Viniks Priorities

As a move to achieving one of his ultimate goals, a world class organization, immediately after

purchasing the club, Vinik began reshaping the franchise both on the ice and internally with senior

management. The transformation of the franchise followed shortly thereafter, with a much-improved

team and a series of announcements regarding off-the-ice initiatives demonstrating Viniks

commitment to his aspirations. In January 2011, he detailed a vision, with core elements including a

team inspired by championship values; an organization committed to Tampa Bay via giving back

through leadership, philanthropy, and charitable contributions; and a state-of-the-art venue.

Fundamental to his success was his philosophy of hiring great people, including general manager

Steve Yzerman and professional sport executive Tod Leiweke.

Community Heroes Program

Among his top priorities were to engage the community with several philanthropic programs. The

Community Heroes Program served as the major pillar for community involvement. Specifically, Vinik

and his wife Penny pledged more than $10 million to be donated through the Lightning Foundation

over five years to the Lightning Community Heroes program. This program honors a local hero and a

designated charity with a $50,000 award announced at each of the teams 41 home games during the

season, constituting annual gifts of $2,050,000. A Lightning player introduces the community hero

during a stoppage of play during the first period of the game and the hero typically receives a standing

ovation from the fans. The Heroes Program was the first and remains the only program with this level

of philanthropy in professional sports. In addition, despite the labor lockout during the 201213 season,

Vinik continued to honor the Community Heroes recipients with $50,000 gifts even though the games

were not being played.

The organization also committed 4,000 hours of community service from Lightning staff each season

through its employee volunteer program, C.H.A.R.G.E. (Contributing Hours Across our Region

through our Generous Employees). Similar to those in other professional sports organizations, the

Lightning Foundation is a charitable organization established to help the franchise make a significant

impact on the local community. A review of several professional sports organizations foundations

provided some insights into how they are structured and operated. Collectively, these foundations

target youths with a specific focus on education and physical self-improvement. They also target

community outreach endeavors directed toward benefiting local residents with programs aimed at

reducing poverty, increasing educational opportunities, and creating awareness of the arts and other

cultural initiatives. Exhibit 1 provides examples of how several professional sports teams implement

the activities of their foundations.

When Vinik recommitted to the program in 2016 for another five years, he believed philanthropy

was helping the Lightning enhance its brand within the community. However, he was unsure how best

to measure this. Specifically, he wanted to know more about:

1) How can the Lightning use strategic philanthropy to foster and more importantly inspire

philanthropic behavior among its stakeholders?

2) What key factors influence how sports organizations allocate their resources earmarked for

community enhancement?

3) What is the relationship between a winning team and its ability to have positive impact in the

community?

4) Can a superior fan experience overcome weak(er) team performance?

Although the Lightning Foundation has several community initiatives (such as the Bolts family carnival,

the Bolt run consisting of a 5k, 5 Mile, and 1 Mile Family Fun Run, and the Bolts and Bulls golf classic

involving Lightning players, coaches, and other celebrities), the Heroes Program was Viniks primary focus.

The program featured multiple characteristics that differentiated it from both other Lightning programs

and philanthropic endeavors in other professional sports organizations. This includes recognizing a non-

profit organization and then allowing the organization to use the $50,000 award at its discretion to be a

difference-maker in the community. Appendix A highlights the nominator/hero eligibility requirements,

organizational criteria of the recipient, policies, and selection criteria.

Strategic Philanthropy

In April 2016, Vinik and his wife announced another five-year, $10 million pledge through the Vinik

Family Foundation to assure the continuation of the Lightning Community Heroes program for

another five seasons. In addition to celebrating Community Heroes who have primarily been selected

for their ongoing service to the community, they added a new category of awardee: Community Heroes

of Tomorrow. This was intended to inspire public-spirited young people from the Tampa Bay

community who have a history of past community service and volunteerism, but also have plans and

ambitions to drive social change and make a positive future impact in the Tampa Bay community.

Regarding his larger goals, Vinik has publicly stated that he wants to compete for the Stanley Cup,

operate a world class organization, break even financially, live locally, and be an integral part of the

local community. Prior to his purchasing the team in 2010, the organization accomplished break-even

only one timein their 2004 Stanley Cup winning season. Bolstered by an additional 13 home playoff

games the team made a reported $3.6 million dollar profit in 2004 (Thalji, 2015). However, the team did

break even again following their Stanley Cup appearance in the 201415 season. Vinik says Lightning

team executives are constantly working on building a strong brandwith a belief that a stronger brand

(including team performance, culture, and employees) ignites popularity and consequently more fans

are engaged with the brand and ultimately become invested in it.

