Behind the Headlines – September 13, 2019

Behind the Headlines – September 13, 2019


– (female announcer)
Production funding for Behind the Headlines is made
possible in part by: The WKNO Production Fund, The WKNO Endowment Fund, And by viewers like you.
Thank you. – The Grizzlies and their impact
on Memphis, tonight, on Behind the Headlines. [dramatic orchestral music] I’m Eric Barnes with
The Daily Memphian, thanks for joining us. I am joined tonight by Jason
Wexler, President of the Memphis Grizzlies.
Thanks for being here. – Happy to be
here, thanks Eric. – Along with
Chris Herrington, writer, reporter, columnist
for The Daily Memphian, covering the Grizzlies,
and a whole lot of other things for us.
Thanks for being here Chris. – Thanks for having me. – So let’s start,
we’ll talk about, this is not going to
be an X’s and O’s, you know, what sort of
defense y’all are going to run, although if we get
there that’s great, and people will love that.
– Sure thing. – But I want to talk about, how
long have the Grizzlies been in Memphis now,
20-something years? – This is our 19th
season in Memphis. – Ok, coming up on 20 years. And a chance to get you on,
’cause there’s just a whole new look with the team, and I think
even people who are casual fans, and I’m a,
full disclosure, I’m a very
passionate Grizzlies fan, but I don’t go to
a ton of games, and I think I’m somewhere in
the middle of that sort of casual-to-passionate fan. That’s my
disclosure at the top. – No worries. – At the height of
the Grit ‘n Grind era, there’s Zach, and
there’s Tony Allen, and there’s Marc Gasol,
and there’s Mike Conley, and the team is
winning playoff games, and it was even almost more
than that in the sense of capturing this kind of
thing about Memphis, that literally Grit ‘n Grind,
that Tony kind of wandered into and said, “Grit and Grind”
and it captured this feeling of the city of Memphis. Memphis particularly at
a time when it seemed, downtown was being redeveloped,
Midtown was growing, there was kind of a rebirth. Those guys are gone, right,
and there’s a whole new face, a lot of young people, a lot
of promising young people, but probably most
likely a lot of losses, probably not a playoff
appearance run right away. In terms of running the
business and running the team, are you trying to get back to
that exact same feel that the team had, and the
presence it had, or is it a new-look Grizzlies
and a new feel for the team in terms of how it
resonates in the city? – What we want to do is
we want to take the ethos of Grit ‘n Grind,
understanding that they style of play has changed, and bring that ethos forward,
because we know how much it means to the city, we know
for exactly for the reasons you stated, you know the
peak Grit ‘n Grind era, where we were this perennial
tough team making the playoffs, making these deep runs, really
did coincide with this sense of energy and rebirth
around the city, and Grit ‘n Grind became
a shorthand for you know, hey, our success in Memphis is
going to come because we get up every day, we
work hard every day, same way that team
played hard every play, scrapped for every possession,
nothing was going to come easy, we were going to fight for it. We want to take that same
mentality and that same ethos of Grit ‘n Grind that we’re
going to fight every play, wer’re going to
compete every play, we’re going to work
hard every single day, bring it to this next
generation of players and continue that identity,
but in a new way as everybody is enthusiastic and
understands what we’re trying to build going forward. – How much does it mean, and I
don’t mean to curse you with and say you’re not
going to win any games, that came off across a little
more negatively than I thought. I mean everybody
wants to win every game, but how important in the kind
of rebuilding mode like this, and when you’re trying to get
back to what you talked about, is winning and losing, and is
there a sort of number in your mind that you think you can
afford to lose before you drive off fans, or you
lose their attention, you know what I’m
trying to get at? – I think the word you’re going
to hear from us a lot this year, and you’ve already
heard from us is compete. Competing is really
what we want to develop, that’s part of
that Grit ‘n Grind, compete is another
way of saying it, is bringing that
intensity every night, brining that
professionalism every night, bringing that work
ethic every single night. I think fans, from our
conversations with them, they’re extremely
enthusiastic right now, they understand
that we’re building, they’re excited
to build with us, and be a part of that process,
that’s part of the fun of being a fan, is being
the first one in, and early on the bandwagon, and
help build this momentum for the team and the organization,
same way in music and other things like that,
so we feel like, we’ve been trying to be
