through that particular day because whether target reups or there is a new company, that new company or Target will have a big say of what goes on the corner of that building. We might do something in the mean time that could be then moved to another part of the building after the new deal. We are definitely gong to devleop that corner of the building.
#4 ME: David Kahn has laid out a vision of how the next three years will go. With one year almost on the books, how do you see his plan working so far?
CW: Obviously, I think how I would characterize that is that David has a position to take advantage of, possibly, the biggest off-season in franchise history. It is up to him and his staff that the assets we have accumulated are utilized correctly. The fact that we have a top 5 pick, the fact that we have Utah's and Charlotte's pick and expiring contracts, and that we are positioned well in a massive free agency market, it can be potentially one of the great summers in our franchise. As you know from watching the NBA, you only need 3 players to be a very good franchise. Look at how Oklahoma has turned themselves around very quickly in the past few years. We hope to be in a position like that [where we can quickly turn it around] this summer. By this time next year, we think we can be a completely different team in the NBA.
#5 ME (via Wile E. Coyote): How is the team planning to define success next year? From a fan perspective, if next year is not about trying to win games and put the most competitive rotation on the floor, I will not watch. I cannot stand another year of abstract player evaluation, zero accountability for wins, and a general tank-a-thon to yet another draft.
CW: We've got to compete for a playoff spot next year. That is success on the court and with the potential of Rubio the year after, and one more round of free agency, and lotto in the event that we don't make the playoffs; all that being said, I think we will compete for the playoffs next year at this time and if we do not, I will be very disappointed. With this comes expectations of attendance. I think we should be averaging 16k people again.
#6 ME (again, WEC won the coin flip for this question; I'll try and spread it out more in future interviews; in this one, we simply drew good questions without names attached): During free agent visits to various teams, prospective players mention things like practice facilities, weight rooms, locker rooms, etc. Have the Wolves upgraded their facilities so they can be appealing to FAs this summer? (My addition after a need for clarification.) The last time this was brought up was by Michelle Tafoya on her radio show. Is this an off base claim?
It's not off base but it's not completely accurate. We are not the best or the worst in the league; we're in the middle...We've made some upgrages in our downstaris facilities as well as some upgrades in our core and strength workout areas for our players. Maybe when you're in a stand-alone building away from the main facility [as is the case with some of the more high-speed NBA practice facilities], it's good, but for us, proximity is key and we're very close to one another [the players, support staff, basketball operations, and business operation]...As a team operation it makes things more streamlined and less stressful.
#7 ME (a feral-inspired question): Will there be any changes to the team's TV schedule in the near future? This year saw a reduction of the number of games offered on local TV. Is this something team is working to correct and will there be more HD offerings next season?
CW: We have just gone out with an RFP [ed note: Request For Proposal for all of you who have never heard that term before] to all of the over-the-air stations in the area. The number of cable games will go up to 40 and we are waiting for the return on our RFP to make a determiniation on the over the air broadcasts for next year. We are in the very early stages of planning this.
Well folks, that about does it for the interview. Please let me know what you think about both the answers and the format. Do we need to ask tougher questions? Did we provide a good enough balance of topics? Do we need to do a better job of following up on questions? Should we do away with the commentary at the bottom and put it in another post? Does it frame the reaction to the interview too much? Do you buy what Chris Wright and the team are selling? What do you think about the ticket deal? What do you think about the benchmarks for success? Do you think they will be able to bring in 3-4 new players this off season? Do you think 2 of them will be impact players? Do you think they'll be able to spend their money well in free agency? This is an open process and you are our editors.
Thanks again to Mr. Wright for taking the time to answer a few of our and our readers' questions.
#1: COMMENTARY: I really cannot tell you how out of the norm the team's current ticket deal is. It reminds me of a season-long version of the Minnesota Twins' Knothole Days that they used to run through Super America back in the 80s. It's the sort of thing you remember as a young/poor fan and it's really something to get nostalgic about when the team suddenly gets good (as did the Twinkies). There is no other professional sports team out there right now that is discounting its prices like the Wolves are right now. It really is a good thing and I think the Wolves are genuine in their attempt to give season ticket holders a better return on their investment. This team has under-performed by a long shot over the past few years and the season ticket holders have let the team know that their season tickets are overvalued. It's pretty easy to be cynical about their maneuver but I view it as being genuine. They really want to fill the building and build back fan loyalty and they lowered prices in direct response to what season ticket holders were saying about the team. For those who are cynical towards this approach, what else would you have them do?
You may notice that Mr. Wright didn't have a lot to say about the third and fourth stages of the four stage marketing pitch. My best nugget that I could suss out of his comments was that he mentioned that the team would continue to focus on "basketball savvy" consumers/fans in the 3rd and 4th phases and that the team was very aware of the league's best practices and that we could expect something along the lines of a "Bogut-esque promotion" in the lower bowl. I'm not sure what that exactly means, but I'm hoping it is something along the lines of this.
