The economic recession has had far-reaching effects on businesses, but it appears that sports have emerged somewhat untouched. Charles Davidson’s article “Sports Still Draw Fans Despite Recession” published in EconSouth explores that even amid rising unemployment, people across the country are still spending money on sports. Sports, a business unlike any other, provide relatively cheap entertainment and feeds fans’ addiction to sports (Davidson, 2009). Davidson asserts that it is this fan loyalty that has helped larger colleges and pro teams flourish during the recession while smaller teams have not faired as well.
It is not just merely pro teams that have felt the impact of the recession, but colleges, too, have suffered financial turmoil. Davidson highlights that despite the defending national collegiate football champion Florida Gators sell-out for the upcoming 2009 season, they have still seen an affect on their bottom-line (2009). The reasons for Gators financial impact: lower sales of licensed championship products and their lack of increase of ticket prices for upcoming season (Davidson, 2009). However, smaller schools have not been so lucky as many have had to eliminate sports programs to survive severe budget cuts (Davidson, 2009). Similarly, less-established professional leagues and teams have taken the brunt of the economic blow, forcing many teams, and even some leagues, to fold (Davidson, 2009).
Although the recession has not forced more-established leagues to fold, it does not mean that they have not felt the strain of the economic recession. According to Davidson, NASCAR is currently facing tough economic times due to: “high gas prices, rising unemployment, and economic uncertainty have caused racing fans and the automotive-industry sponsors…to cut spending” (2009). International Speedway Corporation (ISC), owner of 13 motorsports tracks, recently saw a 16-percent decline in ticket sales and has responded by reducing the cost of 150,000 seats for upcoming NASCAR Sprint Cup events (Davidson, 2009). Though the NFL, ranked as the nation’s most popular sport, does not have as many worries as NASCAR, they have had similar challenges selling tickets (Davidson, 2009). Many NFL teams have created flexible payment plans and instituted other measures to accommodate season ticket purchasers. For example, the Falcons introduced a six-month payment plan, while the Saints created a first-ever layaway option for season ticket holders (Davidson, 2009). While these newly created payment plans may help a team sell season tickets, it still only benefits a small amount of their fan base. I think many teams are missing out on a great opportunity to develop programs, which can provide fans savings on individual game ticket purchases.
Recently companies, such as Groupon and Living Social, have gained massive popularity and created a booming market in offering “deals,” meaning at a deeply discounted price. They offer customers a new deal every day on a range of products and services. However, there have been few sports teams who have used these deal sites to promote discounted tickets (Yi, 2011). This does not make much sense since most sports professionals agreed that these sites would be beneficial to, “help them move inventory that they wouldn’t normally be able to sell in a limited amount of time” (Yi, 2011). Joseph Yi’s article “Should Sports Teams Use Deal-A-Day Sites?” presents an explanation for why teams might be hesitant to utilize these deal sites: loss of profit and lack of customer retention (2011). First, if teams did use these deal sites they would not only have to offer a deal at 50% or more, but also they would have to split the revenue of those sold with the deal site (Yi, 2011). Secondly, statistics show that, “only 15% of Groupon users are coming back, which means that for a sports organization they would lose money in the long-run since their is no customer retention” (Yi, 2011). Although these are strong reasons why sports teams should avoid deal sites like the plague, I still believe such sites can prove beneficial to teams especially during this slow time as we still struggle to move out of the recession.
I believe using deal sites can give sports teams the opportunity to get casual fans in the building, which will allow the team an opportunity to sell the fan on a return visit or possibly even season tickets (Leonsis, 2010). It is very difficult getting new fans to attend a game, especially during economically weak times, but deal sites can accomplish this for sports teams. Deal sites connect potential fans from the local community to the team meaning fans, which otherwise, would not have attended the game.
Additionally deal sites allow teams to reach a much broader audience. Yi emphasizes that teams can use their own website to advertise deals, but I think this limits their audience (2011). Although teams will have to share revenue with deal sites, I think it is more advantageous because it gives teams the opportunity to reach new fans. Usually people registered to a teams’ website are already fans of the team. Most likely, these registered people would probably purchase a ticket at regular price and do not need the allure of a discount to attend a game.
Finally, Yi argues that Groupon is not effective at customer retention because statistics show only 15% of users return to businesses again (2011). However, I think this is an inaccurate statistic to apply to sports teams. Yi mentions that few sports teams have used such deal sites, so I think this is an inappropriate statistic (2011). It is commonly agreed that sports is unlike any other business because the product you buy is the experience. Groupon, and other similar deal sites, can provide discounts to specific products and services that are offered by a variety of businesses, but the experience of a sporting event cannot be packaged and sold. I believe it is through this unique experience that sports teams can create a return customer.
In the below video, I highlight 3 reasons I think deal-a-day sites are essential for sports teams
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