clear with our fans that we’re extremely enthusiastic,
they’re extremely enthusiastic, but it’s a building
process, so come join us, help us build this great thing
we’re going to build and be there from day one. – You’ve mentioned this is year
19 of the franchise in Memphis, and I think now that we’ve sort
of got some years under our belt as an NBA city, it seems
like fans have seen what the cycle is like for a
professional franchise. You know with college programs
sometimes you can have an expectation of a
constant level of succses, right, and in NBA you see the
situation where the team was in the midst, really began a
new build as the team entered Memphis with the Pau Gasol,
Sean Battier Grizzlies, built up, had a
period of success, dipped back down, built
back up with the core four, the Tony, Mike, Marc, Zach. That is now sort of fallen,
as it was always going to, that sort of slipped away,
and it seems like with Jaren Jackson,
Ja Morant this year, you see the
first turn back up. May not be
reflected in the record, but you can see that sort of
process start to build again. You think fans now in
Memphis given this history, sort of sense that this is
what the cycles are like for professional franchises? – Yeah I think there’s
definitely a great awareness, having been through it now,
like you’ve said a couple of times, and understanding the
timelines of an NBA cycle, but I also think the NBA is
covered differently now than it was ten years ago, so there’s
greater awareness among fans, there’s greater understanding
of the concept of team building and organization building as
part of what people who cover the NBA talk about
as a regular basis, it’s not just what happened
in the game last night, and it’s not just X’s and
O’s, it’s the entire structure, so I think there’s a
greater awareness that having infrastructure behind your team
helps your team be successful on the court, and so everybody
kind of gets that it is a little bit cyclical, and these
other facets are important, so the media discusses it,
social media discusses it, and it’s why some of the… most attention is drawn to
which players are going where, how a draft lottery works,
things along those lines. – You mentioned Grit ‘n Grind
as a sort of civic ethos that sort of exists beyond
basketball to a degree, but that did sort of
evolve organically, right? That’s literally an accidental
utterance of a player, and fans grabbed onto it,
franchise grabbed onto it, and did a good job of
capitilizing on that. Doesn’t the team, the franchise
have to be sort of ready to react to whatever comes next? And I think we’ve seen, we
haven’t seen Ja Morant and Jaren Jackson
play together yet, but we saw them run a little
two-man game on social media this summer, right? And so you see
a little bit of this new kind of personality emerging,
and I think maybe it’s hard to predict what form
that’s going to take, but there’s a seed
of something there, right? – Yeah, and you wanna, I mean,
I want to give our marketing foliks credit because it would
have been very easy to come in and white board a slogan
or a campaign on top of Grit ‘n Grind and hire outside
marketing professionals when Tony Allen might be the best
marketing professional in the city of Memphis.
[Eric and Chris chuckle] And we did, there are ways of giving
something like that a little bit of a tail wind and a push
without being heavy handed, and I think our folks did a
great job of that over the years, and honestly, we’re
trying to continue that, it’s too important to
let go of that entirely, how it morphs over time with
new players and new identities, to be determined. But we’re also being
very conscientious as an organization and as a team that
we have a lot of young players coming in, Jaren,
Ja, Brandon, Grayson, lot of folks, and they need
room to develop as players. So they shouldn’t feel
the burden of carrying the marketing of the team at
this point in their careers, that happens
naturally over time. It was several years into Mike
and Mark and Zach and Tony’s tenure’s in Memphis before they
had the big banner overlooking the FedEx forum plaza, so we’re
going to let these guys develop over time, let it
develop organically, see what happens,
see what emerges, and in the mean time, I think
everybody in the city kind of understands, like, hey,
this is this building phase, we want to be a part of
it and go from there. – How hard was last year? I mean Gasol leaving, you
parted company with a coach, Chris Wallace, long time
general manager and executive with the team, I mean just a
tremendous amount of turnover, Mike Conley obviously
through the summer, I mean is that, those are, I
don’t know if there are many people who, there are certainly
people on sports radio that will challenge every
one of those decisions, ’cause that’s sports radio. But, how hard was it internally
