Penguins' marketing has turned team into one of the fastest-growing brands in sports
A huge banner of Sidney Crosby and Evgeni Malkin hangs from the new Penguins arena along Fifth Avenue.
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Despite all the team's problems, the Pittsburgh Penguins still had a good fan base in 2005, and after landing Sidney Crosby in that year's draft they knew they could leverage it into something more. To study how the team was perceived, consultants asked sports-obsessed locals to compare the Penguins to the granddaddy of successful franchises, the Pittsburgh Steelers.
It was done metaphorically. If fans imagined the Steelers as a pickup truck, the Pens were seen as a Lexus. The Steelers were a bear and the Penguins a jaguar. The Steelers a construction company and the Pens a high-tech startup firm.
That translated into marketing themes like energy, drive, innovation and youth, concepts that the team used as guide to refortifying its image. And it worked. In the past three years, according to a Forbes magazine study, the value of the Penguins brand has grown more than any other franchise in the NHL and is among the fastest growing brands in professional sports.
Stupendously, the team is more popular now than when Hall of Famer Mario Lemieux was on the ice -- instead of the owner's box -- according to television ratings and ticket sales.
That is a lot of dominoes to fall after one massive stroke of luck in the Crosby draft.
"When we had names like Mario Lemieux, Jaromir Jagr, Paul Coffey and Kevin Stevens, we never sold out an entire season," as the Penguins did the last two years, said team President David Morehouse. "It's not just about talent and not just about winning. We won two Stanley Cups and didn't sell out. We knew because of that there needed to be some work."
The team started new customer service initiatives for season-ticket holders (including players hand-delivering tickets) and outreach to younger, single-ticket buyers through its "student rush" offers. Those who could not get into the arena were welcomed to watch on the big screen outside. With a season-ticket waiting list 2,500 strong, the team could have cemented sell-outs, but kept some individual tickets available for new fans.
The rebound in the teams' status is all the more remarkable because at the time Mr. Crosby was drafted, the team was again near bankruptcy, coming out of a lockout year, playing in the country's oldest arena and threatening to leave town. The year before the lockout, they had the worst record and attendance in the league.
Since Mr. Crosby was drafted, Forbes found, the value of the Penguins brand -- defined as the portion of the team's value derived from their name as opposed to their market and league value -- grew by 88 percent, for a total of $28 million.
During last season's Stanley Cup run, the team collected $50 million from sponsorships, naming rights, media, tickets and merchandise, according to Forbes. The team's brand revenue grew from $15 million four years ago.
The Round 2 telecast of Game 6 between the Penguins and Washington Capitals on FSN Monday night was the highest-rated NHL telecast ever on any FSN regional network, let alone in Pittsburgh. It registered a 24.2 average, according to Nielsen, beating out the 21.4 rating from Saturday night's game. The previous network-wide record was for a May 10, 2001, playoff game against the Buffalo Sabres. Mario Lemieux's return to the ice in December 2000 set the regular-season record of 15.9.
Forbes has rated the Penguins the 18th most valuable franchise in the 30-team NHL and the Capitals 26th. The Caps are not among the top five teams listed in the latest Forbes study on brand growth, but the D.C. team never faced the fiscal problems the Penguins did -- going from existential crisis to huge success makes the Pens' growth, on a percentage basis, all the higher.
Other studies track with the Forbes findings. The Penguins were ninth out of 122 pro teams in last year's Turnkey Team Brand Index, up from 20th in 2007, and the Caps 93rd last year, up from 118th. (The Steelers were rated third in brand loyalty, after the Packers and Red Sox.)
The team's off-ice success came as no surprise yesterday to Allegheny County Executive Dan Onorato, who worked with the team on financing its new arena. He gave much of the credit to No. 87.
"Right now the Penguins are viewed around the country as the young team, the future of the NHL. And Crosby's a great individual. He's a great spokesperson and a great ambassador for us as a region," Mr. Onorato said.
The team has kept selling out the old rink even during the nation's economic crisis, with regular season ticket prices of up to $115 per seat. Not counting Canadian teams, the Penguins lead the league in merchandise sales and Web site hits. Sales at Honus Wagner sporting goods Downtown have remained level with last year, General Manager Tim Piett said, with young fans from Point Park University still streaming in to buy T-shirts on the way to the arena.
"Given the economic climate and everything that's good," he said of the unchanged sales.
Another thing of note: The store's biggest sellers these days are Evgeni Malkin shirts instead of Sidney Crosby ones.
Mr. Morehouse was careful to say that as much as Mr. Crosby was the catalyst for the team's marketing success, it was still dependent on management to build something out of his draft choice.
"If we just let that happen [on its own] we wouldn't be doing our fans or organization a service. While we had the great talent of Sidney Crosby and other young players, we couldn't rest on that as a laurel," he said. "I accept that Sid Crosby and the dumb luck of winning the lottery and hockey games has a lot do with the brand growth, but it's not in and of itself responsible."
Though the current Penguins now lead the Lemieux teams of the 1990s in many business categories, it is down by two in the measure that matters most to fans and players alike. The team's marketing successes will be an afterthought if its latest championship drive ends tonight.
First Published May 13, 2009 12:00 am