Economics of sports marketing

One of my lives is as the Chief Marketing Officer for an Arena Football team. I started in this role after some friends convinced me to invest in the team and become a minority owner. Sports marketing has been something that I had been aware of but didn’t really have deep knowledge of and this opportunity allowed me to get some experience in it. After shadowing the marketing people and Front Office GM of the team last year, and spending time with the sales and marketing heads at the Chicago Rush and LA Avengers offices, I agreed to step in as acting CMO beginning last June.

Here’s what I’ve learned about sports marketing so far – and while it is on a much smaller scale for an emerging team or league – the economics are still the same:

1) a team has to have local relevance and has to get fans interest. There needs to be people interested in seeing the team, getting updates via news and media, and interest in connecting with other fans. Whether it’s from great plays, good season record, exciting and interesting athletes, or drama;
2) a team has to have an exciting game ops program to make people want to come to see a game – feet to the seat are important;
3) based on interest from fans and attendance to games, building good partnerships and sponsorships from the community are critical;
4) revenue sharing partnerships round out the model – from TV revenue to stadium/arena revenue to licensing deals – all of these are important and all are based on #1 and #2.

The bottom line is this – a team has to put an exciting product on the field, fans have to care, and the business and media community have to respond. If any of those breakdown a sports team has some real business challenges. At least that’s what I’ve learned so far.

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