Digest: Blazers President Chris McGowan Talks Ticket Prices, Business Topics

Portland Trail Blazers president Chris McGowan addressed a bunch of topics, including 2014-15 prices for season ticket holders, in a meeting with the media on Tuesday.

Here's a digest version of the conversation and question and answer period, which took place in McGowan's remodeled office at One Center Court.

2014-15 Season Ticket Holder Prices

As noted here, 2014-15 prices for season ticket holders are going up 5 percent overall. That 5 percent increase is not flat across all sections of the arena: a majority of the sections will be showing price increases, others will not, and others will keep the same prices as in 2013-14.

The new ticket prices are part of what McGowan called a "re-scaling" of the Moda Center. That "re-scaling" process involved a thorough section-by-section analysis of ticket sales, secondary market sales and other relevant factors that began last year.

"We were just not anywhere near where our market is," McGowan said of the old pricing, once the ticket audit and analysis was completed. "As a result, we have re-scaled the pricing for Moda Center for Trail Blazers games. You're going to end up wtih 30 price categories versus 27 last year. On aggregate, our pricing has gone up five percent. We don't treat every seat location as equal because there are different demands throughout the arena. Some prices have gone up more than five percent and some have held flat or gone down. ... The end result on a blended basis is a five percent increase."

The sections that showed the biggest price increase are 300 level sections identified as "Sky Blue" on the new ticket map. Those tickets are increasing from $10 per game to $15 per game, representing a 50 percent increase. McGowan noted that the price hike in that section was influenced by the fact that those tickets hadn't changed in price for the last 19 years.

McGowan also raised ticket prices last year and said he has already been receiving negative feedback on Twitter about the price increases.

"As an organization we're trying to find a balance of not gouging but at the same time putting ourselves in a position to increase revenue and run a better organization, whether on the team or the facility side of things," he said. "Try to find that right balance, protect that season ticket holder price and hopefully fans will understand."

Back in December, the Blazers removed roughly 700 seats from the Moda Center. McGowan said that a physical count of the seats revealed that there were extra seats well above the building's "capacity" number and that the actual figure was above his preference for an NBA game, given the size of Portland's market.

"We took seats out because we had too many seats in this building," he said. "We landed where we want to land. For this market, we have the third biggest building in the league. You may be able to sell them, but what price are you selling them for? We looked at it, I wasn't happy with the results that I got, I just feel like we needed a little bit lesser capacity in this market for what we're trying to accomplish."

As I noted when the seats were removed, the most noticeable areas that lost seats were in the baseline sections of the 200 level. Those sections are often the emptiest during games. One result of the audit, Blazers executive Vince Ircandia noted, is that those sections will now become the cheapest lower bowl sections in a long time.

"We're actually offering the lowest price lower bowl ticket in the last 10-plus years," he said. "It's a $39 price point in the lower bowl. That's in those baseline 200-level seats where we see lower sell-throughs and lower secondary [sales]."

Bargain hunters: check out 208, 209, 223 and 224.

McGowan had a straightforward message to season ticket holders who don't think they can stomach the price increases: consider switching to a nearby section with a 2014-15 price that is similar to your current 2013-14 price.

"If a certain fan is in a price category that they think has gone up too much, they still have options," he said. "A couple sections over or in different seat locations, that are in the same price range that they were paying in years past."

Other season ticket notes...

• Season ticket holders that renew by March 7 will be able to purchase 2014 first-round playoff tickets at their current price.
• The Blazers assert that their analysis has revealed that season ticket holders are saving 29 percent on their overall ticket prices over the course of a season compared to buying single-game tickets. McGowan said this number was larger than they projected because of strong demand on the secondary market for Blazers games this season (due to their winning).
• Asked whether the team's strong start drove the ticket price increases, McGowan replied: "That's a variable that goes into what we're doing with pricing but that's not the only variable. We still have a lot of basketball to play. We can't predict what's going to happen over the next two to three months of the season. We look at it with a lot of variables, what our fans are telling us, what demand is, what the secondary market looks like, the overall product. The product on the floor is the most important thing but also the overall product we're giving to fans when they come into our arena, through fan amenities and that type of stuff."
• The Blazers are switching to TicketMaster to handle their tickets. McGowan: "We're doing that because we feel it's a great product for our fans. We're going to have some great new systems for fans to manage tickets, we're going to have a great exchange for fans to resell their tickets. We're doing renewal for season ticket holders through TicketMaster. Officially our building will become a TicketMaster building on July 1."

