Dick Cass, President of the Baltimore Ravens, has one of the most difficult jobs in football: running the organization. At the CEO @ Smith event on Tuesday, Nov. 30, Cass spoke to more than 300 eager Smith School students and friends about the issues he deals with on any given Monday.
The Ravens organization looks in some ways like any medium-sized business. It has about 140 employees, apart from the players, and total revenues of $250 million. But Cass has to contend with a number of restrictions that don’t afflict ordinary business owners. Collective bargaining agreements with players dictate both salary floors and salary ceilings. Revenue sharing sends some of the organization’s income to its rivals. The Ravens’ marketing territory—the area in which the team can use their marks and logos—is dictated by the NFL (all of Maryland except for Prince George’s County and Montgomery County, which belong to the Redskins). And don’t even get him started on the Ravens’ restrictive TV market.
Dealing with industry-wide issues is an ongoing challenge. The NFL has been affected by the recession. Teams like the Ravens hire players, but not staff. More people are staying home to watch games on TV, so attendance is down, particularly in high-profit skyboxes and priority suites. Problems like the disparity in revenues between different organizations and the uncertain future of a labor agreement affects the Ravens, but so do problems closer to home.
The Smith School is just 30 miles from M&T Bank stadium, the Ravens’ home, but that is already out of the team’s primary market. So it is important for the team to attract and keep fans. That means the organization keeps careful track of fan engagement. TV viewership is a key metric, particularly in a media market as small as Baltimore. Cass uses the 2006 ratings, when the team had its all-time best record, 13-3, as a benchmark. This season, ratings in the Baltimore market were up 24 percent, says Cass.
“We also spend a lot of money and time on the website because it’s a way to engage fans,” says Cass. “And I think it’s working for us. In 2006 we had 3.6 million unique visitors. In 2009, we were up to 6.3 million unique visitors. We’re making progress there.”
Fan clubs like Ravens Rookies, a club for the team’s youngest fans, and Purple, a club designed to engage female fans, also help the team attract, engage and keep new fans. And the organization is determined to make sure those fans have a great time when they attend a game.
“We spend a lot of time worrying about the game day experience,” says Cass. “It is critically important to keep the game day experience a good one. We work really hard at this.” Fans at games are surveyed several times a year and once a year by the NFL. Last year the organization was rated No. 1 in overall fan satisfaction, measured by a combination of ticket price and satisfaction with the experience.
Those are great numbers, but they don’t come cheap. In the last five years, Cass has spent $17.5 million renovating the stadium, including the installation of 550 high-definition big-screen displays throughout the club levels and concourses and upgrading the Jumbotron screens to high definition, which also necessitated a new control room to run them.
The team ranks tenth in the NFL in terms of revenue, but students hoping to own a sports team in the future shouldn’t expect it to make them rich.
“If you’re talking about ROI, this is not a good business to be in,” says Cass. “You would not want to stand up in front of a group of financial analysts, if this were a public company, and talk about return on investment. It would not go well. Since Steve Bisciotti bought the team in 2004, we haven’t paid him a single dividend.”
It’s a good thing Cass isn’t focused on profit maximization, because he faces a number of challenges to growing revenue. Baltimore is a small market, and there are only 5 Fortune 1000 companies located in the metro area, which limits its ability to develop corporate partnerships. The Ravens don’t have a secondary market to draw from because geographically they are so close to several other major teams—the Washington Redskins, the Philadelphia Eagles and the Pittsburgh Steelers.
Another challenge, and one that surprised Cass, was the weak media market. Baltimore fans have no easy way to get news about their team because the Baltimore Sun has low circulation and the Washington Post doesn’t have a beat reporter to cover the Ravens.
Fortunately, says Cass, the team also has a number of advantages, including strong local leadership, the strength of Baltimore’s football culture and the health of its economy, and a division that includes cities of similar size and culture.
So what are the key differences between running a football club and any other medium-sized business? Profit maximization is not part of the equation for Cass. But public scrutiny is. There is an immense amount of public attention on the Ravens, much more than any other business of its size could hope to achieve. “Anything anyone says is transcribed. There are cameras all over the place, there are microphones all over the place. [Before he purchased the Ravens] Steve Bisciotti had a $20 billion company, and nobody even knew it existed,” says Cass.
And few other businesses also have the power to unify a city the way a football team can. Come Monday morning, people working all over the region are talking about the Ravens game. That’s just the way Cass likes it.