When asked how the Lighting organization has achieved a world class culture, CEO Steve Griggs

noted: Growing our brand and improving the product that Lightning fans and Amalie Arena guests

are familiar with all starts with a strong culture within our organization. Culture is paramount in

developing any company and I think our high emphasis on it is why the Lightning have enjoyed so

much success off the ice over the past few years. Our full-time and part-time employees are the main

reason weve seen our brand transform into one of the best in pro sports, so its imperative that we

provide them with a culture that enables them to strive for success. There is no doubt that employees

need to be happy when they come to work each day and take pride in their work, and because of that, weve worked hard to create a workplace where the best and brightest can prosper and develop. Over

the past six years, we have undergone some incredible transformations, but improving our culture

with our full and part time staffs has directly improved our customer service with our guests. Our

world-class customer service is reflective of how well we treat our employees internally.

Off the IceAssembling the Lightning Management Group

In selecting people for his key leadership positions, Vinik followed his previous business

philosophy about hiring experienced people and providing them with sufficient resources, but without

constant meddling. To address the significant role of team general manager, responsible for the players

and coaches, Vinik hired hockey Hall of Famer Steve Yzerman. Prior to joining the Lightning

organization in 2010, Yzerman spent four seasons as vice president with the Detroit Red Wings where

he worked closely with general manager Ken Holland, senior vice president Jim Devellano, and then-

assistant general manager Jim Nill on evaluating talent at both the professional and amateur levels.

Yzerman had previously been a four-time Stanley Cup Champion, winning three as a player (1997,

1998, and 2002) and another as a member of Detroits management team (2008). He was inducted into

the Hockey Hall of Fame in 2009, his first year of eligibility. At the age of 21, Yzerman was named

captain of the Red Wings and continuously served for the next two decades, retiring as the longest-

serving captain of any team in North American major league sports history.

To complement Yzerman on the business side, immediately after buying the team Vinik recruited

and hired experienced sports industry executive Tod Leiweke to serve as CEO. To help recruit Leiweke,

Vinik sent a strong message signaling this was more than just a traditional hire but more of a

partnership, by offering him an equity stake in the Lightning organization. Leiweke came to Tampa

Bay from Seattle, where he had served the previous seven years as CEO of the National Football

Leagues Seattle Seahawks and President of Vulcan Sports, providing oversight of the National

Basketball Associations Portland Trail Blazers and Major League Soccers Seattle Sounders.

As part of their initial conversations, Vinik credits Leiwekes commitment to how a sports franchise

can play a significant role in its community as a big reason for bringing him to Tampa to run the

Lightning organization (Ozanian, 2015). In Seattle, he chaired the United Way campaign to fight

homelessness and created the Spirit of 12, an organization to help multiple non-profit organizations in

the Seattle community. In June 2015, Leiweke returned to the NFLs league office in the role of chief

operating officer. Upon Leiwekes departure Vinik subsequently promoted Steve Griggs to the

Lighting CEO position. Prior to being named as CEO, Griggs spent one year as team president and four

as chief operating officer.

Summer of 2016: Player Signings

In terms of players, the Lighting took several significant actions in the summer of 2016. They re-

signed captain Steven Stamkos to an eight-year $68 million contract placing him among the top five

highest paid centers in the league. In addition, the team also reached a contract agreement two days

later with its star defenseman Victor Hedman and a month later retained the services of forward Nikita

Kucherov. No players were lost to free agency and no new free agents were signed. Collectively, these

commitments were considered important to establish the Lightning as a key contender in the chase for

the Stanley Cup over the next 57 years.

The Stamkos re-signing was especially significant since several teams were bidding for his services

and media reports indicated other teams were offering substantially more money than the Lightning.

