Building a Community-Focused Sports Organization in a Tourism and Entertainment Mecca
In his role, Kerry oversees all business aspects of the NHL team and organization.
Under his leadership, the organization won Sports Business Journal’s “Sports Team of the Year Award” for the 2017-2018 season, as well as the NHL’s “Commissioner Award for Business Excellence” for its inaugural season. Also, Golden Knights games at T-Mobile Arena have been voted “Best Atmosphere in the NHL” by the players in an NHL Players’ Association poll.
Prior to joining the Golden Knights, Kerry spent 13 years with the Cleveland Cavaliers. In 2013, he was named President, Business Operations, where he oversaw ticketing and suite sales, corporate sponsorship revenue, broadcast, marketing, communications and community engagement for the franchise. During his tenure with the team, the Cavs were consistently recognized by the NBA during its annual Sales & Marketing awards ceremonies as a top performing team in all key business metrics.
In addition to overseeing Cavs business operations, Kerry also served as President and Alternate Governor for all franchise property teams owned by the Cavaliers Operating Company, including the Lake Erie Monsters of the AHL. Kerry also was President and Chief Operating Officer of the Cleveland Lumberjacks of the IHL from 1994 to 2000.
The Tulsa native also has NHL experience, serving as vice president of sales for the Carolina Hurricanes and the Dallas Stars prior to joining the Cavaliers.
In conversation with podcast host Jim Andrews, Kerry discusses the evolution of a young sports organization, the impact of its unique market and where growth will come from. Below are edited highlights of the conversation.
Jim: So much has happened since you arrived landed in Las Vegas five years ago and the Golden Knights began playing a year later, I’m wondering what have been the most unexpected developments for you in that span of time, whether with the team, the city, etc.?
Kerry: Initially, it was the narrative of professional sports at the major league level even being open to a market like Las Vegas. For years, the NBA, the NHL, the NFL had talked about Las Vegas. Obviously it was one of the fastest growing markets in the country, but there was always that one element of gaming and gambling that forced the leagues to be hesitant.
I give Gary Bettman and the NHL a lot of credit for taking a step back and saying, “Maybe we’re looking at this with the wrong lens; given the concern for gambling and what that could do to the integrity of our game, the safest place from a gaming perspective really is Las Vegas because it is so heavily regulated.”
The narrative when I got here in October of 2016 was not that this was a good decision. The franchise was officially approved in June of 2016 and as we started to put the organization together, I can remember the narrative during the first 12 months before we started playing hockey was that it was a bad idea to put another NHL team in a Southern tier or desert marketplace. They didn’t like our name; they thought it was terrible. There was a narrative about our logo; that it was bad.
And once we got to the expansion draft, the “hockey experts,” so to speak, thought this might be the worst roster of players they had ever seen. Of course we thoroughly enjoyed all of that narrative, because within about two-and-a-half to three months into that season back in 2017—initially it was, “well, they’re getting very lucky”—and by mid-season it was, “You know, this is actually a pretty good roster,” and there were a lot of GMs looking around saying, “I would take that roster.”
Then there was the buzz being created around the franchise regarding the game presentation. We were, in a lot of ways, recreating the event experience for the National Hockey League. We were doing it under the guise, of “Let’s just be a little bit different. Let’s be Vegas in how we present this.” This is the entertainment and sports capital of the world and there was a lot of great entertainment we could tie into for one heck of a show. So we’re just really proud of what we accomplished that first year.
The biggest surprise for me was that we were able to turn that narrative that was so negative in a really quick fashion. All of a sudden, Gary Bettman was being hailed as an innovator for the work he did in selecting this market—which is well deserved because he had the vision all along. And our hockey folks received well-deserved praise for the decisions they made. And just the organization in general and the fact that by May of that first season not only were we playing in the Stanley Cup finals and were one of the lead revenue teams in the league across every category, but I’m really proud of the fact that we were named the Sports Business Journal Team of the Year.
The speed at which we were able to take a startup franchise and establish it at such a rapid pace is probably the biggest surprise. And of course now here we are five years later and not only do we have the Vegas Golden Knights, which is still one of the top revenue-performing organizations and our game presentation is still considered one of the best in sports, but we have two teams now. We have an American Hockey League team playing right here in Henderson. So it’s just been an amazing five years.
