BC Zalgiris and Zalgirio arena – the perfect cooperation 0

by: Frank Lawlor, Euroleague.net

For at least one Turkish Airlines Euroleague club, there is never an off-season anymore. Since the opening of Zalgirio Arena in 2011, the club of the same name has dedicated itself with double devotion to making a name for its city even when no basketballs are bouncing. While Zalgiris Kaunas remains the flagship Euroleague team in a basketball-crazy country, it also thrives as the managing entity of a state-of-the-art arena at the center of all cultural and entertainment life in Lithuania’s second-largest city. Whether it’s concerts by world-famous artists, exhibitions, ballet, musical theatre or any number of entertainment events, Zalgiris never stops because its arena does not either. Its dual role as basketball club and arena manager is a unique one that shows how Euroleague clubs are diversifying to have a strong future, as club general manager and arena director Paulius Motiejunas told Euroleague.net. “Kaunas is a basketball city and is called the basketball capital of Lithuania. It was so even before the arena built,” Motiejunas said. “And now Zalgiris Kaunas and Zalgirio Arena have become a double power that is the postcard of Kaunas, the main component of the city’s image. The people of Kaunas are very proud of it.”

First, tell us about the club’s role in managing Zalgirio Arena, one of the best new venues of its kind anywhere?
“We are really proud to call Zalgirio Arena one of the best in Europe. Zalgirio Arena is the largest and the most modern arena in the Baltic States. For concerts it can accommodate up to 17,500 spectators, and during sport events it holds up to 15,688. Obviously it is the home arena for Zalgiris Kaunas. The arena and the club are run by the same director and the management is responsible for everything, from the basketball side of things (selecting the players and coaches for the team, organizing the games) to welcoming all other events (concerts, exhibitions, seminars) and to maintaining the arena’s technical conditions in the perfect shape.”

How unusual is it for a pro sports clubs to manage its arena, and how did Zalgiris get into it?
“It is very unusual. Most arenas in Europe are not managed by professional sports clubs. We know that Riga Arena is managed by people tied to the Dinamo Riga ice hockey club, but we haven’t heard about another team in the Euroleague or Eurocup that manages the arena they play in.

“How did Zalgiris get into it? Before this arena was built, Zalgiris was playing in an old gym of 5,000 seats that was built for the 1939 European Championships. It was obvious that Zalgiris, a perennial participant in the Euroleague, needed a new, much larger basketball arena. There was also the requirement from the Euroleague for each team to have at least a 10,000-seat arena. We took it very seriously and the last push was Lithuania being awarded the right to organize EuroBasket 2011. So, when Kaunas city finally approved the plans to build the new arena on an island in the Nemunas river, we at Zalgiris Kaunas decided to become the operator of the arena. Zalgiris Kaunas won the concession and became the manager of the arena for 25 years, with the possibility to extend the terms. We are glad that there was a mutual understanding that the arena was being built for Zalgiris Kaunas, and therefore Zalgiris should be the manager of arena.”

Zalgirio Arena is more than just basketball. What other entertainment and sports events take place there?

“Zalgirio Arena is multifunctional sports and entertainment venue, where audiences can choose from different types of events: basketball, handball, ice hockey, concerts by world-famous artists, exhibitions, motorcross, drift, monster truck shows, musicals, circus, ballet, ice shows, dance performances and chamber events.

“This June the main hall of arena was successfully transformed from a basketball court to an ice hockey rink and then to a handball court in just four days. Zalgiris won the Lithuanian League on Friday and at the same time work started to prepare the court for shooting an ice hockey commercial while on Monday the Lithuanian national handball team held a practice on the handball court.

“We are also proud that many famous music stars have held concerts in Zalgirio Arena. Red Hot Chili Peppers, Lenny Kravitz, Eric Clapton, Rammstein, Marilyn Manson, Elton John, Katie Melua, Prodigy, Sting, James Blunt were the major ones. Kylie Minogue, Enrique Iglesias, Andrea Bocelli and others are planning to come here in the near future.

“And Zalgirio Arena is not only that. There are offices, restaurants, bars, cafes, and the biggest fitness club in Kaunas, which are always working.”

What impact does arena management have on your club’s budget?

