White Sox make pitch for business with tech unit

By Ben Klayman

CHICAGO (Reuters) - The Chicago White Sox are stepping up to the plate in the digital media arena.

Silver Chalice Ventures, a wholly owned subsidiary of the Major League Baseball team, is working with customers to boost business online and via mobile platforms by helping clients offer such services as the ability check scores on cell phones.

The revenue raised by Silver Chalice will not be subject to baseball's revenue-sharing rules, meaning everything generated by Silver Chalice belongs 100 percent to the team, said Brooks Boyer, White Sox chief marketing officer and CEO of the new venture.

"When you look at baseball, we are the only league without a salary cap. My challenge is ... we have to grow revenues," he said in a telephone interview.

"If you look at ticket sales, the ballpark is only so big," Boyer added. "Sponsorships, there are these ceilings when it comes to generating revenue. It's become incumbent upon baseball teams to seek out those new revenue opportunities."

The unit quietly opened in January, but the White Sox wanted to build a client roster before making an official announcement.

That ability to keep all that money has previously led other teams, including the Boston Red Sox, San Francisco Giants and Tampa Bay Rays, to start similar ventures. The Red Sox, for example, own half of a NASCAR race team, as well as some minor league baseball teams and a marketing business.

Ultimately, Boyer said the plan includes adding other businesses under the venture, including investing in or buying other companies.

Boyer said the venture would have an "insignificant" impact on the baseball team's 2010 payroll. He hopes that will change in years ahead, however, possibly resulting in the White Sox being able to add a major batter or pitcher.

The venture was funded by the team, but Boyer declined to reveal the start-up funding amount.

Silver Chalice's clients include the Chicago Bulls basketball team, owned by White Sox owner Jerry Reinsdorf. The company helped the National Basketball Association team develop a digital network -- BullsTV -- launching Thursday.

Silver Chalice also developed mobile offerings in partnership with XOS Technologies for the Southeastern Conference's SEC Digital Network, allowing fans at such schools as the University of Florida to obtain live scores and game highlights on their iPhones and other wireless devices.

Other Silver Chalice clients include mobile music and entertainment company mSpot and Mycontent.com, an online start-up focused on distributing video content.

(Reporting by Ben Klayman, editing by Matthew Lewis)