Jim: The Golden Knights and T-Mobile Arena will play host to the upcoming NHL All-Star Game and Las Vegas is hosting the NFL Pro Bowl and the East-West Shrine Bowl that weekend as well. What opportunities does that create for your organization?
Kerry: It’s unique. A lot of folks are blown away by the fact that you’ve got four major events happening consecutively Thursday through Sunday that weekend in February with the Skills Competition and All-Star Game for us, the Pro Bowl and the college East-West Shrine Bowl.
But there have been numerous weekends along the way where we have had a major UFC fight or a major boxing world title championship fight, along with a NASCAR race, along with a Raiders NFL game, along with a Vegas Golden Knights game all happening within a two-day period! And that’s in addition to all of the other events and activities that normally happen along The Strip literally seven days a week here in Las Vegas.
It reinforces that not only is this the entertainment capital, but it’s the sports and entertainment capitol. For most cities, to have those four major events would be a great year, yet here we are doing it in a four-day period.
To get back to your bigger point about what type of opportunity it is: First to be side-by-side with the National Football League, the Pro Bowl and our new broadcast partners in ESPN is a tremendous opportunity. There will be a lot of cross-promotion, not only in terms of the events themselves, but what’s happening in the community. You’ll see NFL players side-by-side with NHL players doing community events. There will be some other cross-promotional activities from an entertainment perspective. There will be events with crossovers between sponsors and league executives.
The National Football League is tremendous in what they do in addition to the incredible number of people who follow that sport. But just to have our community on a stage of what the NHL, the All-Star Game and the Pro Bowl represent and be able to not only showcase the great entertainment, events, hospitality and restaurants that are here, but also that we are about more than just the Las Vegas Strip.
We are a community of about 2.4 million people. I always joke that, “Guess what, we actually have residential neighborhoods, grocery stores, churches, schools, etc.” I say it jokingly because so many people only have the perception of our market as the great area where all the casinos are and they forget that there is actually a community of 2.4 million people. And of course, that is our fan base for the Golden Knights.
Jim: I assume that community of people will factor into your answer for my next question. When you talk about all of the things that happen in Las Vegas on one weekend, Golden Knights and Raiders home games, boxing matches, NASCAR races, etc. I imagine all of those activities competing for fan and sponsor dollars can be both a blessing and a curse to a single franchise, but what’s your take on that?
Kerry: I don’t believe there is a negative aspect to it, because what gets lost with these major events in the population numbers I was sharing and the fact that this is one of the fastest growing markets is that on top of that you have 43 million people coming into the market every year. That number is 2019, pre-Covid, but the great news is that we are really getting back to some of those same numbers.
If you just do quick math, 43 million divided by 52 weeks, that’s 600,000-plus additional people that come to Las Vegas each week. They tend to turn over two or three times during the week if you think about the traditional business week—Sunday through Wednesday or Thursday—and then the weekend entertainment seekers coming in Thursday, Friday and Saturday. All of these other events and attractions are linked to those folks coming in to visit. What we have tried to do with the Golden Knights is build it locally first.
If you come to a game, you would see that nine out of 10 people would be decked out in Golden Knights jerseys and gear. They live right here in the Valley as opposed to the other events and activities where you have a more diverse group of people coming in from around North America or even globally depending on what the event is.
We want to be Vegas’ team, the locals’ team. We’re proud of that and it’s been our unique defining positioning in the marketplace. The Raiders have done tremendously and if you go to game there are still a lot of fans who don’t live in Las Vegas. They come in from L.A., they come in from the Bay Area. They are really a national brand in a lot of ways. The vast majority may be in Raiders gear but a smaller percentage live here in the Vegas Valley.
Jim: Even with that local focus, is there a marketing plan to reach those people who are coming as tourists, and maybe the convention business?
Kerry: The first year we put a lot of focus on that because we just didn’t know what the geographic profile would look like. What we started to see was that we had a tremendous opportunity to build it locally first. That’s really been our priority.
