Warriors Sell More By Selling Out

BY ADAM GROSSMAN

One well-known strategic challenge sports organizations face is monetizing their venue throughout the year. More specifically, the MLB, NBA, NHL, and NFL play 81, 41, 41, and 8 regular season home games respectively where the teams have maximum seating (and sometime standing room only) capacity that limits the number of tickets they can sell.

One lesser-known challenge is that sports organizations do not fully utilize much of their venues even on game days. More specifically, most fans spend much of their time in venues watching games from their seats. That means locations throughout the arena are often unused for much of the game because fans are understandably focused on game action.

The Golden State Warriors have discovered a potential solution to this problem. The team is now offering an "In The Building" pass for $100 per month. Pass holders can enter Oracle Arena to access to the arena's bars and restaurants but the pass does not grant seating access or a view of the court.

Teams have been working with their partners to create unique experiences within their venues. In a recent post, we talked about how the Devils in particular have already sold to both William Hill U.S. and Caesars Entertainment branded betting hospitality locations in the Prudential Center. The Detroit Lions have created the Miller Lite Taproom as unique social space at Ford Field.

A potential problem with these new locations is that it requires fans to make a choice to leave their seats to enjoy the experience of these locations. The In The Building pass should solve this problem by selling passes to fans that are specifically interested in going to these hospitality areas. This enables teams to better monetize their fan base on game days while also helping partners maximize foot traffic at their hospitality locations.

The Warriors created the In The Building pass in large part because the team had sold out for 300 consecutive games and has a 44,000 person season-ticket waiting list. However, this monthly pass could actually increase ticket sales for teams that implement this idea without being in the Warriors enviable position.

The proliferation of mobile devices has enabled teams to create new ticket offerings to customers. In particular, teams have offered fans ticket upgrades often through their mobile app for fans to purchase better/upgraded seats when they are at the venue.

One of the original reasons to do this was to increase season-ticket purchases. More specifically, fans would be more willing to buy season tickets if they knew they could relatively easily sell the tickets for games they could not attend. Exchanging these tickets directly with a team through an app provided teams with more direct control over the secondary (i.e. resale) ticket market while also increasing their revenue from their primary distribution channel (i.e. season tickets).

A problem was that teams would often be limited in their potential addressable market to current ticket holders (i.e. to upgrade a seat for which a fan needed a ticket in the first place). The monthly pass increases the potential audience size that can purchase ticket upgrades. The fact that the fans are already at the venue means it is likely that they would be much more willing to buy a seat upgrade (since they do not have a seat already). If the venue has no seats available then they can still enjoy all of the hospitality locations they were planning to attend anyway.

It is ironic that a solution that was designed because no season tickets were available to Warriors games could help other teams sell season tickets. Yet, this is exactly the type of solution that can work for teams, fans, and partners because sports organizations are experts at creating unique experiences. By maximizing the number of people in the building, teams can better monetize venue assets in ways that work for all sports audiences.