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The income generation lines of a stadium
10 Dec 2021   ·   

Any sports stadium has direct and indirect income. The most obvious is the first: ticket sales, rental of facilities, operation of food and drink areas, club shop, tour, and any other income dedicated to entertainment or marketing. The second and no less critical are retransmission rights, commercial rights, and sponsorship. Both are equally important, regardless of the money they generate, because they depend directly on each other. And if the business model is not well designed to exploit them, it will be useless to build the most spectacular stadium in the world.

The keys to monetise fan experience

That primitive idea of selling the ticket to attend a match no longer makes sense. Now the spectator goes to an experience where everything counts. This goes from the access to the stadium to their comfort, passing through the offer of food and drink. Also, the activation activities conducted by the sponsors, and the shows outside the game time, which complement the game time. The most technical part is:

  • connectivity,
  • the stadium’s app,
  • personalised commercial offers and
  • audiovisual content.

This complete set must be designed to increase spectator participation and their commitment to the club. In other words, to increase fan engagement, all the actions that are created should be oriented to that end. But to achieve this, it helps design participation and interaction actions in the games. Still, it is also essential to identify the profiles of our public and give them what they want.

This is truly relevant in premium seats, which must have a privileged position to watch the game, and not only with more services than the stands but the same vision, as sometimes happens. You also must focus on a type of spectator who is consistent, the one who only comes to the stadium when their team is well-positioned in the competition or decisive matches such as semifinals and finals. These two profiles complement the most loyal fans and followers of the team.

Everyone, without distinction, should leave the venue at the end of the event sure of having lived a unique experience. We need to adjust fans’ priorities to the sources of income, the characteristics of our stadium, and the general business plan. Because this is how we will achieve an increase in the activities that generate income:

  • increased commercial and consumption flow;
  • average ticket increase;
  • a better environment in the stadium;
  • greater use of revenue from audiovisual media;
  • higher participation in sponsors activation; and
  • sales growth in the hospitality area.

And we will achieve this if the general strategy is designed to extend the time that spectators spend in the stadium: the longer the interval, the greater the average revenue ticket.

The atmosphere in the stands, decisive in the rest of the business lines

The image of crowded stands, with a party atmosphere and a dynamic environment, is much more attractive than a half-empty one with apathetic fans. And this atmosphere depends on the overall success of any stadium and direct and indirect revenue. Because in addition to attracting spectators to the venue, it attracts audiences who seek to connect to shows that convey success and are a privilege to attend. Images of full stadiums always increase followers on social networks. And when a venue is packed and overflowing with people who enjoy passionately, media and platforms often fight for broadcasting rights.

The Premier League is the best example, consistently with record audiences despite the quality of its matches, lower than that of other leagues, which nevertheless have a smaller television audience. The difference that English football makes is its packed stadiums, which convey a first-rate fan experience.

The atmosphere also influences the exploitation of commercial and sponsorship rights. Brands want to be associated with clubs and stadiums that project a positive image of success, with their personality, to attract their target. Any brand will avoid a sports entity that does not attract the public to its stadium, as it is a failure symptom. And on the contrary, those entities which project an image of success will be more persecuted by firms. This is definitive in naming rights contracts because they suppose a continuous identification between the sponsor and club and a very long-term association.

The Bundesliga is another outstanding example. All its stadiums have a naming contract, and all its teams have an international sponsor on their shirts, as most multinationals want to see their brand associated with German clubs. The reason is that it has good stadiums, a good fan experience, and prices between 30 and 40 percent lower than the rest of the market. They thus achieve a spectacular image, with packed stadiums at every game, even for teams in the weakest positions in the table.

We shouldn’t ignore that the stadium’s atmosphere also works against the club, supported by technology. The improvement in the broadcasts, a careful realisation, cameras at field level, flying machines, and drones or cranes that collect indoors and outdoors are today capable of perfectly transmitting the emotion in the stands. They make the home experience so good that it discourages some spectators from going to the venue. That is why the first objective of any business plan for a stadium should be to achieve an excellent fan experience for those who come to the stands. The feeling of exclusivity and authenticity for being there, the fun added to the venue’s visit, and the promotional actions and exclusive content must be something that cannot be replaced with digital technology and can surpass any other leisure experience.

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