The first year we worked with some of the visiting team markets, knowing this would be their destination. If I’m a Blues fan, my one trip is going to be our team play in Vegas. So we had a lot of fun with that the first year, but we knew to make this work long term, that would be nice to have, but it shouldn’t be the priority and the focus of the business. You have to build it locally. If you look around at all the great longstanding teams in the NHL, they were built locally first and we want to be just like those other markets.
Jim: We’ve been fortunate to have a number of team presidents and CEOs as guests on the podcast and one of the common discussion points has been around where they see growth coming from for their organization. For some who own their venues, it’s development of new spaces, others have developed media and content operations. Can you share some of the plans you and your chairman Bill Foley have in that regard?
Kerry: There’s a couple of different pieces to this. I’ll start with the core of what we do on the sports side. From early on we wanted to position the Golden Knights to take advantage of Las Vegas being a global brand. It’s one of the most recognizable city brands in the world, right on par with New York City and Chicago around the globe. We knew we had an opportunity there to position the team on a broader basis. We created programming like VGK Worldwide, our digitally based membership community.
We also wanted to position the team from a broadcast perspective to take us across states like Montana, Idaho, Wyoming and Utah into Nevada and give ourselves a really strong regional footprint. Let’s understand that the population of those five states is not that significant, but the reach of that territory is.
Locally, it’s about how we are building the game within the core. We acquired the American Hockey League team from San Antonio and put it in Henderson, which is a Las Vegas suburb of 326,000 people. As part of that investment, we also built another community facility much like City National Arena. City National Arena is our NHL training facility, but more than anything else a community center to grow the game at the youth level and the adult level. The youth hockey numbers are just staggering.
We built a similar facility in Henderson. It’s about a $28 million investment and it’s been open for about 12 months now, called Lifeguard Arena. Our American Hockey League team trains there and we are also using it to grow the game at the youth and adult level.
The third piece is that we are actually building an arena—the Dollar Loan Center—in Henderson that is close to a $100-million project. It will have 6,000-to-7,000 seats depending on the event and be the home of the Henderson Silver Knights. We have also launched an expansion team in the Indoor Football League, the Vegas Knight Hawks. That team will begin play there next March.
We’re taking the sports piece of our footprint and growing it in the Vegas Valley with hockey at the AHL level, with indoor football, and with other entertainment options, as we will run, control and operate Dollar Loan Center.
That’s the sports side. And then our owner has a tremendous portfolio of hospitality assets in terms of wineries in Northern California, Southern California, Oregon and even as far away as New Zealand; plus restaurants and hotels—including the Hotel California in Santa Barbara.
We have formed a new entity called the Foley Entertainment Group to bring those tremendous hospitality assets together with the ecosystem we have built on the sports and entertainment side. We want to take these major investments that Bill Foley has made, and which have been on two different paths, and connect those dots through loyalty programming.
We hired a gentleman by the name of Randy Morton, who spent 20 years as president and CEO of the Bellagio within the MGM family. He’s focused on building out the hospitality portion of the business while I’m on the sports side. We’re working collaboratively as co-CEOs of Foley Entertainment Group to connect those dots and utilize his expertise in loyalty programming and all the great work he did at the Bellagio in terms of what a five-star experience looks like.
That’s where a lot of our growth focus is as we look forward, in addition to always wanting to sell more tickets for more money, drive more sponsorship revenue and continue to find ways to maximize every opportunity that you have.
Jim: You mentioned that one of the connections is through loyalty programs—obviously something that the casino and hospitality business has done pretty well with. Can you elaborate on that?
Kerry: The sports industry in general is probably about 15-to-20 years behind the gaming industry and even the retail industry when it comes to data, analytics and loyalty and being able to connect those dots. It’s one thing to capture the data. But how are you using the data to drive revenue? I can remember during my time in the NBA, they did an amazing job of sharing best practices, not only from around the league, but they would bring in the CEO of Caesars Entertainment to talk about Caesars Rewards. It was not about who’s doing it the best in the NBA, but who’s the best in class in the world.
We all talk about that 360-degree view of our consumer and our fan. A lot of teams are able to talk about it, but who’s actually able to deliver on communicating across all the different opportunities. We certainly aren’t there yet, but we are aspirationally utilizing our ticketing partner at AXS at working again with Randy and his expertise.
