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Chapter 5
 

Chapter 5

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    Chapter 5 Chapter 5 Presentation Transcript

    • CHAPTER 5 DISCUSSION QUESTIONS1) What is the goal of any facility manager?2) What is the lifeblood of sport & entertainment facilities?3) What is the most important marketing concept that any business shouldremember?4) What are mini-plans?5) What reasons are a season ticket beneficial to the organization?6) What does the underground luxury suites at The Palace of Auburn Hills lack?7) What do club seats offer the patron?8) What is often the most important revenue source for many facilities?9) What is a per cap analysis?10) What do some teams charge fans in addition to the fee for entering the parkinglot?11) What is one of the most important revenue sources for most facilities?12) One of the critical components of maximizing the answer to Question 11 is topolice the facility for illegal sales of what?13) What can sport & entertainment facilities provide a sponsor access to?14) What was the company, team, & year the first time a company agreed to pay tohave its name attached to a professional sport facility?15) What was the issue with SF Candlestick Park agreeing to naming rights?16) What was the issue with the Houston Astros selling the naming rights to itsstadium?
    • 1) WHAT IS THE GOAL OF ANY FACILITY MANAGER?-TO GENERATE REVENUES THAT EXCEED EXPENSES.-PROJECTING REVENUE &EXPENSES IS ONE OF THEMOST IMPORTANT ASPECTSOF MANAGING ASPORT/ENTERTAINMENTFACILITY.
    • SPORT/ENTERTAINMENT FACILITY REVEUE SOURCES
    • THE 4 AREAS OF FACILITY RETAIL OPERATIONS1) CONCESIONS 2) PARKING 3) MERCHANDISING 4) TICKETS-TICKET OFFICE IS THE HEART OF SPORTS ENTERPRISE & KEYTO FINANCIAL SUCCESS.
    • 2) WHAT IS THE LIFEBLOOD OF SPORT/ENTERTAINMENT FACILITIES? TICKETS
    • 2012 NFL ATTENDANCE1) 708,249 2) 643,964 3) 637,236 15) 550,044
    • 2012 MLB ATTENDANCE1) 3,565,718 2) 3,542,406 3) 3,460,280 8) 3,043,003
    • “STUBHUB TAKES NAMING RIGHTS AT HOME DEPOT” SBJ: MARCH 4-10 PAGE: COVER
    • 1) Starting June 1, what will be the new name of the Home Depot Center?-STUBHUB CENTER2) What was the value of the agreement that Home Depot signed in 2003?-$70 MILLION OVER 10 YEARS3) What 2 MLS teams play home games at the stadium?-LOS ANGELES GALAXY & CHIVAS USA4) Who is StubHubs parent firm?-EBAY5) Announced in November, StubHub became the official ticket reseller for all venuesowned by what company?-AEG GLOBAL PARTNERSHIPS
    • 6) What is the name of the entertainment district across the street from the StaplesCenter?-L.A. LIVE7) Where is StubHub based?-SAN FRANCISCO, CA8) What company did StubHub hire to help develop concepts related to activation of itssponsorship?-CAA SPORTS CONSULTING9) Who was the first ticketing company to put its name on a major league sports facility?-STUBHUB10) What MLB teams pulled out of the StubHub-MLB deal when it was renewed inDecember?-YANKEES & ANGELS
    • “MOVING IN OUTFIELD FENCES GIVES PADRES ROOM FOR NEW SEATING” SBJ: MARCH 4-10 PAGE: 13
