Held at the Arthur Ashe Stadium of the USTA Billie Jean King National Tennis Center in Flushing Meadows, NY, CTIC 2014 created an opportunity for industry leaders to discuss the business of sports and to directly impact the future of the industry. The one-day event hosted panels and sessions that featured over 60 speakers and covered topics on ticket management, food and beverage maximization, branding, non-game day access, compliance strategies, regulatory issues, design and many more.
The World of Sports Tickets,
Good afternoon. It’s great to be here again. I want to thank Bill Dorsey and Tony Knopp for bringing me here once again. I’m a big fan of this conference because unlike many conferences, which have become increasingly more about being safe, I feel like real ideas happen here. So I’m not going to be safe. I’m going to call it as it is, even if it is painful to some of the people in this audience, so I hope that the food is far enough down your esophagus that it won’t come up on you.
A year ago, I came before you and said that I couldn’t predict the future but was pretty sure the ticketing marketplace was as dynamic as ever before. That became the reality. In the last year, if there’s one storyline it’s that we’ve seen more teams decide that they would rather hold inventory themselves than offload it to brokers.
For so many years, big accounts presented the teams with a great opportunity. Have a couple people take the risk off the table and give the team automatic revenue even if the product on the field, court or ice went south.
And the growth of the internet allowed these brokers to take on more inventory. The local business all of a sudden became a national business. Anyone living in Cleveland could eliminate their hate for LeBron James by profiting off him by selling Miami Heat home games. An entrepreneurial student at NYU here in New York, whose favorite player was Stephen Curry, could have a little Warriors ticket business on the side. And when I once heard a cab driver tell me he developed a Brooklyn Nets ticket brokerage business I knew we had jumped the shark.
But that business has quickly soured. Four things happened.
And that’s where we are today. NFL teams en masse have dropped many brokers and for the first time sought to take back the single game sale for themselves. With that we’ll see teams, for the first time this year, go with variable pricing.
You see, even as ticket prices rise, the money isn’t as good as it once was as an overall percentage of the pie thanks to the huge gobs of money leagues and teams are pulling in on their media deals. So if teams have a bad year, not offloading to brokers is being seen as OK. We know that teams now are being encouraged by leagues to hold back tickets as part of taking back the sale. The NBA’s official exchange through Ticketmaster proves that it’s a priority of leagues to recondition the fan to stop going straight to StubHub to buy a seat and check out team websites first. This has proven to be a challenge.
Now there are a couple exceptions to this broker pullback theme and it’s interesting to look at the marketplace and survey who among those national brokers have survived. I’ve done my best to piece together the winning brokers who still have huge accounts with teams as consolidation has occurred.
The winners? Sometimes not the biggest accounts – Sometimes not the accounts with the longest relationships. How about the ones that share the best data? The pervasiveness of big data is one of the reasons why smart brokers who seek to help teams remain good partners, while those that don’t are being left on the cutting room floor come renewal time.
For a business as robust as the sports ticketing business, teams don’t know that much about their fans. Owners have grown increasingly uncomfortable with this idea as the owner profile has changed to a younger, more metric based owner who wants data as much off the field as he is now getting on it.
And so the idea that the person who is sitting in the stands isn’t the person whose name is on the account becomes more troublesome. It’s one of the reasons why ticketless ticketing has been pushed so hard — with varying amounts of success — in recent years. But if you become part of the big data movement you can protect yourself.
One broker I spoke to told me that’s why the team kept him. He helped them re-price single game tickets, he helped them reprise certain season ticket locations, and he helped them create their secondary price floors. Now let’s just let that sink in for a minute. What does this mean? It means that for brokers and for many parts of business it isn’t about the hard green cash alone anymore — it’s about how can you make us better against the marketplace.
Other winners are guys like Primesport. Whether the money they throw at things makes sense I don’t know, but they are locking up a huge amount of tickets through what is called a sponsorship deal. Again, the theme here isn’t a one off transaction where team sells to broker. It’s a partnership. If teams don’t take everything in house, expect more rev share deals with partners.
The good thing for many in this audience is that as many brokers have become devalued in this new equation, the sponsor has become more valuable. Let’s explore why.
You see unlike the broker sale, where the person ultimately paying the bill to the team just cares about the margin, the sponsor cares about the experience, even for the person who they are off loading the ticket too. And even in the event that they are giving away some tickets, the person who they are giving it away to is often a key client who is interacting with them after the sale. This is very different from the broker sale, which as the market has become more national, has increasingly become a one-off transaction where the broker and the fan buying the ticket might never speak again.
In a sponsor, a team has a dual revenue stream: a paying customer who is buying sponsorship and buying tickets. And a team also has what it needs from the information side — while they might not know who exactly is coming with the sponsor, they know the sponsor’s goals and they can learn to make them happier and happier.
