Business as Usual Features David Morehouse of the Pittsburgh Penguins

Transcription:

Good afternoon. Welcome to business as usual, this is Audrey Russo, I'm thrilled to be here on the hump day of whatever week it is, since the onset of COVID. I've actually lost track must be like the 16th week. Anyway, I'm thrilled to be here. And I'm joined by Jonathan kersting. He is vice president of all things media at the tech Council, and also hosts a radio show called tech by radio. So a few things just about today's call. It would not be possible without the support that we get from our from our, you know, partners, and our partners are Huntington bank sheetz and Deloitte. And you're probably wondering sheetz, the tech Council, well, there's lots of opportunities there. They actually have built an innovation center in Pittsburgh and we're working on the most amazing things that we will be very surprised about over the next couple of years. And they're very passionate about bringing innovation in to their industry, and Deloitte. Deloitte is a big force in information technology world. And there, they have a huge presence, their presence, they represent over 85% of all the US fortune 500 companies in terms of the work they do. And from an innovation perspective, they've been at the forefront of many, many revolutions in business for 175 years. So, I want to thank everyone for being a sponsor for us today and for believing in the work that we're doing. We started this, you know, it seemed like a year ago, but we're still strong and moving forward. So I'm very, very thrilled to have our guests today. So I've muted all of you. Well, actually, I didn't do it. But one of the smart people on my team did it. And they muted your microphones just to make sure that we don't get any of the noise in the background. And, and with that said, we want this to be interactive. So we want you to be able to have an opportunity to ask our guests, some questions and have some chat. So really think for everyone to be here I am. But this is not an opportunity to sell. We're not here to sell. We're only here to have a conversation with David Morehouse. So David, I am thrilled to have you here. We're gonna set this up. But I just want everyone to know if you don't know anything about David, there's just like a couple of points that I want to rattle off and there's so much to his career. First of all, he comes from beach view. And he is Pittsburgh guy. He actually started out by working in I believe he was a boilermaker is that right David? maker and then got injured and went on to CCAC and sort of reinvented himself a few times had a chance to work in a couple of prominent democratic campaigns and with people who were pretty prominent in the in, you know, who have been our President Clinton as well as john kerry. He has, you know, went back to school got his Master's in Public Policy near and dear to my heart from The Kennedy School he, you know, found his way into, you know, the hearts of the penguins. And I think Mario Lemieux said we're not going to let this guy go. And here we are. I've known David for 12 years. I can't believe it, David. They have been incredible partners with the tech Council. Honestly, this is no BS. Right from the onset of the time that I've joined the tech Council, we have done a lot of really great things, a lot of experiments. And there's nothing better than having a partner that you can do experiments with, and that you know that you're in this journey together. And we've taken some big chances together and I just want to thank you for your leadership, not just for the pens, but just for this community. You've been awesome. So I know I abbreviated you know your history there. But I just want to welcome you and I think it was really important for everyone to know that your roots in Pittsburgh as well as your national roots, and that your journey into the penguins is a very is a very unusual one and fascinating one.
Thank you. I hope it's not for you. No, thank you.
And so here we are. So you're here and you know, you've been busy. It's been COVID, the hockey has changed, life has changed. But not no surprise to me the penguins have been resilient. And let's just sort of talk about, you know, let's just jump in and talk about the, you know, the collective bargaining agreement. Let's talk about what you've been busy with over the last. Oh, I don't know. How long has it been David 10. It's
been since March 12. Okay, specifically, I have adjusted my screen so you can see the Stanley Cups. Yeah, there you
go. Yeah, there you guys
definitely want to see
anytime I bring them out.
So I want to make sure I remind myself why we're here because we're in such a crazy time. So yeah, March 12. We're scheduled to play the Columbus blue jackets and We we learned of, you know, COVID a few weeks prior to that, and that's when our season was cancelled. postponed. And from that point on, we've been doing what everyone else has been doing. We've been trying to
stop the bleeding.