    • 1) The Padres moved the outfield fences how many feet closer to home plate?-11 FEET2) What is being installed just behind the right-field fence to fill the space left by the shift?-14 4-SEAT TABLES & 7 2-SEAT HIGH-TOP TABLES & STANDING ROOM FOR 10 PEOPLE3) What is the name of the seating vendor that was hired to install the tables?-4TOPPS4) How will be Padres be able to generate revenue with the new right-field wall?-LED DISPLAY: A 105-FOOT-LONG, 7-FOOT HIGH SLECTRONIC SIGN WITH A 14-FOOT-LONG STRIP CARVED OUT FOR LIVEVIDEO5) What companies teamed up to produce the 105-foot-long, 7-foot-high electronic sign?-DAKTRONICS & SONY6) The new 6 boxes behind the Home Plate Club will be sold as all-inclusive season-ticket packages & cover the cost of what?-FOOD, BEER & WINE, IN-SEAT SERVICE, 1 PARKING PASS, & ACCESS TO THE OMNI PREMIER CLUB7) What company owns the naming rights to the Padres stadium?-PETCO
    • 3) WHAT IS THE MOST IMPORTANT MARKETING CONCEPT THAT ANY BUSINESS SHOULD REMEMBER?THE MOST DIFFICULT & EXPENSIVE THING TO DO IS MAKE THE FIRST SALE.-A CONSIDERABLE INVESTMENT OF TIME & MONEY ISREQUIRED TO TO GET A CONSUMER TO OVERCOMEINITIAL RESISTANCE TO BUYING INTO APRODUCT/SERVICE, BUT…-ON AVERAGE IT COSTS 5X MORE TO GET A NEWCUSTOMER THAN IT DOES TO KEEP AN EXISTING ONE.-IF CUSTOMERS HAVE A POSITIVE EXPERIENCE DURINGTHEIR FIRST VISIT THEY ARE MUCH MORE LIKELY TO BEREPEAT CUSTOMERS.
    • “SEASON-TICKET HOLDERS SNAP UP HEAT’S NEW 3-YEAR PLANS” SBJ: MARCH 11-17 PAGE: 4
    • 1) Besides the Heat, how many other franchises currently offer a 3-year season-ticket renewal planacross all season-ticket price points?-NONE2) What does the 3-year season-ticket renewal deal provide the Heat?-ASSURED TICKET REVENUE3) What does the deal lessen for the Heat?-THE SEASON-TICKET ADMINISTRATIVE BURDEN ON THE CLUB4) How do the ticket holders benefit from the long-term deal?-LOCKS IN RATES COUNTERING ANY PRICE INCREASES THAT MIGHT COME DOWN THE LINE(PLAYOFF TICKETS AT REGULAR-SEASON PRICES)5) The Heat also sold 3-year season-ticket plans after winning its first NBA title in 2006. What wasdifferent with that plan offering than the current deal?-NO PRICE INCREASE INCREASES FOR THE TICKETS ACROSS THE SPAN OF THE DEAL
    • 6) Along with having a star-laden team, how else has Miami increased demand forHeat season tickets?-LIMITING THE SEASONLONG INVENTORY THAT’S AVAILABLE FOR THE CLUB7) The Heat hold back much of the nightly ticket inventory to maximize revenuethrough what 2 types of ticket-pricing efforts?-VARIABLE & DYNAMIC PRICING8) Heading into this season, how many teams were projected to have sales of atleast 10,000 full-season equivalent tickets?-159) What NBA team offers a 3-year plan for their higher-end, "all-access" seasonseats?-BROOKLYN NETS
    • TICKETS AS REVENUE
    • 4) WHAT ARE MINI-PLANS?A SERIES OF TICKETED EVENTS DURING THE SEASON.
    • ESCALATOR APPROACH-A SALES APPROACH THATATTEMPTS TO MOVE ACUSTOMER UP THE “TICKETESCALATOR” ONE STEP AT ATIME (SINGLE GAME TO MINI-PACKS TO FULL SEASON).
