Once known only for its bright lights, quickie marriages and even quicker divorces, Nevada has evolved to a professional sport mecca. The sport’s market, particularly in southern Nevada now boasts three major league professional sports teams with rumors of an NBA team on the horizon. However, adding a robust sports industry to Nevada’s resume has not been without its challenges. Recently, a group of industry experts met at a roundtable sponsored by City National Bank and held in Las Vegas to discuss professional sports in Nevada.
Connie Brennan, publisher and CEO of Nevada Business Magazine, served as moderator for the event. These monthly roundtables bring together different industries to discuss issues and solutions.
Why Have Sports in Nevada Been So Successful?
Kerry Bubolz: We did not know the market [in Southern Nevada] and that led to an initial reaction of [considering making Las Vegas a sports hub] a little bit crazy. But once [we] started to dig in and analyze the opportunity, it did not take long to [recognize that] it could be really successful.
Sam Joffray: The Super Bowl is an example of how instead of the event enhancing the city, the city certainly enhances the event here [in Las Vegas]. When the Super Bowl goes to most other cities, it is the number one thing happening. It makes everything else have a Super Bowl scale to it. But [in Las Vegas], the NFL really had to step up, and Las Vegas became the real star of the show. The entertainment, the options, the things to do, and the fact that it is already such an exciting weekend every year certainly was a differentiator between any other host city.
Steve Hill: An event, like the Super Bowl, overwhelms most cities. [Las Vegas] is the only city in the world that has the ability to treat 60,000 people at the same time like a VIP. Nobody else has the capacity to do what we do.
Ben Joffe: Our market is growing. We are getting more and more residents in our community and our community is changing as a whole and our trajectory has changed as a community. We need to find more spaces for our kids to be able to participate in sports and stay out of trouble because we have those opportunities here. We have great role models here, but we do not have the capacity to keep up with our growth of homes. Parks and buildings to play sports in are the capacity issues that I see on our end.
Hill: [Las Vegas] is a relatively small market that, because of our tourism base, performs larger than we are, but we are still relatively small. It has an impact on regional television and media contracts. It has an effect on workforce and [creates some] capacity issues that come with being a market of 2.4 million instead of 10 million people.
Nikki Fargas: We have seen a challenge with the growth of women’s basketball [in regard to capacity]. It spiked quickly. With our ticket sales numbers, we are growing out of our space. We thought 10,000 was a sweet number for us, and with our season ticket membership base already at 85% capacity, it does not leave a lot of tourists or those who are not from the Nevada area to be able to watch women’s basketball because our community has supported us in such a grand way. It is positive to have community support, but it also does not lend us a broader audience.
Bubolz: The number of people that I met initially [while] still 12 months out from [the Golden Knights] ever playing a game that had not only put down a deposit but had already started to make payments on our tickets [was amazing]. It is not inexpensive. Our average ticket price now is approaching $150 a person. I would ask [ticket buyers] why they bought tickets and [people would respond and say] they just wanted to support the city and the community. [Many had] never been to an NHL hockey game, and early on that told me that this community was all in on this opportunity because the vast majority of people that I met fell in that category. There were others that may have relocated here from other markets that were familiar with NHL Hockey, but the folks that I met had never been to a game and just wanted to see our community grow and evolve.
Joffray: The [Golden] Knights have done such a great job in the community, on the business side, and obviously on the team side. [They] got [sports in Southern Nevada] rolling. [Las Vegas] has 150,000 hotel rooms. We have the ability to bring people in from out of town. That is why the $750 million in public money for Allegiant was one of the best investments the state and the local government ever made. All of those things added up. We can handle it. We know what we are doing. We can sell tickets.
Bubolz: The market did a great thing when they built the T-Mobile Arena because it allowed us to attract a major league organization like the NHL. Then it did another tremendous thing when we built the Allegiant Stadium. It allowed the NFL to come here and other great events like the Super Bowl. My biggest worry is now we are contemplating two other Major League indoor arenas to attract an NBA team. The NBA is very interested in this market, and I do not think we have to build another facility to house that team. We have an NBA-ready building that is just eight years old, that is already contemplating major investments going forward to [address the needs of] a major league organization like the NHL or the NBA, as well as the other content that is programed there. That speaks to excess that is not needed in this market.
