Ticketing is a vital income stream for many professional sports teams. For example, tickets and other event day income representing over two-fifths of total turnover for some of the largest football clubs in Europe. Manchester United receive 42% of their income on matchdays while, in comparison, the three biggest clubs in Italy generate less 20% from these sources. This can be attributed to the size and quality of facilities at the respective venues, and the local market prices for match tickets. In North America, Major League Baseball teams record up to two thirds of their income from ticketing but again there are sizeable variances in the data. The Boston Red Sox – who are one of the sport’s most popular franchises – record 66% of total income from gate receipts, while less popular teams, such as the Tampa Bay Devil Rays with a comparable figure of 13.8%, rely more of media rights and sponsorship.
Income from ticket sales are important for the hosts of mega events as well as sports clubs and franchises. Many international sports federations and professional sport leagues retain control of media rights, key sponsorship properties and sometimes merchandise and licensing agreements. Therefore, ticketing represents one of the most important revenue streams that local organising committees and member teams can exploit.
The value of the global ticketing market can be further boosted by mega events such as the FIFA World Cup and Olympic Games. For example, the Germany 2006 FIFA World Cup organising committee achieved ticket sales of €220 million from the 64 matches staged during the tournament. A total of 3.4 million tickets were distributed for the tournament, plus another 0.9 million tickets for the Torino 2006 Winter Olympic Games that was also staged in Europe just a few months earlier. There is always strong huge demand for tickets for these events and organisers of other major events staged during the same period must consider the impact on sales from domestic and foreign visitors.
However, sports organisation are experiencing declining live audiences, or are becoming more concerned about the acquisition and retention of customers as there is more competition for consumers’ discretionary spending from other entertainment and leisure providers. Fans are expressing antipathy about perceived value for money of tickets, and are able to enjoy an ever-increasing choice of televised live sport and other leisure activities. Proactive ticketing and marketing managers are initiating audience development strategies and have adopted best practice from other industries. One such example is the use of customer relationship management (CRM) applications to establish customer loyalty and maximise value from these relationships. This enables sports brands to identify key customers and market trends, and to utilise effective communication channels to develop valuable and long-term relationships with fans.
Sports teams and venues are becoming more sophist acted in developing new products. Stadia and arenas are being developed to accommodate hospitality seating products such as club seats and party suites. These are being targeted at new markets, with high net worth individuals becoming as important as traditional corporate clients.
Pricing strategies are also being evolved to focus more on the needs of the customers. The basic option of a season ticket or a single game or match ticket has been replaced by a menu of choices and pricing plan. These are designed to appeal to the consumer but also to maximise ticketing revenue and venue utilisation.
Reference: Stevens, Andy (2007) Maximising Value from Ticketing and CRM. March. London: SportBusiness Group.
