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Pricing In Sports

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Pricing and How to Price during times of recession in Sports

Pricing and How to Price during times of recession in Sports

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  • 1. Nathan Torres and MychalZito
    Pricing in Sports: Doing it the Right Way
  • 2. Sports Pricing Facts
    Sports Industry Revenue (2009) – $410.6B
    MLB (2009) – $6.2B
    NFL (2009) – $6.0B
    Average Ticket Price
    MLB (2010) - $22.21
    NFL (2009) - $75
    Media Coverage Revenue
    NFL (2009)
    CBS - $7.6B
    NBC, Fox and ESPN - combined paid each team $94 million
    MLB (2006)
    Fox and Turner - $3B
  • 3. Recession
    Getting Away…
  • 4. Effects of the Recession in Sports
    Attendance
    NFL
    Average 2008 - 68,018
    Average 2009 - 67,849
    BUT - Ticket and concession revenue increased 6% last season, kicking in an average of $59 million per team.
    MLB
    Average 2008 - 32,516
    Average 2009 - 30,298
  • 5. National Football League
    Pre Recession Pricing
    2007 to 2008 ticket price increase – 7.3%
    Average cost of family of four to attend a game* - $396.36
    Affects
    2007 to 2008 attendance drop – 2.6%
    How to react?
  • 6. Reacting to the Recession
    Fan First Approach
     “We're going to have to work harder, be more creative and more responsive, understand what our customers are going through” – Roger Goodell, Commissioner
    Putting Into Action
    24 out of the 32 teams in the NFL froze there ticket prices
    NFL Ticket Price Increase – 4%*
    * - would be 0.6% increase without the new Dallas Cowboys stadium which resulted in a 90% ticket increase
    Results…
  • 7. Major League Baseball
    Pre Recession Pricing
    2008 to 2009 ticket price increase – 1.5%
    Affects
    2008 to 2009 attendance drop – 6.9%
    Currently in the 2010 season, several teams have experienced record lows in attendance:
    Toronto Blue Jays had the worst showing at 10,314
    How to react?
  • 8. Reacting to the Recession
    Even though 19 teams have either lowered or kept prices at their 2009 rates, 11 teams have raised ticket prices.
    Contributing to the 1.5% are the Minnesota Twins who opened a new stadium this season. Their ticket prices rose 45%.
    MLB Commissioner not worried:
    “Obviously, I've stated how well we've done," commissioner Bud Selig said at the end of 2009, "I'll have plenty to say after I've seen the final numbers.“
    Results…
    Video
  • 9. How To Apply…
    Small Market Sports - Spokane
    Less is More
    Shock, Chiefs, Indians
    Fan First Approach
    Long Term Relations (Not a quick buck)
  • 10. QUESTIONS?
  • 11. Sources
    http://www.plunkettresearch.com/Industries/Sports/SportsStatistics/tabid/273/Default.aspx
    http://content.usatoday.com/communities/thehuddle/post/2009/09/nfl-average-ticket-prices-rise-thank-the-dallas-cowboys/1
    http://www.sportsbusinessdaily.com/article/101722
    http://www.forbes.com/2009/09/02/nfl-pro-football-business-sportsmoney-football-values-09-values.html
    http://espn.go.com/mlb/attendance/_/year/2008
    http://espn.go.com/nfl/attendance/_/year/2008
    http://www.youtube.com/watch?v=BqtmhguhORo

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