Episode 12

Transcript

Mike Smith: Welcome to another episode of Frantz Ward's podcast series, Shoveling Smoke. I'm Mike Smith, a partner at Frantz Ward and your host for today's podcast. As we told you when we began airing Shoveling Smoke, from time to time we're going to reach beyond the legal world, for insights on what's happening in Greater Cleveland. There's so many fantastic things happening here. It's really important for us to appreciate how Cleveland is moving forward in ways large and small. Today's podcast delivers on that commitment in a big way. I'm thrilled to welcome to Shoveling Smoke, David Gilbert, President and CEO of the Greater Cleveland Sports Commission. The Greater Cleveland Sports Commission is a nonprofit organization, dedicated to measurably improving and enriching the Cleveland economy and the community overall by making Greater Cleveland the nation's foremost destination for large scale sporting events. David is also President and CEO of Destination Cleveland, the region's convention and visitors bureau. At Destination Cleveland, David is responsible for carrying out the organization's mission to drive economic impact and stimulate community vitality by positioning and promoting Cleveland as an exciting vibrant destination. David re-founded the sports commission in 2000, assumed his role with Destination Cleveland in 2011, and served as the President and CEO of the Cleveland 2016 Host Committee for the Republican National Convention. David's commitment to Cleveland can also be seen on a personal level. He sits on the boards of the Rock and Roll Hall of Fame, the Greater Cleveland Film Commission and the Maltz Museum of Jewish Heritage. David also serves as Vice {resident on the board of the International Children's Games, based in Lausanne, Switzerland. He was named by Crain's Cleveland Business as one of Cleveland's 30 influencers over the past 30 years. He received the Ernst & Young Entrepreneur of the Year Award. And in 2016, he received the SME Cleveland Business Executive of the Year Award. David is a proud Buckeye with a Bachelor of Arts and Marketing from The Ohio State University, and has an MBA from Cleveland State. He resides in Moreland Hills with his wife Faith. When David finally gets some alone time, he can be seen cycling or running along the many trails of the Cleveland Metro parks. Welcome, David.

David Gilbert: Hi Mike. Thanks for having me.

Mike Smith: Thanks for being here today. Also joining me to round out today's discussion is another Buckeye, Frantz Ward's Managing Partner Chris Keim. Chris is a litigation partner and has served as the faithful leader of Frantz Ward for eight years now. I asked Chris to join the conversation because he's currently a board member on the GCSC and can give us some thoughts on how the Commission interacts with business and legal communities. So thanks for being here, Chris.

Chris Koehler: Thanks Mike. I was denied access for this podcast for so long I had to go out and deliver probably one of the most important people in our community and probably the busiest person in our community. So that's all it took.

Mike Smith: Yeah, we're still figuring out a way to edit you out of this. So we'll go from there. David, before we get going, are there any favorite trails to cycle or run that you'd like to tell the listeners about?

David Gilbert: Well, I live on the East Side and I would say, I think, down in the Chagrin Valley is really one of the prettiest places you could go anywhere in this country. My brother, my nephew, and I, every year we do a week long cycling trip somewhere in the country. And I still think riding around here down the Chagrin Valley, Geauga County, still some of the prettiest places we have.

Mike Smith: Yeah, I still think that they really aptly named it the Emerald Necklace.

David Gilbert: Yeah.

Mike Smith: And it's really all that and more.

David Gilbert: Absolutely.

Mike Smith: So let's start at the beginning on the Cleveland Sports Commission. Can you just give us a brief description and history of what it's all about?