to make those decisions, and to just sort of tear the
band-aid off the situation, is what it seemed like to me,
that’s my words, not yours. – It was really
difficult emotionally. As my son put it, he
doesn’t have any memories, he’s 18 years old, before
Mike and Marc were Grizzlies. Like, he’s a
kid, he’s grown up, you have a whole
generation of people, we watched, you go back and
look at the Mike Conley videos from draft night, like the
whole city grew up with him, the whole city
grew up with Marc, we watched Zach and Tony raise
their families and become part of the culture,
and part of the city, and so any time you have that
kind of separation it’s hard, it’s emotional,
there’s a reason, Chris, you circled
Mike Conley’s return as one of the big nights,
and Marc’s return as one of the big nights,
’cause there is that connection. So that’s really hard, and it
was incredibly strange this year when we were starting
to build out our marketing campaign, that you’re
looking at graphics and images, and there’s no Mike
and there’s no Marc, so I think it’s going to take
everybody a little while to kind of get used to that, it’s
like any other organization when you have somebody that’s
been there for a long time who’s had a significant
impact, and an era shifts. – Let me shift a little bit,
and we’ll definitely get back to Grizzlies, but I
wanna shift just slightly. Right now there’s
a huge spotlight on the Memphis Tigers, your,
what are they, a tenant of yours at the FedEx Forum–
[All laugh] – (Jason)
Of the city and county. – So does that, the
expectations on them are off the charts, final four,
Penny Hardaway and this incredible class coming in. Does that help or
hurt you from a, not from a
basketball point-of-view, but just a marketing and
this rebuilding period, does it help that there’s
a big spotlight on them, and maybe a little bit
less on the Grizzlies? Or do you feel like,
no we want to bring that spotlight back from them? – I think it’s fantastic
that they’re successful. Our philosophy is the more
people coming into FedEx Forum, spending money,
enjoying themselves, having a great time
for Tigers, Grizzlies, concerts, events, is a
huge win for the city, and a huge win for
the organization. Back in my real
estate development days, if there were other
projects going on, that’s not
competition in downtown, that’s raising the bar for
everybody in downtown ’cause the market is
there to support it, which is fundamentally
the critical part. We believe the market
is there to support a successful Tigers program, a
successful Grizzlies program, and a successful slate of
concerts at FedEx Forum. – Same question to you, I mean
just your perspective on the way the spotlight on
the Tigers affects, for good and
bad, the Grizzlies? – Well I think the city needs
to be able to support both, and it has for 19
years now, right? And so I think as
I said earlier, with a professional franchise
you’re always going to have this cycle of up
and down, no matter, it doesn’t matter who you are,
you can be the New York Knicks, the Los Angeles Lakers,
those teams have been bad for a long time. The Grizzlies at one point
had the third longest playoff streak in the
whole league, right? So the ups and downs are
part of professional sports, and if you’re going to maintain
a professional franchise in your city, you have to go
with those ups and downs. Those ups and downs will
be financial to a degree, but fans got to sitck
with it through that, and sort of as
Jason points out, the Grizzlies have, as
operators of FedEx Forum, the Grizzlies do have a
financial interest in the success of the Memphis
Tigers, and so it is not, as much as people like to pit
the two things against each other, like there’s a reason
why the Grizzlies want the Tigers to be successful. – And I mean, I’m old enough to
remember before the Grizzlies came, and it was like,
they can never co-exist, it seems like that debate
has come down a whole lot, that they can’t
co-exist because they have, I’m just curious,
it’s interesting, I don’t know, I mean since
Calipari was here that there was such a
spotlight on the Tigers, and such a–
– Well they’ve had their own cycle, right? And a lot of times
in college sports, teams are just always
bad, or they’re always good, like if you’re Duke,
you’re just always good. The Tigers have been a little
bit more of an up and down, based on sort of
their coaching history, but by-and-large that is a
program that has advantages over a lot of its competition
and sort of is generally successful all the time. – I’ll stay with you. – Well I mean this brings up
a point about the idea of the Tigers success mattering to the
Grizzlies financially brings up the notion that while getting
people in the building for Grizzlies games is probably the
most important thing for you, as a business enterprise
in a small market lots of things matter, right?
