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ATTRACTING A PROFESSIONAL TEAM

ATTRACTING A PROFESSIONAL TEAM. Sports and Entertainment Marketing Chapter 3 Lesson 3.2. GETTING IN THE BALLGAME. More cities want teams than there are teams available League controls locations based on: Business benefits to league and owners. DISTRIBUTING THE GAME.

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ATTRACTING A PROFESSIONAL TEAM

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  1. ATTRACTING A PROFESSIONAL TEAM Sports and Entertainment Marketing Chapter 3 Lesson 3.2

  2. GETTING IN THE BALLGAME • More cities want teams than there are teams available • League controls locations based on: • Business benefits to league and owners

  3. DISTRIBUTING THE GAME • Each team is a member of a cartel • Cartel---combination of independent businesses formed to regulate production, pricing and marketing of a product • Usually cartels are prohibited • Federal anti-trust laws • Special legislation exempts leagues

  4. HOW IS DISTRIBUTION DECIDED? • Large potential customer base • Owners want public funds to subsidize new team • Local governmental agencies must have voters support

  5. DISTRIBUTION con’t • 1998 – NFL • Cleveland, Ohio awarded a franchise for 31st team • Work began for #32 • 24 owners must agree to selection of new city • Owners set price • Owners split “expansion fee”

  6. DISTRIBUTION con’t • Potential owners • Financing to pay NFL $450 million to $600 million for team • New team needs a home

  7. ATTRACTING A SPORTS TEAM • Until 1960: • Teams owned their own facilities • Then, local and state governments subsidized • Franchises sell their naming rights • 1990s: • Taxpayers show resistance

  8. IT TAKES MONEY • Money and risk • 1989 • San Antonio, Texas -- $156 million--Alamodome • 10 years later – still no NFL team • NBA-champion Spurs want a new arena

  9. IT TAKES MONEY con’t • Financial picture • Pricing of tickets • Concessions • Luxury seating • Merchandise • Biggest is TV coverage • Advertisements • Cost based on number of viewers

  10. TV RATINGS • 3 of the 14 biggest TV market areas • Cleveland • Houston • Los Angeles • Ratings for NFL viewing dropped considerably

  11. TIME OUT • Paul Brown Stadium • Open 2000 for Cincinnati Bengals • Scoreboard -- $5.4 million • New Offices – (no furniture) -- $2.67 million • 679 wooden-backed chairs etched with the team logo -- $135,000 • Window treatments for the administration building --$48,106 • One custom-made desk -- $4,854

  12. AND MORE MONEY • Houston and Los Angeles battle for NFL team #32 • Houston – 50 million viewers • Los Angeles – three times that number TV sets • Team price increased

  13. AND MORE MONEY con’t • Los Angeles had no money • Taxpayers not willing to pay • Houston had taxpayer backing • 60% of $310 million retractable-roof stadium • Lure of big TV revenue made Los Angeles more attractive

  14. ANOTHER OPTION • Community ownership • Local government or fans • Green Bay Packers sell publicly traded stock • “Give Fans A Chance Act” • “Yer Out”

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