David Gilbert: Sure. We're a 501(c)(3) nonprofit organization and there are many sports commissions around the country. There's a National Association of Sports Commissions. They come in various sizes and forms. There's probably, I would say 25 to 30 like us that are larger independent nonprofit organizations. And when I say large, we at 15 employees are one of the larger in the country. So they're not typically very large organizations, but we're really about economic development in Cleveland through the hosting of major events. And what we do in practice is we compete for the rights to host regional national and international events, big ones that people may know of, NBA All-Star Game and NCAA Women's Final Four and lot of big, big events and many small ones. Our bread and butter is a lot of singles and doubles. The US Jump Rope Championship, the US Synchronized Swim National Championship, big regional volleyball tournaments. And since the organization was restarted back in 2000, we've been responsible for hosting now about 230 events in Cleveland, or having booked for future years. And the total impact on those, which is new direct spending into Cleveland, is about $800 million. So it supports a significant piece of the economy, supports a lot of jobs. And certainly with big events like the NFL Draft which was recently held, gives a lot of notoriety to our community. I do want to say a real strength of the organization is sort of how we're able to wrap the community around events. Our goal is to provide more services to the events that come to Cleveland than any other city in the country. And we do that not just with our staff, but through our board, which Chris sits on and is an active member. And so many other people in the community who really get behind what we do as an organization and the events that we host. And it really in many ways is what keeps Cleveland year in and year out really one of the top four or five cities in the country at hosting major events.

Chris Koehler: Hey, David, you mentioned the over $800 million in economic impact. And I remember growing up reading it in the paper, that's how long ago, and also hearing about it. And it wasn't until I was on the board that I actually realized, when I heard Mike explain it. There's a scientific way it's done so to speak. So it's not just put the finger up, like, "Hey, it looks pretty busy. We got 20 million in." Could you explain a little bit of how that works and how the numbers are fairly accurate?

David Gilbert: Chris, it's a great point because a lot of people just see these numbers and think it may just be finger to the wind. And ultimately it is about, completely about, dollars spent. We measure within Cuyahoga County, from outside of Cuyahoga County from 50 miles or more, that wouldn't have otherwise been spent in our community. And there are nationally recognized, actually through our association and Destinations International, some major national and international organizations that use a particular economic impact calculator, that based on about 20 different inputs can calculate to a pretty safe degree the amount of money that's been spent. Takes account production and other dollars that were brought in from out of town, significantly, visitor spending. And it takes into account different types of events, how long people stay, friends and family that come with them. And certainly what people may spend for a day in Cleveland is different than a San Francisco or maybe different than a Tampa, Florida. So it takes all those into account. We do not use multipliers. Sometimes people get crazy numbers because economists can use multipliers say, "Well, a dollar spent from the outside goes through the community and really is worth two." We don't do that. This is direct dollar spent. And the reason these impact calculators are really critical, and they came about about 10 years ago, because you would have an event, the same event in two communities and have wildly different numbers. You don't see that anymore. If you host a US Figure Skating Championship, city to city, you'll have a pretty similar number, maybe a little bit up over inflation, it might depend if a crowd might have been bigger in another city, but the advent of these tools to help us utilize the metrics have really, really normalized the value of these events to a community.

Mike Smith: In addition to dollars, David, can you also give us an idea of how these large scale sporting events have changed the city?

David Gilbert: Mike, it really is in two ways, and they both are about perception. I think you have internal perception, sort of your self-image, which is something that Cleveland has battled for probably a couple of generations. There is certainly a little bit of a psychological effect of being that mother-in-law joke of all cities for from Johnny Carson and many others now probably a couple generations ago. But also the external image, the perception of Cleveland regionally, nationally, which for a long time had taken a hit. We measure it. It's gone up significantly. But I think it's important for a couple reasons. One, understanding that these things don't happen by accident. Someone who owns these events, we call them events right holders, be it the NFL or an Olympic governing body or the NCAA, they don't just sort of close their eyes and throw a dart at a map and it lands on Cleveland and that's where NCAA Basketball Tournament's going to be played. There's an exhaustive process, an incredibly competitive process. And when they choose Cleveland, and we punch well above our weight for having events choose Cleveland, it happens for a reason. NFL Draft was a great example. Just took place a couple of months ago, coming out of COVID, over 40 million people in this country watched the Draft on multiple different platforms and they saw an incredible Cleveland. Clevelanders saw an incredible Cleveland. And that's not part of the economic impact calculus, but in some ways, long term, it could be even more important to the future of our city.

