BROOKINGS, S.D. — The seemingly endless prairie that blankets this part of the United States would seem to be an unlikely place for one of the largest makers of sports video displays, Daktronics. After all, the nearest big-league ballpark is a four-hour drive from this town, which has barely enough residents to fill any of the arenas and stadiums where the high-tech screens are fixtures.
Yet in the nearly half-century since its founding, the company has become a global giant in sports entertainment, and though the quiet, tree-lined streets may not show it, business is good.
Revenue grew by a healthy 6.5 percent last year, largely because of demand from the NFL. For months, hundreds of the 1,600 workers in the sprawling Daktronics complex off the interstate that runs between Omaha, Nebraska, and Fargo, North Dakota, have been building gigantic video displays for NFL teams in cities like Charlotte, North Carolina; Cleveland; and Jacksonville, Florida, where two screens the length of a football field were installed behind the end zones and will be unveiled this week. Smaller screens will end up in the baseball, basketball and hockey homes of professional and college teams.
The new orders are a result of a paradox: As teams reap billions of dollars from television networks that carry their games in increasingly vivid detail, fans are finding more reasons to stay home, especially as the costs of tickets, parking and food escalate.
So in a twist that would make Marshall McLuhan proud, teams are trying to recreate the living room experience in stadiums. In recent years, they have installed televisions in suites, boosted Wi-Fi and cellphone signals, and created lounges where fans can track their fantasy football teams.
They are also installing high-definition video displays made by Daktronics, Mitsubishi Electric and others, providing a sensory punch that can be appreciated only in person.
“We see the living room as our biggest competitor,” said Al Kurtenbach, a Daktronics co-founder and its chairman. “Our job is to help the venue manager with fresh content. We can give fans a reason to stay.”
Teams have always tried to draw fans to stadiums. They have hired mascots, given away merchandise, and put on free concerts and fireworks shows. Fans can run the bases, throw out the first pitch and meet players and coaches.
The prevailing wisdom among sports executives now is that younger fans raised on smartphones are less willing to attend live events because they are cut off from the online content they find compelling.
Giant scoreboards, they hope, will quench that digital addiction while generating new advertising revenue. They can also become attractions like the enormous video screen in the Dallas Cowboys’ stadium, which opened in 2009.
James Ricchiuti, who covers Daktronics for the investment bank Needham & Co., said, “There’s real pressure on teams to do something, because with large-screen televisions in the home, they have to do something to attract fans to come to the arenas and stadiums.”
‘The Wow Factor’
Shahid Khan had that thought in mind. After buying the Jaguars in 2011, he realized that Jacksonville, one of the smallest NFL markets, was a hard place to sell tickets. The team has not made the playoffs since the 2007 season, and college football is wildly popular there. A transient population and a struggling local economy did not help.
So Khan cut ticket prices, added club seats and party zones, and refurbished the locker rooms and training rooms. This year, he and the city have spent $63 million to renovate EverBank Field and add two of the world’s largest video displays, made more than 1,500 miles away by Daktronics.
Towering over each end zone, the displays are 362 feet long and 60 feet tall — taller than almost every building in Brookings. Fans will get their first look at them Saturday, when Fulham (also owned by Khan) of England’s Premier League and D.C. United of Major League Soccer play an exhibition at EverBank Field.
“What we’re doing is upgrading the experience for our fans,” Khan said. “This is another step in the arms race to get the fans back into the stadium.”
The Cleveland Browns have not had problems selling tickets, but they felt their 15-year-old stadium needed an upgrade. A big piece of their $120 million renovation of FirstEnergy Stadium was the installation of Daktronics displays, which are three times larger than their predecessors.
“We feel like we had to improve the fan experience,” said Alec Scheiner, the Browns’ president. “And when we get better on the field, we feel like it will translate into more revenue, too.”
Khan has a keen interest in the displays because his main business, Flex-N-Gate, makes auto parts, including headlamps with light-emitting diodes. He visited Daktronics in May to see the displays being made.
In a large showroom in a vast warehouse, Khan and the team’s president, Mark Lamping, saw a display 38 feet long by 14 feet tall that was crammed with about 300,000 red, blue and green diodes, each the size of a pinkie fingernail. A 40th of the size of the displays to be installed in Jacksonville, it showed graphics of the Jaguars’ logo in stunning clarity.
The density of the pixels correlates closely with the resolution of a display.
Pixels were often 16 millimeters apart a few years ago, but they are now often 8 millimeters apart. Daktronics has also designed modules so displays are easier to read outdoors.
“This display technology really punches through the sun,” said Mike Kempany, a sales manager at Daktronics. “There are other technologies out there, but they don’t give the wow factor that this does.”
In laboratories near the showroom, Khan and Lamping were shown how the displays were tested to ensure they could withstand strong sunlight, downpours and other extreme weather conditions for at least a decade.
A 14.4-inch-square module, the type used for outdoor displays, has sat in a vat of water and blinked for three years. In the Highly Accelerated Life Testing chamber, the temperature ranges from minus 166 degrees to 392 degrees to see if displays can tolerate cold and heat. Other displays sit under banks of infrared lights that simulate the intensity of the sun in Phoenix. Other tests replicate freezing rain and salty mist.
“We have a goal for our products to last the same amount of time regardless of where they are,” said Paul Gilk, who runs the reliability lab.
Eric Johns, Gilk’s colleague, put it another way. “We’re trying to break them to see their weak points,” he said.