– (Jason) Sure. – And I’m interested to what
degree regionalism is still something that is
considered important, that the team focuses on. I know Ja Morant
wasn’t drafted because he went to Murray State,
but your Around the Town Caravan stuff was in Murray
this summer, right? Obviously you see that as a
market where you can sort of draw both eye balls,
and maybe ticket sales. How much is regionalism still
something that is important for the Grizzlies? – It’s extremely
important for us. It’s a big reason why we push
Grind City Media because it’s a digital media concept that
allows us to reach folks, and why we cover
college football, and HBCUs and all sorts
of things that are not just straight up NBA
basketball or the Grizzlies, you know when you look
at our market radius, we’re allowed to market
according to NBA rules, the entire state of Tennessee,
and 150 miles from FedEx Forum, our broadcast footprint
for Fox Sports SouthEast, our broadcast partner
goes through seven states. When we have a big
Saturday night game, and speaking of the Tigers, one
of the days as a basketball fan I’m most excited for
this year is November 23rd, you have Tigers, Ole Miss
at FedEx Forum at noon, and Grizzlies,
Lakers that night. You’re going to have
37,000 people coming through FedEx Forum to watch
basketball in one day, it’s going to be fantastic. When we have a big
Saturday night game like that, that’s an event game, and
especially one of the signature teams for which it’s almost,
it’s more like a concert or event than it is a
basketball game, you have people coming from
hundreds of miles in to see that game, because we
are the regional NBA hub for Little Rock, Nashville,
St. Louis, Jackson, everywhere in
between, Birmingham. So we want to cultivate
that audience and those fans, and one of the things I
always get a kick out of is, I know it’s frustrating for
Grizzlies fans to be in the building and see so
many fans of other teams, but when you walk
around the building, the kids who walked in in a
Steph Curry jersey are in line in our team store
buying Grizzlies gear, and probably the family
is realizing that hey, we could come to
more of these games, and next time we don’t have
to pay premium Warriors price tickets, we might be able to
get a little bit of a more affordable ticket to a
less prominent game, and make this part
of a regular habit, and then they start
watching the Grizzlies on tv, and they follow us on social,
they come across Grind City media, and you
start to build that up, and we have
appearances in their town, we’re doing a ton with youth
basketball through the region, we have, I want to say like
over 5,000 youth basketball players outside of Shelby
County in Grizzlies branded youth basketball teams. – How does that work,
is that a funding thing, or do they license
that name from you? How does that work on
just a business level? – We have a Director of
Youth Sports Programming, we go around the region trying
to sign up youth basketball leagues, and say here, if you
affiliate with the Grizzlies program we’ll provide you
uniforms which work with our sponsor Nike, in that
regard, we’ll provide some instructional
components to you, and there’s a game and a group
ticket discount that we can provide to you and you’ll
get an NBA affiliated brand, and then those kids probably
being kids will start playing with the Grizzlies on 2K before
they’ll actually start watching a game and go from there.
– Let’s talk about 2K, so for people watching
who don’t know what 2K is. – NBA 2K is the NBA videogame,
and it’s extraordinarily popular, and honestly a lot of
folks start playing 2K before they start
watching games on TV, the NBA has started
an NBA 2K league, we have a team in
that, a franchise, Grizz Gaming who
competes in a 2K league– – Ok, so I know what this is,
my son, and we’ve all got I think kids who’ve been
into games, but for people who don’t…
– (Jason) Yes. the notion that there
are E-Sports leagues, where people make money, are
paid to be on teams and play videogames, not just 2K,
I mean all kinds of games, it’s huge in say– – (Chris and Jason)
And people watch. – in South Korea, my son, I
look at him over his phone, “What are you watching there?” He says, “Oh, I’m watching
these people play like World of Warcraft” some
competitive game, I can’t remember what it is,
and he’ll sit there and just for you know, 40 minutes and
watch this live game happening. It, for people who haven’t
seen it or don’t understand it, it sounds like nonsense,
but it is incredibly popular. What is it, South Korea
is one of the biggest areas for E-Sports? – Right, and it’s, for
the fantasy games and shoot ’em up games are the
most popular ones, so NBA 2K is right now
more of a niche, the sports games are more
of a niche within that, but you know they’ve got a
pretty dedicated audience that the league is working to grow,
and the teams are working to grow, and you’re starting to
look internationally a little bit with respect to that, and
it just supports everything the league is trying to do
to become multi-faceted, and for us we’re trying to be
multi-platform because we’ve got gaming, and
we’ve got the Hustle, and we’ve got Grind City Media,
and we’ve got FedEx Forum, we’ve got the
Grizzlies, so when we work with sponsor/partners we’re able
to create opportunities across all those platforms. – The Hustle being your,
what I would call– – G-League team.
