February 27, 2006

Raising the Rays

How Stuart Sternberg is changing the face of MLB’s worst franchise


By Pete Williams


Of all the dramatic changes made by the Tampa Bay Devil Rays in the first four months under new principal owner Stuart Sternberg, perhaps the most symbolic can be found in the middle of the team’s offices at Tropicana Field, overlooking center field.

What once was a cavernous office and adjacent executive conference room belonging to former managing general partner Vince Naimoli has been cleaned out, knocked down, and combined into a luxury suite that can be used during games either by sponsors or by Rays employees looking to forge new partnerships.

“We will not ask what you can do for the Devil Rays,” Sternberg said in October when he took control of the team from Naimoli for a reported $15 million on top of the $65 million he paid for 48 percent of the franchise in 2004. “We will ask what the Devil Rays can do for you.”

Sternberg’s Kennedy-inspired line is the closest the youthful, 46-year-old former Goldman Sachs managing partner has come to criticizing Naimoli, who during a tumultuous reign characterized by self-entitlement and confrontation managed to offend seemingly every element of the Tampa Bay business community.

This while the Rays stumbled and bumbled through eight forgettable seasons, finishing last in the American League East in all but one (2004) and seeing attendance fall from 2.4 million during the inaugural 1998 campaign to just 1.1 million last year.

The Rays, under former general manager Chuck LaMar, specialized in free agent flops (Greg Vaughn, Wilson Alvarez), squandering high draft picks (Josh Hamilton, Dewon Brazelton), and lopsided trades (Bobby Abreu for Kevin Stocker, among others). The poor on-field product coupled with Naimoli’s management style made it tough to sell baseball to a provincial community with low per capita income and cheaper, outdoor entertainment options.

Now the Devil Rays represent an ambitious re-branding project, a complete overhaul that will include the marketing, corporate culture, stadium — the current one and a future facility, possibly within the next decade — along with perhaps the name, colors and site of spring training. It’s a tall order, but Sternberg believes the club’s short history will make the project easier.

“It’s not like we have to undo 30 or 40 years of history here,” he said. “People are much more willing to embrace some sort of change because they haven’t been through it four times before.”

If nothing else, there’s always the good will generated by free parking for the 2006 season, which Sternberg announced within minutes of taking over in October.

“That was nothing short of brilliant,” said Mike Veeck, the longtime minor league baseball owner and promoter who served as the Rays’ marketing chief in 1999. “There’s no question that there’s been tremendous damage done, but Tampa Bay is still a wonderful market. This changing of the guard and the ideas they have will be worth 400,000 or 500,000 fans this season.”

A new look in people, property

Naimoli’s office is but one element of a complete housecleaning ordered by Sternberg and overseen by Matt Silverman, the 29-year-old Harvard graduate and former Goldman Sachs employee Sternberg installed as president.

The dust literally was still settling in January as employees worked around scaffolding, painters and carpet installers. The club has operated since October under the temporary marketing campaign “Under Construction,” and signs posted at the entrances of the offices count down the days to the 2006 regular season.

In one offseason, the Rays have replaced an owner, general manager and manager. They’ve overhauled the executive suites, undertaken an ambitious $10 million refurbishment of antiquated Tropicana Field, worked to mend fences with the business community and, perhaps most remarkably, transformed from an organization that took its cue from Naimoli’s abrasive, take-no-prisoners style to one that emphasizes customer service, communications and fan friendliness.

“I’ve been shocked by how quickly and totally the culture inside this building has changed,” said Rick Vaughn, the team’s vice president of communications and one of only two vice president holdovers in the same role from the previous regime. “It’s just a completely different place.”

Of course, there’s only so much that can be done with Tropicana Field, one of two domed stadiums in baseball without a retractable roof. But the Rays are trying. A $2 million, upscale club is being completed between home plate and right field that will offer 300 premium seats at roughly $100 a game. A large “touch-tank” holding about two dozen devil rays — the creatures, not the players — is being constructed near an existing kids play area. New televisions will be installed throughout the concourse so fans will not miss any action.

The team is experimenting with lighting that will brighten the dark seating bowls. A new sound system will provide crisper music and effects. There will be fresh paint, and every seat will be scrubbed. Cinder block walls on the lower concourse levels will be covered with stucco or drywall. The blue carpet on the club level, some of it left from when the Tampa Bay Lightning occupied the former Thunderdome in the early 1990s, has been replaced by softer, earthier tones. The building’s notorious messy bathrooms will be cleaned and given new tile, sinks and paper dispensers.

“Think of what you do before you have company over,” said Silverman, the most prominent of a group of under-32 employees running the team, including Andrew Friedman, 29, the executive vice president of baseball operations. “You scrub everything and make sure it’s neat. We’re hoping to have a lot more company this year.”

