Fight Sports Revenue Erosion Read online

gravy. This is different from the non-fixed items, which have a deep, inherent cost to each on the wholesale market prior to being in the package.

  To manufacture the materials for a hotdog and soda, include parts and labor, let’s figure on $2.50 per one combo, meaning that $12.50 goes toward those costs. To make a t-shirt, it is $7 per t-shirt, meaning that the total cost is $35. Total expenditures are $47.50 for a total ticket package selling for $68 with a net profit of $20.50. This means that the franchise makes $4.10 per patron (dividing by 5 per family pack of 2 adults & 3 kids) throughout the total experience, impacting not only the per cap, but diluting the leverage of buying any ancillary once inside the ballpark.

  Sure, there is that $50,000 in trade that the franchise is gaining by doing this package. But that $4.10 per attendee in the group of five may not cover the other shadow costs meant to handle the occupants inside the building. Let’s pretend that 400 total packages are sold (2,000 total tickets divided by a family of five) – meaning that there is a net profit of $10,250. That may not cover the additional labor and facility costs of the stadium in handling those 2,000 additional attendees.

  Let’s delve a little deeper into the R.O.I. conversation. Bobblehead giveaways, like Beanie Babies or baseball caps, used to be the ultimate silver bullet promotion for any minor league team in a five- or ten-game output. That magical silver bullet of an instant draw, as previously mentioned, can draw more people who show up to grab a Bobblehead and enter through the turnstiles.

  It may increase that club average of 5,000 fans up to 7,000 fans per game, just because of a Bobblehead giveaway. But that is also where the marketing department, in their inexperience or lack of understanding of in-game experiential marketing, tends to stop their promotion. They pat themselves on the back for the draw, deeming it a job well done that the stands are packed, and then gloss over the real damage of premium item giveaways, that the marketing department tends to neglect in-game promotion and activities during and after the Bobblehead giveaway nights.

  This is where the Bobblehead’s shadow costs hurt the franchise without being seen: what happens to the game following the premium item giveaway? That is the real evidence of how damaging a Bobblehead night can be to a franchise’s per cap average. The game after a premium item giveaway will likely be another off-night, showing a 4,500 attendee game instead of the common 5,000 attendee average. Why? Because the public doesn’t see the value in going to an non-premium giveaway weeknight. The franchise, in its haste to attract any possible attendees to the weeknight game, has now branded its non-giveaway games as being of less value than those with premium item giveaways.

  The value of the in-game experiential paradigm was shifted by enticement. Instead of the in-game experience captivating and driving new business through the turnstiles, it is now seen as a secondary, almost unimportant element when compared to premium item giveaway promotions. I'm sure there are sports marketer gear-heads reading this and saying, I “don’t get it,” but the facts remain the same and in my favor. Premium item giveaways carry a devaluing cost to the overall price point by deflating the value of non-giveaway nights, which are deemed by single game attendees to be unattractive by comparison of their premium item giveaway brethren.

  Value should be a quality intrinsic to each sports team, especially when considering sales to the local community. Sports teams are by definition a unique product with a cyclical expiration date – each game is a moment that can never be replicated. And yet, more of these games will happen. When sports marketers compare sports business to retail, they are only half correct. It is not the retail of furniture that sports sales should emulate, but the retail of milk, something that has an expiration of the unit that will constantly make the units sold worthless in a few days time.

  Sports marketers, being the gear-heads that they are, tend to not view the actual ticket entry as a way to display value to the customer. Not everyone should be able to afford the product. That in itself is a reasonable rationale when looking at why people pay for anything. It is to separate themselves from everybody else. That is why the Opera costs more for its ticket than one to a movie theater. Both house an entertainment experience, but ticket prices separate out the masses. Without that dividing line, it harms the overall reason why the event itself is important. But the sports marketer gear-head believes that everyone will show up to a game, even when you aren’t doling out toys. However, once that premium item distribution brand is set, the marketplace changes.

  Sports marketers have the idea that vast numbers of ultimate sports fans exist in each market. They believe that these are waiting to show up nightly, especially weeknights, regardless of what promotional draw exists. This is a fallacy believed by gear-heads who mistake their own intense passion for the sport as the norm rather than the extreme. It's the same reason most sports marketers cannot understand passive interest in the actual game or events. They work in the industry because they love it. They are more than just fans; they are more like the super fans you see painted head-to-toe in zero degree weather.

  The issue remains whether the sports marketers can view the industry, and what draws people to the facility, with open eyes. Creating premium lures to the stadium without a follow-up experiential marketing plan once the new people are inside the venue aside from “the game,” is a recipe for failure. The sports marketer gear-head doesn’t see it that way – he believes that the marketing stops to allow the game to be played. In reality, that is where the marketing truly begins.

  The marketer's belief stems from a faulty notion that there is a stark “conversion culture” that happens automatically once people enter the stadium. It’s like believing in arranged marriages becoming instant love. That doesn’t occur very often, but the belief is still out there. If it only took one or two visits for people, especially those entering the ballpark via complimentary pass or heavily discounted ticket, to fall in love with the team, where are those people now? A 50,000 seat ballpark for Major League Baseball has 4,050,000 possible seats to fill throughout the season. By now, every ballpark has run about 10 billion heavily discounted ticket giveaways or complimentary ticket advertisements. Where are the fans who accepted those tickets, and why aren’t they returning? Haven't they been converted into fans via free pass? It's a mystery, I guess.

  Diehards for any entertainment industry venue make up about 10-15 percent of the given audience for a live event. It doesn’t matter whether it's sports, film, theater or comedy. Sports industry folks, who are gear-heads mostly, think diehards are 70-75 percent of the audience. Mainly because that is what they would be doing on a Saturday night, or Tuesday, or Thursday. It may come as a shock to most sports marketers, but the majority of those live entertainment sales are to passive audience members, people that go out once in a while, because they have multiple interests or entertainment options beyond that simple gear-head portal.

  Let’s suppose that your city had a Silent Film Festival of European Features from 1910-to-1935 playing from Wednesday to Saturday night. I assume that each of you reading this would be there, right? Wait, why not? After all, I love silent films from this era, especially those from Europe, so why don’t you love it too? It feels different when the shoe is on the other foot and you’re being asked to be a consumer of something that you normally don’t attend. At this film festival, there will be about 20-30 folks for the 500 seat theater who are diehards who will lament how the populace doesn’t understand what they are missing. That is the fallacy of the gear-head marketer, that they can't see how to market beyond their diehard range.

  When you market entertainment, you can't blind yourself with the idea that everyone already knows about your event. Here’s the hard truth: No one knows. It doesn’t matter how many times you tell them, you have to keep telling them, because no one knows about or remembers your event. This is hard for the sports marketer to grasp but no one is as focused on the schedule as they and those 10-15 percent diehard sports fans who want to hang out in the facility two d
ays prior to opening day are. But not understanding how the casual fan operates narrows the marketing arm’s ability to expand its reach. Now be honest, did you know that there was a film festival of silent movies in your city last week, last month, in the last year? Probably not, but the silent movie marketer might have expected you to. That’s where the real issue lies.

  This fallacy often crashes marketing. Diehards become disillusioned when the stands are empty, and begin to believe everyone is a cheap fan. Once attendance numbers drop or remain flat, the expectation changes from an instant “fan” to a lackluster “no one cares.” Sports attendees are somewhere in the middle, but once the disillusionment happens, that’s where sports marketer gear-heads transform into jaded “gifters.”

  Presenting a gift to motivate someone to enter a sports facility creates a gift with a higher value than the actual game itself. This happens because there is no promotion by the facility once the attendee goes inside the game. There’s just