The New York Enterprise Report / Robert Levin
May, 2008
Like many kids growing up in Flatbush in the early 1970s, Brandon Steiner sat in the nosebleeds at Shea and Yankee stadiums. But unlike most kids from Flatbush, Steiner was able to channel his passion for sports and start a successful business that would take him not only to seats behind home plate, but into the locker rooms and the front offices as well.
Steiner didn't start his career in the sports industry. He left Syracuse University with an accounting degree in one hand and a ticket to Baltimore in the other. He went to work for Hyatt hotels and was part of the team that opened the Hyatt Inner Harbor in Baltimore, one of the company's most successful hotels. In 1984, the self-proclaimed "kitchen and restaurant" guy moved back to New York and opened and managed operations at the Hard Rock Café in New York. While running the Hard Rock was a huge opportunity, Steiner grew restless. Not only was he in no position to implement his ideas for improving the iconic theme restaurant, but he was tired of working nights in an establishment with no televisions. He was missing all the games! "I was a real sports lunatic, loved playing, watching," says Steiner. "I thought, 'How cool would it be to do a Hard Rock, but in sports'?"
In 1985 Bobby Valentine's in Stamford, Conn., and the Ultimate Sports Bar in Chicago were among the few successful sports bars, so Steiner and some investors decided to open the Sporting Club, which had since become a Tribeca institution (until it closed a couple of years ago). As the success of the Sporting Club grew, so did Steiner's reputation, and dozens of athletes called him to help them open their own sports bars. He was a consultant on opening bars for Mickey Mantle, Ron Darling and Lawrence Taylor. It was while he was organizing publicity events with big-name athletes that he recognized the need for a sports marketing service - pairing up athletes with businesses that needed to draw customers. In 1987, he filled that need by opening an athlete marketing firm, Steiner Sports. He then eclipsed his marketing success by expanding into the sports collectibles market in 1987. Thirteen years later, he sold Steiner Sports to media giant Omnicom, but Steiner didn't just pack it in and hit the links. Today he is the company's chairman and has orchestrated exclusive collectible deals with the New York Yankees, New York Mets, Boston Red Sox, Syracuse University and Notre Dame. The entrepreneur struck gold again in 2001 when he opened Last Licks, a sports-bar-themed ice cream shop. Complete with athlete signing events and sports memorabilia on display, Last Licks grew to five locations and will soon become a franchise.
NY REPORT editor-in-chief Robert Levin sat down with Steiner to find out how he marketed without advertising, charmed the Steinbrenner boys and plans to beat Michael Jordan in a game of hoops.
RL: The Sporting Club bridged your experience in the restaurant industry and your love of sports. Tell me how you got started.
BS: At 26 years old, I was probably a little over my head. I looked at myself as an extremely young, talented guy who was inexperienced. We've seen a lot of inexperienced, talented people sometimes do some incredible things and yet at the same time fall short. That'd probably be the best explanation - I was onto something incredibly genius at the time and didn't even know it. We were creating this really serious sports theme, with multiple TVs and all the different promotions ran at all these different events. In New York, cable wasn't quite there yet. We had a satellite dish, and I leveraged this so people were lining up to get into a place that, literally, was in the middle of nowhere.
RL: Back in the '80s, Tribeca was nowhere.
BS: You couldn't give away the apartments back in 1985. And that really was my coming-out party - to take a place of that size and put it on the map myself operationally, menu-wise, just the whole thing. I knew I had the ability to get people interested. Through opening up the Sporting Club, I opened up about 10 or 12 other sports bars with many different athletes.
Believe it or not, I couldn't raise more than $250,000 at that time to open up my own place [without my Sporting Club partners]. So I was consulting on a lot of other sports bars and restaurants and helping people like Lawrence Taylor, Ron Darling and a bunch of other celebrities open up their sports bars, including Mickey Mantle's.
RL: How did the sports bar business evolve into a vision of creating a sports marketing business?
BS: I always try to think about what's missing. Business owners were always asking me, "Can you get that athlete to do this appearance and that event?" What's missing? Why isn't somebody trying to help these athletes with these appearances? Why aren't people helping these companies try to hook up?
At the time, even though these athletes were making good money, it wasn't the money they're making now. The niche was helping these athletes, in some cases not the biggest names, just get work and at the same time help companies promote their product. I've always been a big B-to-B guy. I'd create situations to help people make more money.
