SA210
06-23-2007, 12:30 PM
Spurs win is good business
Web Posted: 06/22/2007 08:31 PM CDT
Travis E. Poling
Express-News Business Writer
The Spurs organization wouldn't trade winning a championship for anything, but No. 4 is more about pride than the bottom line.
Ticket renewals could come a little more readily, package deals easier to sell and sponsorships a tad sweeter. But in the end, additional expenses from the Finals, sharing revenue with the NBA and operating in a mature market keep the win from being a windfall, say the Spurs and sports economists.
"Typically after a major league championship, they can increase ticket sales and can increase ticket prices without much backlash," said Victor Matheson, professor of economics and sports business at College of the Holy Cross in Massachusetts.
But Matheson also said the Spurs' consistent performance deep into the playoffs could lessen that impact slightly. Despite the Cleveland Cavaliers' ill-fated Finals, just winning the Eastern Conference should have a big economic impact on that franchise, he said.
David Berri, a sports economist at California State University-Bakersfield and co-author of the book "The Wages of Wins," said there is usually a higher gate revenue for any major league team after a championship, but that it lessens over time.
Sponsorship dollars aren't expected to increase much for the Spurs in a mature NBA market, said Russ Bookbinder, executive vice president of business operations for Spurs Sports & Entertainment. "We've done a good job there already."
And ticket pricing is done in late February or early March before the playoffs even begin.
The cost of attending a Spurs game is still lower than the league average, according to the annual Fan Cost Index done by Team Marketing Report. TMR reports that a family of four can get average-priced Spurs tickets, four small sodas, two beers and four hot dogs for about $259.54. That compares with a league average of about $263 and a league-high $396 for the Los Angeles Lakers.
The Spurs' victories could help fill more regular-season seats.
"We'll sell some more season tickets and renew at a higher rate," Bookbinder said. "But packaging is the best way to monetize the demand."
A Spurs ticket package that includes games against archrivals such as the Dallas Mavericks or Phoenix Suns would be more likely to include games with a lesser demand such as the Atlanta Hawks, Memphis Grizzlies or Charlotte Bobcats. Packages help sell out games with lesser opponents, particularly for the pricier seats.
For the Spurs, winning their first championship changed the economic fortunes of the franchise for decades to come.
In a 1999 season shortened by a player lockout, a team led by David Robinson and a young Tim Duncan took home its first Larry O'Brien Trophy in late June.
In early November, the glow hadn't worn off. Voters approved a tax on hotel stays and car rentals to pay for a new arena controlled by the Spurs, including all revenue, for all but 22 days a year when the San Antonio Livestock Exposition takes over for the rodeo.
After several years of winning games and booking events in what is now the AT&T Center, Spurs Chairman Peter Holt declared that the organization likely would make a profit this year. That profit, he said earlier this year, would be pumped back into the team and the Spurs Sports & Entertainment operation, which includes the WNBA, minor league hockey's Rampage and other arena events such as concerts.
Actually playing in championship games isn't a bottom-line bonanza.
More games in a series mean more money, but unlike regular-season games where the home team gets all of the ticket-sale proceeds, the NBA takes 45 percent of the net ticket revenue for games one through four, and the home team gets 55 percent. The split changes for games after that, with the league and the home team taking a little less and the visiting team pulling in 25 percent.
"The expenses of going to the Finals are high," Bookbinder said. "It's well spent and we gladly spend it, but getting to the Finals isn't that panacea that people think it is."
Bookbinder said the team needs to make it to the playoffs to profit; but by the championship round, expenses such as player and coach bonuses, rings and the costs of celebrations make the final round nearly a wash.
"It seems like every championship ring gets a little more expensive," he said.
[email protected]
http://www.mysanantonio.com/business/stories/MYSA062307.01D.SpursEconomics.2aa2a3f.html
Web Posted: 06/22/2007 08:31 PM CDT
Travis E. Poling
Express-News Business Writer
The Spurs organization wouldn't trade winning a championship for anything, but No. 4 is more about pride than the bottom line.
Ticket renewals could come a little more readily, package deals easier to sell and sponsorships a tad sweeter. But in the end, additional expenses from the Finals, sharing revenue with the NBA and operating in a mature market keep the win from being a windfall, say the Spurs and sports economists.
"Typically after a major league championship, they can increase ticket sales and can increase ticket prices without much backlash," said Victor Matheson, professor of economics and sports business at College of the Holy Cross in Massachusetts.
But Matheson also said the Spurs' consistent performance deep into the playoffs could lessen that impact slightly. Despite the Cleveland Cavaliers' ill-fated Finals, just winning the Eastern Conference should have a big economic impact on that franchise, he said.
David Berri, a sports economist at California State University-Bakersfield and co-author of the book "The Wages of Wins," said there is usually a higher gate revenue for any major league team after a championship, but that it lessens over time.
Sponsorship dollars aren't expected to increase much for the Spurs in a mature NBA market, said Russ Bookbinder, executive vice president of business operations for Spurs Sports & Entertainment. "We've done a good job there already."
And ticket pricing is done in late February or early March before the playoffs even begin.
The cost of attending a Spurs game is still lower than the league average, according to the annual Fan Cost Index done by Team Marketing Report. TMR reports that a family of four can get average-priced Spurs tickets, four small sodas, two beers and four hot dogs for about $259.54. That compares with a league average of about $263 and a league-high $396 for the Los Angeles Lakers.
The Spurs' victories could help fill more regular-season seats.
"We'll sell some more season tickets and renew at a higher rate," Bookbinder said. "But packaging is the best way to monetize the demand."
A Spurs ticket package that includes games against archrivals such as the Dallas Mavericks or Phoenix Suns would be more likely to include games with a lesser demand such as the Atlanta Hawks, Memphis Grizzlies or Charlotte Bobcats. Packages help sell out games with lesser opponents, particularly for the pricier seats.
For the Spurs, winning their first championship changed the economic fortunes of the franchise for decades to come.
In a 1999 season shortened by a player lockout, a team led by David Robinson and a young Tim Duncan took home its first Larry O'Brien Trophy in late June.
In early November, the glow hadn't worn off. Voters approved a tax on hotel stays and car rentals to pay for a new arena controlled by the Spurs, including all revenue, for all but 22 days a year when the San Antonio Livestock Exposition takes over for the rodeo.
After several years of winning games and booking events in what is now the AT&T Center, Spurs Chairman Peter Holt declared that the organization likely would make a profit this year. That profit, he said earlier this year, would be pumped back into the team and the Spurs Sports & Entertainment operation, which includes the WNBA, minor league hockey's Rampage and other arena events such as concerts.
Actually playing in championship games isn't a bottom-line bonanza.
More games in a series mean more money, but unlike regular-season games where the home team gets all of the ticket-sale proceeds, the NBA takes 45 percent of the net ticket revenue for games one through four, and the home team gets 55 percent. The split changes for games after that, with the league and the home team taking a little less and the visiting team pulling in 25 percent.
"The expenses of going to the Finals are high," Bookbinder said. "It's well spent and we gladly spend it, but getting to the Finals isn't that panacea that people think it is."
Bookbinder said the team needs to make it to the playoffs to profit; but by the championship round, expenses such as player and coach bonuses, rings and the costs of celebrations make the final round nearly a wash.
"It seems like every championship ring gets a little more expensive," he said.
[email protected]
http://www.mysanantonio.com/business/stories/MYSA062307.01D.SpursEconomics.2aa2a3f.html