Sports Business: Marketing
The Doctor Is for Sale
A new profit center for teams
If you believe the artist's sketches, Pacific Bell Park will be the Versailles of major league ballyards. Set to open in April, 2000, the future home of the San Francisco Giants will pamper fans with cushy seats, dreamy bayside vistas, and one very unusual amenity: a full-service medical clinic. Giants fans will be able to leave their seats not only for a hot dog or brew but also for an X-ray or a throat culture.
Catholic Healthcare West is paying the Giants a cool $15 million over 12 years for the stadium space and other marketing goodies. The investment is already looking smart. CHW reports that business at its sports medicine clinics is up 14% over last year. "This relationship has enabled us to make a leap that would have taken us close to 10 years," says Wade Rose, a CHW vice-president.
Not that long ago, agreements like the Giants-CHW alliance were unheard of in pro sports. Teams cut deals with breweries and deli-meat companies, not the team doctor. Now health-care providers are paying sports franchises enormous sums to establish relationships they can promote. Teams that have sold the title of "official health-care provider" include the Orlando Magic of the National Basketball Assn.; the Jacksonville Jaguars, Tennessee Titans, and Philadelphia Eagles of the National Football League; and, of course, baseball's Giants. "These companies are saying in effect: `When your favorite athletes are sick or hurt, we take care of them. Shouldn't we be taking care of you?"' says Sean Brenner, editor of Team Marketing Report, a sports marketing newsletter.
Nowadays, almost every major sports franchise has at least one health-care sponsor--and many major providers are in the game. Blue Cross Blue Shield, Columbia/HCA Healthcare, and CIGNA all have had sponsorship ties to sports teams. Healthsouth Corp., a nationwide provider with a growing sports medicine practice, is affiliated with 13 franchises in all four major sports leagues, according to Team Marketing.
For the franchises, health-care agreements are simply smart business. The right deal can turn what had been a team expense--medical care for players--into a profit center. In the case of the Giants, the revenue is badly needed: The team is privately financing its new $306 million ballpark. "We're using a lot of creative techniques to get the park built," says Larry Baer, Giants chief operating officer.
While these deals appear to be win-win, they are not without risks. Nashville's Baptist Hospital Inc. became a freespending backer of the Titans when the franchise moved to Tennessee from Houston in 1997. But since the nonprofit hospital staggered to a $73 million loss in 1998, its multimillion-dollar deal to be the Titans' exclusive health-care provider has come under scrutiny. Baptist is seeking to renegotiate the sponsorship agreements.
Beyond exposure and profit, some in the medical community say the marriage of sports teams and health-care groups can be troubling. "In the end, it's not an appropriate use of our funds as a nonprofit, research-oriented hospital," says Toby Gordon, a vice-president at Johns Hopkins Hospital in Baltimore.SOUR GRAPES? As the price of sponsorship grows, questions also arise about the criteria teams use to select their physicians. Are they seeking out the finest medical minds or the highest bidders? "If I'm a baseball player and I know the team doctor is there primarily because he put up money, I'd worry some of his decisions might not be in my best interests," says Dr. William E. Straw, the Giants' team doctor for 13 years before his group, Palo Alto Medical Foundation, was dumped last fall in favor CHW. Straw says Palo Alto Medical refused the Giants' proposal to remain with the team in part because it was uneasy about being the team's doctor and one of its major sponsors at the same time. Says Rose of CHW: The Giants "would not engage with an organization to provide health care unless they were absolutely sure they were going to get the best."
Baer of the Giants acknowledges the potential for abuse. But he adds that responsible franchises won't allow rich deals to influence health-care decisions. A team that does that, he says, "is putting its core asset at risk--players."By Mark Hyman