Chris Koehler: Yeah, David, we had talked a little bit about the tweet over, I mean it was over the weekend from New York, that said "Cloudy day in New York's better than a sunny day in Cleveland." And I thought your response was fascinating. So I tell what the Destination Cleveland side, that you did and how you monitored, and what you guys took out that.

David Gilbert: Sure. Destination Cleveland has a few big roles in the community. And one is really the continued advancement of the perception of Cleveland through a lot of different means. And so it was something that immediately came to us from different sources, and we were monitoring, watching what was happening last Friday. And we decided our strategy was to wait and see what happened and, A, would it sort of die down. And what was fascinating, Chris, was how it took on huge legs. And the legs it took on were comments literally probably 50 to one blasting New York for doing something that was kind of dumb, taking a pot shot at Cleveland, but more importantly, Clevelanders defending their own city, whether people who live in Cleveland or New Yorkers, Clevelanders who now live in New York or other places. And it wasn't in a typical defensive way that we might have seen eight, 10 years ago. It was talking about how amazing this city is. And in the end we felt like we didn't need to do anything. People would expect us to do it in almost a defensive fashion. It was incredible to see the hundreds and hundreds of responses of people showing gorgeous pictures of Cleveland or talking about why they loved Cleveland and blasting New York in the process, but they didn't even have to do that. It was more about how people saying, "Obviously the people who wrote this don't know Cleveland, and here's why it's amazing." And I don't think we would've seen that, I know we wouldn't have seen that eight to 10 years ago. Pretty cool to see how things have changed, particularly how Clevelanders feel about their own city, and how they project it.

Chris Koehler: Yeah. I loved it. So because a lot of our listeners are in the business community I thought we'd take a second and just have you explain the interaction between the sports commission and the business community and particular, maybe a little bit of what Velocity was because I think that's really shows the public and private collaboration that goes on in our city.

David Gilbert: We talked a little bit about before wrapping our community around events. And so much of that, and so much of our success as a community and as an organization, is how supportive leadership of our corporate community is with our organization and with the events we host. I've gotten to know over 20 plus years my peers pretty well in this industry. And if I were to pick out who I think are the top eight or 10 cities in the country and get to know their directors, I would tell you, I think the most common denominator is not that they have necessarily the best facilities in the country or the most sunny days or the best entertainment. Some of that certainly plays into it. But I think, Chris, more than anything is the ability of those organizations to have their community, particularly their corporate leaders and public and civic leaders, highly engaged in what they do. Our board is a pretty big board, about 70 people. And it's mainly made up of leaders from business, sports, sports media, and some within city, county, and so on. But they are so incredibly engaged and people do not come on our board just to say they're on this board, just to put it on their letterhead. They seek opportunities for engagement and it happens in so many different ways to help the organization advance, to help give advice on the business, and to really help with events that we host and how to do it. Sometimes it's in ways like fundraising, and I'll speak to Velocity in a second. Others it's incredible connections that they may have in all sorts of ways to help elevate the events. It could be medical support from the clinic. It could be people know different celebrities that they help bring to the table. It's so many different ways. And you mentioned Velocity. About three, probably at this point almost four years ago, we knew we were going to be awarded Major League Baseball All-Star Game. We had been working with the Indians. We had submitted the bid to Major League Baseball. Hadn't been formally announced, but we knew we were going to be getting it for 2019. And what happens with some of these major events like that, doesn't happen that often, but there's a significant price tag involved. And it's what we call community obligations. It's not, nobody writes a check. So Major League Baseball, NFL, NBA, they come into town and they spend tens of millions of dollars. But what they want out of a community might be free facilities, marketing, all kinds of different services that they ask for, for any city that hosts their event. And those kinds of events, once we calculate what we think those will be, they could be several million dollars. So we had been awarded MLB All-Star Game. We are thinking we have to figure out how to raise the funds. And I could tell you the Indians, the Cavs, the Browns, they don't make money when they host that event. In fact it costs them money, but they look at it good for their brand, good for the city. And all of a sudden, within a handful of months, we knew that other bids for some major events were coming down the pike. NBA All-Star game, we had been talking to the Cavs, the NFL Draft, we had been talking to the Browns, NCAA was coming out with bids in Women's Final Four, which we hosted back in '70 was going to be on the docket. And what we had to decide was could our small organization take on the risk to host those events? Because we're the ones who sign the contract. With NBA All-Star Game coming up in February, we have 14 contracts, for every venue, the contract with the NBA, that our small organization is responsible for, in that case about $5 million worth of stuff. Now over $100 million is going to be poured into the community and we don't make money. So what we decided to do, and it was kind of a big risk, was we said, "Let's try to raise money for all of them together." And it was one of our board members, Bob Klonk from Oswald Insurance that had the idea, and we packaged it all together and it was about $14 and a half million that we would have to raise, that if we awarded all four events. And don't forget at the time we had been awarded one. Chris, I think we thought at the time, if we got two, if we get MLB All-Star Game and one of those other three, that'd be pretty awesome. And honestly the thought of getting all four was, I don't want to say a pipe dream, but that was the Grand Slam. Well, and how we decided to do it was, and this was Bob's idea. "Let's go out and raise all the money. Let's ask the community." And I'll tell you how we raised it, but we had about $14 and a half million to raise. And let's raise it where we ask people to make a commitment over four years and only pay for the number of events that we get. So if we're awarded two events, you only make the first two payments, if you're awarded three. But what allowed us to do was go out and try to get commitments. So when we were bidding on those events, A, we had some more comfort that we weren't going to put ourselves out of business by hosting an event and, B, that we could say to the NCAA when we're bidding on Women's Final Four, "Hey, we're not just going to promise you we're going to raise the money." We could say that we have most of it already committed. And in the end we were awarded all four events. And as of last week, you probably hadn't even heard, Chris. We haven't announced it to the board. We had raised all but about 400,000 and we had a company step in last week and fill the entire-

