Leaders in today's dynamic sports industry face many difficulties optimizing media and ticket sales revenue. For a franchise to remain financially sustainable, leaders must stay abreast of fan preferences and embrace emerging technologies effectively. According to a recent report by Kraft Analytics Group, only 34% of today’s sports franchises feel like they have the appropriate data & analytics strategies in place to deliver the best business outcomes. This white paper offers CFOs, CROs and other sports business leaders valuable strategies and insights on overcoming these obstacles successfully; by effectively addressing media and ticketing revenue strategies franchises can ensure financial sustainability, increase fan engagement and promote an environment for long term success.
Media Revenue Strategies
The RSN fallout has created significant financial uncertainty across most of the major US leagues, particularly in the MLB, NBA, and NHL, where teams receive over $4 billion annually in local media payments. While local media revenues have historically been almost entirely in the form of broadcast contracts with regional sports networks, digital platforms and streaming services offer new avenues of media revenue generation. Now more than ever it is essential that franchises embrace innovative technologies to enhance fan engagement through interactive and personalized content, leverage data analytics for targeted advertising opportunities, and employ data visualization techniques for targeted sponsorship opportunities. Business leaders looking to implement effective media revenue strategies should focus on:
Utilizing digital platforms and streaming services to reach a broader audience over the long term, while taking advantage of opportunities to negotiate new deals with local broadcast channels in the short term.
Exploring alternative revenue sources beyond traditional broadcasting deals, including direct-to-consumer platforms, social media partnerships, e-sports collaborations and other creative ideas.
Working alongside leagues or other centralized solutions to secure beneficial media rights agreements that ensure equitable revenue distribution among teams and leagues.
The LA Clippers serve as a prime example of successfully employing the above media revenue strategies to generate additional income. The Los Angeles Clippers made waves by entering the direct-to-consumer (DTC) arena by unveiling ClipperVision in October 2022, providing up to six alternative broadcasts for over 70 live in-market games. Clippers CourtVision was their initial Beta offering that extended team connection beyond the arena. Following years of user testing and refining based on feedback, ClipperVision made its debut during the 2022-23 season incorporating both traditional broadcasts, alternate-language streams, as well as AR streams with graphics overlays that provide personalization and immersion for fans.
ClipperVision not only exemplifies the Clippers' dedication to cutting-edge technology and innovation, but also their focus on fan experience. Through partnerships with regional sports network Bally Sports SoCal and broadcast affiliate KTLA, ClipperVision makes traditional broadcasts accessible direct-to-consumer. Through these efforts, the Franchise recently received the NBA Team Innovation of the Year award during the leagues annual sales & marketing meeting, Best Use of Technology by a Broadcaster at the Sports Technology Awards, and Best Streaming Platform Innovation at the Cynopsis Sports Media Awards. The Clippers' introduction into DTC set an exemplary precedent where technology, fan engagement, and personalized content come together to shape the sports media landscape.
Ticket Sales Strategies
Business leaders must remain aware of the ever-evolving ticket sales environment, driven by consumer preferences and expectations. Challenges associated with optimizing ticket sales strategies can span from primary and secondary market infrastructure to fraud prevention strategies to ticket bundling and pricing approaches. Business leaders should keep several key considerations in mind when developing ticket sales strategies:
Prioritizing fan experience and preferences to provide ticket offerings that meet their expectations.
Applying dynamic pricing strategies that adjust prices based on demand, opponent strength and other variables to maximize revenue generation (recent scholarly research suggests that the right dynamic strategy has resulted in increases of up to ~20% for certain US-based franchises).
Utilizing technology and data analytics to develop customized marketing campaigns, targeting fan segments with maximum ticket sales conversion probability.
The Boston Red Sox's student ticket sales strategy provides a good example of a unique and effective ticket sales initiative. Through their website, students can register and take advantage of exclusive ticket offers starting at $9 for select 2023 home games and events. The Red Sox hope to draw in younger fans with affordable student tickets and mobile ticketing technology, in an attempt to attract them to Fenway Park. The three-click process and limited supply of $9 tickets creates a sense of urgency among fans, helping ensure all available tickets sell out quickly. Though this program typically is limited to between 2,000 and 2,500 discounted tickets for select games, it provides an opportunity to engage and create relationships with a younger audience while contributing to game day by purchasing concessions. A student ticket sales strategy is a great way to engage younger fans, a very important subset of any franchise's fanbase.
Bridging Media Revenue and Ticket Sales
Franchise leaders must recognize the interdependent relationship between media revenue and ticket sales, which can enhance fan engagement while also maximizing overall revenue potential. Leaders can employ various strategies to maximize synergies between media revenue and ticket sales:
Cross-promotion and integrated marketing campaigns that use media exposure to drive ticket sales.
Enhancing fan engagement through interactive content at live events, as well as through media channels.
Utilizing customer data to drive targeted sales and advertising efforts, tailoring offers and promotions specifically to fan segments.
The Detroit Lions have experienced early signs of success integrating media and ticketing revenue streams through real-time fan tracking technology. Working closely with CrowdIQ (a computer vision data and analytics service used in their stadium), they have gained valuable insights into fan behavior, demographics, preferences, as well as increased media revenue as a result of these insights.
CrowdIQ's real-time fan tracking solution gives the Lions insight into popular areas within their stadium, optimal advertising placement opportunities and partnership activation suggestions. By understanding where their fans reside and what drives their interest, the Lions can tailor their media revenue strategies to maximize advertising and sponsorship opportunities. Data-driven approaches enable the Lions to personalize ticket offers to specific fan segments, increase ticket sales conversion rates and drive revenue growth.
Sports franchise leaders face many difficulties when it comes to maximizing media revenue and ticket sales, including navigating an ever-evolving media landscape and meeting the expectations and demands of modern fans. Business leaders can address these obstacles by adopting digital platforms, using data analytics for insight purposes and providing personalized experiences to drive revenue growth. We advise franchise leaders to adopt innovative approaches such as investing in technology, data analytics and fan engagement initiatives as ways of driving long-term success.