CIO Insight: How did you get this job?
Schlough: I was recruited by McKinsey & Co. They'd put together a study of how to grow the Giants from a $65 million company to $160 million over five years, and it included a CIO. They suggested the Giants create the position, and it was exactly what I was looking for.
You aren't the only relatively young executive in the Giants' front office. Is that in the nature of sports today?
I don't think it's sports so much as entertainment. Actually, if you go around the league you'll find that people in my role at other clubs have been there awhile because turnover is low. Because it's baseball, people are really passionate about their jobs. And with our offices right here [in SBC Park], they can walk right out and see the benefits of their work.
Let's talk about that work. The Giants were the first to offer a secondary market for tickets online. Why not leave that to eBay Inc.?
It's funny. We caught some flack for Double Play when we first offered it in 2000. Because a few people asked exorbitant amounts for their tickets, some columnists in the local papers said we were enabling scalpers and rip-off artists. But most of the tickets sell at face value or one-and-a-half times. The advantage over buying on the street or on Craig's List is that we take responsibility for the transaction. Fans don't have to meet a stranger or carry cash or mail a personal check or give out a credit card number. The tickets can be reassigned as e-tickets and printed out at the stadium kiosks when you arrive. So it's safe and secure. You never have to deal directly with the seller.
Do the Giants take a cut?
We take a small transaction fee, but honestly we aren't making money on that. It's a service. When we first proposed it, other teams all but told us we were nuts. It's hard enough selling tickets once, they said; why put yourself in the position of selling them twice? But most of the tickets being resold are from our season-ticket holders, so we see it more that we're putting money back in the pockets of our best customers. I'm really proud of the decision to do this. There was a lot of risk involved in the concept of putting money in your customers' pockets as opposed to your own. But it works.
How many people have used the service?
Well over 400,000 tickets have been resold on Double Play since 2000. And in just under two seasons, more than 60,000 tickets have also been transferred by Ticket Relay, a similar service that allows ticket holders to transfer their unused tickets to family and friends online.
Those numbers don't seem terribly large.
This is still new, and again, the key thing is that it's a way to keep our best customers coming back. We've refunded more than $20 million to our best customers. Also, one of the top reasons season-ticket holders say they don't renew is "tickets-in-the-drawer" syndrome. At the end of the season, they have all these unused tickets. And they feel guilty about it, even if their company is paying. But if we can make it easy for them to let others use those tickets, they don't feel that guilt. We also have a service where you can donate them to charities or kids and get credit for them.
What's your renewal rate on season seats?
More than 90 percent.
Have you found that season-ticket holders use the service to underwrite their seats?
We have heard some things like that. I think someone figured out that if you buy the package for 81 games, and you sell 50, you can go to 30 games for free. But I don't think that's common. There's another point which gets missed here: San Francisco receives 15 million tourists each year, and if games are sold out, this makes it possible for visitors to get in to see a game. Any time a seat is filled, it's better for us, for concession sales, for atmosphere. It's always more fun when there's a full house.
This article was originally published on 10-01-2004
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