Fight Sports Revenue Erosion Read online

This practice suggests that teams are “gifting” the wrong people and causing more “divorces” of long-term buyers in favor of giving premium items to single game buyers with the hopes of marrying them to long-term contracts as well.

  Contrast the sports industry with the cellular phone industry. If you want a cellular phone for a penny, you have to get locked into a two year contract. They don’t provide a person with a gift simply for entering the store, thinking a crowded store is better than an empty one. What the cellular phone industry wants is to lock-in customers long-term. That’s why the phone costs less than the overall contract.

  The sports industry tries to emulate the best features of retail, but fails to understand the retail ecosystem. While there may be a discount on a specific item (with a low R.O.I.), surrounding that item are several other items at full price (and a higher R.O.I.). The goal is to draw with one item, and build on that sale with a higher value item. Sports marketers seem to think that since the item with the highest R.O.I. (that being tickets) is the easiest to mark down, it should be discounted to allow those items with the lowest R.O.I. (concessions, merchandise) to be available for purchase within this ecosystem.

  So, instead of showing great value in purchasing the ticket initially at full price, then converting the single game buyer with discounts or a higher added value after they have entered the building, the sports industry ecosystem has been inverted. And those buy who long-term are forced to compete for premium items against those single game buyers or watch as those same single game buyers benefit by receiving items without committing long-term to the sports product. This shows little reason to become a season ticket holder.

  Word of mouth advertising is king for any product, and if only those long-term buyers are rewarded, single game buyers will question why they aren’t buying long-term. If the draw isn’t the actual game experience, but more of the premium item, why isn’t the carrot attached to a longer stick? Of course, the sports marketer un-intelligentsia will fight this notion, since they don’t believe in the sports product in the first place.