Sports Marketing Quiz 1

Local Events

-Draw Fans from Small Geographic Area -Promote Using Local Media Examples: Minor League Team, High School Sports, Local Amateur Competitions

Primary Authorized Seller Pros

-First access to tickets -offers services both online and offline

Secondary Ticket Market Websites

are technology driven website hubs for reselling tickets, allowing access to ticket deals and sold out tickets. $15 Billion industry.

Primary Authorized Sellers

are the original providers of tickets at face value. Ex/ Ticketmaster

Variable Pricing

(sometimes called tiered pricing), teams set different prices for the same ballpark seat, depending on the day and the time of the game and the popularity of the opponent. Variable prices are set before the season begins. The goal is to drive demand for certain games with low prices and maximize ticket revenue for high-demand games with high ticket prices.

Secondary Ticket Market Summary

+ Exhaustive inventory-you can always find tickets for the events you want to attend + Using an aggregator, you can get a comprehensive picture of what's available + Some sites (like, ahem, SeatGeek) offer detailed analytics and price forecasts, ensuring you get the best deals + Offer the possibility of getting tickets well below face value + More transparent fees than primary market

Primary Ticket Market Pluses

+ Paying face value (plus fees) reduces uncertainty + Person-to-person interaction at box offices + Primary authorized sellers like Ticketmaster offer a broad selection and a good consumer experience

Primary Ticket Market Minuses

- Box offices often have long lines - Primary market tickets often sell out quickly - Complex, opaque fee structure - Prices are fixed so you cannot find deals below face value

Season Ticket fan benifits

- Priority (location, playoffs) - Discount on Tickets - Discount on Merchandise - "Club" Status - Access (training camp, meetings, etc.) - Additional Offers

Secondary Ticket Market Minuses

- Tickets not available immediately after they go on sale - Uncertainty due to price fluctuations

Season Ticket revenue benifits

- Upfront payments - Guaranteed revenues for games - Interest on Ticket Payments

Secondary Ticket Website Pros

-Access to sold out and cheap tickets -available for all major events -Good user experience -Price fluctuations allows for discount shopping

Scalper Pros

-Allows for last minute purchases -Instant gratification

International Events

-Appeal Transcends National Borders -Large Media Presence -Venue often Shifts Among Countries Examples: Ryder Cup Golf Tournament, World Cup of Rugby, Wimbledon Tennis Championships

Global Events

-Broadcast to Global Audience -Significant Rights Fees Paid by Broadcasters -National Pride often a Consideration -Few Events in this Top Category Examples: Olympic Games, World Cup of Soccer

Secondary Ticket Website Cons

-Can't get tickets when they first go on sale -Do not provide insight on price movements -Hard to evaluate which tickets are the best deal

Ticket Search Aggregator Cons

-Can't get tickets when they first go on sale -Users are redirected for purchase, breaking user experience flow

P2P Pros

-Direct buying from people in extended network -sites like facebook and craigslist have increased access for P2P buying

Team or Venue Website Pros

-First access to tickets (although secondary market access is catching up) -Simple browsing experience (limited to team or venue) -tickets sold at face value

NFL

-Hard cap -non-guaranteed contracts on salary - why bonuses are so important New 10 year deal started in 2011 In 2014, the cap will be about $133 million per team, Players receive roughly 51% of total revenues broken down by: 55% of TV revenues 45% from NFL Ventures and NFL Properties 40% of net local revenues at the club level

Ticket Search Aggregator Pros

-Has all the benefits of secondary ticket sites -Side-by-side ticket price comparisons -Large inventory of tickets -price forecasts and deal metrics

Primary Authorized Seller Cons

-High convenience and service fees -Non-transparent pricing -frequently sold out tickets -prices are fixed (bargains can be found on secondary market)

National Events

-Large Portion of One or Two Countries -Often Large Media Presence Examples: Stanley Cup Playoffs (Ice Hockey), BCS (College Football) Championship Game, NCAA Final Four (College Basketball)

No Scalp Zone Cons

-Limited availability -no guarantee of tickets

P2P Cons

-Limited unreliable selection -No guaranteed availability

Regional Events

-Little National or International Interest -Marketers Attempt to Move Event Up Examples: Most Collegiate Sports Teams, (Most) Marathon Races

Scalper Cons

-No price guarantee -Risk of fraud, forged tickets -might need negotiation skills -No guarantee or returns

Box Office Cons

-Tickets can sell out before they are available in the box office -long lines -inconvenient locations

Box Office Pros

-allows fans to get tickets at face value (can also be a con) -Box offices are located in the heart of the event setting

No Scalp Zone Pros

-fixed locations -Allows for last minute purchases

Team or Venue Website Cons

-tickets can sell out online -user experience can be tough since selling tickets is not the site's specialization

Secondary Ticket Market Aggregators

Examples: SeatGeek, Tickex, FanSnap, Seat Karma -Can compare tickets from all the major ticket providers in one place -Offers ticket forecasting, deal discovery, and event discovery to help people save time and money

Secondary Ticketing

Examples: Stubhub, eBay, Craigslist. Tickets that were purchased on the primary market and then resold

Primary Ticketing

Examples: Ticketmaster, Live Nation, the box office

NHL

Hard cap 10 year agreement through 2021-22 50-50 split 2014 salary cap $69 million - floor is $51 million

NBA

New 10 year deal in 2011 Players to receive between 49% and 51% of revenues Soft cap with punitive luxury tax

MLB

No salary cap but luxury tax -A penalty of 22.5% of the amount they were over the cap, second-time violators pay a 30% penalty, and teams that exceed the limit three or more times pay a 50% penalty from 2013 onwards. There is also an incentive to lower payroll; if in any year a team goes under the threshold, the penalty rate decreases to 17.5%, 25% or 40% (depending on prior record over the previous five years) for the next time the tax is paid, which will apply from 2013. -The cap limit for 2011-2013 is $178 million, and for 2014-2016 $189 million. The New York Yankees have paid 88.66% of all luxury tax collected by MLB.

Resale Market PSP

Person-to-person buying can mean from a friend or through the secondary market in general

Types of Ticket Offerings

SRO, General Admission, Season Tickets, Premium Seating, (Club Seats, Suites, Loge, Unique) PSL

Ticketing Strategy Stairs

Start with Individual game buyers, turn them into individual game buyers with benefits, turn them into mini-plan purchase, turn them into half-season, turn them into full-season

Secondary No Scalp Zones

are designed locations where fans sell extra tickets they have at face value (in the vicinity of the venue)

PSLs (Permanent Seat Licenses)

is a paid license that entitles the holder to the right to buy season tickets for a certain seat in a stadium. This holder can sell the seat license to someone else if they no longer wish to purchase season tickets. However, if the seat license holder chooses not to sell the seat licenses and does not renew the season tickets, the holder forfeits the license back to the team. Most seat licenses are valid for as long as the team plays in the current venue. The primary reason sporting venues offer PSLs is that the proceeds are used to help pay the debt incurred during the construction of the stadium or arena

The Secondary Ticket Market

is the resale market or the 2ndary market that exists between fans brokers for event tickets after they have been purchased from the primary ticket market

Scalpers

resell tickets direct to ticket-seekers. Usually sell tickets close to the event venue

Dynamic Pricing

uses algorithms to measure demand and price sensitivity to a particular game on a real-time basis. Many factors are considered, including the weather, a winning or hitting streak, the debut of a hot prospect and the price tickets are selling for on the secondary market, like StubHub. Pricing consultants crunch the numbers and then the teams to decide whether to raise or lower the ticket price for a particular game and by how much. (real-time pricing)