– G-League, minor league team that plays at DeSoto
Civic Center? – It’s at South Haven
at the Landers Center. – (Chris)
Landers Center, yeah. – I’ll go to Chris, we
have eight minutes left. – I think you know, the
diversification you talk about is interesting in
these platforms, I would assume, and this may be
an incorrect assumption and you can correct me, the biggest
financial driver probably for the team is the
national/international television deals, right? Is that, I think there’s so
much consternation about how things are moving in
terms of streaming, in terms of
bundles, in terms of, like what’s the future
like there for the NBA, for teams like the Grizzlies,
is that a concern where that’s headed in terms of viewership? – I think everybody in
professional sports is a litle bit curious and concerned
because it’s really hard to predict where things are going. The bundle is going to be
around for a long time, right. Even though there’s been steady
cord cutting over a period of years, the bundle is still
hugely impactful and important, and then what you’re seeing
with cord cutting is more of those people are
aggregating, and you know, our partner Fox Sports
Southeast is on a lot of the over-the-top platforms already,
so the Grizzlies fans can still watch Grizzlies games. – Over-the-top
being things like Hulu, or just other services so
you’re not using your whatever cable company, you’re using
one of these paid services. – Paid services, exactly. But ultimately how that
works from a national valuation perspective in a period
of years down the road is definitely an area of focus
and interest at the league. The league negotiates obviously
the league-wide media deal that teams are generally aware and
abreast of what’s going on, but as far as our partnership
with Fox Sports Southeast, it’s in a really
strong position, we have a deal that
extends out several years, but it’s definitely something
that everybody in professional sports is monitoring, and it’s
a pretty regular industry topic of conversation. It’s a little bit hard to
predict where it’s going to be. – You mentioned concerts,
how many concerts do y’all do each year?
Give or take. – It varies, yeah. You know, you have a lot of
event shows in terms of like the Disney on Ice’s and
those kinds of things, Harlem Globetrotters,
and then you probably– – Broaden it out,
how many non-basketball events are happening every year?
I mean is it 50, 100? – No, no, no, no, no. It’s more like 20,
in the 20 range. Probably about
12-15 concerts, events, maybe pushing towards 20. We have a really
strong slate this year, we have a number of shows
coming up in October– – (Chris)
Carrie Underwood. – Carrie Underwood, Heart,
Elton John who is all the way sold, through Bob Seager, Kevin
Gates I think is this weekend. So we have a bunch
of concerts– – (Eric)
Celine Dion? – Celine Dion is I
think in December, and Ariana Grande
is in December, basically what happened is, we
work with Live Nation is the largest promoter of concerts,
and so they’re somebody you have to work with if
you’re in this business. We recently about a year,
a little over a year ago, modified our relationship with
Live Nation so that FedEx Forum is now booked out of the New
Orleans office of Live Nation rather than the
Nashville office. New Orleans had a
history of sort of being an under-performing concert town,
kind of like Memphis has a history of being an
under-performing concert town, and they’ve done a good job
down there cultivating that, and we feel like they’re
doing a good job here, and I think you’ve seen an
increased slate of shows over the last years at FedEx Forum. – For people who don’t know,
and I kind of have a sense of it, but how the economics
work on a given concert, so a given performer, you
don’t have to name anyone, but a given performer is
going to come to town, how much, who all is
paying to make that happen. It’s not just, I mean
ultimately it’s the ticket sales, but there’s a lot of
money involved and players involved, so who all is putting
money up to get somebody in, and then speculates that
they’ll sell enough tickets to make their money back? – Typically that’s a
promoter, so it’s Live Nation, or it’s AEG, or Beaver
Productions is a regional one that we work with, who just
booked Trans Siberian Orchestra with us for December, so
they are the ones who are essentially renting
FedEx Forum for the night, and then they take the
risk of selling the tickets. Now, we as an enterprise put a
lot of our marketing resources behind it, which is
why you see all those, we don’t have an obligation to
put those concert ads on during all of the Grizzlies games and
Grind City Media broadcasts, we do that to help