“It definitely has a positive impact. The club receives a part of the arena’s profit, which is included in the yearly budget of the basketball team. This revenue helps to stabilize the financial situation of Zalgiris Kaunas. There is constant income from the offices we rent, from restaurants, bars and so on. We have plans to organize two or three events every year by ourselves. It would generate additional profit and would be a boost to Zalgiris’s budget. We also want to give more attention to other sports. There is a thought that in the future we could administer one more Zalgiris team from a different sport.

“There is also another set of advantages that arena management gives. Social responsibility can rise to another level. Projects like One Team or tournaments like the NIJT Euroleague Junior Tournament can run much smoother and create added value. By running the arena, Zalgiris has the opportunity to create content of the highest quality. It proves that Zalgiris is a socially responsible club not only for the people of Kaunas or Lithuania, but also for the international community. This way we can attract more sponsors as well.”

How does the club manage staff in terms of basketball employees vs. arena employees?

“When the arena was built, it had a separate management, while Zalgiris Kaunas was working on its own. Through an ongoing process, almost a year ago we merged both managements and it helped to optimize the cooperation and make the work more productive in many ways. We have one big office and departments like marketing, communications and ticketing now are working together. It helps to speed up everything because the right hand knows what the left hand is doing. Zalgiris Kaunas and Zalgirio Arena became one body. Even the technical department, which you would think should only care about the arena building itself, is implementing the new lighting regulations recommended by the Euroleague. These works are being done very smoothly because all the staff is oriented to the success of Zalgiris Kaunas.”

What other revenue streams does the club exploit that it would not if the arena was managed by a different company?

“First of all, we would have much more expenses as a basketball club. The prices for renting the main hall and all the practice facilities would be much higher. Now we not only save that, but we also get a percent of the profit from the other events which are held in the arena.

“It helps in the search for sponsors as well. We can offer advertising possibilities for sponsors during basketball games and can add some other events. The arena also benefits from the club as it can use more communication channels for non-basketball events. As you probably know, everything that goes together with basketball attracts a lot of attention in Lithuania.”

What advantages does the club managing the arena bring to the basketball fans in Kaunas?

“We can be more flexible in ticketing. This summer Zalgiris invested and installed an independent ticketing system that is totally controlled by the club. It opens all the possibilities to offer our fans the best product. We can create special packages and be much more versatile. We can also easily create added value. For example: season ticket holders every week can win tickets to concerts or other events. After Zalgiris games, whenever the game ends, the public buses are waiting for the fans and can bring them to all parts of Kaunas.

“Beside this, there is also a huge moral part of the story. Kaunas is a basketball city and is called the basketball capital of Lithuania. It was so even before the arena built. And now Zalgiris Kaunas and Zalgirio Arena have become a double power that is the postcard of Kaunas, the main component of the city’s image. The people of Kaunas are very proud of it.”

How much does the arena management part of the club’s business help it compete as a small-market team in the Turkish Airlines Euroleague, both on and off the court?

“The arena is multifunctional, but is very comfortable for basketball. We can implement all the new things ourselves. The conditions for the players are exemplary and outstanding. Everything was created using NBA standards. We probably have the biggest locker room in Europe with weight-lifting equipment installed in it. In the same area, there is also the recreational space with all the medical treatment equipment plus ice baths, sauna and jacuzzi. And with a five-second walk, the players are at the practice court, which is used only by them. They can enter the locker room and the practice court at any time and use it as much as they want. Such conditions help to attract players and help to prepare for the games. Moreover, we can save money on preseason camps. We have all the conditions and facilities here. If we go to other places it is only because we want to change the environment and not because we need better conditions. Zalgiris is not the richest club, but the top-notch conditions, fan support and comfortable life in a nice city – we can offer this to any foreign player.”

What does it do for the stability of the club and its future planning to be able to manage Zalgirio Arena?

“One of the main criteria of participating in the Euroleague is playing in an arena of required capacity and maintaining high attendance at the games. We have one of the most modern arenas in Europe, so the focus can be shifted to attracting more fans to the games.

“Talking about the future, the organization of a Turkish Airlines Euroleague Final Four is on our minds. The club and arena alone, of course, could not make it happen. Help from the city and Lithuania’s government would be needed. Even if our market is smaller than the countries that have held recent Final Fours, it is hard to imagine basketball-crazed Kaunas and Lithuania without an event of such importance. Like EuroBasket was in 2011, the Euroleague Final Four in Kaunas is a must. We believe that the Lithuanian Sports Department, Kaunas city and the Lithuanian government should unite and present this great basketball festival to the fans in our country.”