This is an excerpt from Athletic Director's Desk Reference With Web Resource by Donna Lopiano & Connee Zotos.
13.17 Planning Tool
Maximizing Event Income: Ticketing, Concessions, Parking, and Guarantees
Besides offering opportunities for athletic event sponsorship programs with athletic event benefits (see Planning Tool 13.13) and individual-giving programs tied to seating priorities (see Planning Tool 13.18), athletic events present myriad other revenue generation possibilities that should be exploited if possible. These opportunities include event ticket sales (season, individual game, and special or postseason events), concessions, guarantees, and parking. Another source of income is including event program and signage opportunities in a multimedia rights package (see Planning Tool 13.19 in the book and Form 13.20 in the web resource).
The Decision to Sell Tickets
The first revenue decision to be made for any sport program is to answer the question of whether tickets could be issued and a fee charged for admission to a sport event. The answer to this question depends on whether the sport is being contested in a controlled-access facility that has spectator seating. If the answer to this question is yes, the next question is whether admission should be charged. Before answering this question, the administrator should consider the following:
- The public will place a higher perceived value on events for which an admissions fee is charged as opposed to free events. Thus, the decision to charge for admission is a decision by the athletic department to place a value on the sport program.
- Admission fees can always be waived for special populations such as parents, members of the current student body, or faculty upon presentation of an institutional ID or courtesy pass.
- The cost of charging for an event is minimal: the price of roll tickets (cheap generic paper tickets that are numbered for accounting purposes but not printed specifically for the event) and the hourly wages for a ticket seller and a ticket taker to thank the fan for his or her support (usually a task that can be performed by a person working at minimum wage, a volunteer, or an existing staff member).
- he greater the involvement of a person in a program and the closer his or her perceived relationship is to the coach, players, and institution, the more likely it is that the person will make a donation to the program on top of the price of admission. Ticketing is the first step in developing a sport into a revenue producer. Donor gifts are often more important than ticket revenues.
- Diversification of revenue sources is a characteristic of successful fund-raising programs. If a program depends on revenues from only one or two sports and one of those sources fails or has a down year, the financial stability of the athletic program may be endangered. Every effort should be made to develop every sport as a revenue producer, if not through the sale of event tickets, then at least in the development of donors who have an affinity for that sport.
- Fan and friend attendance at athletic events, which naturally occurs as an element of the athletic program, is the most cost effective mechanism for the development of donors. Athletic events bring donors to interact with the program in large numbers at their own expense.
If the leadership thoroughly examines the preceding considerations, it is difficult to justify a decision not to charge admission. Sometimes these decisions depend on the energy and passion
of the athletic administrator to develop a program, but at other times such decisions depend on the availability of human resources to administer and promote the ticketing program.
After establishing a mechanism for the purchase of walk-up tickets as the first step in developing game revenues, the second step is determining how to market season-ticket sales. Season-ticket sales increase revenues because the money is received in advance and retained whether the purchaser uses the tickets or not. Tickets could be redeemable based on one per game, exist as a season-ticket pass, or exist as a book of general admission tickets that could be used at any event when the customer wants to bring friends and family, depending on decisions related to public demand. Ticket books are not necessary when a season-ticket pass card that is punched for each of a maximum number of games is just as functional and more cost effective. The advantage of individual tickets for each game is that they can be given to others. And, of course, premium fees can be charged for the best seat locations, the nicest seats, tournaments, special events, or postseason championship play. Promotional imagination is the only limitation on the types of season tickets that can be offered.
Discounted and Complimentary Tickets
Care must be taken in offering discounted and complimentary tickets. The number of seats offered of each type and the seating location of students, faculty, and staff must be carefully thought out, especially when the size of the facility cannot fully accommodate ticket demand. Student, faculty, and staff involvement in the program must often be balanced against pressure to produce revenues. These decisions have significant political and philosophical implications that must be carefully weighed. The distribution and identity of persons receiving complimentary tickets should be recorded for every athletic event, and such practices should be reviewed every season. Complimentary ticket promotions will always be more prevalent when developing a new revenue sport than with a mature, high-demand revenue sport. When seats are available, “papering” the house with youth groups, community service organizations, and other groups can be an effective promotional effort in introducing a sport to prospective fans and creating an exciting game atmosphere.
Historically, concessions at high school and college athletic events have been operated either by volunteers (booster clubs, parents, and so on), student groups, or charitable organizations. Such groups keep a percentage of the profits of such operations for their charitable purposes. In these circumstances, the institution is responsible for the volunteers working in these areas and the safety and health-related concerns of food operations. These volunteers are not eligible for workers compensation benefits.
As health and food safety laws and regulations have become more stringent, the operation of concessions has increasingly moved to third-party operators who are food service experts and are insured to manage these operations at little or no risk to the educational institution. Many of these third-party operators continue to use the same volunteer groups, but the training obligation and risk has effectively been transferred to the concessionaire. In many cases, the concessionaire is the same company that provides student union, cafeteria, or other food service operations on campus. Ideally, such third-party execution of concessions is desirable. When concession rights are sold to a third party that executes the food, beverage, or merchandise services, a percentage of gross sales is negotiated as the return value to the athletic department. The concessionaire is responsible for everything from staffing concession booths to the purchase and preparation of products to be sold. These third-party turnkey vendor opportunities are viable only when athletic event attendance reaches significant levels in the view of the concessionaire or at smaller institutions where operating the food service for all university events makes sense with regard to amortizing staff and operating costs.
But at many high schools and small colleges where attendance at athletic events is not substantial enough to warrant the business interest of third-party concessionaires, the institution is still faced with administering and supervising these operations and the athletic department has the primary responsibility for doing so. In today’s litigious culture, policies, procedures, and training programs for these volunteer and concession operations are essential. A common practice at smaller high schools and colleges is for the athletic department to allow student clubs or local community service organizations to run concession booths and turn over a percentage of the gross to the athletic department. The community group keeps a larger share. Alternatively, the athletic department can make all arrangements (provision of booth, product, and so on) and allow volunteer groups to provide staffing in return for receiving a smaller percentage of the gross. Key to implementing these types of concessions services is having strict policies and procedures to ensure that each vendor meets local health and other regulations. For samples of essential policies, a volunteer release and consent form, and a charitable organization application for a concessions booth, see Policy 15.26, Form 15.27, and Form 15.28 respectively in the web resource.
Institutions often have difficulty scheduling nonconference home competitions. As a result, an athletic department might offer a financial incentive, commonly called a guarantee, for another institution to come to their institution to play. In the case of NCAA Division I institutions, such guarantees may be six-figure sums that are critical to the budget of the institution being enticed to play an away event against what is often a better team.
When parking is limited, institutions often charge for access to convenient parking areas or give the premium parking areas to major donors as a benefit associated with high annual contribution levels or to fans who have purchased larger numbers of higher-priced season tickets. The decision to charge for parking depends on both demand and the ease and expense of controlling access to a parking area.
Learn more about Athletic Director’s Desk Reference.