The money was small at the time. For example, a blue-chip athlete appearance at that time would be $5,000 to $10,000. That same athlete now, for a couple of hours' worth of work, is $100,000, and in some cases not even achievable. But for $2,500, there were many, many athletes available. Athletes were tremendously under-marketed in the early and mid-'80s.
RL: How did you market Steiner Sports in the early days? BS: If you think about the amount of spokesmen and athletes that we've been tied in with and the size of our brand, we've been fortunate. And we haven't done it through advertising. We've never spent more than a couple of hundred thousand dollars in any given year on advertising. We've done it all through brand extension, partnerships with athletes and public relations.
I always thought those [athletes] moved the needle, brought in crowds, created a lot of confusion and craziness, and they're worth every dime, but I'm a little biased. Back then, being friendly with them was the key to success here. Getting on the inside with them and seeing the kind of stir they created every time we would go somewhere. We would go to a restaurant and all of a sudden there are more people at the bar than there should be just because they heard that we were there with a bunch of athletes. Imagine if we actually told customers or put it in the paper that we were going to be here having dinner. What an excellent opportunity to help this bar owner build his business.
RL: How did you start the collectibles business? BS: The collectible thing was a hobby. I've always been a saver and a collector of everything. I'm passionate about saving the past. But when I started this business, collectibles really weren't on my mind. As a matter of fact, people came to me and wanted me to get them collectible stuff, and I actually said no. We were really focused on marketing athletes and doing PR projects with athletes. Collectibles had a little bit of bad connotation, a reputation at the time, and I was veering away from it.
RL: When did you change your mind? BS: In the early '90s my wife sat me down and asked, "Where's this business going?" I was thinking about starting a family and, to be honest with you, it was a good question. I told my wife that maybe I would close Steiner Sports down, but the next day I went in to work and realized what I really needed to do was extend what I was doing into something more profitable. In booking athletes, there's a limit to how much money you can make, and you're not controlling the production. As soon as the player would get hot - be in a World Series for example -instead of being able to run and do a million things with them, they wanted to do less. So that wasn't working.
I was doing an appearance for American Express and we had Roger Staubach doing a speaking engagement. This high-level vice president comes running down the hallway with a bunch of stuff he wanted to get signed. But he had all the wrong footballs and really terrible photos. Later, I got the right footballs and an unbelievable photo and the next time we had an appearance with Roger, I had him sign them. I brought the stuff to the [American Express vice president] and he said, "Just bill me whatever you want. This is even better than having Roger speak. This is unbelievable. What I'm going to be able to do with this stuff for my clients and for my boss! I want you to make a lot of money on this. You went out of your way. Thank you."
That's when I realized that collectibles was an opportunity to extend the services for my clients, which is the most important thing. It was taking away the headache for my clients by folding everything in one.
But what really took me into the front row was when the Rangers won the Stanley Cup in '94. I was taking the train to work and I saw Mark Messier on the back of the Daily News and the New York Post. I'm a big Ranger fan, and he just had that grin like, "I'm the happiest man in the world." I saw that as one of my favorite shots and moments as a fan, and I just saw that as a collectible. I had to create a collectible line around this photo. I know that at least 17,500 people were at that game, not to mention every other Ranger fan watching on television. We all felt like [we] were a part of the Rangers' winning the cup. We'd all been suffering together for 54 years, so I went on a mad chase to try to get Messier to sign with me. Part of negotiating the deal with him to sign that particular photo, I signed him to an exclusive collectible deal. It was the first player that I had signed. All of a sudden, we started opening up some accounts, and people wanted to buy stuff. That was kind of the foundation of Steiner Sports Collectibles.
I don't think there's a person in this country that doesn't feel like they have their Mark Messier story - their magical moment in sports that they will always remember. Other than getting married and [the birth of] your kid, which everybody's got to give that standard answer, what's your favorite moments in your life? Nine out of 10 people I approached said a sporting moment was definitely in the top five favorite moments in their life.
I then went on a rampage trying to go figure out every magical moment that's ever happened in sports. The Ice Bowl, the Keith Smart shot, the Dwight Clark, the Hail Mary, Roger Staubach - it just goes on and on and on, and we've captured every one of them here at Steiner. That was a big turning point - finding an emotional need. We started rolling out these moments and rolling out the positive stuff that athletes had done and there's such an emotional pull from the fans. It's like, bingo. It was like magic. I just couldn't get enough of it.
RL: How did you get franchises like the Yankees and Mets to sign these exclusive deals?
