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I thought I’d use this lull in the D-League’s game schedule to delve into a rather interesting component of my particular situation: specifically, the unique business model of the Bakersfield Jam.

For those of you who don’t know, the Jam briefly shut down operations at the end of last season, only to reopen with a fresh take on the D-League model. The token phrase has become luxury basketball experience; what that means is several things:

First, and perhaps most importantly, the Jam franchise built its own stadium in the offseason. How, you might ask? Well, it’s a very small stadium – 420-person capacity, to be exact.

Not only does this mean a much more intimate setting, it also means that every seat in the house provides its occupying fan with a fantastic view of the game. There is a single ring of courtside seats, four open suites on each long side of the court, four luxury boxes lofted behind one basket and a bar area (also raised about 30 feet above floor level) behind the other. Suffice it to say nobody will be using binoculars inside the Jam Events Center.

Left at that, it would likely be difficult for one to imagine how the Jam would make any money. This is where the luxury element comes into play.

The Jam sells a big percentage of the 420 seats exclusively as season ticket packages, and these packages come with far more than paid attendance to 24 basketball games (one of the team’s “home” games was played at the D-League Showcase in Boise). A wide variety of packages come with perks ranging from deals at local restaurants or businesses to LA Clippers tickets.

The packages are marketed primarily to businesses – the idea being that a local Bakersfield business might see a luxury loft or courtside suite as a great holding, whether to use for entertaining clients, rewarding its own employees or some other purpose that I’m not clever enough to think of (certainly there must be several).

It is also billed as a business-to-business networking opportunity, and many of the packages include a pre-game dinner in the bar area where season ticket “partners,” as we are calling them, can meet and mingle. To further this end, the team will also hold a number of networking events – one this very day, as a matter of fact, called the “State of the Jam Luncheon” (I’ll let you know how it goes) – intended to help the affiliated businesses make useful connections.

Depending on their particular packages, some businesses also get their logos or advertisements in the gameday program, on the NBA Futurecast for home games, read over the PA, etc. I think you get the point.

So the natural next question is, simply, “Does this work???” To be perfectly honest, I have no idea. By which I mean that it is neither my job nor within my interest to check the books and run the numbers.

What I can tell you is that things appear to be working out fairly well for the team, as the suites, lofts, and majority of courtside seats are filled at each game and we continue to play games and pay employees. Furthermore, I have seen basketball played from virtually every angle in the building and can personally guarantee that the goal of having no bad seats was achieved with flying colors.

Philosophically speaking the business model fascinates me, and not only because it is something that I have never heard of or considered before.

At first, that was enough: I saw it as a stroke of genius, and one that could be revolutionary to the live sporting experience. Sure, one way to make money is to sell a lot of tickets at reasonable (though less and less so) prices. But isn’t it just as viable to sell far fewer – but far better – tickets at a significantly greater price, especially if you package it with various amenities?

On second thought, however, I realized no revolution was imminent. For one thing, the model is really only workable in basketball as far as the three major sports go. Baseball and football are simply too big; there is no elegant way to design a 500-seat arena for either sport.

Beyond that, it really only applies to minor league basketball. For the NBA’s purposes, there would be nothing to gain. NBA teams already charge exorbitant prices for courtside seats and luxury boxes, and they don’t have to offer any amenities (besides perhaps some service staff) to do so.

Major league franchises also rely far too much on the common fan (i.e. the one who just buys seats in the nosebleeds for one or two games each year) to drive sales of everything from jerseys to TV ads. I’m sure the threat of alienating the general public would keep an NBA team from ever considering a luxury-only model.

All these things said, it does work rather perfectly for a team like the Bakersfield Jam. If you are a D-League franchise paying exorbitant rental fees for a local arena that you never fill (not to mention springing for the established staff to handle concessions and all the other things that make an arena function) wouldn’t you much rather just have your own place that you can operate primarily with staffers who are already in your employ? Of course!

Put another way, if you do everything you can to fill a stadium with your fans but are unable to do so, why not build a stadium that your fans fill?

It will probably be at least a year or two before anyone really knows how successful this experiment is. But now that it’s been done, I would imagine the general idea will be repeated somewhere in the world of minor league basketball, whether it works here or not.

It just fits minor league basketball too well to be ignored.

13 Comments

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  1. Hey, didn’t I read somewhere that initially this site was designed to be a state of the art PRACTICE facility? The best in the D-league. Also what’s the deal… word around the league is the players do not respect the coach and almost all of them want out.

    Thanking you for your non sugar coated replies in advance.

  2. The short story is that Bakersfield ownership has a few $$. However in a down economy, not THAT many bucks. So what do you do when you barely draw at the place you rent, own a state of the art practice facility and have rich friends?

    You quit renting, you retrofit your practice center to a place you can play and then you tap into your rich friends to “join the country club.”

