Veteran minor league sports owner Woody Kern becomes first Revolution franchisee
February 26, 2008

COLUMBUS, OH -- Peter C. “Woody” Kern, a long-time minor league sports owner-operator, has become the first Revolution Sports+Entertainment franchisee. Kern will place various Revolution franchises within the Dallas, TX, territory, which also includes the Ft. Worth, Frisco, and Arlington communities.

The specific sports Kern will place in the various venues he will utilize within his territory are still to be determined.

“I really enjoy living in the Dallas area and, as a long-time Dallas-area resident, I’m very excited about bringing my Revolution franchises to the Dallas territory,” said Kern, a resident of Pilot Point. “In the past, some of the other teams that I’ve owned and operated have been far away from where I lived and I’ve in effect been an absentee owner. This opportunity gives me the ability to be more hands-on than I have been able to be in the past.”

Kern is currently a minority owner of the AFL’s Tampa Bay Storm, having sold majority ownership of the team to a Tampa businessman in December 2007. Kern’s relationship with the AFL has stretched 15 years. He owned and operated the Ft. Worth Cavalry in 1994 before purchasing the Storm in 1995. With Kern as Tampa Bay’s owner, the Storm proved to be the league’s flagship franchise, winning three AFL championships in 1995, 1996, and 2003.

Kern is also a veteran minor league baseball owner. He most recently owned and operated the Asheville Tourists, the Class-A affiliate of the Colorado Rockies. His other minor league baseball holdings have included teams in Walla Walla, Wash., San Jose, Calif., Newark, NJ, and Little Falls, NY.

“With 25 years in minor league baseball and 15 years in Arena Football, I have a certain amount of experience in minor league sports,” said Kern. “I saw an opportunity in the Revolution model to utilize the same staff to market and operate multiple sports and entertainment events. That, and the fact that the franchise prices are significantly less than in other sports organizations, really attracted my attention”

Kern joins three other former minor league and niche sports owner/operators who have played key roles in the establishment of Revolution Sports+Entertainment, a new sports and entertainment company developed as an answer to the failing business models in niche and minor league sports.

Like Kern, Revolution CEO Dave Whinham, Revolution COO Dr. Eric Margenau, and Revolution partner Mark Hamister have all been deeply involved in the Arena Football League during their careers in the sports industry.

“We are thrilled to have Woody Kern join The Revolution and especially happy that he is planting his flag in the Dallas/Ft. Worth territory,” Whinham said. “I am confident that we will have great success there.”

In addition to Kern’s Dallas territory, Revolution is currently working with Global Spectrum and others to determine which markets and venues will join Dallas as original Revolution franchises.

MINOR LEAGUE SPORTS GROWTH HAS NOT ALWAYS LED TO SUCCESS
Minor league and niche sports as a whole have seen tremendous growth during the past few decades. However, much of this growth has come a structured plan for long-term viability.

“It’s an amazing phenomenon with the growth that’s taken place, to the point where most cities in the country, even modest and small size cities, have some kind of professional sports franchise,” said Dr. Margenau, whose minor league ownership and operating experience stretches over 25 years and includes teams in Arena Football, arenafootball2, minor league baseball, and minor league hockey.

“The problem is, as is the case often when you have tremendous growth in an industry in a very short period of time, the quality of growth and its development sometimes leaves something to be desired,” Dr. Margenau continued. “We’re at a very critical point in the development of the minor league and niche sports market in the wake of all of this growth. We must find a way to sustain the growth so that these resources and communities can continue to thrive with these sports products. That means, most importantly, a transition to professional ownership and management of these teams from what was dominantly handled as a hobby.”

Similarly, Hamister points to unsustainable financial models as a hurdle otherwise strong leagues with entertaining products have failed to overcome.

“The fans of sports clearly have demonstrated their desire for quality minor league and niche sports products,” said Hamister, former owner of the AFL’s Buffalo Destroyers and af2’s Cincinnati Swarm and Rochester Brigade.