BS: A lot of persistence. I think the Yankees [deal] was a culmination of everything I ever learned about getting business. They're the biggest franchise in the world of sports and it was a dream come true. But it's, you know, my mother's motto: "If you want to get to know somebody, get to know their best friends."
The Yankees are extremely smart businesspeople; as good as they are on the field, they're as smart in the front offices. And I think the most important thing that I learned is how sensitive and intense they are about their fans, and giving the fans what they want. I don't think they really needed the money necessarily, although they are in business for profit, but I think they were actually more intrigued with making sure their fans had a legitimate way to get the real [authentic] stuff while also making sure things weren't "disappearing" out of the clubhouse.
RL: How did you leverage what you learned about the Yankees organization in your pitch? Did your angle come out of discussions in which they mentioned the fans, and you hooked on it? BS: [My pitch] actually came out desperateness more than anything else, to be honest with you. Frankly, I was on their radar screen, and they weren't quite sure what the hell I was doing. But whatever I was doing, it involved a lot of their players. They were definitely sizing me up, and checking me out. My game plan going into the meeting was to try to stabilize the situation and let them know that what I was doing was aboveboard, legitimate, and I was following the rules.
When I go into a client's meeting, I'm not thinking about "how can I make a sale or how I can do some business?" It is "how can I help them?" It's real hard to go into a meeting with the New York Yankees, and you're like, "Well, how can I help them, a small little guy like me?" Well, I think there were two things. One, we're owned by Omnicom, and at that time the Yankees were starting YES. I thought there was an opportunity to join the Omnicom forces. There was some synergy there. We found that connection.
The other thing was that they had a security issue on their mind. They had a problem in the stadium with things leaking out of the clubhouse. I explained to them that there's a way for us to put a system together that would make you guys feel more comfortable so that you don't feel like things are getting stolen or leaking out of the clubhouse. I'd be accountable to you, and I can explain to you the products that I'm creating, what I'm doing, and you'd have input to make sure that your fans, which is your prized possession, are getting an authentic deal.
And, you know something? It took two and a half years. It wasn't like we had a couple meetings and then, bam. It was very complex.
Now, teams like the Yankees, the Mets, the Red Sox, the Dodgers, Notre Dame, Syracuse, some of the biggest brands in sports, have actually stepped up to the plate and said, "Collectibles are real. We understand our fans want them." That's huge. Think about the credibility that I've given our industry.
RL: Does your business make it harder for you to enjoy a game?
BS: It's over, and that's the one sad part. I'm not here to cry and, believe me, life's good. You're talking to a person who grew up extremely poor. I had no money, scraping up enough money to go sit out in the worst possible, cheapest seat, and I still went to 35 games a year, somehow.
Yankee Stadium was like going out to the park and playing. It was the most enjoyable thing that I could do, and many nights, even at five to seven, I would be a little bored, zip over to the stadium, buy a seat and watch the game. Now I have the access to go watch those games, but it's business, it's big business for me. So it's not as enjoyable.
Now, I walk around that stadium for 45 minutes. I feel that it's an obligation to go and see what people are buying. I want to see what people are eating, what they're wearing. I want to see what people are reacting to. I want to know who's getting the applause, who's not. I want to know who's hot, who's not, and why. There's a fine line between being popular and being beloved. There's a big difference between love and like in sports, and you got to be able to see it.
But sitting back and enjoying a game is something I do a little more on TV. I'm a watch-four-games-at-one-time guy. Watching one game would be like having a sip of water after you just ran two miles.
RL: If you look back to the start of your business, 15 years ago, the business was very personal - branding and the relationships you had with the athletes. People were buying you. How did you establish that?
BS: I live my brand. And I think that's been a huge part of [the success] from a PR standpoint. There was a 10-year stretch where I did 15, 20, 30 interviews a week. I hosted my own TV show and my own radio show. I had an opportunity to go on Money Line on CNN every other week, CNBC - I didn't even know what it was. I didn't have money to invest so I never watched CNBC, but I went there two or three times a week to talk about the financial impact on sports, corrections in the sports market, all that sort of thing. Right now I have my own ESPN show, my own YES show. But back then I was doing any kind of radio or TV that I could - not promoting myself, but promoting the brand. I was saying, "Here's what sports marketing is. Here's what sports collecting is." If you want to be an expert at something, then you've got to be objective, you've got to be able to explain to people what's going on, even if sometimes it hurts you a little bit. That's gotten a little harder now at this point in my career; when you're partners with the Yankees and Derek Jeter; it's not easy to talk bad about the Yankees.