Trying to maintain some semblance of normalcy in a very abnormal environment.
Work From Home, learn how to use zoom,
learn how to put props behind you when you need them.
And, and we've been, you know, working towards making sure we're strong coming back. So we we had to make some furloughs. The people that we kept, you know, we challenged them to, you know, come out of this shutdown periods stronger than we were went into it. And I think they've, they've risen to the challenge. We've really good staff here. A lot of people that make the penguins look good. And we started our training camp on Monday, which went extremely well. We had six weeks prior to that, we were given the okay. When we went the yellow to an NHL protocols, we were allowed to have six players at a time on the ice and working out so we created color coded odds. So these six players would come into a separate door in our UPMC limited practice facility, they would go to a separate locker room. They would work out just amongst themselves with one trainer. It worked out on the ice with a trainer and they'd never cross paths. So we isolated pods of six. So in case someone does To become positive, we just have to isolate six at a time. So we think that's worked out very well. And, you know, we're looking forward to our first game, which is a think I have it here it's against Philly. Yeah, the 28th for clock and our first playoff games, August 1 against Montreal at 8pm. So we're, we're, the league decided to finish the playoffs, expanded a bit from 16 teams of 2024 have a play in round which is which are Montreal. Round Montreal didn't make the playoffs in the beginning as a 2016 seat tournament that they did when we expanded at 24 and, and then try to get the playoffs and without people Place them in two locations where they're in a bubble. And there, they have no interaction with other people. It's so just so happens there in Canada, where they actually have to use technology to track them. And they're not allowed in any. They're not in any of the restaurants outside of the bubble.
And, and there is a technology.
One of our colleagues, CEO of one of the companies that we work with, said that in China, there's an app that your homescreen is green or red. And it's based on whether you've, you've made contact with anyone that is, is tested positive, and there's restaurants that you would not be able to come in unless you had a green screen. Now, in the United States, it's a little you know, people are going to be a little bit more skeptical of that kind of technology, but we're using it in Canada. Two Cities they selected were Toronto, and Edmonton. So we're playing our first round, and our exhibition game in Toronto. Our first and second round games would be in Toronto. And then if we made a conference finals would go to Edmonton for Conference Finals, and Stanley Cup Finals. Wow.
So that's exciting, a lot packed in a short period of time. But yeah, my hat's off to you to making to making it work. So people are saying that this whole CBA Can we go into the talk about the CBA? Yeah, bargaining in it and talk about like, this negotiation was like no other. So clearly, there were no media reports of negotiating issues at all through the process, not not that I could see how did the process go and why was it so smooth?
I think, you know, immediately, everyone recognize, you know, team management. ownership, league management players and and the Players Association, the PA that we were, we were trading in unprecedented waters. And it's not the time to do a typical bargain session. So we knew that we needed as we come out of this pandemic, and everything else that's come along since we needed to show stability, and we needed to come out of this financially stable. Both the teams themselves and the players. And the way our current CBA is structured, our players next season would have had had, you know, give over half of their pay back to the owners. I mean, they're, they get 50% of hockey related revenue, so that that means they also get 50% of the risk. So So the union recognize that the players that and Commissioner Batman and Bill Daley, who did the negotiating, from the beginning, just tried to figure out, let's not just talk about a return to play, let's see if we can extend the CBA create some stability would say that for six years, create economic certainty, knowing the players knowing how much they had have to put into the escrow for the revenue share, because that was always unknown. And it you know, it was based on like, it took two years to get the final numbers on what they owed. And, and so so we streamlined a lot. We fixed a lot of things that were broken, and the original CBA and I think what motivated them was just, this is not the time to have a hostile negotiation is the time to work together to find out how we can do what I do. said our staff people are doing, take a bad situation and try to make yourself better.
Yeah, remarkable. So what do you think? Do you think the team is prepared to win?