“There are many great minor and niche leagues in the market today. However each of them suffers from one troubling trait. These teams come and go in many markets. The cause of such annual opening and closing down of teams is chiefly the economic models of these minor and niche leagues. Too many leagues have lost their discipline for the policies and practices which drive the economic models. When teams consistently lose money or cost too much to attend by their fans, closure is usually not too far behind. This instability does not serve the fans, the team owners, or the markets they call home. Revolution has designed a unique concept of packaging entertainment and modeling fiscal discipline into the fabric of the league. I believe that all constituencies win as a result.”

REVOLUTION IN POSITION TO LEAD THE INDUSTRY’S CORRECTION
In addition to financial discipline via an economic model that can thrive with the types of revenues and expenses typically produced by a Revolution franchise, one of the key elements of the Revolution model is the providing of management expertise within the office of every franchise. This management expertise comes in the form of a Team Specialist, a veteran sports professional trained and placed by Revolution to assist each franchisee with planning and budgeting, sponsorship and ticket sales, marketing, and overall business operations.

“The primary attractiveness of the Revolution concept is the low priced acquisitions and the management expertise and oversight provided by the franchisee,” said Kern. “There are a lot of good people involved that have been in minor league sports for a long time who have seen the dark side of the world in terms of bad financial models and the ramifications of what those unworkable models can do to a team. The Revolution economic models make sense. The oversight from the company will ensure that all franchises have a great opportunity to be successful. Everyone involved will be pulling on the rope in the same direction instead of everyone kind of swimming in their own swimming pool.”

Another element of the Revolution model includes the ability to own and operate multiple Revolution sports teams within the same entertainment company. This multiple team ownership element will allow a greater opportunity for profitability by Revolution franchisees.

“Over my 20 years in the industry I’ve had a couple of occasions to operate multiple teams in the same market and my experience is that not only do you have the advantage of being able to reduce your costs for each team by spreading expenses among them, but you also have the opportunity to cross-promote your products. You can utilize the platform of one team to market your tickets and sponsorships for the other. It just allows for much more efficiency in your operations and better utilization of your personnel,” said Dr. Margenau, who operated multiple franchises simultaneously in Chicago and Mobile, AL.

“The concept of multiple sport ownership is a key feature to the Revolution model because it offers the franchisee the opportunity to realize economies of scale that are very difficult to attain otherwise,” Dr. Margenau continued. “These economies of scale are an important element in Revolution’s financial model. Just as it’s important to increase revenues in any industry, so too is it important to control costs and expenses. The opportunity to have multiple types of events under a centralized management team provides the Revolution franchisees with a tremendous advantage.”

In addition to the management expertise provided by Revolution to its franchisees and the ability to operate multiple teams within the same market, two other elements make Revolution work. They are low-priced team acquisitions and sensible economic models. All of these elements work together to bring a new revolutionary approach to minor league and niche sports in North America.

“The concept by which many aspects of franchise management are overseen by the Revolution home office is clearly instrumental in keeping the level of performance by all of the franchises as strong as possible,” Kern stated. “Instead of there being some franchises that are standout while the others are struggling, this model allows everyone to have success because there is so much management expertise and oversight that franchisees can fall back on.”

The combination of these principles, along with the many years of successful experience brought by the Revolution leadership, including that of Revolution CEO Dave Whinham, makes this new model truly revolutionary.

“Dave Whinham is a creative and honest subject matter expert who has worked many years within the sports arena, including within great leagues that have lost their way,” said Hamister. “Dave has consistently maintained his decorum, his graciousness, and has the ability to step back, see the challenges and deliver on creative solutions. The combination of these values and traits has led Dave to be a person that is highly capable of succeeding in all that he undertakes, including Revolution.”

Revolution offers professional sports and entertainment ownership to a new breed of professional sports and entertainment operators. These franchisees may offer an assortment of Revolution products to their local markets, including Revolution Football, Revolution Lacrosse, Revolution Boxing, and Revolution Hockey, along with other Revolution Entertainment properties such as concerts, action sports events, and other types of programming, thus creating local entertainment companies focused on producing an outstanding fan experience while operating within viable financial models.

Revolution Football and Lacrosse will both begin play in 2009. Local franchisees will begin presenting Revolution concert and boxing products as early as the spring of 2008.

Prospective franchisees and others who wish to learn more about Revolution Enterprises, LLC, may log onto www.TheSportsRevolution.com or call 1-866-4-THE-TEAM.