our promoter partners. And try and build
awareness for it, but they are the ones
who are ultimately economically at risk for a show. – Does, so the Grizzlies
theoretically can make money off those shows? – We make very little,
it’s our share of parking, our share of food and
beverage, and then… it’s not, it’s operating an
arena in a market our size is a money losing
enterprise, we’ll say that. [all laugh]
– So let’s walk through that, we’ve got three minutes left,
so the Grizzlies arrangement going back to when the team
moved here and FedEx Forum was built, it is somewhat if
not very unique nationally. I mean other markets, the
city or whatever entity, the government
entity owns the arena, you correct me where I’m
wrong, owns the entity, and absorbs any kind of
losses, or any profits. And arenas aren’t particularly
profitable I think in most cities, is that correct? – There’s a bunch
of different models, so I’d hate to kind of apply
a blanket construct– – Ok, talk about the
different models. – In the largest markets,
the arenas are owned privatly because they’re going to be
filled 250, 300 nights a year– – (Eric)
Sure, Madison Square Garden. – Right, so Madison
Square Garden is owned by MSG, Barkley Center is–
– But mid-size cities like us. – Yeah, mid-size cities is
a bunch of different models whereby,
municipalities either own them, operate them, provide
operating subsidies for them, so the city and county when
they negotiated the deal for FedEx Forum, honestly
did a fantastic job, because the
arrangement is that what was Hoops, LP, now is
Memphis Basketball, LLC, bears the operating
balance sheet for FedEx Forum, and the city and concert market
hasn’t grown to a point where operating FedEx Forum
is a profitible venture. – How much longer, is
that a 20 year term on that? – It goes till, it’s just
part of the existing lease structure, which I
wanna say is 20…29? – Ok, so there’s
still a few years. This then brings up the,
sometimes y’all get criticized that you are preventing
the creation or launch of a mid-size arena, something in
the 5-6-7 thousand seat space because of the
non-compete that was put in there
at the beginning. And the non-compete, if I
understand it correctly, and you’ll correct me
again if I’m wrong, is that there can’t be any
public money that goes to building an arena. If somebody wanted to spend
tens of millions of dollars and build a private
arena with 6,000, 7,000 seats, they could
do that tomorrow I assume. But, no public money
can go to that based on that original agreement. – That’s the non-participation
clause actually, right? – Non-participation, ok.
– (Jason) Yeah… – So talk about that
dynamic in a way that for the casual person
who just doesn’t understand what’s going on in that. – Right, and this is where, I
don’t really feel like it’s a legal interpretation debate,
it’s really more of a business decision, and I think sometimes
what gets lost with us operating FedEx Forum is
that we don’t own FedEx Forum. The city and
county own FedEx Forum, the city and county own
the Mud Island ampitheatre, the city and county
own the Cannon Center, and as a landlord and an owner
who’s invested in a number of facilities around town, and
is also friendly with the non-profits that own things
like the Botanic Garden and the Orpheum, I think it’s an
economic decision for the city and county at times to decide
is it worth investing in a venue that’s going to compete
with existing venues that they already operate, or
are responsible for. – Forty-five seconds left.
Your sense, because you also cover music, and you have
forever, and the arts and all kinds of things.
Your sense on the need or demand for a mid-size arena
in this city? – I think what people forget,
I understand people don’t like that concerts
happen in Southhaven, and tax money goes
across the state line. A, not many concerts
happen there anyway, ’cause there’s not
the market for it, but that arena is in the
metro area of Memphis. Memphis as a metro area
has a mid-size arena, and there’s not
much activity there, because there’s just not
much of a market for it. – And we do an enormous number
of shows in the 3500-10,000, next time you’re in
FedEx Forum for a concert, and it’s not an A+ name, if the
curtain is closed on the third floor, then you’ll know
the size of the concert is a mid-size concert. – I think that Memphis has
a bigger issue with smaller venues than a lack
of a mid-size venue. – Alright that’s the last word,
thank you both for being here, thanks Jason. – (Jason)
Thank you. – And thank you for joining
us, join us again next week. Goodnight. [dramatic orchestral music] [acoustic guitar chords]

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