January 23, 2012

Cover Story

The Utah Jazz

When Larry H. Miller bought the Utah Jazz in 1985, his intention was to give ...Read More

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The Utah Jazz

Regardless of the scoreboard, the NBA team is a win for Utah

Spencer Sutherland

January 23, 2012

When Larry H. Miller bought the Utah Jazz in 1985, his intention was to give something back to the community he loved. “If you go down to the root of [why he bought the Utah Jazz], it has a lot to do with our family’s commitment to the state of Utah,” says Greg Miller, Larry H. Miller’s son who serves as CEO of the Larry H. Miller Group of Companies. “When it comes to the Jazz, I don’t think there’s any question that my dad felt strongly that the quality of life is enhanced for Utah citizens, himself included, because the Utah Jazz is part of the landscape … We really view [the Utah Jazz] as a community asset.” From the Stockton and Malone era to today’s Deron Williams-led team, the Utah Jazz has played a leading role in enhancing the state’s social and business community. A Slam Dunk for Utah The Utah Jazz does more for the Beehive State than keep basketball enthusiasts happy. The Utah Jazz has a winning economic and community-building impact on the state. In fact, it’s estimated that each at-home Jazz game brings in approximately $1 million to the state. That’s because when people attend a game, they often make it a night out on the town, spending money at local restaurants, parking or taking public transportation, and buying other Jazz-related merchandise. Jeff Robbins, president and CEO of the Utah Sports Commission, says the Utah Jazz are a huge economic driver for the state. In fact, Utah’s sports industry as a whole has an estimated $6 billion impact on the state each year—and the Jazz is a huge piece of that pie. “Sometimes people don’t view the industry in a money-making way, but at the end of the day it has a significant impact on the local economy.” Hersh Ipaktchian, president and CEO of Iggy’s Sports Grill, says that a Jazz game means a busy night at the restaurant. “When the Jazz play, we see about 40 percent more people,” Ipaktchian says. “People make an evening out of the games. If they don’t have tickets, we’re the next best place to be. They can come here and get loud cheering with other fans. If they have tickets, they come here first to eat and get ready for the game. We benefit every night that the Jazz play, even when they’re playing outside of Utah.” Beyond the in-state dollars that get spent before, during and after a Utah Jazz game, the franchise continues to boost Utah through televised events that promote the state’s image across the nation and throughout the world. “Media value cannot be underestimated,” says Robbins. “When sporting events are televised throughout the nation, the state is promoted which helps drive tourism and other sporting events to Utah. It also helps shape our image nationally and internationally. Anytime you’re associated with a major sporting event that has credibility, there’s also some rub off on credibility that you get as a community as well.” Robbins adds that third party commentators and broadcasters during the games also help promote the state. “If the Sports Commission runs an ad, everyone knows it’s an ad. But if a commentator talks about the state of Utah being a really great place, it’s effective to help build the state’s image nationally and internationally,” Robbins says. “The national games that are broadcasted from the EnergySolutions Arena—you not only get some of the economic impact from the game, but you also get an impact from the broadcast that shows a lot of beauty shots and includes mentions about Salt Lake City and the state of Utah. There’s significant promotional and media value that these major sporting activities have for the state.” Keeping the Fans Cheering “We can’t control whether the team is going to win or lose,” Rigby says. “But we can control the other experiences a fan has.” Whether it’s training service staff to be respectful and accommodating or working out new stunts for the Jazz Bear, Rigby says it’s the little things that truly add to a fan’s experience. “We always have great halftime entertainment and fun things during the timeouts and quarter breaks,” he says. “We’re always looking at new dance routines and new Bear stunts. We’re adding fun activities with our slam dunk team or our drum line so that people say, ‘You know what? That was a fun night.’” The Jazz also looks to other teams for ways to improve the fan experience. Team leaders regularly attend NBA meetings to discuss best practices and innovative ideas. “There are things that you can learn from just about every team,” Rigby says. In particular, he’s impressed by the Phoenix Suns, who up until this past November had hosted 153 straight sellout games. When discussion turns to enthusiastic fans, however, the league looks to Salt Lake City. “You hear other teams say, ‘They have the loudest arena and the best fans in the NBA.’ That’s really true,” Rigby boasts. “That’s a tribute to how we designed our building. We have the best sight lines in the NBA and we get our fans closer to the floor and part of the action. Our game operations people are the best in the league at putting on a top-notch entertainment experience and The Bear does a wonderful job of getting people into the game and up off their feet and cheering. That all adds to the experience.” Despite the ups and downs, consumers continue to find value in basketball itself. “There are very few things that have the fan value and the interest from the consumer, like sports. It is something that people want to watch now and they’ll plan their life around it.” Rigby says. Integral to the fan’s experience is the team—it’s no surprise that when a team stops winning, viewers stop tuning in. Like any company, success for the Jazz is based on employees—and in this case, team members—who are happy with where they are and the work they do. “The players are human beings. A lot of times I think people forget about that,” Rigby says. “The Deron Williams and Paul Millsaps and the Carlos Boozers have feelings and emotions just like all my other employees. “It’s the role of Jerry Sloan as the coach to really deal with those players on an individual basis and on a team basis, to understand what they’re going through and what they’re dealing with and to help them work through it. There’s no one better than Jerry Sloan at managing and coaching a team and working with his players. I think he’s superb.” Along with the regular day-to-day stress of any job, NBA players also face the pressures of constant media and fan scrutiny and deal with the insecurities that come from having a dollar amount attached to their name. “I think a player, just like any of the rest of us, wants to feel that they’re being treated fairly for what they’re being paid. It certainly adds to a real stress value for them. But the positive thing that Jerry does with our players is that he separates the business from the game. He handles it as a coach striving to have a team win and lets [General Manager] Kevin O’Connor handle the contractual agreements.” Giving Back to the Community Along with those hefty paychecks for on-court performance comes plenty of off-court responsibility. While all major sports leagues are plagued by players running afoul of the law or receiving unfavorable press for extracurricular activities, Jazz players continue to garner positive recognition. Rigby says that is no accident. “We’ve been doing this for a lot of years and we’ve established a standard for what we expect and look for in our players. We work hard to get the players who are going to be the right kind of role models and play in our system and do the right things on and off the court. I think that’s a complement to the system we’ve established.” Every Jazz player is involved in community service activities and many have also established their own foundations and charities. Andre Kirelenko donates services to Utah and Russian hospitals through the Kirilenko’s Kids Foundation and Carlos Boozer helps families affected by sickle cell disease with his Boozer’s Buddies organization. Rigby says he’s also impressed with Deron Williams’ efforts. “Deron is doing a remarkable job with his Point of Hope Foundation. He’s helped autistic children, he’s helped wounded soldiers and their families this year, and he’s working with a juvenile diabetes organization. He’s doing all the right things right now. “These players are seeing the value of giving back to the community,” Rigby says. “We really push them to give back to basketball, what basketball has given to them by helping the community and the fans who pay their salaries.” That community interaction has always meant more to the Miller family and their organization than just the team’s wins and losses or profit sheet. “The Utah Jazz is not a revenue generator for the Miller organization,” Rigby says. “It has been a key effort for us to just make this organization break even. There have been many years where we have been far from doing that. For the Miller family, [the Jazz] is truly a gift to the community.” A Score for LHM? Despite the economic and community-building impact the Utah Jazz has on the state, the Larry H. Miller Group of Companies doesn’t make a pretty penny by owning the franchise. The Jazz—and most of the NBA—struggles each year just to make it out of the red. In fact, prior to the 2009-10 season, NBA Commissioner David Stern announced that less than half of the league’s team turned a profit in 2008-09. The average team value dropped 3 percent, with the Jazz dropping 4 percent to $343 million. “The Jazz makes money through sponsors, season ticket holders and broadcasting revenue,” explains Randy Rigby, president of Larry H. Miller Sports & Entertainment, who is now in his 24th season with the team. The Jazz and the rest of the league are seeing decreased revenue in two of those three areas, thanks to a recession that’s causing fans to stay at home and, more importantly, corporate sponsors to cut their advertising budgets. “We know and appreciate the price our fans take in investing and coming to Jazz games,” Rigby says. “So we’ve really tried to do as much as possible to give them the best value that we can with their Jazz experience.” From finding ways to reduce their operating and personnel costs, to creating more attractive packages for sponsors, the Jazz are working to keep revenue up during down times. But according to Greg Miller, his father, Larry H. Miller, never intended the Utah Jazz franchise to bring in loads of money. “It would be nice if the Utah Jazz was a cash cow, but I don’t think anybody buys a sports franchise as an investment—in terms of wanting to have a cash-on-cash investment … It would be a very different state in the absence of the Utah Jazz … It’s our family’s privilege to be stewards over the Utah Jazz.”
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