RL: Why did you decide to sell Steiner Sports in 2000? BS: For a couple of reasons. One, I wanted to be the best, and I knew that [as far as services I could provide], I was starting to get boxed out. I thought I had to increase the roof over my head. Working capital and the ability to get into some distribution channels that in no way could I possibly ever get into on my own really intrigued me. And I wanted to have the biggest company and the best company.
RL: Your brand is so personal, did you have trouble delegating or giving other people responsibility, especially after you sold to Omnicom?
BS: The first thing to let go is the stuff that you don't really know a lot about, or don't like, or aren't interested in. It's a lot easier to delegate that stuff off, because you're just dying to have somebody else do it anyway. That's the first place to go, because nobody wants to give up the thing they love and enjoy the most. And you will be less critical of the way others do the stuff you don't want to do anyway.
RL: Has it been tough, going from owner to employee? BS: It's not as hard a transition, because they still allow me to be a little bit of a character. I'll admit it, I'm not the typical CEO running a company, but [Omnicom] respects it. They let me do my thing. There's a tremendous responsibility on the financial end, and if there has been a burden, it's been the financial reporting and the commitment to hit numbers, and produce numbers. I'm an accountant. My wife's a CPA, who's our CFO. So we weren't oblivious to the financial end of things, but they took that whole thing to a completely new level. And that's probably the biggest adjustment.
RL: Are you working on any new deals at Steiner Sports?
BS: We're going to have our version of eBay, which right now is the biggest opportunity. You'll be able to go on our site and sell your collectibles. We have our own authentication process to monitor [the auctions] and govern the site for those people that are fearful. Hopefully, there will be a huge launch this fall. All the stuff that people bought over the years they now can flip over, make profit, and buy more stuff. I think we'll be the first company that'll be able to sell something twice. We think it's a pretty good business model there. We put more than a million signatures into the market a year.
RL: Can you tell me a little bit about Last Licks, your chain of ice cream stores?
BS: Last Licks just came about as a culmination of just about everything I've done. Back in 2001, my kids were about nine and six and they were kind of upset that I sold Steiner. And I said, "Well, I'm going to go buy the ice cream store in town." The kids would stop by two or three nights a week and it was a big thing. I thought the experience was good, but I also thought, "This is boring. It sucks." You sit here, you get some ice cream, some candy, and then what?
So, I thought about the Hard Rock and I go to the Sporting Club, and I think about my food business experience, and I see a sports bar. I imagine the ice cream shop with TVs. I can come and plop here, grab some ice cream, watch the game for 15 or 20 minutes. We'd put memorabilia on the walls, everything with a sports connotation. I could bring my players here to meet the kids, and do some clinics, that kind of stuff. That's kind of how that came about, you know, as a sports bar for kids. We remember what ice cream they like, just like your bartender would remember what your favorite beer is. We're the bartenders for those kids. It's a little bit different than a typical ice cream store.
I don't need to make a dime on Last Licks. It's just really for fun, but it's turned out to be a really special place that we're about to franchise, and it's really about to explode. In '09 we hope to be in Yankee Stadium and we're opening up our flagship store this month. Our ultimate goal is to name ice cream flavors after athletes. And every time a kid buys a scoop of Mark Messier Mocha Chip, a certain amount of money from their purchase goes to Mark Messier's Tomorrow's Children's Fund. And the kid knows he's making a donation, and now he learns a little bit about Tomorrow's Children's Fund. And, hopefully, that brand of ice cream will end up in supermarkets.
RL: Who's left on your list of people that you still want to meet?
BS: Well, I have a few things on my agenda, I say, things that I want to do before I die. Whip Michael Jordan's butt in one-on-one. That was definitely a big one. I met President Clinton and I definitely want to spend some time with him - like a four- or five-hour plane ride, or at least have dinner.
I've given up on my rock and roll talents, but certainly there are a few rock and rollers that are on my list - Billy Joel and Bruce Springsteen are one and two, John Mellencamp being third. And I'm hoping that maybe can happen.
I'd like to meet Oprah or go on her show one day. I've never met her, but I follow a lot of her thinking in my charitable endeavors, and the things I try to do to help people. I've watched Oprah most every day - I TiVo it, and I watch it with my wife. I've learned more lessons about women and more about business just watching that show.
RL: Your favorite flavor at Last Licks? BS: Right now, it's butter pecan.