On a Tuesday afternoon between Christmas and New Year’s Day, Silverman launched a PowerPoint presentation for a visitor. The holiday week is the only time baseball shuts down, but Silverman stayed on the job, even with the Rays’ offices in disarray during remodeling.

At that point, Silverman had given the presentation to a dozen potential sponsors, with at least that many scheduled. It’s not a sales pitch so much as it is a jazzy, video-laced re-introduction to the team, emphasizing the club’s commitment to community relations, customer service and fun at the ballpark.

“They’ve brought in a great team with some cutting-edge ideas,” said Tim Hoey, director of food service sales for Pepsi Bottling Group, a longtime team sponsor. “From the marketing and the way they’re looking to increase sponsor value, they seem to have upgraded across the board.”

Ultimately, the team hopes to land big-name sponsors to fill vacancies in several prominent categories, including airline, automobile, bank, supermarket and wireless carrier. The goal is to land six or eight “All-Star Partners,” seven-figure deals along the lines of the Tampa Bay Buccaneers’ “Pewter Partners.”

For now, Silverman uses the presentation to reconnect with sponsors and lay the groundwork for future conversations. He politely declined SportsBusiness Journal’s request to accompany him on a sponsor presentation. Not because there’s anything in the PowerPoint he does not want the media to see, but because at the end of each session he asks for blunt feedback on past experiences with the Rays’ organization.

Inevitably someone in the room recounts dealing with an aggressive usher, a filthy stadium bathroom or the wrath of Naimoli.

“It can get a little tense, but that’s OK,” Silverman said. “This exercise is about mending fences, and it’s a way for us on a very personal level to get our message out to key constituents and start a conversation about what the Rays should be doing in the business community. We need to hear the stories and understand how the organization may have operated in the past and what we can learn from that.”

Stories of Naimoli’s heavy-handed confrontational style and explosive temper began before the inaugural game. A year before the first pitch, companies complained that Naimoli would not do business with them unless they bought season tickets. When the St. Petersburg/Clearwater Convention and Visitors Bureau asked to use the team logo and photos on the cover of its visitors guide, Naimoli demanded $750,000.

In 2000, the team shunned a fundraiser for the medically needy because it was held at the St. Petersburg Coliseum, not Tropicana Field. The St. Petersburg High School band canceled an appearance to perform the national anthem after band members were told they would have to pay admission. During a 2001 speech, Naimoli blasted members of the Greater Tampa Chamber of Commerce for not supporting the Rays, even citing the host hotel for canceling its season tickets.

Naimoli, who wouldn’t comment for this story, routinely launched tirades at media members in the press box.

Even the St. Petersburg Times, a longtime sponsor that handled the owner with kid gloves in its sports section, was not off limits. Naimoli once ordered Times newspaper racks removed from the stadium after a story good naturedly suggested that James Gandolfini of “The Sopranos” fame play Naimoli in a movie.

The new owners have made amends on that front, too, slashing press dining charges and relocating the media dining room and press parking to more convenient locations.

As for ticket prices, the Rays will charge an average of about 50 cents less per ticket this season, though the team’s decision to slash the cost of 3,500 lower box seats located by the bullpens accounted for much of the decline. Most tickets were raised $1 to $3 a game.

Still, it’s a stark contrast to the previous season, when the Rays raised ticket prices an average of 10 percent.

“The new ownership is fortunate that so many of the things they’ve implemented would be considered obvious to anyone other than the previous regime,” said Bob Andelman, whose book “Stadium for Rent” chronicled Tampa Bay’s long struggle to land a franchise. “Maybe they’re trying to tackle too much at once, but you can’t fault them for being ambitious.”

Some of Silverman’s PowerPoint seems lifted from the playbooks of people formerly affiliated with the team who left frustrated with their inability to work with Naimoli.

Upon taking control of the Rays, Sternberg announced that fans could bring snacks and certain beverage items into the stadium. Silverman said it’s part of the Rays’ plan to be less policy-driven and guided more by customer service.

That’s inspired in part by the “No Rules, Just Right” slogan popularized by the Tampa-based Outback Steakhouse chain. Two of the company’s founders, Bob Basham and Chris Sullivan, were among the former general partners who sold their shares to Sternberg in 2004.

“You’ve got to improve the customer experience, which was something we were never able to do while we were part of the ownership group,” said Basham, who has met recently with Sternberg and Silverman. “Obviously, you’re eventually going to have to have a product on the field that can win if you want to take it to the next level. But first you have to take that experience up a notch so it becomes a lot more fan friendly than it’s been.”

The Rays plan to bring fun back to the ballpark in the form of better in-game entertainment, adding a young spirit troupe to work the stands between innings. If nothing else, the goal is to replace the surly image that seemed to permeate from Naimoli down to the ushers.