Mike Smith: That's fantastic.

David Gilbert: So as of now, and this was for events, the big events through 2024, we raised $14 and a half million. About six came from the state through a state program for major events, Destination Cleveland put in about $1.8 million, all contingent on getting the events. And then from our corporate community and a little bit of local foundations, we raised over $6 million and it was incredible. And you have to understand these companies, Frantz Ward included, people aren't getting much for it. If people want to say, "I'm going to take that money and buy the best tickets I could get," they're going to do a lot better and go into the secondary market buying tickets for the MLB All-Star Game. It's for this community. We're given a little bit of benefits where we can, but we don't get big blocks of tickets. We create events. We do what we can for all of our partners, but it's amazing how this community stepped up for what's great for this for Cleveland. And I could tell you, I've been part of conversations in our industry about how we handle Velocity and it's the envy of other cities, that our community step behind it. And think about in a five year period of time we're hosting MLB All-Star Fame, NFL Draft, NBA All-Star Game, and Women's Final Four, in addition to many other events. But those are probably the four, maybe most impactful events we potentially could host, all in a five year period of time. It's a tremendous run we're in right now for Cleveland.

Mike Smith: And with regard to that run, I'd like to spend just a few minutes on the NFL Draft. So could you just give us kind of some highlights of what it took to bring it here? And maybe even more importantly, kind of a postmortem, lessons learned about going forward for the upcoming events?