Joffray: [Las Vegas] had four different ways that the Super Bowl could have been configured with the amount of square footage of convention center space, the amount of special event venues, and hotels and number of hotel rooms [available]. You could have literally had four different plans whereas in most cities, you start with the convention center and the million square feet you have there, and you build the event around that. Here [in Las Vegas] you had to figure that piece of the puzzle out first. There are so many different options for event owners.
Bubolz: The reality is having additional facilities in this market like the T-Mobile Arena requires us to lower the bar in terms of meeting financially to bring those events into our facility. It becomes an unnecessary element. If the NBA wants to come to this market, we [do not] need another two additional facilities to be built. That makes no sense when we already have on a per capita basis the most facilities in our market at 2.4 million of any market in the country. [Las Vegas] has mid-sized facilities and small facilities. We have everything to meet the needs of this community already, and we do not need to build any more facilities.
What Impact Is Sports Making on Nevada?
Hill: The Super Bowl and Formula 1 [generated] $2 billion [alone]. The numbers are big enough that, frankly, they stop mattering at exactly what the exact number is. [Sports have] become a huge part of the economy of Southern Nevada.
Yvonne Wade: Fifteen to 18 percent of sports-related jobs have been created by the new [sports] entities that have evolved in Las Vegas. [Sports has become] a great opportunity to develop the workforce.
Joffe: There are job opportunities in sports. I look at the kids that are coming up and 99.9% of them are not going to make it in professional sports. But there are guys that can come in and start at ticket sales or work security and work their way up.
Joffray: You do not have to work for a team [to have an opportunity in the sports industry]. There are opportunities in the industry in administration, printing, decor, event planning [and so forth].
Joffe: [Las Vegas] has [sports] events constantly. It is amazing. [There was] F1, the Super Bowl, we had the NFL draft, we have the NHL All-Star game coming here, and the NHL draft coming up next. Those are events for kids to see people work at. It is amazing for our community.
Wade: [In the] education space we have created many different programs [that have allowed] internships. UNLV has a sports business program that is putting interns in [sports] spaces. We have a SCORE program, which is a partnership with Southern Nevada Officials Association that was charged with addressing the shortage of officials for youth sports. And in the last two years since [its launch], we have doubled the number of officials in two years. Those types of programs for not only the major players of the game, are going to support the workforce here, give kids opportunities to play as the population grows, and then provide jobs for officials and all the people that work behind the scenes of [sports] organizations.
How Important Is Winning?
Fargas: It is everything. When you win or when you are part of a winning program, there is no excuse. What can you say when you are crown champions to your administrator or whoever is making the decision on where the funding goes? Now, whether you are selling out your arena or not is the ticket sales team [responsibility]. If they are not marketing us properly, that is [the responsibility of] the marketing team. That is who the administrator hired. But when your team is winning championships, there should be no reason why they should not have anything but the best.
Don Logan: The game matters and winning makes it a whole lot easier. I have had some bad teams. But one of the things that I [remind] our guys now is that we are the top-grossing team in the history of Minor League Baseball. Nobody has even come close to us.
Bubolz: I think it depends on how you define winning. Winning on the ice is important. We have an expectation [to win], and that expectation lives culturally within our hockey organization. Early on, there was a group of players that believed they could win despite the initial circumstance of how they came together. That has carried forward to where we are today. We have an owner that has an intense expectation around winning and is prepared to put the resources within the confines of our league. We are a salary capped structured league. It is not [only a monetary] compensation that you pay those players. It is the facilities, it’s culture, it’s lifestyle, it’s how you provide beyond just the player. It’s their support system, it’s their families.
Fargas: After my coaching career, one of the things that Mark Davis sold me on was “just win, baby, and we are going to provide these women with nothing but the best.” You can see that in our facility. We hired the best damn head coach we could possibly get. That was Becky Hammond. We made her the highest paid WNBA coach. Then we put together a front office and [provided] resources to get the best in marketing, the best in ticketing and sales, and the best in partnerships. We put the pieces together. And when you are winning championships, people want to be a part of that. They want to come work for you, work with you, or they want to come and just watch you. That is what we have seen happened. The back-to-back [winning] feels really good, but it is harder to stay on top than it is to get to the top. That is what we are constantly challenging ourselves with.
