Business of Sports Assignment #6

(1) Provide the notes from 3 classes spanning October 18, 20, and 25th.

Class on October 18th - Partly Analytics and Ticketing (8), Contemporary Design of Sports Venues (9)

● As we started class, we first focused on the marketing aspect of ticketing analytics with the Charlotte Hornets
○ “Peak on peak marketing”: The Hornets have made sure to maximize the games that will generate
them the most revenue possible
○ They will be always pushing the “good games” instead of spending money on worse games that will
struggle regardless of marketing
● For the Charlotte Hornets, they will decide to block the seats off based on the people buying the tickets

Group Buying Price Reasoning Behind This

The Groups 75 These will be cheaper but worse seats, they don’t care as much as
watching the game but rather having a good experience

Individual tickets 125-150 These are for the individual games, they will depend based on the
scarcity and demand

Partial Season Tickets 60 These will be based on probably pick 23 games of the 46, these seats
will go by section to the buyers who are willing to spend the most
amount of money, can be as expensive or as cheap

Season Tickets 50 These are all of the games, have the priority, same as the partial season
tickets because it can be expensive or cheap

● With the ticketing analytics, it is also important to have the contractually guaranteed income, which include…
○ The naming rights deals, five year leases for premium seats, personal seat license (can purchase
season tickets there but will have to pay season pricing each year)
● Then, we will be talking about designing the contemporary sports venues
● There are certain situations in which teams have left because of not having good enough/inferior sports
venues…

St. Louis → Los Angeles The St. Louis Rams was moved to Los Angeles because of Kroenke wanting to get
into a better sports venue. St Louis is suing Kroenke because the Rams said they
would develop a stadium plan but instead moved to LA without hearing their
solution

Baltimore → Colts Baltimore Colts decided to move to Indianapolis overnight so they wouldn’t have
to deal with media

Oakland → Las Vegas The Oakland Raiders were playing in a multi-sport arena where they shared with
the Oakland Athletics. There are poor aesthetics of these former baseball
stadiums because they were ring-centric.
● While sports venues are important, it is important to have development around the venues as well
○ Example: Real Estate is important, there is development around the Chase Center in San Francisco
because the teams are wanting to create revenue year-round; there is an economic impact that is
generated from professional sports
○ Overall, there are more cities who want teams than teams available, an important way to attract a
sports team is having a good sports venue
● How the sports venues have started to change

What They Want To Do How They’ve Changed

Emphasis on adhering to the “mobile fan”
● They want to walk around more about the stadium
and be social: standing tables for food, having food
trucks or bars in areas where there is still an option to
watch the game
● There has been a reducing of seat capacity for easier
flow of in-game foot traffic, along with a 360 degree
concourse

Emphasis on “being social” ● Creation of “neighborhoods” in venues, these are

based upon different food and beverage options along
with designs and color themes

Enhance facility aesthetics ● Start of photographs and memorabilia throughout the

arenas that show the history of the sports scene
because nostalgia is powerful
● Example: Little Caesar in Detroit has Red Rings and
Pistons photographs throughout the arena, this is
known as “District Detroit”

Create social media opportunities ● Sports venues have wanted to have

Instagrammable/selfie moments
● This allows the teams to build the brand before,
throughout, and after the game

Have good bandwidth through the game ● Want to have the fans have good wireless connectivity
● This will help with mobile concessions ordering and
communication with others who aren’t at the game
● It is important to have frequent major renovations
● An example of technologically advanced stadium
○ Golden 1 Center: Located in Sacramento, very advance, they have hangar doors that will open during
the summer to make sure that it doesn’t get too hot

Class on October 20th - Continuation of Contemporary Design of Sports Venues (9)

● As we continue focusing on the sports venues, we will focus on the trends in capacity
○ The new sports facilities are wanting to change the traditional seating areas to generate additional
revenue and have fans come to games
○ There are thoughts to expand the social areas even further
○ There have been thoughts to decrease the stadiums substantially: MLB with 30,000 seats, NBA and
NHL with less than 16,000 seats, and NFL with 65,000 seats
● However, with following the trends in capacity, it is important to know your sport and market
○ Shrinking seating capacity could mean expanding the premium products
○ These premium products have been seen in Fiserv Forum, Las Vegas’ T-Mobile Arena
● What has the LA Galaxy done to have a more modern sports venue?