Profitability

You might remember back in January that Forbes projected that the Blazers were turning a $30 million profit. You also might remember that the Blazers issued a comically oblique statement to Blazersedge about Forbes' analysis, which essentially said that the organization has its own figures and refused to address whether the Blazers were actually profitable last year.

On Tuesday, McGowan told Blazersedge that the Blazers are not currently profitable and that they won't be until at least the 2015-16 season.

"Next year and [then] the following year [2015-16] will be our big year," he said. "We're getting very close. We operate on a three-year revolving plan, set budget, set revenue, goals, we just update it every year, we look out three years."

Of note, the 2015-16 season will be the first season without payments going to former Blazers guard Brandon Roy via the amnesty clause system.

Here's how McGowan assessed the biggest current impediments between the Blazers and profitability.

"We have to generate more sponsorship revenue," he said. "If you take Moda out, we need to generate more sponsorship revenue. We still have some room to go on tickets. We have to figure out suites and club seats as well. There is still revenue potential in all of the big areas that we work on during a daily basis. Our TV deal still has three years left on it. We've got some time there obviously. That's a little bit out. There's not much we can do that relates to that. Our focuses are on ticket sales, club and suites sales and sponsorship sales. Additionally, we're really focused on putting more events in here. We run the arena: How can we get more concerts, Arena Football, more traffic and events in the arena?"

Rose Quarter Updates

• On March 3, the Blazers and Levy Restaurants will be opening a new restaurant where "The Game" used to be located. The name has been set but it remains a secret for now. The restaurant will be open before and after games and events, but it will only be open on game/event days/nights. McGowan described the menu as "modular" -- which drew a lot of laughter because ... come on, man -- but he clarified by saying that there will be options for quick eats, sit-down style eating, etc.
• The Moda Center will be adding Stumptown Coffee and Salt & Straw Ice Cream to its local food options in the arena. That should do it for the local options for the foreseeable future.
• The Rose Quarter has new sustainable landscaping if you're super into potted plants.
• McGowan teased "three large capital improvement projects that will happen in the arena." He called them "the largest projects we've done in recent history" but refused to go into additional details. They will be taking place inside the arena.
• McGowan's latest pet peeve is the lack of retails options inside the Moda Center for buying jerseys and other team gear. "I'm not happy with the places where fans can buy retail and I'm not happy with our stores. We're going to look to improve that experience heading into next season. ... It's really hard to purchase right now, there's a lot of lines and there's not a lot of point of sales around the arena."

Playoffs

• Playoff ticketing will be done online this season. The long lines of fans that camped overnight for seats should be a thing of the past. McGowan: "We won't be doing that. It will be online. I suspect people could come down and buy tickets but we're not going to build tents down there and have people wait in the cold and get them doughtnuts and coffee and all that stuff."
• McGowan expects a playoff appearance will translate to increased season ticket sales. "[Making the playoffs] gives you an opportunity to grow your season ticket holder base. People get fired up about a team that's in the playoffs. The teams that build their base rapidly, it's because of playoff runs. Teams that don't have playoff runs hold flat or deteriorate and we haven't had that opportunity [to make the playoffs] for a long time. We think over the next couple months, we're going to be able to generate a bunch of new season ticket sales which is something that we haven't been able to do in the past because we were a tweener team or we were out of it."

• No progress has been made on McGowan's goal of hosting All-Star Weekend in Portland, but he remains committed to the idea.

Sell Outs

• As I've noted in my Media Row Reports, the called "sell outs" have been more legit this year than under the previous administration. The Blazers say they have sold out 15 games so far this year compared to 14 at this time last year.
• McGowan did his best to avoid criticizing the policies preferred by former president Larry Miller and former COO Sarah Mensah. He said: "I'm not going to speak about the past but if it's sold out, there's going to be a lot of people in this building for us to call a sell out. If that means we're going to have fewer sell outs on an annual basis, compared to when we had streaks of whatever they were, I'll live with that."
• McGowan would prefer that the term "sell out" not exist but said they deal with it because there is "media interest" in the subject.
• McGowan said that there are instances where the Blazers distribute all of their tickets but "the turnout ratio is not good" -- meaning fans don't show up for whatever reason -- and he decides not to deem the game a sell out. He also said that the team's turnout rate is "over 90 percent" which is "above-average" and "a lot better than the teams that I worked on with Los Angeles."
• Finally, one last swipe at the previous administration: "I think you can get off-center by being hung up on selling out as opposed to long-term building things the right way."

-- Ben Golliver | benjamin.golliver@gmail.com | Twitter