The team from Erica when I like I like this team, I never I never predict things, right. I'm superstitious, too. But But I really like this team. I liked it all year. I think we have the right combination of players we've had in during a hockey season, when you look at the years we've won, we've always had some kind of adversity that we've had to overcome. During the season. We had that earlier in the season, with a lot of injuries, had a lot of young players get experienced they wouldn't have otherwise had. And then, you know, I had the opportunity to go back and watch all of our Stanley Cup playoff games, which I didn't. I've never watched before I was there. So I I never got to watch the coverage. I didn't realize that your muscle memory you still get sick to your stomach at the end of game seven in 2009 when you see the puck laying there and blurry on the wrong side of the crease it even even though my my conscious brain knows what's gonna happen. I was back in my, my subconscious healing and watching those games, you realize every one of the cups we want going back to the 90s if not for one or two things we lose. I mean, it's not just how well you play me. You know it's things going your way, staying healthy, getting the right play at the right time having good goaltending. So, there's a lot of things that go into it. It's not just the best team, but I think this group of players will benefit From the fact that we've had this time off, that they've had six weeks to train at a much higher pace in smaller groups, because our veterans, you know, if you look at an 82 game schedule for occupier imagine football playing five days a week. That's the kind of contact they're having on a day to day basis. And so, so, we, and we, and we track all that and we use technology to track it. And we think our players are well rested. They're healthy, and I can't wait to see the stars without having the weight of the regular season attached to them as we go into the playoffs.
Well, you know, we think that
it's so critical for you guys to restart for the region. Just because of everything. Going on COVID everything that's happened in Black Lives Matter, everything that has happened just in our in around the United States, but we rally around our sports. And we look at you and your team as part of the solution to our mood, our sentiment, and you've got to be you've got to feel some of that pressure, David. And okay.
Yeah, I mean, I grew up here and and i also, we did research when we were looking at Las Vegas and Kansas City before we signed the arena deal to stay here. And so, when you look at the demographics of Pittsburgh, it's not a three professional sport team city, and 300,000 people in the city property, right. 1.5 million 1.2 1.5 and a county 2.5. Whatever numbers are in a region. We don't have the numbers that support professional sports teams. But having grown up here, I had A unique understanding that went beyond simple demographics then the affinity for sports here is deeper. And, and the only only other city you can compare to would be Boston. And it's funny I was walking in, took my son, who was born in Boston and he lived there 18 months but he's a Red Sox fan. He's actually a tom brady fan. He's not allowed to be a Bruins fan, but but we were. I took him to the Sox series game last year, last year, and we're standing in a line and someone was having a conversation. They said, you know, the only city close to Boston is Pittsburgh as far as championship teams and the type of players they've had come through. And so you're right. We are a big part of the community. And we're a bigger part because it's such a small tight knit community. So we we understand, we stand on the platform of sports and we have a responsible ability, because of that platform, to do things for the community and to activate in times of crisis. We did a lot of that during the Tree of Life tragedy. We've done it at different times. And we continue to do it and through our foundation, you know, we give away between five and $7 million a year to local charities and, and local charitable causes in the region. So it's in our mission statement, our mission statement is to win the Stanley Cup, give back to the community and grow the game of hockey. I mean, it's crazy. But but but that's it and and and after every season, we go through it and and, you know, two seasons in a row is able to check every box. So and it's as opposed to over to Roger, you've been in the office. We've been we've been hanging outside the conference. It's on everyone's desk, I go by someone's desk and they don't have it on their desk. They're told about it.
And, and, and we live by it. And so
we take that responsibility seriously. And we try to do what we can to use the platform as best we can to make a difference.
Well, you even that, not just the Lemieux Foundation, but also the penguins Foundation has done a lot for to, you know, for many years for working on the digital divide, and getting technology into the tools of young children getting into their hands. So it's this isn't something new and recent. So my hat's off to you to continue to do that work. So how have the How have you been keeping your fans engaged, though, like
through social media mostly. So
we've really good social media team.
