Various Revenue Sources in Sport Today

In professional sports there are many sources of revenue for individual franchises. The most important source of revenue for most franchises is ticket sales. The Washington Capitals reportedly have increased

season-ticket prices by nearly 60% on “some distant seats at Verizon Center but are reducing prices in other sections to keep the average price roughly the same as last season.” The Washington Capitals revenue from ticket sales this year has increased about 10% from last year even though the attendance rates were practically the same. The Washington Post reports the reason for the increase is in part due to the team handing out fewer free and discounted tickets. On a similar note the Ottawa Senators are raising their ticket prices for the first time in four years. The ticket price will increase 4.5% in an attempt to move closer to the National Hockey League average season ticket price. The franchise has offered other incentives to increase season ticket holders such as skateing with the players, open practices and chances to win trips to Barbados to watch a game with owner Eugene Melnyk.

The season ticket holder price is still 52% less than single game ticket prices. In an attempt to increase attendance, the St. Louis Blues will lower the prices for the 07-08 season. It is reported that the decrease will be a blended 8% across the board. This is happening just after the Blues increased there ticket prices from last season but obviously were not meeting expectations. Also the Nashville Predators are raising ticket prices for next season by 7.25% through 41.7%, marking just the third increase in the club’s nine-year history. Predators Executive Vice President of Business Affairs Steve Violetta said “The fans understand that we’re playing catch-up a little bit as far as other teams and getting to the league average. We have to stay competitive on the revenue side.” He added that single-game prices “have yet to be set but are likely to rise as well.” Besides tickets sales other revenue sources include naming rights deals for stadia and arenas. In Washington D.C., a Virginia based real estate firm, Kettler, inked a deal to name the practice facility leased by the Washington Capitals “Kettler Capitals Iceplex.”

The Iceplex has two NHL sized rinks and the building puts the training facilities and the corporate offices under the same roof for the first time. The facility is worth 42 million dollars and the deal was settled at 400,000 dollars for seven years. The Dallas Cowboys and team owner Jerry Jones is laying the ground work for the biggest naming rights deal in history asking for around 1 billion dollars for the naming rights of there stadium. Without doubt the most revenue generating is done by television broadcast deals between the professional leagues. For instance the National Football League has without a doubt the most lucrative broadcast rights deal. CBS, NBC, FOX, and ESPN pay the NFL a combined total of 3.1 billion dollars per year to broadcast league games. However, these unprecedented revenues are not seen in other professional sports leagues. For instance, the National Hockey League has been informed that ESPN will not match the offer made by Comcast for NHL broadcast rights. ESPN has paid the NHL 60 million dollars for broadcast rights but Comcast recently offered 200 million dollars for 3 years of broadcast rights.

Major League Baseball is trying to get its hands involved in the Asian market to increase its league’s revenues. Since the league opened an office in Tokyo several years ago, revenues have doubled to more than 100 million dollars annually. Japan is “viewed as a gateway to large untapped Asian markets, such as China.” The league thinks its best strategy is to promote the rivalry between the New York Yankees and the Boston Red Sox since they have famed pitcher Daisuke Matsuzaka and Yankees have left fielder Hideki Matsui.