New Paths: The Milwaukee Bucks Exemplify the Changing Nature of Sports Organizations
Now in his seventh year as president of the Milwaukee Bucks, and fourth year as president of the world-class Fiserv Forum, Peter has completely reimagined, rebuilt and reenergized the Bucks’ business operations, resulting in substantial increases in attendance, ticket revenue, merchandise revenue, partnership sales and TV viewership. He has assembled a top-flight management team and has nurtured a corporate culture marked by accountability, collaboration and fun.
Peter’s vision was instrumental in the financing, planning, design and development of the 30-acre Deer District, which is anchored by Fiserv Forum, a $524 million, 17,341-seat sports and entertainment venue, as well as the Froedtert & the Medical College of Wisconsin Sports Science Center, the Bucks’ training facility. Continued development includes an entertainment block with restaurants and bars, as well as an upcoming hotel and apartment building, linking Fiserv Forum to existing infrastructure to create a vibrant, urban community.
In his All Access conversation with podcast host Jim Andrews, Peter addresses a wide range of issues including future growth trends, the impact of the enduring labor shortage and the social justice movement. Below are edited highlights of the conversation.
Jim: On the court, the Bucks are just beginning the defense of their NBA Championship, which can be a big challenge. On the business side, you still have an entire season to continue to leverage being the champs. Can you describe the primary tangible and intangible effects of being No. 1 and how you are taking advantage of it?
Peter: When you win an NBA championship and you’ve been on this global platform throughout the playoffs and the finals, you have an unbelievable opportunity to leverage that audience and monetize it in a big way. So there’s no time to rest, unfortunately. You would love some time to sit and rest on your laurels and really enjoy it, but the truth is you have a window where your global audience is larger than it ever has been, your awareness is high, you’re selling retail products like you’ve never done before, you’ve got a high equity price for everything from your tickets to sponsorship to people globally understanding what the Deer District is.
So it’s a moment in time where you really have to prioritize and think about how to leverage that for growth in the future.
Jim: One situation facing not just your organization is the current labor shortage, which many did not anticipate being this severe or lasting this long. How are you managing that issue for a business that prioritizes customer service and the fan experience?
Peter: It’s a transformational event that nobody’s talking about. First, we had the pandemic, which we had to figure out how to operate around. It accelerated mobile app use, impacted ticketing, safety protocols, etc. Now we’re learning how to do what we do with half or 60-to-70-percent of the labor force.
That’s forcing us to rethink the way we service our audience—the way food and beverage is served, the way ticketing happens, etc. What you are going to see is a lot of these operations in the sports and entertainment business coming out of this in the next six-to-twelve months being able to efficiently run with a fraction of the labor force.
That’s the paradigm that will shift—everything from how you think of security at a surveillance level to how do you think of your ability to communicate in real time through mobile, to how do you reposition your guest services people to have that qualitative touch. We have so many touch points, but the reality is that the labor force is diminished so much that there’s nothing in sight for this to change, so we have to react to it in a very big way. It’s going to change the way we do business fundamentally.
Jim: I would imagine some of the automation that was accelerated during the pandemic helps with that situation, but there is still a necessary human element to customer service. What do you think the biggest impact or change will be this season because of the labor situation?
Peter: On the qualitative side, it’s the human touch: How do we physically service our customers, whether that’s ticket retention people, our premium people, or how do we transact? What is your bar experience like for transactions and what does that mean for volume, for per-caps, etc.?
So far, the trends are positive, but there will be a significant paradigm shift in the way people are serviced and the way they transact. We will depend a lot more on automation for ticket sales renewals and new acquisitions. That’s going to happen quickly.
Jim: We all saw the overwhelming success of the Deer District during the NBA playoffs and finals, which exceeded everyone’s expectations. Has the way your fan base embraced that area changed the way you are approaching future development, programming ideas, etc.?
Peter: It’s allowed us to do two things. First of all, the coverage and the awareness through the playoffs and finals has catapulted where we are with brand recognition. I have traveled a bunch since the finals and people are referring to the Deer District as a locator for things, which is fantastic. Second, it’s made us pivot and rethink what our general plan design is for the future building blocks of the District itself.
