Sports Properties Using Premium Add Ons to Plug Experiential, Revenue Leakage

Sports Properties Using Premium Add Ons to Plug Experiential, Revenue Leakage

Sports fans will pay up to attend ‘must-see’ events and ‘once-in-a-lifetime’ experiences (see: UFC’s $22mm gate at Sphere). In fact, they’re 1.3x more likely to spend on hobbies, luxury goods, and experiences than non-sports fans.

The problem volume sports properties and most other rights owners have though is few of their games qualify as either–even if the fan has a premium seat. It’s simply too easy to catch the next one, and the overall experience often isn’t great regardless of where one sits (think: traffic, lines).

Rights owners can’t solve for every pain point that fans encounter on their way to the stadium, during their time there, and on the return trip home. But an increasing number are coming to realize that they are allowing others to dictate the fan’s experience with their product by failing to take ownership of as much of the outing as possible.

That “is not the optimal strategy,” Flavil Hampsten (president of property sales, Elevate) said.

Elevate acquired Zinc Agency, an event solutions company, in August and subsequently introduced Elevate Experiences to help sports properties concerned about the experiential and revenue leakage that exists try to plug it. The company offers a menu of premium experiential add-ons that fans and corporate clientele can bolt onto ticket packages.

The goal is to ‘elevate’ an otherwise routine night at the ballpark into a memorable experience.

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Don’t get me wrong, fans still value a good seat.

It’s “how we price buildings,” Dustin Vicari (EVP, Elevate) said. We “start with our best seats and tier down the cost of tickets from there. There are certain areas inside the venue, like the 50-yard line of an NFL stadium, that are almost price inelastic because of the demand for the location.”

But for many people, the multitude of inconveniences encountered on game day will overshadow any fun he/she may have at the game or because of the vantage point.

“Today, the entire customer journey matters,” Hampsten said. “From when [a fan] gets in their car to go to the venue, [until] they come home. Every little aspect [of that experience] is being judged. Is this worth my time? Is this valuable to me? Am I having a good time?”

And do I want to do that again?

Sports properties need the answer to all four questions to be a resounding yes to keep attendance, fandom, and revenues growing. So, an increasing number of them, including Elevate clients like tennis’ US Open and Circuit of the Americas, are now providing fans with a host of premium hospitality and experiential options they can purchase to enhance the outing.

“Premium is not just sitting on or next to the court anymore,” Hampsten said. “Premium is now sometimes a premium seat with a VIP entrance and a one-of-a-kind merchandise item.” 

In fact, the add-ons can be anything the fan values and that makes an otherwise routine event experience more enjoyable; and ideally unforgettable.

“We’ve done meet and greets with players on the field, even if it's just a quick handshake and picture,” Will Steinberg (managing partner and co-head of Elevate Experiences) said. These types of “opportunities now exist to level up a trip to the stadium.”

While some may seem superfluous and unlikely to sway a fan’s opinion on the visit, others have become table stakes (think: VIP parking).

“Convenience is extremely important [to deliver a positive experience],” Vicari said.

Premium hospitality also represents an incremental income generating opportunity for sports properties doing it right (see: diversifying offerings to include individuals and small groups). Some are starting to catch on.

“You're seeing a lot of renovation power go into [rights owners] updating their product offerings and amenities to today's tastes,” Hampsten said.

The US Open has been able to more than doubled premium hospitality revenue over the last five years taking that approach (+16% in ‘24 over ‘23’s record breaking event). It’s worth noting that 47% of those who bought an experiential hospitality package to this year’s event did so for the first time.

“Fans will typically pay a multiple of the ticket price [to gain unique access at an event],” Steinberg said.

There are some additional dollars for rights owners to capture outside of stadium confines too.

Fans "are booking their own hotels, they're booking their own car [rentals], they're booking their own restaurant [reservations] etc.," Steinberg said. Properties can take back some of the income others are generating on their backs by simply offering packaged solutions to fans buying premium seats directly from them.

Of course, the more a property knows about that individual, the greater share of wallet it can capture.

It’s important to understand that premium experiences are not just for wealthy fans anymore. A recent Elevate study indicated that 30% of one University’s premium ticket base earns less than $100,000/year.

“Whereas some of those discretionary dollars maybe in the past have shifted towards material goods, we are seeing more and more people across economic and societal demographics putting an emphasis on creating memories,” Steinberg said. “That's only going to continue, especially as more properties develop more opportunities for ‘once in a lifetime’ moments.”

In fact, entry level premium is an underserved market and represents an opportunity for properties across sports. HENRYs –High Earners who are Not Rich Yet– value smaller suites and loge products.

These are “young professionals, that are growing families, that [want] a taste of premium, but don't have the established income yet of the older demos,” Vicari said.

As they begin earning more money, the club can move them up the ladder into more even premium offerings. 

The game is no longer enough to draw fans out on most nights. Providing a holistic premium experience that softens pain points and can create lasting memories for a multitude of fan demographics will pay dividends in terms of both growing the fan base and top line.

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