Case Study: Daktronics gets in on the soccer act - June 2004  

NASDAQ-listed company Daktronics designs, manufactures, sells and services dynamic visual communication systems including Light Emitting Diode (LED) screens for sports properties and events worldwide including the NFL, NHL and previous Olympic Games. Its recent opening of an office in Germany signifies the company's ambitions to further penetrate the European market and to capitalise on the plethora of soccer stadia in particular. Sport and Technology's Mark Jeffers spoke to John Mette, managing director, of Daktronics GmBH about the company's products and plans.

Daktronics, with a market capitalisation of $302m, has installed tens of thousands of scoreboards and display systems in more than 70 countries since founding in 1968 and is recognised as a world leader in scoreboards, electronic displays and large screen video systems, outnumbering its rivals by two to one. Daktronics customers are typically sports organisations, businesses of all types and sizes and government entities. Its products range from small scoreboards to complete scoring systems for all levels of sports competition, displays that promote large and small businesses, highway traffic and mass transit information displays and electronic voting systems for legislatures. Its Tuff Sport, OmniSport and ProStar products are helping boost company coffers.
The recent launch of Daktronics' office in Germany, headed up by US native Mette, signifies the company's ambitions to expand further in that market. "We face a lot of competition from Barco and Philips," says Mette, "although Philips often supplies screens as part of a sponsorship deal."
Sponsorship is not Daktronics' thing - the company is more used to working behind the scenes at events on a white-label basis. "We're not concerned so much with publicity," says Mette. "People know who we are." The company for example supplied screens to Swiss Timing at the Atlanta and Sydney Olympics and on behalf of Seiko at Salt Lake 2002 but was not name-checked until after each event.

Sports event contracts

Sports contracts make up two-thirds of Daktronics' business according to Mette. The company is already a major supplier of screens in its US home market including servicing numerous National Football League, Major League Baseball, National Hockey League and National Basketball Association stadia. Daktronics for example recently supplied an installation in Glendale Arizona, home to the Phoenix Coyotes of the National Hockey League. "The ribbon display in this facility is a new product from Daktronics we call 'ProRail'," explains Mette. "Instead of having a concrete fascia around the facility between the decks and attaching an LED display to the face of that, the LED display acts as the fascia itself (including a hand-railing on the top). These lower construction costs and give better site lines."
Turning to Europe and the Middle East, Daktronics supplies a temporary screen to Twickenham, home of the English rugby football union, that is rolled in and out when required and has seven screens so far in Qatar thanks to a deal with the Qatar Olympic Committee. The company hopes to also have screens at the 2006 Doha Asian Games.
Indeed, how does Daktronics source future work? "We tender for all our own work using our own initiatives," says Mette. "Over time we have built up a lot of contacts such as architects, and have gone on our own trade missions. We try and get involved in an event as early as possible and offer free training to architects such as HOK Sport."

It's a visual thing

On matters of a visual nature, Mette thinks it is a good thing that Daktronics' installations are above the field of play. "Personally I find the LED advertising that you see in Europe around the perimeter boards at some soccer matches distracting," says Mette, echoing public outcry that has been experienced in some markets such as the UK. "In the US, you occasionally see scrolling images at the edge of seating tiers, but generally these are above the line of vision. Electronic displays are very much designed for the people at the event, to put on a show for them."
Mette contrasts this with the way LED screens are generally used at events in Europe. "It's more of a purist scenario. The soccer match is the event and not much else exists around it as additional entertainment. The focus is usually on the television audience rather than the audience in the stadium."

The beautiful game

The opportunity to place installations at soccer stadia in Europe and enhance spectator experiences is an attractive proposition for Daktronics according to Mette. The company will have screens at the 2004 UEFA European Football Championships in Portugal as well as the 2006 World Cup in Germany (for the final at the Olympia Stadium, Berlin). The company also has a screen at St Mary's - the residence of English Premier League soccer team Southampton FC.
The latter in particular presented an interesting challenge for Daktronics, explains Mette. "The stadium had already been built by the time we were approached and didn't have an obvious place where we could install a screen. Therefore we came up with a solution where the screen could be attached to the front edge of the roof." Flexibility is all in a market where Daktronics is facing stiff competition from the LED screen rental companies - its own focus erring towards permanent installations.
"We are however looking more at mixed use considerations," adds Mette. "One of the ways screens can make financial sense is if they can be taken out of a stadium and used elsewhere, particularly at a soccer stadium where the screen might only be used 20 times a year."
That sort of proposition certainly makes LED screens more attractive financially, with a common industry complaint being that they are too expensive. "Prices are coming down now considerably though," says Mette, "in fact over the last four years prices have dropped by more than half. The cost curve is starting to flatten out."
As far as making a decent return is concerned, Mette is convinced that more can be done with screens in Europe to make them pay. "There's a great opportunity in Europe to enhance fans' experiences at games through smart content. Advertisers get signage and therefore stadia and rights owners can make revenue at the same time."
Certainly, keeping the punters happy and making smarter use of advertising at stadia seems to be the Daktronics warcry as it continues onwards with its mission to conquer the LED market Europe.

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