Traveling Fan Phenomenon Could Impact Future Expansion, Relocation Markets

Traveling Fan Phenomenon Could Impact Future Expansion, Relocation Markets

The New York Jets played in Las Vegas on Sunday night. The large number of Gang Green fans in attendance made the road team feel as if it were playing at home.

For context, SeatGeek data shows ~72% of fans purchasing tickets to a game in a ‘typical’ NFL city –they pulled Cleveland– will come from inside the state. Just ~4% of those who purchased tickets on the secondary market site for the league’s most recent SNF game reside in Nevada.

Visiting team fans have made their presence felt at several other Raiders, Rams, and Chargers games this year too. The NFL considers the recent moves to Las Vegas and Los Angeles as being successful, despite the relative lack of fanaticism that exists for the home teams.

Now, the Oakland Athletics are in the process of leaving behind a once proud fan base in one of America’s larger markets to build from scratch in one of the smallest.

Shifts in pro sports’ business model over the last three decades have altered how leagues and teams view the designated market area (DMA).

“National revenues and TV rights for the major leagues have been growing substantially. So, that puts a little less pressure on the local market,” former New York Jets president and current Sportfive co-president of the Americas Neil Glat said (Sportfive is a sports marketing agency that works with a number of NFL and NBA clubs).

But logic suggests as the Pay TV bundle continues to erode, local revenues may regain importance on the balance sheet. And that could drive some sports team owners considering expansion/relocation to begin factoring a market’s appeal to visiting fans into their decision on where to call home.

“It could change [the equation] because of the evident benefits of a location with tremendous tourism,” former NFL EVP Eric Grubman said.

At least on the margins.

“People love to visit Las Vegas and they love to visit Yosemite, but you are not going to build a stadium anytime soon in Yosemite,” Grubman said.

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Historically speaking, local revenues anchored pro sports businesses and ticketing was teams’ largest line item. Owners sought to establish residence in densely populated cities or in ones with a rabid following for a particular sport (think: Green Bay and football), so that they would be able to reliably sell seats.

Those that were maintained an advantage. The NFL began sharing gate receipts between home and away teams to account for the imbalance.

But as national television and sponsorship dollars began rising, ticketing related revenues –and local revenues, in general– started to make up a smaller percentage of the business.

There wasn’t much clubs could do to keep local revenues growing at the same clip. It is challenging to add seats to an existing venue or to meaningfully raise prices and still reliably sell out of ticketing inventory.

“The urgency to be in a large market,” Glat said. “That [was reduced, it became] a little less critical than in the past.”

A separate, unrelated, phenomenon has emerged in recent years.

Certain teams have always been capable of filling up the opponent’s stadium (think: Cowboys, Steelers, Raiders). But with sports fans increasingly looking to partake in memorable experiences in a post-COVID world, a growing number of them are going on the road.

SeatGeek data shows that ~40% of fans buying tickets to NFL games in Dallas on the secondary market this season are coming from outside Texas or bordering states (up from ~36% in 2019).

The NFL anticipated L.A. and Las Vegas would become destination locations. It saw the number of fans traveling far and wide to come to AT&T Stadium in Arlington (and to The Star in Frisco) pre-pandemic and knew world class facilities in those markets would draw similarly well.

But the NFL didn’t allow the Raiders to move to Las Vegas hoping a different set of fans would fill the building each week. It did a feasibility study that determined the local region would be able to support the team (think: had the socio-economic demographics need to sell media, advertising, signage, licensing, season tickets, and merchandise).

The expectation of visiting fans traveling in was simply ‘a kicker’ they added at the end.

However, as national media growth slows (or stalls), local revenues could once again become a focus for team owners. Some may look to the recent relocations cited and weigh their ability to draw visiting team fans in a new city and/or with a new venue.

But it’s hard to imagine the moves to Los Angeles and Las Vegas radically shifting the paradigm of where sports teams set up shop. Savvy owners still want to be sure the local DMA can support their club.

“Local television, if you’re talking about sports other than the NFL, and sponsorship are still going to depend on making sure there are enough eyeballs consuming the product,” Glat said.

And most owners will continue to prioritize where they can get a good stadium deal, whether it is based on public money or naming rights.

On the other hand, the next generation of sports stadiums is expected to be smaller. If a club only must sell 45,000 tickets, versus 60,000, it should, in theory, expand the pool of potentially viable markets.

Teams could look to smaller cities that have a higher concentration of high-net-worth individuals and corporations capable of buying what will be a greater number of premium or club seats.

“That’s most cities in America,” Grubman said.

So, which are realistic options to land a pro franchise over the next decade or two?

Dean Spanos’ inability to navigate local politics and address the stadium situation in San Diego led to the Chargers exit. The sunny locale seemingly remains an attractive destination for a football franchise.

And while Nashville has NFL and NHL teams, the popular tourist destination would seem like a logical locale for the other pro leagues. Music City Baseball has long been trying to bring a MLB team to the city.

Of course, speculation exists that the NBA will eventually award teams to both Seattle and Las Vegas.

It’s not clear the A’s will find the same success its NFL and NHL counterparts have in the desert. Baseball fans aren’t going to travel en masse like they do for football because there are too many games. And it’s hard to imagine the team winning at the same clip the Golden Knights have (which has helped in establishing a local fan base).

Building a world-class venue would aid their cause. As would embracing local market attributes and embedding themselves in the community with some over the air distribution.

“Part of [finding success] is making sure you’re giving fans access to your product. You want to appeal to the largest number of fans in that market,” Glat said. “That is usually the on ramp to getting people out to the stadium.”

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