The heavy lifting of making modules — the building blocks of the displays — occurs in an adjacent building. With all the big orders Daktronics had received, the production line was running near capacity in two 10-hour daily shifts.
The 13-step process to make a module starts with millions of red, green and blue diodes. When LED displays were introduced about two decades ago, the diodes cost about a dollar each. Now that they cost pennies, sports teams have been able to buy larger and more advanced displays for less.
To generate extra revenue, Daktronics and other manufacturers have been developing software for teams to use on their displays. In addition to creating tailor-made graphics, Daktronics hosts seminars for programmers who operate scoreboards in Major League Baseball and NFL stadiums.
The scoreboards would not be possible without the hundreds of modules that come off the line every day. The process of making a module starts with a blank circuit board that runs through machines that attach drivers, chips, resisters, capacitors and other components. Three radial machines insert red, green and blue diodes. (The factory uses about 3.9 million of these LEDs in an average week.)
After the LEDs are soldered to the circuit board, signal connectors, capacitors, coils and other components are inserted manually, then soldered as well.
The boards are washed and dried to remove contaminants and placed in hard plastic casings. Any modules with malfunctioning LEDs are repaired. Silicone is applied to waterproof the modules, which are dried in an oven for six minutes. A robot drives screws into the modules, and power supplies are added.
In all, it takes about 30 minutes to build a module, and one module comes off the line every 65 seconds. The precision and speed are results of an overhaul in production that took place in recent years.
Neil Andal, who is in charge of improving production processes, said: “Our customers want to do something bigger and better, so if we didn’t improve our manufacturing, we couldn’t keep up. No one ever said, ‘I want a smaller scoreboard.’”
Bigger Is ... Bigger
The process, which is based on many Japanese techniques, is far more efficient than it was when Kurtenbach and a fellow electrical engineering professor at nearby South Dakota State started the company in 1968.
They were more interested in biomedical instrumentation than scoreboards. But an early investor in the company who was active in collegiate wrestling asked Kurtenbach to design a new scoreboard. With help from their students, Kurtenbach and his partner built a four-sided, four-foot-high tower with incandescent bulbs.
As orders came in, Kurtenbach realized that there was a market for other scoreboards. Daktronics made voting tally boards for nearly every statehouse in the nation, then scoreboards for high schools and colleges. Later, they created scoreboards with basic video displays made by Sony, Mitsubishi Electric and others.
To offset the unpredictable nature of the sports market, Daktronics expanded into traffic signs, commercial displays and other more stable businesses.
Daktronics made scoreboards for many of the events at the 1980 Winter Olympics in Lake Placid, New York, but it did not enter the pro sports market until 1988. That year, Daktronics made a scoreboard for the Buffalo Bisons, a Class AAA baseball club. At a Bisons game, Kurtenbach met Joe Spear, the stadium’s architect, who invited him to work on a new ballpark in Baltimore.
Camden Yards opened in 1992 and touched off a frenzy of construction that emphasized throwback designs, better sightlines, fan-friendly concessions and prominently placed scoreboards.
Orders poured in, and sales expanded overseas. Daktronics — an amalgam of the words Dakota and electronics — was listed on the Nasdaq stock market in 1994. Today, nearly every NFL stadium has some Daktronics equipment, and the company’s scoreboards are in many well-known venues, including Madison Square Garden and Citi Field.
College stadiums are a growing opportunity, too, particularly at Division I universities whose wealthy donors are willing to pay for a display.
One reason Daktronics has thrived in a town of about 22,000 has been its proximity to South Dakota State in Brookings. At any time, about 300 students work at the company as engineers, in marketing and sales, and in graphic arts and other departments.
Kurtenbach recognized that employing students was crucial to grooming the next generation of workers without having to persuade people elsewhere to move to South Dakota.
“They are a heck of a supplier of talent for us,” Kurtenbach said of the university, where the engineering school is in Daktronics Hall.
David L. Chicoine, the university president, said: “It’s fantastic to give students an option. When I went to school in South Dakota, if you had a tech background, you had to leave.”
Daktronics’s closest competitor in the roughly $800 million market, Mitsubishi Electric, has focused on marquee locations. With displays designed in Japan and assembled in Pittsburgh, Mitsubishi contends that its advanced technology provides higher resolution and seamless displays. It has displays in Yankee Stadium, AT&T Stadium outside Dallas and elsewhere.
“We are focusing on the higher end of the market,” said Todd Stih, a national sales manager at Mitsubishi Electric’s scoreboard division. “Tiffany still has to sell the best.”
The workers at Daktronics would disagree. They fasten modules into metal-frame cabinets that are 8 feet 4 inches tall and 7 feet 2 inches wide. Fans are attached in the back, and the modules are run hard for an hour to ensure that no LEDs burn out. A fully installed cabinet comes off the line about every five minutes.
“The displays are so large,” said Amber Peper, a master scheduler, “it’s not feasible to build them all at once because they’re not going to install them at once.”
The Jacksonville display required 416 cabinets. Crates of eight cabinets were shrink-wrapped and loaded onto flatbed tracks, which were parked at loading docks before their four-day ride to EverBank Field. Each crate, weighing about 2,800 pounds, was numbered to indicate its place in the display’s frame.
Before he left, Khan was given a Sharpie and asked to sign a cabinet numbered 53313. On the side, he wrote: “We were here. A OK.”