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In this Thursday, March 9, 2017, photo, construction workers walk past a mixed-use area to feature … More restaurants and retail stores at SunTrust Park, the Atlanta Braves’ new baseball stadium in Atlanta. The team and its new SunTrust Park will share top billing in its 60-acre complex with The Battery Atlanta, the mixed-use development that will include restaurants, bars, shopping, apartments, a four-star hotel and a concert hall. The Braves believe their complex will be a model used when other teams look to build new parks. (AP Photo/David Goldman)
Copyright 2017 The Associated Press. All rights reserved.
Klutch Sports Group has made major inroads into player representation since being founded in 2012.
Klutch, under the leadership of chief executive officer Rich Paul, represents more than 200 athletes in the NBA, NFL, MLB and WNBA.
In recent years, Klutch has grown its commercial business through the creation of global partnerships, brand consulting and sports and brand insights division. The sports and brands insight team, recently partnered with Royal Bank of Canada to create a proprietary study in the form of a whitepaper, which lays out the growing value of sports-anchored, mixed-used districts, commonly known as SMDs.
SMDs are becoming a trend throughout professional sports, particularly since the Atlanta Braves made the jump in 2017. The Braves moved from Turner Field in the city to what was then called SunTrust Park in Cumberland, Ga., in suburban Cobb County.
The stadium name was changed to Truist Park in 2020, but one of the most unique parts of the venue is that it is included as part of a SMD known as The Battery Atlanta. The complex includes a mix of shops, dining, living and workspace.
The Green Bay Packers have also developed the land around historic Lambeau Field into Titletown. According to Klutch, there are 37 SMD currently announced in men’s North American professional sports
The timing then seems right for Klutch to get involved in the SMD wave. Thus, its whitepaper was born.
“There were a number of people and articles that talked about the rise of these SMDs, but didn’t really delve into the details,” said Caryn Rosoff, Klutch’s senior vice president of brands and insights. “So, we noticed there was a gap in the market to really start thinking about SMDs from a financial and a more datacentric perspective. Ultimately asking, what are the financial implications of these opportunities and do they enhance franchise values?
“We’re bringing some real world tactical and strategic recommendations within the paper for how the investors, rightsholders and brands can leverage SMDs, particularly from the commercial side.”
In all, 40 venue leases will expire between 2030-39 in the NFL, NBA, MLB, NHL and MLS. It seems likely that many of those franchises will also want SMDs as part of their next stadium or arena.
Over time there is expected to be increased interest in women’s in women’s professional sports, including the WNBA and NWSL. The Kansas City Currents signed a 10-year naming right agreement with railway giant CPKC that is worth $117 million for an SMD.
The new venue features waterfront retail, entertainment and restaurants along with 1,000 residential units and 20,000 square feet of office space.
Along with women’s sports, SMDs attached to international venues, college facilities and practice spaces are expected to contribute over $100 billion in revenue opportunities through the end of the next decade, according to Klutch.
“I think it is really interesting that SMDs can make these rightsholders year-round lifestyles brands,” Rosoff said. “That coincides with what we’re seeing of sports being at the epicenter of culture, cross pollinating with music, lifestyle, fashion and entertainment.
“These SMDs provide rightsholders with a much more diversified platform and different ways to engage with consumers. Not only will rightsholders interact with team fans but net new customers that might visit the SMD to go shopping with their families, or residents and tourists that might visit with the restaurants, bars, hotels, entertainment spaces and more. Not to mention the community gathering component as well. The rightsholders are leveraging the prestige and brand equity of the teams as a draw to build something much more holistic.
“These SMDs are giving these teams a much more diversified platform, all these different ways to engage. Not only with the fans but general consumers that might just be going shopping with their families, as well as the surrounding residents through the hotels, the restaurants, bars, office spaces and more. Teams are really seeing this opportunity as a way to capitalize and really grow and expand their brand. These brans that were already built on prestige by their on-field performance are really becoming much holistic.”
Professional sports teams are always looking to generate more revenue streams. In most cases, they also ask for government funding. Luana Harris, the managing director at RBC Sports Advisory, believes SMDs can drive substantial economic impact for their local economy.
“They generate more money than just the selling tickets to the ballgame,” Harris said. “We’ve seen the, rejuvenate growth as we look at local economies. These can create thousands of jobs, both temporary and permanent, increasing property values and tax revenue as well as driving a lot at tourism. It really just isn’t the venue itself. It truly expands to the city and the region because of the different revenue drivers.”
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