How are all of y’all holding up?
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Come have a drink with me, Ken, and Matt this evening! We are doing our weekly Happy Hour!
To the tickets!
As a kid, I loved the Braves: Dale Murphy, John Smoltz, and Ron Gant to name a few. So I’m surprised I haven’t bought any shares of the Braves’ stock so far. Because from the looks of it, it isn’t a bad deal right now.
I love stories like these because they enable us to get a better picture of what is going on with a business in a way that we might not otherwise see in the US.
If the pandemic has taught us anything, it is that a lot of things that seemed solid aren’t. Looking at the Braves’ numbers and their stock price actually can teach us a few things about the future of the business of sports.
First, we see that the Braves brought in about $476M in revenue last season.
Their second at the new ballpark.
Great ballpark! If you haven’t been, the glove rental thing is a cool addition and we spent some serious time in the Team Store. My son wears his Murphy and Hank Aaron t-shirts once a week, minimum.
Second, if we take the working number of having fans at games equaling about 40% of revenue, it means the Braves are bringing in about $2.37M per game.
Third, knowing that 60% of revenues come from the TV that for the Braves, this would mean almost $300M a year from the TV deals.
I lay this out because it is interesting to see where the money comes in and to walk through some marketing and exercises to think through monetization going forward.
First, new ballparks are great for boosting revenue.
From looking at the Braves numbers, we see that the first two years really push numbers forward.
In the case of the Braves, it seems like the premium and hospitality options really jumped as consistent options for their target market in the second year, driving much of this revenue boost from year one to two.
Second, looking at the future of the business of the sports business model, we should ask how likely the foundations and assumptions that our businesses have been built on are likely to stay the same?
In the States, we’ve yet to see any sign that the TV money will slow down, even where ratings and attention are declining.
In addition, we have seen interest in sports decline due to the pandemic, playing and watching. Though I would caution everyone to hold off on declaring this a trend until we are a little closer to the end of the pandemic.
We also have seen fans and customers are put off by the actions of platforms, ticket sellers, and teams with refund policies, refunds, and exchanges during the pandemic.
Again, we don’t know what the long-term implications of this are going to be, but I feel a lot more comfortable saying these things are going to be problematic on the flip side of the pandemic than I feel saying folks are just going to be completely out on sports.
Mix all of that together with real turnstile attendance being down in many sports and venues before the pandemic, you get a situation that does deserve attention.
Like a lot of the planning and strategizing going down right now, you should be looking at a few questions:
- How are we going to compete for people’s attention and spending when we return?
- Who will be our customer? (Are they the same or different? Are you rethinking this?)
- How will we win our customers over?
One of the big challenges that a lot of teams in sports have fallen into is they’ve gotten into some bad marketing and sales habits that plague all businesses when things are going great like relying too heavily on price promotions, forgetting the basics of sales development, and allowing marketing to become solely focused on communications.
So, the first thing every organization should be doing right now is making certain they are market-oriented.
I wrote up a piece this week on my blog about the different orientations a business can take when they go to market with some analysis of each and an action plan for becoming market-oriented.
Market Oriented just means seeing your business through the eyes of your customer, outside-in.
Second, make sure you refresh your organization’s thinking around research, segmentation, targeting, and positioning.
Most research you do right now is not going to be useful because we are still in the middle of a pandemic where people’s behaviors are changed unnaturally.
But you can still use your historical data to review your segmenting, targeting, and positioning, which will make taking action on researching and updating things a little simpler when tickets can be sold at scale again.
Finally, take some time to make sure you are working on your strategy so that you can put strategy before tactics.
Over the last decade, we’ve seen a great deal of “tactification” happen in businesses around the globe.
Tactification just means everything is all tactics, all the time.
You’ll recognize this behavior by the people that are quoting Gary V’s mantra to push out 100 pieces of content a day, to “crush it”, or to use some other buzzword fueled mantra to hide the fact that most actions are really being guided by sticking their finger in the wind and hoping for the best.
I haven’t spent a lot of time on these stories lately because I’ve been pretty clear, the refund scenarios where people aren’t getting their money back make everyone look bad even if you have nothing to do with the situation at hand.
These delays and obfuscations make everyone look bad, no matter what.
I think we are seeing these stories become more pointed and we are going to see more and more fans start ripping into venues, bands, teams, and other folks in the ecosystem.