Plaza The stadium’s box office and team store will have a statue of David Beckham

Open Areas There is now live events, watch parties, along with signage for the high-level club partners
● Populous has worked for their venues to have enhanced tech offerings, there is smart in-venue technology
such as wanting the fans to feel the vibrations that are happening in the game
● What makes different sports venues special?

LA Live They have the Staples Center, Microsoft Center, nice hotel; this is attractive and feeds the
people into that part of town. There are hotel offerings and entertainment as well

Indianapolis This allowed for Downtown Indianapolis to grow, this was paid by the public 40-50%. There
is an area where the Pacers play as well and it’s a walkable area.

● Scott Radecic’s Insights Regarding Facility Logistics

1) Building a size that’s right for your marketplace (and sport)

2) Seat count and the overall square footage: this impacts the types of amenities you will provide the
fans, as well as the overall cost

3) Hospitality for the various levels of ticket holders: some of the companies will be able to afford
higher-end hospitality, there can be less nice places in the facility as well

4) Site location: this includes site topography and the infrastructure requirements: access,
ingress/egress will depend on the topography features of the site

5) Site hydrology and soil conditions

6) Available utilities

7) Roadway infrastructure: will there need to be new roads? New on/off ramps? Will the streets be
widened?

8) Parking availability

9) There are financial considerations and funding strategies: there can be hard costs of facility and the
soft cost of infrastructure, what are the types of revenue generation opportunities with the facility
feature?

10) How does the building aesthetically fit into/within the community: Does it amplify the team brand?
Will it help contribute to the city?

● What are the most critical “facility attributes” that will shape the fan impressions of a team or brand regardless
of their ticketing level?

1) Ingress and egress: this is coming and going, there are only so many places that you can park and
then leave the places at a sports venue

2) Access to amenities

3) Variety of concessions

4) Concourse design

5) Experiential activation

6) Sponsorship areas: they would be able to have LED displays

7) Hospitality spaces: these host and cater the events

● These features above have to be able to double as revenue generation for the stadium to be viable
○ There will be a consideration of opportunities inside and outside of the building; elements optimized
in order to have an excellent facility for a long time
● There are also different unique challenges when you will be working on the university projects: this is due to
the university structures

1) Designers have input from many sources: university president, athletics department, facilities
planning team, project management division, donors, Board of Trustees

2) Selection process: universities abide by RFP, RFQ, shortlisting processes, interview timeframes and
checklists, this isn’t as fluid

3) Review boards: these include campus architects, group of outside architects, make sure that the
review designs fit within the greater architectural context of a campus

4) Require Board of Trustee approval

5) Factors such as university bond rating and debt capacity are important if a project moves forward

● What are the design features most critical to the success of sports facilities today per Meg McWilliam?

Integrated Technology Fan: Having a high bandwidth and good Wi-Fi so they can be connected
Team: data capture and ability to leverage data in meaningful ways, with the fan
engagement and player development, will impact the facility

Specificity & Flexibility Flexibility for multiple uses and revenue generating spaces
Having an intense focus on team dynamics, player development w/ specific areas

Something for Everyone Important to understand what draws a broad segment of the population
Family-friendly spaces, social-media driven fans, get close to the game

● A way that the venues have started to combat against things such as COVID
○ Facial recognition: create a touchless experience with Mets and LAFC
○ Dolphins used UV powered tech to get rid of the coronavirus in the environment
● Smart venue: integrates the use of data, analytics, and technology
○ Example: Yankee Stadium reducing the energy costs with different lights
○ Better crowd flow: smart venues will reconfigure scanning or lines to reduce wait-times
● There are ways to help athletic performance
○ Velocity based training, individualized nutrition
● How will we pay for this?
○ Possible for taxpayer money, this needs votes to approve of
○ Ownership group; privately financed with corporate partners
○ Pre-sale of the luxury suites, naming right deals
● Key Takeaways from Sports Facilities - Marquette University
○ The Atlanta Braves had some of it financed publicly
○ Sin taxes on alcohol with the Cleveland Indians
○ There are some stadiums that won’t have public financing
○ Situations where you will tax people indiscriminately; also times when you tax tourists
 Class on October 25th -Economics & Finances of Sports Venues (10), A Sports Stadium Case Study of Pro
Football in Los Angeles (11)

