No Venue Left Behind
In the world of sponsorship assets, sports venues are about to enter a Golden Age as the epicenter of fan engagement and monetization. What more could a team owner want?
And, we are only seeing the very beginnings of what will ultimately be an extreme makeover for dozens of venues, as teams attempt to 1) get closer to fans with all sorts of gimmicks (as well as real technology breakthroughs – more on that in a minute) while at the same time 2) maximize revenue from every square inch of the stadium, inside and out (and the air in between and above the stadium).
To be clear, venue revenue is crucial for a team for two main reasons:
1) It’s accretive to the bottom line: Nearly all teams in all sports get to keep most of the revenue that comes from the venue – advertising, concessions, luxury seats – whereas sponsorship revenue is often shared with the league and other teams. So, cracking the code on the in-stadium fan experience equals potential big dollars for team owners.
2) Putting big revenue numbers on the board is a way for a team to flex their muscle during complex negotiations with sponsors: Make no mistake, the stronger a team’s venue revenue, the better leverage they have from a sponsor in the overall relationship, which often can amount to $10’s and $100’s of millions for multi-year agreements.
And, nailing the fan experience is often the best path to strong negotiations with sponsors. Avid and engaged fans equals stronger negotiating power with sponsors. The most cutting-edge stadiums of today (i.e. Dallas Cowboys’ $1B new stadium) are getting closer to cracking the code on fan experience.
But, we’re about to see a renaissance of innovation regarding the in-stadium experience and nearly all of it revolves around the use of technology. Sure, food quality is better and the “walking around” experience is higher end, even Beverly-Hills-Mall-like, but those are easy upgrades that owners didn’t do in the past because of cost considerations and lack of need by fans.
Now, wifi is being deployed across entire stadiums in anticipation of fans engaging with massive TV screens that are 25-50 yards long – in fact, one could argue that TV is the only platform that matters for the NFL. Therefore, nailing the in-stadium ‘screen’ experience is crucial. On the technology front, companies such as Gimbal, PoGoSeat and Audience Entertainment are reinventing (and reinvigorating) the fan experience by providing powerful vehicles for sponsors to engage more deeply with fans.
From in-game seat upgrades and geofencing to extending social media to engaging fans outside the stadium, the fan experience is top of mind for team owners. The teams that nail this wave of innovation will also reap the financial rewards.