Ultimately, Stamkos decided to stay with the only NHL organization he has played for since he was an 18-year-old rookie in 2008, two years before current ownership. Stamkos acknowledged the team

culture has undergone a complete 180-degree renaissance under Viniks tenure at the Lightning. He

described why he elected to remain in Tampa and continue playing hockey for the Lightning:

When you cant necessarily sell your product on the ice, you really have to sell the fan

experience. In larger markets, you can sell out your games whether you go 820 or 082,

but Tampa isnt like that. So now we give fans a lot of access to players, like at Carnival

Day. Fans enjoy the huge scoreboard and the lightning (special effects) inside the arena

and concerts before and after the game. The staff is friendly. And now that weve

developed a core of players and expectations are high for us, we still genuinely want fans

to come and bring their families. You can feel it, whether its during games or coming to

the rink or when youre recognized throughout the community. . . . Tampa is gradually

becoming a hockey town. [Keating, 2016]

In a television commercial series made specifically for the 201617 hockey season by the teams broadcast partner Fox Sports Florida, a commercial featuring Stamkos contains the following quote from the team captain:

Being here for eight years, knowing the special team and community we have here in

Tampa, seeing the passion that these fans have . . . thats a pretty amazing thing as a player.

To come to the rink every night and feel that energy I tell everyone it is a hockey town.

Team Financial Performance On the financial side, the Lightning had shown considerable growth in major categories and had come close to breaking even financially. The club had also earned national recognition as a successful franchise in the sports realm, as described below. One area of substantial improvement was season tickets. Season ticket sales in Viniks first year (201011) were only 4,000. This was attributed to several previous issues, including ownership turnover, poor culture, and lack of community engagement. The team had changed ownership five times in its first 18 seasons. Current Lightning CEO Steve Griggs acknowledged the Lightning were a different organization in 2009 prior to new ownership. When rival teams including the Detroit Red Wings or Philadelphia Flyers played in the Lightning building there was a sea of red or orange [visiting team colors] not the Lightnings blue. Furthermore, Griggs stated the brand was irrelevant. (Smith, 2016)

Fast forward six years, and the team has 14,600 season ticket holders, a consecutive home sell-out streak of a 107 games through the 201617 season, a world-class culture according to Griggs, and the organization is reported to be breaking even financially. After being named the top professional sports franchise in North America in 2016 by ESPN the Magazine, CEO Steve Griggs announced how this recognition validates Viniks vision to be the Green Bay Packers of the NHL. Griggs also credits the organizations 185 full-time employees as ambassadors to help spread enthusiasm for the Lightning brand and build a sense of community. In October 2016, Lightning management acknowledged that the team was coming very close to breaking even financially for the first time under Viniks ownership. Furthermore, the organization provided information on how several key financial performance indicators have changed since the time of Viniks purchase of the franchise. Specifically, according to the Tampa Bay Business Journal: (Kritzer, 2016) Regarding sponsorship, while sponsorship revenue is up significantly, there are only about half as

many sponsors now as in 2010. Significantly reducing the number of sponsors was considered by team

management to provide a cleaner, more sophisticated game presentation and subsequently made the

remaining sponsorships much more valuable. (Kritzer, 2016)

Regarding attendance, Exhibit 2 provides information on Lightning attendance since 199697. This

includes arena capacity, total attendance, percentage of seats sold, and the teams finishing position each year.

Regarding ticket pricing, the table below shows the average regular season ticket price, excluding luxury boxes and premium seats, over the last eight seasons covering Viniks ownership. Regarding season ticket sales, the table below shows total full season equivalency (FSE) ticket sales for the same eight-year period. From 201415 to 201617, total season ticket sales have increased by about 25%.

Reflections

Jeff Vinik announced his ambitious plan upon arriving in Tampa in 2010. Understandably, his

vision was both praised and also met with skepticism. Now, seven years later, as the Lighting continue to thrive both on the ice and off, many of those initial skeptics have become believers. Not surprisingly, Vinik and the entire Lighting organization are quick to acknowledge their success has been a true community effort exemplifying how a successful sports team can leverage strategic philanthropy and brand building to galvanize a community. Vinik characterized outstanding customer service, good hockey, great value, an outstanding game presentation, and perhaps more importantly, great people as contributing reasons to transforming the Lightning brand into a world class organization. Following the teams disappointing 2016-17 season where the Lightning missed the playoffs, Vinik and the organization placed a full-page ad in the local newspapers thanking the fan base for being the Thunder and reassured them the organization is vigorously committed to improving on and off the ice.

Question:

1) Assessment of the Lightning's Community Heroes Program - what is their goal? is it beyond just giving away money? how can the protagonist (Vinik) measure the program's success?

2) What is the Impact of Philanthropy

3) What about the Team Strategy? How doesn't one create a strong culture in an organization? Do you think it is easier or more difficult to do this with a sports team compared to a traditional business?

4) Should the owner be concerned about break even or better financially, compete for league championship or a combination?

5) Do you have any recommendations for improving the Lightning's overall program to achieve Vinik's goals?