The bigger point here is, good luck getting your money back from a Russian oligarch!
While that’s partly a joke, I do think how this is handled is going to set a precedent for how these refund situations are handled going forward because we are likely to see a few similar situations when shows are rescheduled involving the secondary market, smaller platforms, and other content producers.
If you are in a situation where you are putting on shows and have outstanding inventory or refunds, I’d run through a risk mitigation exercise right now.
Andrew Lloyd Webber has been at the forefront of experimenting with ways that people can get back into West End theatres.
This week, he did it again.
Watching the reviews of the productions that Webber and his team at LW Theatres put on this week was exciting because it shows that where there is direction and ingenuity, there is opportunity and innovation created by people.
While in other countries, we’ve seen the government support efforts to help the arts and entertainment through this period like efforts in Australia, China, and Germany. And, this week, the UK government put forth grants to many impacted venues.
The good news doesn’t hide the bad news. The industry is on the ropes and everyone that touches the industry needs to be as creative as possible to come up with revenue ideas, sales opportunities, and ways for folks to weather this period.
Here are a few things to do now:
Check out what NIVA is working on and support their efforts however you can.
And, if you are in the States, VOTE! Support candidates that support the live entertainment industry.
Bon jour to my friends in France!
This is interesting to keep an eye on because the government has supported the efforts with loans to provide for the lost revenues from the French leagues acting quickly to end their seasons and then having other leagues actually find ways to complete theirs.
But also it again shows the implications of having no fans in place for matches and games.
As we saw with a report out of Milwaulkee, the Brewers are reported to be down around $178M due to the lack of fans this year. We’ve seen significant impacts in Australia where the AFL, NRL, and other leagues have had to make significant adjustments to their business practices and staffing to ensure that they are able to survive. I’ve shared the story a few times of Serie A and their investigation of taking private equity money.
Obviously, these are trying times for everyone.
One solution that I’m dubious about the likelihood of success is the Premier League’s attempt at charging approximately $20 for live streams of matches.
I don’t discount the streaming option or even charging folks for the streams, but I do think $20 is a bit much for a Wednesday night mid-table match up.
Instead of looking at a per-game fee, I’d offer up the idea of a full season subscription, may be bundled with a membership like I’ve pointed out with the AFL and the Melbourne FC team’s plan before.
As I’ve found out working with a few teams and festivals over the last six months on ways to engage with their fans now, a lot of times if you give people an option to help you and spend money, they will try to spend with you or support you.
This is going to be a little different in the States than in some other countries, but, again, creativity matters.
I’ve seen clubs in the Premier League continue to sell matchday programs. And, another extension on that would be to create an offer special matchday memorabilia even if fans can’t get to the stadium like the game posters the Trailblazers created to support their charity a few years back, special match-day shirts like they used to make for every Alabama game when I was in college, or, really, the sky is the limit as long as you become more creative.
Just in case you need a refresher, here are 101 ways to monetize and market your event that I created about 18 months ago. While it was pre-pandemic, you may find something useful still.
The NFL is doing the best they can and their players are professionals, adults, that can make decisions based on their own best interests.
College football players are in a different situation because they aren’t paid, are still developing critical thinking skills, and are propping up a system that has been shown to be pretty unstable.
In both scenarios, we see that keeping the pandemic out is almost impossible.
I was texting with a friend on Wednesday night when the news of Nick Saban’s positive test came back. Here’s what I said, “I can hold two ideas in my head at one time and say this: I love my Alabama football and I can also recognize that this is a situation that always begs the idea of whether just because you can do it, you should.”
It seems likely that we are going to continue to see coronavirus cases impact all parts of our society and one of the big challenges that we need to figure out is how we are going to know what is truth and what is fiction because in the case of college kids, not being honest about what you are putting them through is highly unethical.
Get well soon Nick!
I’m around DC still! Just driving the boy to soccer matches and practices. So give me a shout!
Check out the podcast archives. I’ve got a good one with Greg Githens coming up in the next few days.
Check out this cool blog about Halloween and the theatre over at the Booking Protect blog. I don’t know if trick or treating is on the agenda, but I will still accept bourbon, beer, and wine in my pumpkin! Also, I never knew about keeping your script under your pillow!
Visit the We Will Recover project!