David Gilbert: Sure, Mike. In terms of getting here again, a very competitive process. The interesting thing about the draft, up until about six years ago, it was for 50 years was an event that took place in a theater, had become a big televised event. It was at Radio City Music Hall for much of the last 20 years or so. For a number of reasons, they took the show on the road. They took it to Chicago, created a little bit of a festival with it. It blew up. And after three years, all of a sudden, you had all these cities saying, "Wait a minute, I want to host that." And the NFL at the time, it would just be an owner would raise their hand and say, "I'm interested in it." Well, they really changed it. They handed over to the group who managed it internally at the NFL that hosts the Super Bowl. They realized that they had another property, another event, that could rival the Super Bowl in terms of its size, scale and impact. So they put it out to bid for 2019, '20, and '21. And for three years, and you have 22 different NFL cities. You had to be an NFL city to bid, 22 cities decided to put in a bid, including Cleveland. And went through some machinations. We were not awarded in the first round. It went to Nashville. We retooled our bid and flew up to New York and asked the NFL to give us a little bit of time to look at what our new bid was. And long story short, we were awarded the event for 2021. And it was an amazing partnership with the Browns. And I think in the end it really was you had two forces at work, that without both, we wouldn't have gotten the event. Their whole high level events team, really, really digging in very deep, doing their due diligence with cities including Cleveland on whether or not they felt it could be successful in so many different ways. And had they not done that and recommended Cleveland, we wouldn't have gotten it. At the same time the Browns and the Haslams were also advocating from the top down with the Commissioner and their fellow owners. And no matter how good a job we would've done on our end, we wouldn't have gotten it had we not had them advocating. And so it was such a great marriage from the beginning and a partnership between Sports Commission and the Browns, and then many other partners in putting it on, City of Cleveland, Destination Cleveland, Downtown Cleveland Alliance, all really working with the NFL on how to put it together. And it was an awesome experience. During COVID, up until about nine weeks out we didn't know if it was going to happen. We had to plan as though it were going to happen. And we had to keep a smiley happy face and our mantra was the draft is going to happen as a live event until it's not. It was either going to be a live event or all virtual, which they had done the year before when the draft was supposed to be in Las Vegas, and only about a month out, they had to pull the plug and make it virtual. And in the end it was extraordinary complicated because it's a large free event. When I say large, you're talking in Nashville two years prior, 200,000 people a day, over three days. And now they had to make it an event that while still free was gated. You had an area where you had to be vaccinated. So many protocols in place, dealing with months and months and months with the CDC, with the State of Ohio, City of Cleveland. And in the end, I would say the one and maybe only downside was less people, although even in the way it was structured with all of the modifications with COVID, we still ended up with over the three days about over 150,000 people, more than about 20% from out of state. So still had a lot of visitors, big impact, probably would've been four times as big. On the other hand, we had more eyes watching us from around the country, not just NFL fans, and I mentioned before 40 million plus viewers over the three days, but so much other media watching Cleveland, non-sports media, because it really was probably the first major event in the country to be held of scale post-COVID. And Cleveland showed so well on TV. And I heard a lot of people say, the word I kept hearing was and really felt, was it felt like a lot of hope. It was right when many people were vaccinated. And even though they had masks on, people dancing, people outdoors, people hugging people, being at an event being happy. And it was an incredible event for this community. And while we don't have the final numbers yet, it still is going to be an event that probably will end up with a well over $40 million direct financial boost to the community. And I think, Mike, you mentioned lessons learned, I think in almost every event we do you try to take something away of what you learned. I think a big part of it is never give up. You keep going as hard as you can. And we had a lot of events. We had had 11 different national events cancel last year that we had already committed to Cleveland. Many of them committed for a future year, but every one of those, we still planned up until the very end. And that's what we do for this community. And it was amazing, to me a big payoff for all of us involved, was the draft and just how much of a community builder an event like that can be. We look at it through the economic lens all the time, but that just showed what an incredible just unifying event that was for our city.

Chris Koehler: Hey, Dave, could you quickly talk about the Sports Commission's role in community and diversity and inclusion and equity issues? Because I know that's a big part that people probably don't understand that's also part of these events coming to town.