    • VARIABLE & DYNAMIC TICKET PRICING-TICKET SELLING STRATEGIES THAT USE ADVANCED COMPUTERPROGRAMMING TO MAKE PRICE ADJUSTMENTS BASED ON CERTAINDEMAND FACTORS (DAY OF THE WEEK, MONTH, OPPONENT, HOWWELL THE TEAM IS PLAYING, ETC.)-VARIABLE: PRICES ARE SET AT THE BEGINNING OF THE SEASON-DYNAMIC: PRICES ARE ADJUSTED DURING THE SEASON, SOMETIMESAS LATE AS THE DAY OF THE GAME-MORE THAN 1/2 OF MLB TEAMS UTILIZE DYNAMIC PRICING
    • 5) WHAT REASONS ARE A SEASON TICKET BENEFICIAL TO THE ORGANIZATION?-USUALLY PURCHASED PRIOR TO THE START OF THE SEASON SO THEORGANIZATION RECEIVES ALL OF THE MONEY FOR THE TICKETSALES PRIOR TO PAYING EXPENSES FOR THE GAMES.-SOLD FOR THE ENTIRE SEASON: THE SALES STAFF DOES NOT NEEDTO WORRY ABOUT SELLING THE SEAT-ASSIST THE GAME OPERATIONS STAFF TO PREPARE FORANTICIAPTED CROWDS
    • RED SOX SEASON TICKET WAITING LIST-CURRENTLY OVER 7,000 PEOPLE ON THE RED SOX SEASON TICKETWAITING LIST.-THE RENEWAL RATE: ABOUT 98%, AMONG THE HIGHEST IN MLB.-AT THAT RATE, ABOUT 400 RED SOX SEASON TICKETS ARE NOTRENEWED EACH YEAR.-SINCE MOST PEOPLE BUY SEASON TICKETS IN PAIRS, ABOUT 200FANS ADVANCE THROUGH THE WAITING LIST YEARLY.-THAT MEANS IT COULD TAKE UP TO 20 YEARS FOR A PERSON ONTHE WAITING LIST-CHICAGO CUBS HAVE LARGEST SEASON TICKET WAITING LIST INMLB AT ABOUT 120,000.
    • PERSONAL SEAT LICENSES (PSL)AN ADVANCED PAYMENT FOR THE RIGHT TO PURCHASE ASEASON TICKET FOR THE SEAT.COWBOYS STADIUM-$4,000-50,000/SEAT-MOST EXPENSIVE CLUB SEATS: -30 YEAR, $50,000 PSL/SEAT -$340/SEATMETLIFE STADIUM-$1000-20,000/SEAT.-52% OF SEATS WILL COST $5K.-EST. REVENUE: $317 MILLION
    • LUXURY SUITES-MOST SIGNIFICANT AMOUNT OF TICKET REVENUE FORFACILITY.-NEW YANKEE STADIUM: 51.-FENWAY PARK: 40.
    • HOUSTON ASTRODOME “THE 8TH WONDER OF THE WORLD”-FIRST STADIUM TO HAVE LUXURY SUITES (53).-FIRST DOME STADIUM.-OFFICIALLY OPENED ON 04/12/1965.
    • THE PALACE OF AUBURN HILLS-180 TOTAL LUXURY SUITES.-OFFERS 13 UNDERGROUND LUXURY SUITES. -5 OPENED IN 2005 (450 SQUARE FEET RENTING FOR $450,000/YEAR). -8 OPENED IN 2006 (800-1,200 SQUARE FEET RENTING FOR $350,000/YEAR). 6) WHAT DOES THE UNDERGROUND SUITES LACK? A DIRECT VIEW OF THE BASKETBALL FLOOR
    • PETERSEN EVENTS CENTER-12,508 SEAT MULTI-PURPOSE ARENA ON CAMPUS OF UNIVERSITY OFPITTSBURGH.-FEATURES 18 LUXURY SUITES.-5 COURTSIDE LUXURY SUITES (ONLY COLLEGE ARENA WITHCOURTSIDE LUXURY SUITES).-ONE 193 SEAT SUPERSUITE.
