Transcript Chapter 11 - Traditional Revenue Generation in S

Chapter 11
Traditional
Revenue
Generation in
Sport and
Recreation
Chapter Objectives
1. Identify the types of revenues available in spectator
sport, participation events, and recreation facilities
2. Differentiate between methods of revenue generation
in a variety of facilities and venues
3. Consider how to utilize different facilities for
revenue-producing events
4. Articulate the strengths and weaknesses of the
various revenue production strategies
5. Identify multiple revenue opportunities for facilities
Importance of Identifying Sources
of Revenues
• Improve the facility’s financial stability
• Facilities have the ability to host numerous types of
events
• Temporary nature of use
– An empty facility produces zero revenue
Ticket Sales
• Most common revenue stream for facility and events
– Gate receipts: Total amount of money received
for tickets at a certain game
Ticket Sales Strategies
• Differential or variable pricing
– Quality: Reputation, strength, and of the
opponent
– Time: Day of the week, time of day, or part of the
season
– Place: Location of seat
• Flexible ticket pricing
– Partial season plans
– Voucher programs
– Ticket exchange
Ticket Sales Strategies (cont.)
• Money-back guarantees
– Example: Jacksonville Sharks
• Web-based tickets
– Primary tool used to purchase tickets
– Increases challenge of secondary ticket market
• Electronic ticket delivery
– Example: FanPass (MLB), Flash Seats
– Provides ticket security (e.g., counterfeit or lost
tickets) and expedited entry
Luxury Suites and Club Seats
• Primary reason for the stadium boom of the
1990s and 2000s
– Houston Astrodome first to use luxury
seats
– Palace at Auburn Hills first to add suites
• Luxury suites
– Provide a room and seating
– Commonly sold for multiple seasons
• Club seats
– Provide a prime view of the game
Personal Seat Licenses
• First employed by Royal Albert Hall in London in
1871
• In the United States, the seat license gives the holder
the ability to purchase a specific seat in a stadium
– Used by college and professional teams as a
source of additional revenue
– Assist in the financing of new construction or
renovation projects
Promotions
• Bill Veeck
– Known as one of the most innovative promoters
and credited for many commonly used promotions
today
• Free product or souvenir giveaways
– Used to increase attendance
• Halftime or on-field entertainment
– Used to enhance the quality of the event
experience
• Promotional days
– Target specific groups to enhance attendance
Ancillary Revenues
• Income generated from goods and services
that enhance the primary product or service
– Concessions and food operations
– Alcohol sales
– Parking
– Merchandise
Ancillary Revenues (cont.)
Alternative Uses for Sport-Specific
Stadiums
• Baseball has limitations of what it can host because of
its design
• Examples of events:
– International soccer matches
– College bowl games
– Concerts
– Large speaker events
– “Winter Classic”
– State/regional championships
– Hospitality events
Multipurpose Sport Facilities
• Used for spectator sports, participatory events, and
physical fitness
• May include hockey rinks, indoor turf fields, sport
court buildings, swimming pools, weight rooms, and
training centers
• Types of events offered in these facilities include
team practices, swim meets, track and field meets,
youth and AAU basketball, road races, among other
possibilities
Participatory Events Revenues
• Entry fees
• Exhibitor fees
• Common ancillary revenues
– Concessions
– Merchandising
• Sponsorship