We lead the league by far. And every social media category. Yes. And, and that's not per capita that's, we have, we have higher numbers than New York, we've higher numbers in Toronto. So So, you know, we actually had a point, beginning of middle of this season where we had more Twitter followers in Canada than every city in Canada except for Montreal and Toronto,
than their home pains. So so
we have a very robust group, led by Andy Perlman, who was just promoted to Vice President. And in the month of March this year, when, you know, half the month we didn't play. We have more social media interaction. So we did the prior Mark March when we were playing. So we've, you know, we're pretty creative. We try to have different types of content go out in different on different platforms. We were we've had our coaches and players volunteer to call or season ticket holders. And and they've they've made phone calls or season ticket holders in the beginning just asking how they were winning call to say do you want to renew? They just want to make sure you okay? Because anything you need a lot of our season ticket holders talk about their ticket reps as if they're part of family, I'll get stopped on a street and they'll say, how's George doing? I'll say, George, George Who? And they'll say George, my ticket guy. And, you know, we've 15,000 season ticket seats, 7000 accounts. I mean, they they feel like they know them on a personal basis. So I think we just have a really good group of people, both on a social media side And on the customer service ticketing side that maintain that relationship. And we've had, you know, for for a league that doesn't have a season yet for next season and doesn't have a schedule. Our numbers are good with season ticket holders. Our numbers are good with our sponsors. You know, we're a relationship driven business. It's how we approach all of our, our business entities and our interactions. And we've been we've maintained those relationships, and I think people have been supportive of us during these times.
That's great. That says a lot, because I was going to ask you a little bit about how the fans have responded to this. So it seems like it's just been consistently positive and you're feeling optimistic for the future.
Yeah, I mean, I'm feeling optimistic. We, we were prepared because we were in the middle of we're just coming out of a lot of research on Millennials and Z's, and, and, and their behavior and consuming sports, and anyone that's done research on millennials and Z's knows that, you know, the idea of them buying a ticket now for March is is not something that is front of mind. So we were already looking at strategies, you know, were built to sell to baby boomers and Generation X. And so we had Russell Reynolds came in and did an analysis, or restructuring, we've done a lot of research. So we were in the middle of that when the pandemic hit. So now we have when we come back, we're going to be shifting resources. And we're going to be selling tickets in a different way we're going to be, you mentioned sheets and their technology we've already taught them. I know they're building that center. We're changing the way concessions are
operate
with a plan that we're for next year to have less belly up to the concession stand experiences and more airport like walk through grab and go. We're developing an app that that with Carnegie Mellon right now that that if you if you're part of a penguins club, we haven't named it yet you pay a nominal fee. You'll get news before the news media on certain things you'll get content that other people don't get. But most importantly, on a Saturday, you're not a season ticket over here, part of this club. You pick up your phone you see there's tickets available, you'll be able to view the seeds with with the seat view is you have an account with us. We have all your information. You see the price. You press buy, you buy your two tickets. screen pops up public transportation, Uber Lyft or drive, you press drive. It tells you the optimum time to leave based on where you're living which parking lot to park in. So you bet that Bessie ingress and egress and that's all paid for all you do when you go into a parking use, you swipe your screen, you walk across the street to the arena. you've, you've hit either in your profile or one you bought your tickets that you want a hot dog and a coke before you sit down. So as soon as you come into the building, our beacons pick you up or when we're scanning you or scanners pick out the order goes into section one on ones concession stand. And there's a pickup place where you grab your hot dog and coke and you sit down you have not had to touch one single person. So so that's the kind of technology that we thought we needed to develop based on the research from Gen Xers and millennials. I mean, Gen Z's and millennials. So we're working on that now as we speak. So, that's gonna play right into, you know, post COVID. And there's some other structural design things, you know, we're going to need touch the sinks touch with stores that, you know, working with companies like sheets, it's one of our partners. Can we develop a new way? Our concessions are kind of like mini sheets stores where people walk in and the warm foods to the left. And in that room temperature and colds to the right, they grab and we've loaded tickets where you know, it's free and ad section if you ever taken in that section or They, they buy, credit to buy things. Things like that cashless probably go cashless at some point.
