Team owners are asking their business operations executives where the next streams of revenue will come from. There are no easy answers.
The huge payday of legalized betting on the Big Four sports leagues won't happen in our lifetime.
Will teams and leagues allow corporate names on their uniforms? Yes. Check that one off starting with training camp and practice in the NFL and the NBA moving into full logomania in the not-too-distant future. Major League Soccer has been bold enough to follow the example set by international soccer teams. Are we looking at a day in the future that we will hear, "The Google Basketball League is proud to present tonight's game between the Tesla Warriors and the General Motors Pistons?" Yes, that day is coming.
The next significant new revenue source for professional sports could be Virtual Season Tickets (VST).
Teams have the ability to package significant pieces of inventory and benefits into virtually immersive off-site season tickets on a platform constructed to generate revenue without cannibalizing existing team profit centers.
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There are tens of millions of fans devoted to 122 North American professional teams who will never set foot in their favorite team’s home venue.
Here is the market of fans that are very interested in the Big Four sports, according to Navigate Research:
NFL -- 83 million
MLB -- 59 million
NBA -- 41 million
NHL -- 21 million
That adds up to over 200 million fans interested in following their favorite team. But only 3.2 million have season tickets.
How many basketball fans around the world would have wanted in on the virtual reality experience of the Warriors winning their 73rd game on April 13 and breaking the 1995-96 Chicago Bulls' record?
There are a number of factors that prevent fans from attending their favorite teams' home games:
Lack of time
Accessibility for disabled fans
Growing sophistication of interactive technology
Enhanced TV experience with HD & 3D
Advances in technology, interactivity, 3D TV, video games, social gaming, mobile applications, video streaming and virtual spectatorship can bring VST holders an in-the-stadium environment in an enhanced virtually immersive yet tangible platform without actually being at the game or spending thousands of dollars on tickets and travel.
Think of the current market of season ticket holder benefits as hundreds of Pick-up Sticks. Virtual Season Tickets will bring order to this chaos. There will be a matrix of inventory that fans will be able to buy as part of VST packages that can open up a significant new revenue streams to professional sports teams.
HOW MIGHT THE VST WORK?
Let me describe what a Warriors gameday might look like for a VST holder in Shanghai, China, in the near future...
1. You'll start with a wake up call from Draymond Green which should get you ready for gameday.
2. When you fire up the computer you'll have customized matchups for that day's game on your screen or VR headset. These weekly matchups will be done by a team beat writer that you select.
3. You will have a customized sports stat package downloaded to your computer created by Global Sports Analytics.
4. A member of the Warriors team will give you a real-time customized virtual tour through the team's offices and training facility.
5. When that's finished, we will take you on a virtual tour of the Warriors' new Chase Arena scheduled to open in 2019 at Mission Bay.
6. When the team is going on the road, we will have a bus and plane cam so you'll feel like you are with the traveling party. No teams have this yet, but you could as a Golden State Warrior VST holder.
7. VST VIP Suite -- You will be able to sit in a virtual suite during the game and discuss the action with alumni players maybe even chat with Al Attles, Rick Barry or Nate Thurmond.
8. VST Fantasy Play by Play -- You and a friend can broadcast the game in your virtual broadcast booth.
9. VST CAM -- We will have a special VST mobile camera moving around the ballpark and taking you to places that no one else is allowed to go.
10. Warriorville -- Similar to the Farmville concept created by Zynga, fans will be able to build their own venues and compete with one another. They can be involved in purchasing all manner of virtual goods as they build their franchises.
11. VST pre and postgame highlight packages posted only to you and other VST holders.
12. AVATAR players in game -- In the not-too-distant future you will be able to experience actual in-game action through your favorite Warriors avatar player. Want a 36-inch vertical? Need a Steph or Klay’s 3-point range? VR can do that.
SIZE OF MARKET
Teams keep their real number of full season ticket equivalents (FSEs) under lock and key. The total number of account holders is less than the gross number of season tickets. There is a duplication factor inherent in fans attending multiple times and being season ticket holders of multiple teams in a market. The number of season ticket holders for each of the four major sports are as follows:
NFL -- 32 teams averaging 68,000 FSEs = 2,176,000 season tickets
MLB -- 30 teams averaging 16,000 FSEs = 480,000 season tickets
NBA -- 30 teams averaging 8,800 FSEs = 264,000 season tickets
NHL -- 30 teams averaging 10,000 FSEs = 300,000 season tickets
TOTAL = 3,220,000 season ticket holders
There is a multi-billion dollar market of spending from pro sports teams fans that isn't being effectively marketed. By creating a unique proprietary service/product offering through one-stop shopping, teams and leagues will be able to create a new revenue pool that can break the stagnating revenue trend in pro sports.
Virtual season ticket packages will be scalable so that significant new revenue can flow to the rights holders.
No single entity is effectively addressing the matrix concept of the VST. Companies are trying to get teams to buy their product with promises of additional revenue or greater insight into existing fan behavior. At this point the market activation has many spokes but no hub. A strong Virtual Season Ticket product will capture new fans and provide a quantum leap in activating the virtual fan into a new revenue producer.
The day of the LPC (Little Piece of Cardboard) known as a “the ticket” is slowly disappearing. The modern LPC (Little Piece of Carbon) helps run digital devices all over the globe. Now we have an answer to a massive new revenue source as we peer around the corner.
The VST could become just the ticket.