● Lately, there have been a higher amount of private funding than in the past, mostly private financed
● With the example of the Chase Center…
○ There is a lot of development to be had on the front-side
○ There is the Uber headquarters with their national headquarters
○ They have the largest scoreboard in the league
○ They are wanting to infuse the art and gathering spaces, artistic displayings with building
● Contractually guaranteed income: very important
○ With the Chase Center, CGI covered 1.6 billion in the private finance
○ Recorded 2 billion in CGI from suite sales, sponsorship, premium product revenue
○ Then, 2.25 million from the top suites, 1.3 million for courtside seats
● With the Allegiant Stadium, it cost 2 billion dollars
○ 750 million is from public purses, this came from a 0.88% increase in hotel tax
○ 200 million loan from the NFL
○ 180 million from land acquisition and the site preparation
○ 850 million in equity towards the construction costs
● With the SoFi Stadium in LA, it cost 5 billion
○ Kroenke privately financed the facility
○ 30 million from SoFi annually for naming rights
○ 500 million from NFL loans
○ 400 million from private financers
○ Will repay the loans in 30 years
● Public financing is due to…
○ Public feels like they have a sense of ownership of the team, psychic income: community receives
○ Economic impact with the entire community around the community
○ Venues are good to host big events in the city
● How do teams benefit from the new facilities?
○ Retain revenue from the luxury boxes, concessions, merchandise
○ They are able to charge higher prices
○ Real estate development near the facility
○ There is a trickling down the local economy: more jobs, opportunities
● How can teams serve as public goods to the fans?
○ Public good: non-excludable, non-rival in consumption, everyone can enjoy
○ Being a fan and feeling pride in the team is a public good
○ Example: public financing argument is that it’s the government’s role to provide public goods, this
means that they should help the sports teams
● How do cities benefit from new facilities/teams/events?
○ There are the possibilities of positive and negative externalities
○ Public funding rests on positive externalities > negative externalities
● What could the negative externalities be?
○ Noise, overcrowding, pollution, and traffic congestion, health problems and inconveniences
● What are the positive externalities?
○ Facilities can become landmarks, generate the pride
○ Benefits to the neighborhoods, cities, metro areas
○ Firms and households that don’t have a direct connection to the facility see incomes rise
 ● What is the connection between the facilities spending and tax revenue?
○ When there are new facilities, it is best for the cities to keep it local; firms that are local will spend
extra income within the community so it’ll help the community
○ Spending by the fans will have an impact in the city; more so, fans who come in will be new income
○ Important to describe the economic impact of the areas when looking at positive aspects
● However, the direct impacts will usually be overstated
○ The evaluation should only count the new spending: not within the region
○ The revenue will always be coming in and going out
● What are the methods of facility financing?
○ There will be bonds, general sales tax, hotel taxes, tax increment financing, sin taxes
○ As of now, there is less public financing than there was during the 1970s and the 1980s
○ Evidence shows that usually, public investments won’t generate enough return to justify investments
○ Overall, you will usually receive 20-50% financing from the public sector
● What is admission tax?
○ This will only affect those who are going to the games, these are the people who care to go to games
● What is the story with Walter O’Malley?
○ Dodgers moved from Brooklyn to Los Angeles
○ Dodgers’ didn’t have to, they were the most profitable and was a cultural totem
○ They moved because they could earn more in LA, high opportunity cost in Brooklyn

The Economics & Politics of Sports Venues

● This lecture revolved around how economics and politics led two teams to Los Angeles
● What was the background for the events?