Where I think Mr. Wright and the team are a bit off is on their salary cap projections and the willingness of potential free agents--especially to the tune of 1 or 2 impact players--to end up in Minnesota. As you can see at our handy-dandy salary cap page, we currently have the Wolves pegged for around $18.3 million in maximum cap space, minus all holds and not including draft picks. If the team knows of a way to get to $20 mil, we can't wait to see it, but we believe the $20 mil mark is a tad on the high end. In fact, once the draft picks are taken into consideration, the team could end up with something more along the lines of $12-16 million under the cap. This also assumes that the cap number will be around $53 million, which is not a guarantee at this point. I don't think that Mr. Wright is being disingenuous with his assertion of $20 million, I just do not think it is very realistic. In order to get to that number they have to have everything break their way. Plus, it's pretty much an admission that Ryan Gomes will not be back with the team.
Also, I think it is incorrect of Mr. Wright to say that everyone believes in the vision right now. I think a lot of people are worried about the vision; whether that is because of past team performance (we really are tired of getting burned) or something else, I don't know, but I think most of the die-hards are at or near their last straw and it's more "wait and see" than belief. He is 100% correct that this off-season has the potential to be their biggest ever and that they have positioned themselves about as well as possible to take advantage of it. To me, that's the best pitch the team has right now along with their ticket offer. They have positioned themselves as well as they possibly could have and it's up to David Kahn and his basketball operations staff to seal the deal. I think people want to see some execution before they believe in "the vision".
#2 COMMENTARY: This was obviously disappointing. We have done some digging on various sports statistic sites offered to professional sports teams and from what we can tell, they are generally in the area of $100,000-$150,000 per year plus a staff member to run the program/data sets. To us, the proper use of something like Synergy Sports (which could be had for between $150-200k/year) could lead to a massively productive return on investment. Take a look at what the Wall Street Journal found about teams that employ a stats department:
According to interviews with every team, The Wall Street Journal found that half the league's teams this season have at least one of these statisticians who helps make in-game, draft-day and trade-deadline decisions. Many of these teams are among the NBA's best. The list accounts for all six division leaders, including the Orlando Magic and Dallas Mavericks, who have a data analyst traveling with the team. These 15 teams that have invested heavily in statistics have combined to win 59.3% of their games this season. The 15 teams without such analysts have won 40.7% of their games, and only three -- the Phoenix Suns, Utah Jazz and Atlanta Hawks -- are on pace to make the postseason.
The Timberwolves are not one of those 15 teams. This is the cutting edge of front office management in the NBA and it is something that seems to provide a significant return on investment. A team that can find a starter or a significant contributor late in the draft is going to find greater value than one who blows a lotto pick on a guy who never really develops. The same goes for the team that can put its best lineups on the floor on a consistent basis as well as telling its players what their relative statistical strengths and weaknesses are. The employment of a data analyst obviously isn't the cure-all, but it does seem to be heavily coordinated with success. 59-41 matters. A lot. That being said, we obviously do not have access to the team's internal survey of its ticket holders and we have no idea how dire things are (ore are not) or were (or were not) vis-a-vis the need to do things like lower ticket prices and provide other in-arena fan-friendly amenities. Regardless, I'm putting this one down in the disappointing column.
UPDATE: I have confirmed that the team uses a product called StratEdge from a company called StratBridge. I'll try to find out more about it.
#3 COMMENTARY: None on this one.
#4 COMMENTARY: With all of the rumors flying around about Kevin Pritchard, Tom Penn, and the Portland, this question was crafted as something of an attempt to get a hedge; to see if there would be any hesitation in his commitment to David Kahn. There was no hedge and no pause. Mr. Wright went right into some comments about how this team has spent a lot of time in a losing environment building up to this single off-season and that it will be up to David to bring it all on home. This is Kahn's off season and there are very clear things that the club is telling fans they should expect: free agent spending, a big player in the draft, and 1-2 more additions. Whether you believe it or not, those are the benchmarks for player addition. It led into my next question (courtesy of Wile E. Coyote..PS: Oklahoma employs a data analyst).
#5 COMMENTARY: There you go. Playoffs and increased attendance. I think they are banking on a turn-around that will approach historic league levels, but that's what they're rolling with. I really hope they make it. The odds are definitely not in their favor.
#6 COMMENTARY: I wish I could provide some context on what other team facilities look like compared to the rest of the league. I thought this was a good question because we hear whispers about it every now and then. I've made some efforts to get some context from our contacts with other teams.
UPDATE: The team has also upgraded its players lounge.
#7 COMMENTARY: I will follow up on this one at a later date. They are in the very early stages of planning next year's TV schedule and they simply aren't at a time where they'll be able to tell us about the number of games on Channel 45, the number of HD games, and...well, I completely forgot to ask an important part of feral's main question: Why does Wolves HD look different than other HD programs on FSN? I'll follow up on that.