Hill: Over a period of decades, virtually every team is going to be a 500 team. We have been very fortunate to have exceptional products on the court and the ice. That is a fantastic way to enter the market. But over time, it is unlikely that you can do that year in and year out. It just does not work that way. Your business is figuring out how to put people in seats. That is where these folks all earn their money when you do not have any control [in reality] over the product that is on the field.
Fargas: Every day, our team is out there trying to be the best and be number one in everything we do. That echoes throughout the entire building. If our players are trying to be number one, then our ticketing and sales team better be number one, too. If we are trying to put ourselves out there and be the biggest, boldest, and disruptive brand, then let’s be the best at it. There are the front office wins, and then there are the on the court wins.
Bubolz: Winning is always going to be important when your business is winning. But it does not define your organization holistically. I have been in that scenario. I called somebody [in the media] out one time and [told them] just because we were no longer the best team on the court does not make us a losing organization. We had one particular player who was an important part of our Encore product who decided not to be with us anymore and take his talents to South Beach. When you have a player of that level who leaves your organization it is going to have an impact. But five years later, we won an NBA Championship, and we started a path to rebuild the organization. [Winning] is always going to be critical because that is the business that we are in. But it does not mean that it is the only way our organization is defined.
Logan: I tell my group all the time that we bifurcate the business and the field stuff. We want to be the best in class. If you are going to work for us, you are going to put the effort in and the results speak for themselves. If you can’t get results, I have let people go. Not because they have not tried hard or have not done a good job. They have not done a great job, and they are not capable of doing a great job.
Fargas: We are finding that if we create this culture that is built on a championship culture, we do not expect anything less from you when you decide to be a part of the Aces organization or put on the Aces uniform. The demand and the expectations do not differ. [A winning culture] is what we breathe every day we walk into that building.
Is the Sports Industry Highly Regulated?
Bubolz: I always advocate for less [regulations]. One [notable regulation] is what is happening with sports betting. It does not affect us locally as much because it has been here much longer than other areas around the country, but it does affect us because we are trying to be more aggressive in the space with data and understanding our marketplace and the familiarity with sports betting. We are trying to be more aggressive in how we promote and how we market [sports betting] because the data is already being captured. But the league is looking across the other 31 markets and some of them now allow sports wagering, but other states like California and Texas [do not]. There is a unique balance going on. We are only able to take advantage of it at a very rudimentary level. The sports betting community allows us to be younger and more diverse in our marketing and all the things that we are trying to do. [The regulations] are slowing us down.
Logan: Baseball has the strongest players union of any of the major sports by far. That is a good thing in certain respects. It is certainly good for the players and good for their long-term economic well-being. But it forces the industry [and the] BOC (the baseball office of the commissioner) to really dig in on certain issues that sometimes seem unreasonable. But at the end of the day, the game has survived in spite of itself.
Bubolz: I am curious about [what is happening with the] NIL (Name, Image, Likeness). It seems like the NCAA has been very reactive in what is going on. The original intent was that young people had the opportunity to monetize their name, image, and likeness through whatever means that may be in terms of going to a local company and then becoming a spokesperson for that organization. Now it has become an ability for schools to essentially just pay their players.
Wade: The college landscape has changed so much because of the NIL. The original [purpose] was [to create] opportunity, now people are leveraging dollars, and it is a fight against the haves and have nots. I would hate to be a college coach right now and have to fight against the schools with big dollars over student athletes. My wins and losses would be affected by that. It is becoming very challenging.
Bubolz: These kids should have the ability to monetize their name, image, and likeness and their talents, but that was not the intent. You can now transfer as often as you want, before there were parameters. [Now] you go into the transfer pool, and you can literally find out how much money you can make at a specific university. It has really changed. I certainly would not want to be the person trying to figure it out.
Fargas: I do not subscribe to pay for play. I don’t know what we are teaching the younger generation when [a player] can say, “I am going to go play for you, but a year later, I am going to go play for you. And a year later, I’m going to go play for you.” When [that player’s] resume comes across our desk and you see someone that you potentially are going to hire, and they have jumped from job to job to job, that person will probably be moved to a different stack.