Jim: It’s almost impossible to discuss sports business today without discussing the role of cryptocurrency and the blockchain, not just because of the sponsorships we’ve seen lately, but from an operations standpoint in terms of accepting crypto for payments, issuing NFTs, etc. Clearly, it’s early stages for everyone, but can you discuss how your organization is looking at that sector and maybe walk us through some other areas where you are innovating?
Kerry: There’s so much unknown in terms of that opportunity and potential. Both the NHL and the NBA—I can’t speak to the other leagues in much detail—have seen the opportunity that is rapidly being created in this space. The category of cryptocurrency is one that his new and different and I give them credit for not limiting teams from selling jersey patch logos in the category.
Our first focus in that category has been talking to different companies and finding ways to see if there was interest in engaging with our organization in terms of sponsorship. At T-Mobile Arena, we are a tenant partner in the venue, so the booking and the operations are done through our partners at AEG and MGM. Thus we don’t have the same opportunities to integrate a cryptocurrency sponsorship across the entire fan experience. When we look at Dollar Loan Center, we are thinking about ways we can be more forward thinking and ultimately create more revenue streams in terms of accepting payment.
There is a company we are talking to called Coin Cloud. Essentially what they do, although they do much more than this, is offer ATMs where you can buy and sell cryptocurrency with cash. Just having that in the venue and ultimately connecting it to the overall fan experience at point-of-sale retail, point-of-sale for food and beverage, etc. are all things we are thinking about.
Certainly in the category, even as we were just talking about sponsorships, they want to pay in cryptocurrency. As an organization, you have to make the decision that you are okay with that. The league has done a great job in pre-answering a lot of those obvious questions that teams have, such as, “When we convert that to normal currency, how does it translate to calculating hockey-related revenue in terms of the collective bargaining agreement, player compensation and those technical aspects?”
We’ve also seen some opportunity from a retail standpoint with the NFTs a lot of teams have done, so we’re starting to get more aggressive in that space.
Jim: You came up through sports in a variety of sales roles and I’m wondering what advice you would have for salespeople who aspire to executive leadership in business operations and general management?
Kerry: It’s important that they have already made the choice to build their career through the revenue side. I try to encourage folks when they are looking at things on a wide basis to follow the revenue. It’s not to say that the other areas of the business aren’t important, because they are, but this is not a very complicated business, even though it has become much more sophisticated.
The revenue and growth of revenue from just 20 or 30 years ago, between media rights, sponsorships, the amount teams are generating from local ticket sales and how it translates to other ancillary revenues like retail and food and beverage, it’s a totally different ballgame. But at the end of the day, it’s still not very complicated.
Right out of the gate, before we ever do one thing, we have an $82 million a year obligation to our players through their contracts. If you lose sight of that in your organization it can be really difficult.
Before we generate $1, we at least have to get to $82 million. Obviously, there are a lot of other costs, but the message we are constantly reinforcing is we have to drive the revenues necessary to support the business. And that starts with ticket sales. If we don’t sell a ticket, there are so many other parts of our business that would never even exist. Certainly sponsors aren’t going to engage if no one is coming to the games. Certainly the AT&T SportsNets and Bally Sports of the world—all of those regional sports networks—are not going to pay significant rights fees if no one is following the team.
It really all starts with selling tickets and then maximizing that value through sponsorships and ultimately generating those other revenues that are necessary to support the business.
The fact that someone has picked the revenue path is important, and then the rest of it is continuing to find ways—even if it’s not your direct responsibility—to learn and understand how these other areas come together from a revenue perspective and what drives those streams and how those dots get connected. A lot of times you just have to take the time on your own to sit down with other executives within the company and learn more about what they do and how they built their careers, how they got exposure.
I also encourage people to not get so lost in, “I want to work for the Golden Knights or the Cleveland Cavaliers or the Golden State Warriors or the New York Rangers.” If you really want to learn the business across the entire enterprise, go to work for the Cleveland Charge or the Cleveland Monsters or the Henderson Silver Knights or a minor league baseball team.
Why I encourage that is fundamentally the business is the same even though the dollars are much more significant at the major league level. For the most part, these are smaller organizations and you are going to get exposure to every area of the business. You are going to wear multiple hats.