St. Louis Cardinals football team moved to Arizona; Arizona played Arizona State then a new facility in
Glendale with the University of Phoenix Stadium. No team in St. Louis

LA Rams played in the coliseum until 1979 then Angels baseball stadium; LA financing didn’t love this

There started to be some issues with San Diego and Oakland not wanting to keep their football team; they
didn’t have the local government to help have public funds to build a stadium

● What happened with Kroenke wanting to move the Rams away from St. Louis?

1) Within the leasing contract, it stated that Kroenke could leave St. Louis if the facility didn’t remain a
“top 8” facility in the NFL

2) Georgia Frontiere, owner, passed away

3) Shad Khan tried to purchase majority interest in the Rams

4) Stan Kroenke exercised right of first refusal, blocked Khan’s attempt

5) Stan move land in Inglewood in 2014

6) In 2015, Stan says he would build a football stadium and entertainment real estate development

● When Stan bought the land in Inglewood, there was a three-team race to have teams in Los Angeles
○ SD and Oakland wasn’t wealthy → converged to have stadium to share near LA Galaxy in Carson
 ● What were the steps in determining which team got to go to Los Angeles?

1) NFL six-man relocation committee met throughout and after the 2015 season, Carson plan was better

2) NFL owners voted for Kroenke’s plan in Inglewood; Jerry Jones said stadium design plan was better

3) The Rams moved from St. Louis to LA

4) Chargers had one year to figure out if they could gain money from San Diego; didn’t gain enough

5) The Raiders moved to Vegas because of the public subsidy of the new stadium

6) The Chargers moved to LA in January of 2017

(2) Share your insights and takeaways for each of the articles below, which come from this past week’s
discussion thread.

Fresh Spin for Generating Revenue

Within the sports marketplace, there are always changing conditions. There has been new technology that
will help for personalization of the fan, along with safety after the COVID pandemic. The customers have
started to have more power to choose the dollars, time, and effort. Those who are focusing on the venues
are wanting to have as many fans in the seats as possible. While there is a focus for personalization, it is also
important for the fans to feel safe within these situations. There have been new ways to categorize a fan
based upon their love for the game and making sure that there are various ways to target each type of fan.
Even with this new great experience, security is the best thing to focus on with the fans. Although it is easy
to get carried away with the new technology, it is still important to understand that there is a mix of
technological advancement along with the continued methods of focusing on the love of sports.

Podcast: The Connected Venue - Using Data to Improve Operational Efficiencies and Fan Experience
Within this podcast, it focuses on the connected venue: this is where you will have different systems that are
working together for the venue managers to have enough data and control. This is with the ticketing, retail,
operations, and the revenue models. All of these elements will come together in the goal to have a better fan
experience. The most important things are what the fans want and the right partners to garner your fan
bases to grow. The staffing is a concern especially after COVID as well. It is just as important to
communicate the data and apply this for revenue, staffing, and the fan perspective. We are wanting to react
to the amount of fans with the merchandise and making sure there is an equal amount of fans throughout
the stadiums. The teams are wanting to make sure that the live events will be a unique experience and they
want to make sure that they would rather be there than watching it back home on television. However, it is
always important to be able to always be changing the needs of the venues.
 Campus Mayhem: The New NIL Marketplace is Already Influencing Recruiting Tactics & Changing the
Stakes for Schools
As we look into the NIL marketplace, there have been deals with individual players, such as Bryce Young at
Alabama, along with deals with the entire team which is known as group licensing, such as FedEx’s deal with
Memphis. Since this industry is brand new, there is a chance that it could grow and expand tenfold over the
next few years. However, these deals have various possibilities: to market products and deals; deals to help
recruiting. The schools have focused on what the coaches have wanted to do rather than being compliance
built. While the NCAA has tried to limit NIL deals that would influence recruiting, these deals haven’t held.
At the moment, the schools can’t pay the players themselves, won’t be able to play matchmaker with
athletes and sponsors, and to keep a log of the NIL deals. However, some states have started to maximize the
opportunities of the student athletes. It depends on the situations that are focused on, but it depends on the
state and what the school will allow. As this continues, the NCAA continues to become less and less
authoritative with these deals while the schools and states gain more power.