    • CLUB SEATS 7) WHAT DO CLUB SEATS OFFER THE PATRON?-THE OPPORTUNITY TO SIT IN THE MAIN SEATING SECTIONS OF THEFACILITY BUT IN A MORE EXPENSIVE SEAT. -WAITER SERVICE. -SEPARATE CONCESSIONS. -VIDEO SCREENS.
    • 8) WHAT IS OFTEN THE MOSTIMPORTANT REVENUE SOURCE FOR MANY FACILITIES? CONCESSIONS
    • CONCESSIONS AS REVENUE
    • CONCESSIONS•2ND IN IMPORTANCE TO FINANCIAL SUCCESS. (#1: TICKETS) CONCESSION MANAGERS MUST UNDERSTAND:1) HOW TO SERVE GOOD FOOD AT REASONABLE PRICE2) DEVELOPMENT OF MARKETING STRATEGY3) FINANCIAL MANAGEMENT4) BUSINESS PLANNING5) PURCHASING6) INVENTORY CONTROL7) BUSINESS LAW8) HEALTH CODES9) OSHA REGULATIONS10)CONVENIENCE FOODS
    • “FOR CUBS, DYNAMIC PRICING’S A ONE-WAY STREET” SBJ: MARCH 18-24 PAGE: 7
    • 1) When did the Cubs first test dynamic pricing?-LAST YEAR2) What seats did they test dynamic pricing?-BLEACHER SEATS (5,000)3) For 2013, what seats will the Cubs price using dynamic pricing?-ALL SEATS (41,210)4) The Cubs reduced all ticket prices by an average of what %?-2%5) Bleacher seats were reduced by what %?-10%
    • 6) By using dynamic pricing, will the Cubs be increasing or decreasing ticket prices during the season?-INCREASING (“PRICING ONLY GOES UP.”)7) Like that of other teams, what is the Cubs strategy with dynamic pricing?-PROVIDE AN INCENTIVE FOR FANS TO BUY TICKETS EARLY8) Who was the first MLB team to use dynamic pricing?-SAN FRANCISCO GIANTS (2009)9) How many individual tickets do the Giants dynamically price?-10,000-12,00010) Unlike the Cubs, what will the Giants do with dynamic pricing?-DROP PRICES ON THE FLY11) The Giants have a consecutive sellout streak dating to when?-OCTOBER 1, 2010
    • WHAT ARE CONCESSION SHORTCOMINGS1) NOT ENOUGH STANDS2) INADEQUATE KITCHEN LOCATION & SPACE3) NO INSTALLATION OF FLOOR DRAINS IN KITCHEN & STAND AREAS4) NO COMMISSARY FOR EMPLOYEES5) SERVCE ELEVATORS LOCATED AWAY FROM STORAGE6) NO PROVISIONS FOR EXHAUST7) LOADING DOCKS & STOREROOMS ON DIFFERENT FLOORS8) INADEQUATE VENTILATION9) INSUFFICIENT ENERGY & WATER AVAILABILITY10)CONCOURSES TOO NARROW
    • CONCESSION STANDS SHOULD BE1) CONVENIENTLY LOCATED (40-60 SEC)2) WELL ORGANIZED LINE DIRECTIONS3) BRIGHT, SIGNS, ATTRACTIVE4) GENERATE AROMA TO CONCOURSE5) BE ABLE TO BE SERVED BY SINGLE PERSON IN EACH SELLING STATION6) MENU BOARDS (PRODUCTS & PRICES)7) ATTENTION GRABBERS
    • HAWKERS-SELL CONCESSIONS/MERCHANDISE IN STANDS
    • ALCOHOL MANAGEMENT-BEARMAN V. UNIVERSITY NOTRE DAME-ARAMARK LAWSUIT-MLB ALCOHOL IN CLUBHOUSES•DRAM SHOP STATUTES:ALLOW INJURED PLAINTIFFS TO BRINGSUIT AGAINST ESTABLISHMENTS THAT ALLOW DEFENDANT•SOCIALDRUNKTO GET HOST LIABILITY:ALLOWS INJURED PLAINTIFF TO SUE DEFENDANT WHOKNOWINGLY SERVED ALCOHOL TO MINOR THATCAUSED INJURY OR DAMAGE TO PROPERTY
    • ALCOHOL SALES STRATEGIES•TO SELL OR NOT TO SELL•PROCEDURES TO PREVENTOUTSIDE ALCOHOL FROMENTERING VENUE•CROWD MANAGEMENTPROCEDURES•STRONG EJECTION POLICY•SUPERVISE TAILGAITING•DESIGNATED DRIVER PROGRAM•CONSUMPTION POLICIES
    • 9) WHAT IS A PER CAP ANALYSIS?DIVIDES THE TOTAL CONCESSION SALES BY THE NUMBER OF ATTENDEES IN ORDER TO DETERMINE THE AVERAGE ATTENDEE PURCHASE.