David Gilbert: Chris, it's a really good point. I think a big secret sauce for us, if you will, is providing those service to the events rights holders. The other thing we do that we're extraordinarily proud of is the programming that we do around the events that we host. And we've developed it in such a way that they end up being a big boost to the events and to the community. And what we do is every event that we host, and we can't do this with all of them. A lot of them depending on the size, scale, what the event is, we don't have the ability to, but probably three to five times a year, an event has the opportunity where we can tie in specific youth programming targeted toward underserved youth, usually through the City of Cleveland rec centers, but other partners like Boys and Girls Clubs and many others, tying them into the national caliber of large events. I'll give an example. And we hosted US Triathlon National Championship, couple years ago. We had it for two years, big event, 5,000 athletes, 12,000 people in town, beautiful venue at Edgewater Park. We ran a program each year, each of those years, where we assembled and gave out for free over 100 bikes to City of Cleveland kids. We used the platform of the event to do that. We created a program where we had through city rec centers, a significant number of kids that got free shoes, bikes, equipment, got trained in triathlon. None of them had ever done it. We had volunteers and a training program. Then they got to do a small youth triathlon on the National Championship course with all these elite athletes cheering them on and their families there. And what's great is we're not as an organization, a youth programming organization. There's lots of other groups that do that. But what we know is we utilize youth programming for underserved youth as a way to make the events better. And what's great is on the other side of it, we have these events rights holders that want to come back to Cleveland because of the way we tie underserved youth into their events and we give their events a community building facet that they don't get in other communities. And I could tell you our commitment to diversity and equity and inclusion certainly has become even more heightened with the events of last summer after George Floyd's murder. And we've done a lot internally to really help give insight into what we do and how to do it better. But it's something that we've been doing for many, many years. And we see as we have an interesting unique role to play in that area.

Mike Smith: So as we kind of wind things down, can you tell us, you've mentioned several of the big four, that one of which has passed, but three more big ones coming up. Can you give the folks just a little flavor of some other events that are coming up in the next couple of years?

Chris Koehler: We have some great ones coming up. 2025 NCAA first, second, round basketball, March Madness at Rocket Mortgage Field House, 2026 NCAA Division I Wrestling Championship, an event that will sell out every seat at Rocket Mortgage Field House for three days, 90% of those people from out of town, all wearing hoodies around Cleveland. A really cool one in 2024 called the Pan-Am Master's Games. Basically the world's youth Olympics. First time it'll be in the United States. We'll expect probably somewhere in the neighborhood of 8,000 athletes, plus an equal number of friends and family from 50 to 60 countries around the world, from all over the world. That event is likely to be the largest international gathering in the city's history and a lot that we're going to do with that. And many others. +We were just awarded just a couple weeks ago, a couple for next year in the following year, two US Synchronized Swim National Championships, working on some events with USA Boxing, USA Wrestling, and we have NCAA Division II Baseball Championship, NCAA Division II Outdoor Track and Field championship. A lot of events already on the calendar. And we have a lot more to go in front of us.

Mike Smith: Man, it's a lot to look forward to. Well, at the end of our podcast, we always ask our guests if they'd like to leave the listeners with a couple of takeaways. So, David, if you have any final takeaways you'd like to give us today?

David Gilbert: I think I probably would boil it down to one. And that is, particularly those people in Cleveland, appreciate what you have here. This is an incredible place and the grass isn't always greener. It's just other grass. I think this last year with COVID had a lot of people reconnecting with their own community, what they loved best. And encourage people. Of you love your city, let people know. Ho online, tell your friends and family what a great place it is. And this city's has been and is really reemerging as a powerhouse. I think we all have a responsibility to let the world know that.

Mike Smith: Thanks David. How about you, Chris? Any takeaways from your perspective?

Chris Koehler: You mean besides when I grow up, I want to be David Gilbert?

David Gilbert: I can give you lots of reasons why you don't want that, Chris.

Chris Koehler: No, in all seriousness, the key takeaway I'd want people to know is that our city and our community are not where we are without David and his fantastic team at the Sports Commission.

Mike Smith: Well, thanks Chris. And thanks, David. We really appreciate being here with us today. So just remember folks, the two takeaways to remember today are Cleveland is an unbelievable city with so much to offer, so get out there and let your friends and family know that we should be a destination of choice. And keep in mind all the hard working people that make that happen, especially David and his team from the Greater Cleveland Sports Commission. So again, David, Chris, we really appreciate you being here today.

David Gilbert: Thanks for having me.

Mike Smith: And that wraps up another episode of Shoveling Smoke. Thanks for checking in with us and we hope you listen next time.

Shoveling Smoke is a production of Evergreen Podcasts. Our producer and audio engineer is Sean Rule-Hoffman. Thanks for listening.