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Celtics parlay team's revival into Green

01:26 PM EDT on Friday, April 18, 2008

April 18 (Bloomberg) -- The Boston Celtics had no sooner announced the acquisition of All-Star forward Kevin Garnett last July 31 when the National Basketball Associations club's marketers launched a fast-break.

Seemingly within 24 seconds -- the time allotted NBA teams to get off shots -- they were shooting off e-mails and text messages to the 200,000 ticket-buying fans in their database.

"We've got the Big Ticket (Garnett's nickname)," wrote the Celtics. "Time to get yours." Fans who wanted to see Garnett restore the Celts' lost glory -- along with another newcomer, All-Star guard Ray Allen, and holdover sharpshooter Paul Pierce -- had better buy season tickets: "The sky is the limit for this team."

The orders poured in so fast that even between 1 and 6 the morning after the announcement, the team racked up $1 million in online sales. The Celtics grew their season-ticket base 40 percent -- to more than 10,000 -- before cutting off sales to preserve single-game tickets. Those sold out in a day when they went on the market in September.

The Celtics have indeed restored the luster lost since the Larry Bird era in the 1980s, when they won three of their league-record 16 NBA championships. This year the team set a record for improvement, going to 66 wins from 24 in 2006-2007.

New Business

The Celtics have leveraged the team's success into lots of new business. They grew corporate sponsorship revenue by 30 percent, partly by getting more New England businesses to jump on the Celtics bandwagon and partly by creating imaginative new categories like "presenting sponsor of the 2008 playoffs." (That would be the Massachusetts State Lottery.)

The playoffs begin tomorrow, against the Atlanta Hawks, but no matter how far the team goes, the Celtics' season-highlights DVD, now in the works, is a certain hit. That's the kind of brand-enhancing "content" the Celtics have turned to producing. It's collaborating with broadcast partner Comcast Corp. on a weekly newsmagazine-style show called "Celtics Now."

The franchise didn't just fall into this bonanza. Its front-office team was formidable long before the on-court one, building a business infrastructure which enabled them to make hay when the sun finally shined again. The Celtics had posted losing records in 12 of the past 14 seasons.

"We often ask, `Is a team 50-win ready?" says Scott O'Neil, the NBA's vice president of team marketing and business operations. "When they have success, can they take off with it? The Celtics have been `50-win ready' for a few years. They have a tremendous analytical approach and the right people in the right jobs."

Ownership

All of this reflects the sensibilities of the Celtics' ownership group which in 2002 bought the team for $360 million. Two of the three managing partners are private-equity moguls -- Wyc Grousbeck, of the Highland Capital partners venture-capital firm and Stephen Pagliuca, a managing director of Bain Capital. The third, Robert Epstein, heads the Abbey Group real-estate firm. They demanded the same kind of disciplines of their basketball business as of their portfolio companies.

That includes cutting-edge technology -- and that's ultimately why the Celtics could instantly pitch 200,000 salivating season-ticket prospects when Garnett hit town. The team's tickets department leads the league in software, using a tool called StratTix to analyze how to price tickets and to correctly target marketing efforts.

`Exactly Wrong'

Celtics President Rich Gotham and corporate sponsorship chief Sean Barror came out of Lycos Inc., the search-engine firm. They come at the business differently and don't mind saying so.

"A lot of people have it exactly wrong," says Gotham, reciting conventional wisdom: a team does great business when it's winning and scuffles through when it's losing. "If you can't have a healthy top line (in a down cycle), you can't invest in your payroll. You have to dump salary, and that doesn't get you anywhere. After a 24-win season, we were able to go out and acquire two $20 million players."

In that dreary 2006-2007 season, when the Celtics went 24- 58, they managed to average attendance of 16,900 (in 18,624-seat TD Banknorth Garden) despite losing 18 straight games at one point and losing All-Star forward Pierce to injury. The Celtics even managed to grow sponsorship revenue by 20 percent that season.

Hustle

They did it not just by mining data but full-court hustle. Co-owner Grousbeck, who is the team's chief executive officer, believes that for mature sports franchises, as for early-stage companies, you have to go strong to the hoop to get, and keep, your customers.

"We make sure every season-ticket holder is thanked by no less than five Celtics personnel," he says. "We created a `high-five' tunnel, so season ticket-holders kids' could slap the players' hands before games."

In the Grousbeck-Gotham regime, the number of ticket salespeople has grown to 35 from 8, according to Shawn Sullivan, who oversees that area. The corporate sponsorship salesforce has almost tripled to 14 from 5, producing a near tripling of corporate sponsors from to more than 100 from 38, according to Barror.

The Celtics have never stopped hustling, even when attracting sponsors got a lot easier. Barror didn't just add Filene's Basement as a corporate sponsor in February, he put the retailer together with Comcast SportsNet as an advertiser and outfitter of announcers.

Just wait till next year. The Celtics will look to strike a lucrative deal for a "presenting sponsor" for the 2008-2009 season. They will somehow wedge in more high-priced courtside seats. They will keep running that front-office motion offense.

"We spent the last four years raising the floor of the business," Gotham says. "We should be able to raise the roof now."

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