Nice. Well, you know, when I first met you and join the tech Council and some of the people who are on our team back then including Jonathan, who's on this call, you allowed us to partner with you so that you were essentially a petri dish. We were doing experiments left and right that many people didn't know. And there were many companies that were formed out of those relationships. There were many companies who were formed no longer exists. There were some who were formed and acquired, and many who had pivoted, but you allowed us to experiment and let the arena and the penguins and even your foundation be this source of experimentation. So it's no surprise for those of you that don't know the inner workings of the penguins and just know them from the front end on the hockey, it's no surprise the kind of examples that you're talking about. Right now. We hope that once we get on Little bit more stable, whether it's post COVID, virtual or not that we continue to work with you on making sure that those connections and opportunities are there. You've been a great platform for us.
Well, because of the history, I think it gives us a head start, if you will. We're the perfect beta test for a lot of things. And we beta tested cameras on helmets,
and now
the cameras yen's cam was developing scan that he did in scams a company that was the ones that's when someone else was a CEO and I was trying to get them to get some of the IP.
He didn't want it and they stayed every day. Yeah, but
we're also we've developed just recently
with with Castro,
Jeremy McCleary, the former CEO, was at a hockey game and sweet 16 Six and we walked out and you saw the boards, the back of the boards. And I said, Terry, you're a material scientist. You can't tell me the material science has an advanced past. Fiberglass on steel. You know, we were we were investing a lot of money in these players. There's a lot of kids that play hockey. And and you know, they're they're running into these brick walls. And he said, yeah, we should do something. So we partnered and we got together with Pitt and Carnegie Mellon. And Castro actually was just Carnegie Mellon investor on this project.
And
we finalize the deal here that we are going to develop, we're going to do make a font at Carnegie Mellon, and have students develop ideas for new boards that are more absorbent. And so the day that we cut the deal, Richardson who works for us and runs UPMC, Lemieux and cranberry called me from there and said your son Jackson, he was he was 14 at the time. He caught an edge practice, went headfirst into boards knocked himself out. He was fine. I mean, he had a concussion but but it was the day we did the deal. I, I felt like I cursed them, but but it was it was a it was a good justification for it. And we developed that summer, cholesterol hired to the CMU students to work with their engineers, and they developed a new hockey board with Athletica, a company in Canada that manufactures them. And we have them installed in our cranberry facility and half the rank in one of our rinks and we're gonna have the full rank installed. We did a simulation with Jake cancels injury from earlier in the season. Those of you that remember, he went headfirst into the boards full speed, turned his head at the last minute and and broke his shoulder and he Did in such a way that a sports or sports, orthopedics couldn't operate on I made to get a trauma specialist. So then we took that video, they were able to slow it down pixel by pixel. And we were able to measure the force he had with each part of his body. And then we superimpose that on current boards where he hit he had a cross beam. So he hit what literally was a steel beam. And then we showed the new boards, how the how it would have absorbed the impact, and it was a 25% reduction and impact. So So those that when you talk about us looking at those things, those are the kinds of things we're looking at. We're we're looking at how to redesign hockey boards, we're looking at equipment, how to redesign equipment. We're looking at how we broadcast games, how can we change the broadcast experience? You know, we're pushing the league on on technology also. But, but we're we're, I mean, I think that's partly because of our relation. I remember we had all the tech companies in the states a few times. Yeah, we should do that again
today that again, we didn't showcase. We had a private group, we actually met with some of your season ticket holders. We've done a lot of different things in terms of mashing it up. So I think that there's just there's a couple of things because we're running past our time, but there's some good conversation. First of all, I just want to give a shout out that Jim Rutherford was elected to the Hockey Hall of Fame this season. So he is your general manager. That's that's a that's a big deal. Congratulations to him. And and to you. So his leadership has to be you know, insurmountable.