Royals Have Work To Do Convince KC Taxpayers On Downtown Ballpark

With the emergence of modern sports venues, they have been more centered around being in the middle of
the city where things are happening. This has happened in Minneapolis, San Diego, Cincinnati, and San
Francisco. However, there are some problems with the same thing happening with the Kansas City Royals.
The Kansas City Royals have a very popular ballpark with the aesthetics and history. Also, this new stadium
in downtown Kansas City would cost up to a billion dollars. Since Kansas City is a smaller market, most of the
financing would have to come from the public sector instead of private investments. Therefore, there are
many barriers to building a stadium in the downtown area, especially if it were to be publicly financed.

Jacksonville Approves Khan’s Four Season Project

A way that the owners for the sports teams will garner year-round revenue is to buy real estate around the
area where there are the stadiums. This is the case as well with a Four Season Hotel in Downtown
Jacksonville. Shad Khan, the owner of the Jaguars, spear-headed this project with $301 million in private
financing. This combination of the hotel and the new football complex next to the stadium will be expensive,
and 120M will be funded publicly. Khan, a savvy businessman, spoke to the importance of being a force of
change in the community for economic development and growth. For a smaller market such as Jacksonville,
it is important to have wealthy investors along with public support.

Jazz, Season Share Partnering For Ticketing Program

Within the sports ticketing industry, they put an emphasis on having venues that will be able to hold
professional sports and entertainment events. In Salt Lake City, there has been a partnership between the
Jazz and Season Share to launch a ticketing initiative that gives fans access to music and NBA events at their
arena. This would be a monthly deal that would allow the Jazz to expand their client base for those who are
also interested in music. Sports ticketing, in the past few years, has focused on getting a younger audience
and demographic; this is a way that this is achieved. The price to have this bundle is also less than the
secondary prices on Ticketmaster and SeatGeek. This matches the model that usually occurs for the season
ticketing: there will be cheaper tickets if there is guaranteed revenue. The Jazz are also to fully understand
who is coming into their games through text and integration with the Ticketmaster platform.
 Oregon Football Getting New Indoor Practice Facility
With the expenses in the college athletic landscape, one of those which is the greatest is the renovations or
the creations of various facilities. These facilities, in turn, will generate more admissions and better athletic
programs. With the University of Oregon, they have decided to unveil a new facility with practice fields and a
connection to the football field in the next few years. With the college athletics landscape, projects are
usually funded through private funders, unless there is state support. With Oregon this project was founded
by private philanthropists. Along with the trends for the sports venues to have some artistic design, the
exterior shell is made from the timber with an Oregon O in the center of the roof.

NBA Kings, Developer Reveal Plans for High-Rise Project in Sacramento

Similar to what is happening in Jacksonville, the Sacramento Kings have started to focus on the real estate
development around the stadium. A newly developed stadium, Center One Stadium, will have a new
high-rise development near the stadium. This is downtown near the center and will be known as a luxury
high-rise rental project.

AAC Expansion Process Expected to Move Quickly This Week

As we have looked into the conference realignment, there continues to be shifts within the college
landscape. The next shift has occurred within the Group of Five conferences with the American Athletic
Conference. They have just lost Cincinnati, Houston, and UCF to the Big 12, so they have started to scramble
to find teams that would hold their own and allow for there to be high TV ratings. The schools that are
thinking to join include Charlotte, FAU, North Texas, Rice, UAB, and UTSA. These schools would be able to
join at the end of the 2023 seasons. However, these schools aren’t the most well-known. The AAC has
poached many of the teams away from the Conference USA, rather than the Mountain West. The C-USA
teams don’t have much sports prowess, but the AAC is reliant on their large alumni bases or their positions
within the large markets. C-USA wanted to combine with the AAC and divide the two geographically,
however, this didn’t make much sense for the AAC. Overall, the AAC is a much better conference than the
C-USA and garners more revenue and national media coverage.