We have certainly qualified the fact that this is an outdoor venue where we can populate, activate and curate events. What does that mean for the way we want to structure it? Maybe we will plan more outdoor space than we had thought, maybe more entertainment spaces as we build more of it, etc.
The pandemic really stunted our development growth—like everyone else in the world—but now we are able to hit restart on building very quickly. We broke ground on a hotel two weeks ago and it’s our hope that the 18-month pandemic stop will very quickly be restarted in the form of more residential and more commercial and this district being a viable, 24/7, 365 neighborhood where people live, work and play in addition to it being a destination.
Jim: Does future growth for organizations like the Bucks lie more with these kinds of developments as opposed to generating more revenue from the core team and arena assets through media rights, ticket and merchandise sales, and sponsorships?
Peter: Without question. When you’re so close to this business you realize traditional revenue triggers don’t have much growth opportunity. There’s only so much you can raise ticket prices, there’s only so much inventory and leveraging of traditional sponsorship. You’re not going to grow selling tickets and hot dogs, as I’m reminded by our owners.
What is the opportunity? You build infrastructures that are billions of dollars in arenas and stadiums. How do you activate those beyond your core business of an NBA team or an MLB team? How do you build the monetization model around that? You have your centerpiece of the arena or stadium; how do you aggregate all of the other pieces to monetize? That’s the idea of the District. And we saw great examples when we were planning the District, whether it was Columbus, Ohio or Kansas City or Staples Center and L.A. Live. These are all great examples of how you leverage the mothership to create viable businesses around it.
Jim: As a sponsorship guy, I look at something like the Deer District and see an opportunity for a naming rights partner, not discounting that you have a great arena naming rights partner in Fiserv. Have you had conversations, internally or externally about that possibility?
Peter: As you know, there is always another solution to sell, so whether it’s entitlement of the plaza, whether it’s air rights, we have our sales hats on figuring out what makes sense around monetizing all of our physical assets.
We think there is a tremendous amount of value there, which is now quantified on a global scale, so it’s an unbelievable opportunity to rethink what naming rights means off the building. We are definitely in market to sell entitlements all over the District in a big way.
Jim: The Bucks have really become the “face” of Milwaukee to many people around the country and the world. I’m curious if that leads to increased interaction with local government and tourism leaders and perhaps a more official role in their efforts to promote the city and the region?
Peter: We’ve been given the edict from our owners to engage. We want to be community leaders and community innovators. We believe if you’re not growing, you’re shrinking, and part of growth is how do we have a call to action to the City of Milwaukee, whether it’s via tourism or helping recruit businesses to come here, etc. We are involved in all of these tentacles to promote the city, as you can imagine, because at the end of the day that helps us.
Rising tides float all boats. We’ve got this unbelievable, almost disproportionate influence being NBA champions, being such large developers of what is really a small city. It’s a big opportunity for us to effect change.
Jim: As part of that leadership role, the organization, and you personally, have been out front in taking a stand on social justice issues. While the movement was such a focus during the events of 2020, how do you keep the momentum going in less obviously turbulent times?
Peter: We have the same philosophy and culture, whether in our business or in basketball, or toward social justice: Constant improvement. We look at what we’ve done and how we can do it better. How can we create some consistency and sustainability in what we stand for?
At the end of the day, we stand for equality and fairness, and we have a significant platform that we’ve chosen to use. There is still a big mountain to climb and there will always be opportunities to speak up for equality and fairness.
Jim: You spent the early part of your career in sports, but then left for the corporate world before returning to the sports industry. What did you learn in leaving this corner of the world and what did you bring back to it from your experience outside?
Peter: The biggest lesson learned is management, accountability and work effort are the same no matter what your subject matter is. If you’re in private aviation or theme parks in my case, the true tenets of success were always the same.
One of the things I do professionally, and which I think everybody should do, is collect people. How do you build a consultancy around yourself throughout your life? And if you have a diverse background, it only deepens that network.
It’s an advantage to understand things outside the sports and entertainment business. It helps you think differently about the business. One of the great things about our industry is that it’s legacy driven. Once people are in, they never want to leave. But that hurts us in the diversity of thought and innovation sometimes.
I didn’t know it while I was doing it, but it helped my career growth and thinking to have done things in other industries and to understand their best practices. I advise people that there are very few things you are unable to leverage for growth, as long as you continue to learn.