In a sponsor, a team has a less fickle customer. A broker will do anything to make a sale — even if it means selling tickets for pennies on the dollar. Teams have become increasingly more uncomfortable with this as the reporting of these types of cheap deals has become more prevalent in the media. While teams don’t expect sponsors to stick tickets to less than ideal games in the office drawer, they do expect them to operate differently, and they often do. Perhaps tickets to a bad game are given to a lower level employee who doesn’t normally get on the ticket list but that transaction isn’t shown to the world.
Finally, in a sponsor, a team has a partner. There’s a challenge today and that’s getting people in the arena, in the stadium. Never before has the competition vs home and bars been as intense to the live-game experience. In 1998, an ESPN sports poll revealed that 54 percent of fans would rather be at an NFL game than at home. Last year, that percentage was 24 percent. Smart teams know that sponsors are partners and they can help change that equation by creating interactive experiences and solutions.
Despite the companies that have been created to allow for an arm’s length relationship on discounting that was supposed to make teams more comfortable — you know them, Groupon, Travelzoo, Score Big and Seat Sumo — the consumer knows exactly what is happening. And this is where the big idea comes in with sponsors. If teams are holding back tickets from brokers because they aren’t satisfied with how they do business and they love sponsors because they transact behind closed doors, buy the seats but give a lot of them away, sponsors are now in a position to own more of the arena or stadium than ever before.
Now let’s explore how this happens and how people on the team side and the sponsor side need to act to make sure this works for both sides.
From a team side, you can expect teams to open inventory that used to be sold on a single basis or to brokers to sponsors. One NBA owner told me that it’s not worth it for his sales force to spend the time it does to sell the upper bowl. And this is for a great team. So what is he going to do? Those upper bowl tickets are going to be used in deals to sponsors to try to up what they pay. Use 200 tickets for charity purposes for a tax deduction or have more employee outings for team building.
In order to create real value and to get sponsors to pay a premium for those tickets, teams have to do more. They have to be better at providing premium experiences. Team meet and greets, private autograph sessions, locker room tours, chalk talks. Teams have done a better job at this in recent years but it’s still nowhere close to where it has to be.
Since teams don’t own players and coaches for outside things, they have to stop being so stingy and try to get things for free in the name of cooperation. In order to make money, you must spend money. In the coming years, I see teams striking separate speech making and memorabilia deals with players and coaches that will make them available for the most exclusive of experiences. I see teams creating special tickets for sponsors — with logos and names. I see the team services departments expanding to allow for same day photo turnaround and jersey framing.
Sponsors: when teams expand the ticket offering to you as I’m sure they will, make sure you are bold and ask for the sky. You can’t rely on a client liking the food you present in your suite anymore or even just the team on the court. If they wanted a ticket to the game they could have bought it themselves. I haven’t seen the data but I can bet that the more unique of an experience you can provide an important customer with, the more they’ll talk to you. Use your power and the big spend you make to work harder for you.
Teams: Stop making sponsors ask for these experiences. Do deals with your team’s players past and present. Create a menu of options that sponsors can enjoy. Don’t assume that because you are dealing with a corporate account that they don’t want to have access to the perks that family season ticket holders get; their kids getting to shoot free throws on the court after the game, the opportunity to high five the players before the game. If you don’t think a kid of a client isn’t a key player in a relationship with a sponsor, I’m here to tell you you’re mistaken. Don’t assume that because a team has courtside signage that that’s the most important asset they have. It’s becoming less important actually.
Teams: you are too rigid with your assets and you can’t afford to do that anymore. Start acting like a high end restaurant or hotel. For the right price, for the loyalty of being a sponsor, everything is possible. Think out of the box. Don’t tell me what’s for sale. TELL ME WHAT I ABSOLUTELY CAN’T HAVE. If I’m a sponsor of the Arizona Diamondbacks can I get my logo on the wax paper under the fried 18 inch corn dog that they are selling 400 a game?
When people ask me what the most dynamic topics in sports business are, ticketing for the last five years or so, has made my top five. It’s what makes it such an exciting space to work in, but it’s also scary. The sooner you embrace the fear, realize its daily shifting nature and share information among your colleagues and the people you do business with — the better off you will be.
“In 1998, an ESPN sports poll revealed that 54 percent of fans would rather be at an NFL game than at home. Last year, that percentage was 24 percent. Smart teams know that sponsors are partners and they can help change that equation by creating interactive experiences and solutions.”
The opening session, moderated by Darren Rovell, included team executives and distinguished experts with education, legal, and consulting backgrounds.
“The [team] is here to listen to you and design a package. People are telling us it’s not the cost of the suite. It’s 120-140 nights — I just can’t find the people.”