Always all a fan or someone asked me, you know, is that the best decision you ever made? I said, As a professional, probably, you said, Well, how did you make the decision? I said, it's kind of like asking the scouts, how they decided Sidney Crosby is going to be the first pick. I mean, he was a Hall of Famer before he came here. I mean, he, he was an impressive individual who took that Carolina team to to, to Stanley Cup Finals, they won one. They lost us in a conference final with with limited resources. He's seen everything. He's been extremely helpful. To me. It's been a good friend. And he's a big reason we've had the success we've had since we hired him, which is fabulous.
So we're going to wrap up with one last question. What's your advice to the graduates of 2020? You've had, you've had a very, you know, interesting career. Now, you know, would you have thought 30 years ago that this is what you'd be doing right now? I would bet Probably not. So what's your advice?
Well, every job I had
along my path I thought was as good as it got. And then as I was there a little while, I said I could do that I could do my boss's job and I take my boss's job. So, but but but but every single job, I mean, I, my life's path was going to be a boilermaker. So everything from that point on was gravy, right? So, but the one thing, I used to talk to a leadership class at Pitt every year, every semester actually, I think the most important thing is, I would ask the class, what do you want to do when you graduate?
And inevitably, I'd get
I want to do something meaningful. I want to do something that you know, is, you know, something I can be passionate about, and I would answer that with you may have to, you may have to pay the rent, like upon graduation. That's great. Right. And it's a great aspiration for a lifetime. But if you get into graduation, it's like hitting the lottery. I mean, you may have to work for someone you don't like, you may have to work with someone that you don't like. And those are good experiences. Those are experiences that will get you to the next level. So, you know, my advice is, like, when you graduate, if you can get that job on graduation, great. But if you can't, and you have to pay the rent, and you have to work in a field that you don't think is the path that you chose.
Don't worry about it.
Take something from it. Take something from I wrote it when I was in graduate school. I remember I took a leadership class I wrote a bad boss paper. That was the best thing I ever did. I mean, I learned more from the bad bosses than I did from the good ones. So Keep that in mind as you as you embark on your careers, that and I think it's lost a lot on on millennials and Gen Z's is, you know, you may not know what you're gonna do for the next five years, you may not know what you're going to do for a lifetime. I mean, so take advantage of whatever it is you do. And, and while you're doing it, do the best job you can like I I was the best copier and the Clinton campaign in 92 they ever had. I mean, and and again, it put it presidential campaign. You don't have an HR department that's, you know, recommending people you look, look behind you and you see someone doing a good job all of a sudden their Deputy Press Secretary, I mean, so that's how I was able, it's a meritocracy. So that's how I was able to move up so quickly. It's a low bar and bottom optics in sports. It's a secret to my success.
All right, well, listen, I can't thank you enough for being with us and for the leadership that you have, and for being back in Pittsburgh for so long, and just being, you know, a good citizen on so many different fronts. And for all that you've done, we are looking forward to these games, we're looking forward to some more tech collaborations. And let's just give it one more shot of all those Stanley Cups. And my hat's off to David stay safe. And I'm assuming all the players are staying safe, just as you mentioned earlier, and thank you for giving us an update on the negotiations and everything going smoothly. So a toast to the penguins. I raised my bottle to a great to a great season ahead. Thank you.
Thank you for your time and thanks for everyone took time to zoom in today. We're really excited about being back on And we're ready to go. Teams ready. We're ready. I think I'd like to say I think we can have a long run in this playoff
thing said, Tim. Thank you. Thanks, David. Thanks, everyone. We're back here tomorrow at the same time.