Equity hopes TV games will lure fans to RiverBlades, Twisters.
On Oct. 24, Equity Broadcasting, which owns more than 50 televisions stations in the country and 11 radio stations, announced it had bought out Dave Berryman, who held 51 percent of Arkansas Sports Entertainment LLC, the company that owned the franchises. Equity had purchased the other 49 percent of the company in 2000.
Terms of the sale weren't disclosed.
Mark Perlioni, an analyst for Business Valuation Services of Dallas, however, estimated the RiverBlades, a minor-league hockey team, to be worth $1.3 million-$1.6 million. Eric Stephens, director of technical services for BVS, said the Twisters arena football team should be valued around $5.5 million.
Negotiations to buy the teams lasted two or three months, said Doug Krile, Equity's corporate director of news and public relations.
A new company, Arkansas Sports Entertainment Inc., a wholly owned subsidiary of Equity Broadcasting Corp., was created for the sports franchises.
Berryman will stay on the board of directors and continue to manage the team, Krile said.
"Until such time that he decides that there's something else that he wants to do," Krile said. "As of right now, he's the guy."
Berryman did not return calls from Arkansas Business.
Krile said the deal is a long-term commitment for the company.
"It's not a jump-in type of thing," Krile said.
Equity Broadcasting has been busy with other matters as well.
It raised $1.86 million last month by selling stock to 79 investors, according to an Oct. 31 filing with the Arkansas Securities Department.
The sale of stock was unrelated to the sports teams, said John Lessel, an attorney for Equity. Instead, the money was used to merge EV Fund Inc., a company formed by Equity Venture Fund LLC, into Equity Broadcasting, he said.
In June, Equity Broadcasting announced a $45 million deal with Univision Communications Inc. of Los Angeles, one of the largest Spanish-language broadcasters in the country. Some of that was to purchase a 20 percent stake in Equity, but the deal also included a plan to sell about five Equity television stations to Univision.
The properties, all in the southwest, are scheduled to change hands at the end of the year, Krile said.
Fanning the Fire
Although neither team saw as many fans at the Alltel Arena in North Little Rock as they did the previous seasons, that could change with Equity's plans to broadcast the games. Televising the games also could boost the value of the properties.
In January, Equity plans to begin broadcasting RiverBlades games on tape delay, probably starting at 11 p.m., on KYPX, Channel 22, the PAX affiliate in Little Rock, Krile said. The games also could be shown in northwest Arkansas or in other parts of the county.
Equity also is planning to show all of the Twisters games, but details still are being hammered out, Krile said.
"The Twisters certainly have the potential to perform well, as does the hockey team. We just think the exposure can be a key factor in increasing attendance," he said.
If broadcasting the games draws more fans to the Alltel Arena, it can't come too soon for the RiverBlades.
In its inaugural season in 1999-2000, the RiverBlades averaged 3,976 fans, despite having the worst record in the East Coast Hockey League. Since then, fans have been disappearing. In its 2000-01 season, it averaged 3,414 fans, which was significantly below the 25-team league's average of 4,319.
Through the Nov. 4 games, the 29 teams now in the ECHL are averaging 4,083 fans a game, while the RiverBlades are averaging 3,287.
Most of the revenue in ice hockey comes from ticket sales, Perlioni said.
"If they can fill the seats up more, that's going to be the key," he said. "Certainly any kind of exposure to the general public is going to help that."
Krile said the teams are still feeling the effects of the Sept. 11 terrorist attacks.
But attendance has been down in the ECHL for years.
Since the 1998 season, the ECHL's attendance figures have slid dramatically, said Perlioni, the analyst with Business Valuation Services. ECHL's average attendance last season was the lowest it had been since 1992, he said.
"As a whole, if you were to look at the ECHL, I definitely think the league is in a slide, and maybe it's saturated," Perlioni said.
Even with the low attendance numbers, Perlioni said he thinks Little Rock can support minor-league hockey.
"It's just a matter of how it's presented and how it stands out," he said. "The more you can let people see these teams and realize they can be fun to go there, the more willing they are to spend a few bucks and enjoy it," Krile said.
Sports and TV go hand and hand, Perlioni said.
"They're a good marriage, and if you have TV, you're definitely worth more than not," he said.
Little Rock is traditionally a football market, but hockey will gain some credibility and broaden its fan base when the games are televised, said Chris Foy, vice president of sponsorship sales for the Bonham Group, a sports marketing consulting firm in Denver.
Televised games adds credibility to the franchise and allows it to market itself to a much broader audience, Foy said.
People in Little Rock are unfamiliar with hockey, and televised games will educate people on the sport, he said.
"Hockey is a tremendous spectator sport; if you can get people in the building, it's been proven ... that the odds of them coming back is very high," Foy said.
Equity has developed a satellite distribution system that allows the company to feed programming for seven television stations from its Little Rock headquarters, with plans to expand that to 12 stations within the next month. This system allows for more cost-effective distribution of Arkansas Twisters telecasts.
Although the arrangement wouldn't generate much money for Equity, it would offset the $10,000-$11,000-cost of producing the game, Krile said.
Broadcasting the games is not a money-maker for the company, he said. The benefit of broadcasting the games comes from the exposure it brings.
"That's why this marriage was good because it benefits the team to be on television, and it benefits us to be able to say, 'Hey, we're the guys who did it,'" Krile said.
Equity also will be able to sell TV and radio advertisers one package for both teams, Krile said.
"It's new, and it's not an easy sell," he said. "There's no ratings to point to. You have to go out and sell it [to] people who believe in the team or believe in the concept of local sports."
Since Equity owns the teams and the stations, it can put the sales team under one umbrella, Krile said.
"It wasn't that we couldn't do it before, it was just that when you are dealing with two completely separate entities [Equity and Berryman's company], it's not as easy as when everything is under one umbrella," Krile said. "We could only take it so far."
Although the Twisters have led the Arena Football 2 league in attendance two years in a row, the team's numbers have also dropped.
In 2000, its inaugural season, it averaged 13,766 fans, while the league averaged 7,239. For its 2001 season, the Twisters averaged 9,351 fans to the league's 5,194.
The league and Twisters are pretty strong, said Stephens, the director of technical services for Business Valuation Services.
"I guess the grain of salt is that [attendance] declined so much from 2000 to 2001," he said.
Stephens estimates the Twisters revenue at $2 million a year.
The AF2 is associated with the Arena Football League, which is affiliated with the NFL, and that provides a certain level of legitimacy for the teams, Stephens said.
And the league is growing. The AF2 had 15 franchises in 2000,28 in 2001 and 40 are planned for 2002.
"Their goal is to have in international game," Stephens said. "With the NFL involvement these thing become a little more possible than they otherwise would be."
Equity, which owns the PAX station that serves the Fort Smith and Fayetteville markets, could show live Twisters games on PAX on Saturday night, which is open for programing, Krile said.
"This doesn't have to be a Little Rock team," Krile said.
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|Title Annotation:||Equity Broadcasting Corp. acquires Arkansas Sports Entertainment L. L. C.|
|Comment:||Equity hopes TV games will lure fans to RiverBlades, Twisters.(Equity Broadcasting Corp. acquires Arkansas Sports Entertainment L. L. C.)|
|Article Type:||Statistical Data Included|
|Date:||Nov 12, 2001|
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