    • PARKING AS REVENUE2ND TO THE BOX OFFICE IN TERMS OF DIRECT CONTACT BETWEEN THE FACILITY & THE PATRON.
    • THE PARKING OPERATION-2 MAIN GOALS FOR A WELL DESIGNED & MANAGED PARKING OPERATION:1) INCREASE ATTENDANCE2) EASE CROWD TENSION
    • 10) WHAT DO SOME TEAMS CHARGE FANS IN ADDITION TO THE FEE FOR ENTERING THE PARKING LOT? TAILGATE FEE
    • LICENSED MERCHANDISE AS REVENUE
    • 12) ONE OF THE CRITICAL COMPONENTS OF MAXIMIZINGMERCHANDISE REVENUE IS TO POLICE THE FACILITY FOR ILLEGAL SALES OF WHAT? BOOTLEGGED MERCHANDISE
    • CORPORATE SPONSORSHIP AS REVENUE
    • SPONSORSHIP13) WHAT CAN SPORT & ENTERTAINMENT FACILITIES PROVIDE A SPONSOR ACCESS TO? A TARGET MARKET AUDIENCE (I KNOW THE BOOK SAID SOMETHING DIFFERENT.)
    • CAN YOU ANSWER THE FOLLOWING QUESTIONS ABOUT NFL SPONSORS?
    • WHO IS THE NFL’S LONGEST ACTIVE SPONSOR (SINCE 1983)?
    • WHO IS THE NFL’S OFFICIAL SPORTS/ENERGY DRINK SPONSOR? FOR THE 7TH CONSECUTIVE YEAR SCORED THE HIGHEST OVERALL AWARENESS MARK OF ANY LEAGUE SPONSOR BY FANS
    • WHO IS THE NFL’S OFFICIAL SOFT DRINK (SODA) SPONSOR? 2012: STARTED A NEW 10-YEAR RENEWAL PLAN WITH NFL
    • WHO IS THE NFL’S OFFICIAL BEER SPONSOR?2012: THERE WERE ON AVERAGE 2 BUD LIGHT ADS IN EVERY NFL GAME BROADCAST
    • FROM 2002-2010, WHO WAS THE NFL’S OFFICIAL BEER SPONSOR?
    • WHO IS THE NFL’S OFFICIAL CREDIT CARD SPONSOR?MASTERCARD HAS TEAM-LEVEL DEALS WITH 23 CLUBS
    • WHO IS THE NFL’S OFFICIAL AUTOMOTIVE SPONSOR?
    • WHO IS THE NFL’S OFFICIAL WIRELESS SERVICE SPONSOR? 2012: FOR THE FIRST TIME VERIZON ENABLED FANS TO LIVE STREAM THE SUPER BOWL
    • WHO IS THE NFL’S OFFICIAL SHIPPING SERVICE SPONSOR?