    When you get lemons you make lemonade…

    My guess is that this arrangement is feasible for a couple of years until the economics of a) Bakersfield/Bakersfield ownership or b) the DLeague/NBA shake themselves out.

    What it precludes is incremental “gravy” cash flow, but lets face it – if you weren’t getting it anyway why worry about it? And if you have rich friends that will back you, why give it up?

    It would be interesting to hear someone closer to Bakersfield sharing the current state of affairs…

  3. Hey Guys…

    I think Rumble is pretty right on with regards to the decision-making process that led to the current state of affairs (though I wasn’t here when those decisions were being made).

    In terms of respect for Coach Voigt, I certainly can’t speak for the players, but I can try to offer a bit of insight. I do think Coach is a tough guy to play for in some respects – most notably in that he asks a lot of his players. I am fairly certain his schedule of workouts, practices and video sessions is more extensive and demanding than most teams game prep. I also know from watching practice that he spends a lot of time teaching offensive and defensive sets during his practices… While I haven’t been at any other teams’ practices, it is my understanding that the D-League’s coaches run the gamut from Coach Voigt to guys who simply roll out the balls and have the guys scrimmage for two hours. While I can understand why some guys would bristle at the work load and hard-nosed coaching style, I also think Will’s approach is far more likely to aid them in their development towards the NBA (not to mention prepare guys better for if and when they do make it to the next level).

    Again, whether specific players want out of Bakersfield I can’t say with any certainty, but I CAN say that our team has made significant improvement since starting the season with zero returning players and a top-level allocation player who showed up out of shape and never really competed. I can also point out that as a color commentator I can very easily see the personal development that some of our players have made in their few months here. Is that attributable to Coach Voigt? Hard to say for certain, but I have to believe he plays a part in it.

    Hopefully that was at least reasonably informative…

  4. Very interesting idea. Hopefully it works out for them. It could lead other D-League teams to think about creative ways to revolutionize their business model to something different than the typical NBA.

  5. Interesting idea, but I can’t imagine Bakersfield has enough wealthy people willing to to overpay to watch D-League basketball to make this work. Basically, ownership is alienating a ton of their potential fanbase and instead relying on their wealthy friends to overpay for their product.

  6. The Bakersfield model is definitely interesting. Thanks Kolsky for enlightening us with some of the details behind the thinking of it.

    My biggest gripe is, what about the little guy? I don’t live in (or anywhere near) Bakersfield, so this doesn’t affect me, but if Erie tried a similar approach, I’d be out of luck. I’m in no financial situation to pay for a “luxury basketball experience,” and I don’t work for a corporation/business that would pay my way either. Basically, I’d be priced out of following the BayHawks.

    Maybe I’m in the minority as a diehard D-League fan, but I know I’d be really frustrated/disappointed if I could no longer attend BayHawks games because they cater to an upper-class audience. Is there any backlash from the average Joe fan in Bakersfield who can’t afford to see the Jam anymore?

  7. Thanks for all the response (and to Deadspin for the pickup). Two things I want to respond to…

    (1) With regards to the financial stuff you guys bring up, I put some of these questions to co-owner and managing partner David Higdon, who confirmed that the model has been financially successful thus far, and that the move to the Jam Events Center has saved the team about a half a million dollars in operating costs for the season. As I hoped to convey in my post, I don’t know that 32 games into Season 1 of the project is the best time to run the numbers and measure success. That said, it appears to be succeeding by every conceivable metric.

    (2) As far as the “common fan” goes, the obvious response question is, “Where the heck was the common fan when the team couldn’t sell enough tickets at Rabobank Arena [the larger venue in Bakersfield where the Jam previously played] to cover their costs?” Beyond that, I know that in several cases the team has worked with previous season ticket holders who don’t have the finances to pay the standard prices for the new venue to get them access to what is a far more intimate experience and (without doubt) a better view of the game. And with regards to the community at large, the team still does community relations work around Bakersfield and partners with the community in a number of ways. In fact, I’d say a solvent franchise is far more capable of benefiting the surrounding community than a franchise that is losing money.

    Thanks again for reading!

  8. Frankly, the Jam’s new business model is nothing more than to scam business into suporting a dying franchise. Once ownership recovers the money they lost the team will be gone. Yesterday, they had an open game (yes, where fans could actually buy a ticket) at Rabobank Arena. They drew 2100 fans. Of course, they blew the whole thing up for local media. Hell, I have seen 500 regularly at the HS games here in town. They will never return to Rabobank because it cost teh franchise $400K a year. . Giving away tix at $5 and even selling 2K per game you couldn’t even break even. So when is the last time you saw anyone wearing Jam flash in Bakersfield? Never, nobody cares about this team, especially with their elitest new business plan. So long Jam!

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