“We wore scowls as opposed to smiles, and that has changed,” said Silverman, who worked in the Rays front office as an observer from the time of Sternberg’s purchase. “We recognize that the fan experience has to improve, especially when the ballclub hasn’t been the primary attraction and probably won’t be this year.”

As for creating a fun atmosphere, that failed before. Veeck, during a seven-month stint as Rays marketing director in 1999, was unable to inject the irreverence and sideshow antics he’s unleashed so effectively in the minor leagues, finding the high-starched, corporate atmosphere of the Naimoli regime stifling.

“They’ve got to change the internal mechanisms and culture,” Veeck said. “You have to root out the people who have been trained for 10 years to do things a certain way, and it appears they’ve done that.”

Optimism among obstacles

A sweeping rebranding is in the works, though because of the timetable required by Major League Baseball, the Rays cannot introduce new colors, marks — or even a new name — before 2007, the team’s 10th season. Rays officials must notify MLB by March 31 of a possible change and provide proposed details by May 31.

Sternberg says everything is open for discussion. The Rays underwent a minor rebranding before the 2001 season, scrapping their kaleidoscope of aquamarine colors in favor of a green palate. The team also tried to appease those who objected to “Devil,” going with a streamlined “Rays” moniker in some marketing materials, though the club officially remains the Devil Rays.

That could change this time. Greg Economou, CEO of Charlotte-based Brandthink, which is helping the Rays with their rebranding strategy, says the transformation has less to do with names and marks than with re-positioning a sagging product, both internally and in the marketplace.

“Fans just want to see a first-class organization that plays a good brand of baseball that’s defined by core values of service and community,” Economou said. “If you have that, then it shouldn’t matter if you call yourself the Devil Rays or Tarpons or something else.”

Economou said the rebranding must occur throughout the organization, including the office culture. Just as Veeck struggled to implement an “Off the Wall” marketing campaign in an uptight organization that seemed right out of the movie “Office Space,” Economou pointed to last season’s marketing campaign — “Watch it Happen!” — as doomed to fail since the Rays were anything but an exciting outfit. (Though some joked that the slogan, if just a couple of letters were added to the middle word, was appropriate for the snakebit franchise.)

There is plenty of precedent for turnaround in Tampa Bay. The Buccaneers ranked among the NFL’s most hapless franchises for two decades before becoming a powerhouse on the field and financially in the late 1990s.

The NHL’s Tampa Bay Lightning endured a miserable first decade before turning things around under Bill Davidson’s Palace Sports & Entertainment, winning the Stanley Cup in 2004 and enjoying strong attendance this season.

Both teams play in new stadiums in Tampa, with all of the modern revenue-generating amenities. They also compete in leagues with economic systems that level the playing field between Tampa Bay, the nation’s 13th largest market, and bigger communities.

The Devil Rays, who play in St. Petersburg, likely won’t rally support for a new stadium any time soon. And under Sternberg’s five-year projection, payroll is unlikely to increase beyond $55 million annually during the next five years, barring a postseason run.

“We’ve got no choice,” said the New York-based Sternberg, who like Davidson and Buccaneers owner Malcolm Glazer will monitor his franchise mostly from long distance. “If I had bought the Dodgers, the business immediately sustains a payroll of far more than double where we are. There’s some legacy there. Here we’re trying to pay our way through this, and while payroll is important, it’s the talent on the field that’s most important, and sometimes they don’t go hand in hand.”

The Rays plan to follow the “Moneyball” model of Billy Beane and the Oakland A’s, hoping to become competitive through shrewd drafting, bargain pick-ups and young talent. They have one of baseball’s better crops of young prospects, a group augmented in mid-January with the trade of veteran pitchers Danys Baez and Lance Carter to the Dodgers for a package of young arms.

New manager Joe Maddon, a self-deprecating Renaissance man who spent the last 12 seasons on the Angels coaching staff, is a stark contrast to tightly wound predecessor Lou Piniella, who departed after not seeing a significant payroll boost in three seasons.

In Anaheim, Maddon was known for his patience, humor and level-headedness, especially when dealing with young players. Like Piniella, he’ll have to operate on a shoestring budget.

As the Devil Rays opened their first spring training under Sternberg on Feb. 17, they had yet to announce any new sponsorship deals. Team officials have been tight-lipped about season ticket sales in recent years as attendance has declined, and Silverman will say only that the club has eclipsed last season’s full-season equivalent figure.

“We’re heading in the right direction,” Silverman said. “Sponsorship deals take longer to develop and oftentimes they pay attention to past numbers. We’re selling the present as opposed to the past. The general interest level is higher and it’s a good indicator for the future. Now we just need to monetize it. We know it will be a gradual process.”


© Copyright 2006 Street & Smith’s SportsBusiness Journal