    • WHO IS THE NFL’S OFFICIAL PIZZA SPONSOR? PAPA JOHN’S SUPER BOWL XLVII COIN TOSS EXPERIENCE: ALLOWEDFANS TO VOTE HEADS/TAILS ON PAPAJOHNS.COM & FACEBOOK PAGE. WINNERS RECEIVED FREE LARGE ONE-TOPPING PIZZA
    • WHO IS THE NFL’S OFFICIAL HOTEL SPONSOR?
    • WHO IS THE NFL’S OFFICIAL FAST-FOOD RESTAURANT SPONSOR?2007-2011: VACANT SINCE BURGER KING’S SPONSORSHIP CONTRACT ENDED AFTER THE 2007 SEASON 2012: MCDONALD’S SIGNED MULTIYEAR DEAL
    • NAMING RIGHTS-KEY ELEMENTS: LENGTH OF CONTRACT,CONSIDERATION($), SIGNAGE RIGHTS & LIMITATIONS,RENEWAL OPTION. CITIGROUP: 20 YEARS, $400 MILLION
    • EARLY EXAMPLES OF NAMING RIGHTS
    • WRIGLEY FIELD-WEEGHMAN PARK FROM 1914-1920.-CUBS PARK FROM 1920-1926.-RENAMED WRIGLEY FIELD IN 1926 FOR TEAM OWNER &CHEWING GUM MAGNATE, WILLIAM WRIGLEY JR.
    • BUSCH STADIUM-SPORTSMAN’S PARK (1920-1953) HOME OF THE ST. LOUISCARDINALS.-RENAMED BUSCH STADIUM IN 1953 FOR TEAM OWNERGUSSIE BUSCH.
    • 14) THE FIRST TIME A COMPANY AGREED TO PAY FOR NAMINGRIGHTS TO A PROFESSIONAL SPORT FACILITY (THE COMPANY, TEAM, & YEAR)? TEAM: BUFFALO BILLS COMPANY: RICH PRODUCTS CORPORATION YEAR: 1973
    • BROADCAST RIGHTS AS REVENUE
    • BROADCAST RIGHTS•MAJOR REVENUE SOURCE FOR PROFESSIONAL &INTERCOLLEGIATE SPORTS.•BROADCASTING EXECS LINK AUDIENCE SIZE &REVENUE TOGETHER.•THE CONTRACT FOR BROADCASTING RIGHTS IS BASEDON THE POTENTIAL FOR GENERATING ADVERTISING &GAINING HIGH TV RATINGS.•THE LARGER THE AUDIENCE THE HIGHER THEPOTENTIAL FOR REVENUE FROM ADVERTISING.•BROADCASTERS SEEK PROGRAMMING THAT WILLAPPEAL TO LARGER MORE VALUABLE AUDIENCES.
    • 1999-2013$6 BILLION FOR EXCLUSIVEBROADCAST RIGHTS OFNCAA BASKETBALLTOURNAMENT
    • -SINCE 1990 EXCLUSIVE BROADCAST RIGHTS WITH NOTREDAME FOOTBALL.-CURRENT CONTRACT ENDS AFTER 2015 SEASON.-CONTRACT TERMS HAVE NEVER BEEN PUBLICLYRELEASED.
    • -STARTING IN JANUARY 2011 THROUGH JANUARY 2014,EXCLUSIVE BROADCAST RIGHTS FOR BCS GAMES.-CONTRACT: $125 MILLION/YEAR.
    • -BECAME OFFICAL BROADCASTER OF NHL IN 2005.-CONTRACT: $72.5 MILLION/YEAR.-CONTRACT ENDED AFTER 2010-11 SEASON.-NBC SPORTS RENEWED DEAL AFTER IT PURCHASED VERSUS.-THE DEAL GOES THROUGH THE 2020-21 SEASON & IS WORTH NEARLY$2 BILLION.-VERSUS HAS BEEN RENAMED NBC SPORTS NETWORK.
    • BIG $ OPPORTUNITIES = NEW BROADCAST FORUMSREGIONAL CABLE TV CHANNELS OWNED BY TEAMS