Attracting a Professional Team

Leagues control the location of teams based on the business benefits to the leagues and their owners. Leagues are in business to make a profit

Distributing the Game Individual teams are separately operated businesses. Individual teams are separately operated businesses. They are not in competition the way other businesses are (ex: pizza restaurants compete for business by better pricing, coupons, etc) They are not in competition the way other businesses are (ex: pizza restaurants compete for business by better pricing, coupons, etc)

They are a member of a cartel They are a member of a cartel A cartel is combination of independent businesses formed to regulate production, pricing, and marketing of a product. A cartel is combination of independent businesses formed to regulate production, pricing, and marketing of a product. Cartels are prohibited by the antitrust laws in other businesses, professional sports are exempt from these laws. Cartels are prohibited by the antitrust laws in other businesses, professional sports are exempt from these laws.

Teams are grouped together and governed by a league agreement. Teams are grouped together and governed by a league agreement. The league controls the location of teams and the number of teams. The league controls the location of teams and the number of teams.

How Distribution is decided Cities with large customer base Cities with large customer base People are willing to vote for tax increase to support team People are willing to vote for tax increase to support team Expansion(new) teams must pay the league to join Expansion(new) teams must pay the league to join New teams play in a place that will attract fans. New teams play in a place that will attract fans.

Attracting a Sports team Cities compete when a team comes available through expansion or moving Cities compete when a team comes available through expansion or moving Offering the best facilities at the best price Offering the best facilities at the best price State and local governments subsidize (help pay) for stadiums which means tax payers pay. State and local governments subsidize (help pay) for stadiums which means tax payers pay.

A new stadium doesn’t always attract a team… A new stadium doesn’t always attract a team…

The price of tickets, concessions, luxury seating, and merchandise make money The price of tickets, concessions, luxury seating, and merchandise make money

But, the biggest profit center is TV revenue. But, the biggest profit center is TV revenue. Generated through the selling of advertising time Generated through the selling of advertising time Cost per minute is based on the number of viewers. Cost per minute is based on the number of viewers. TV ratings are a major deciding factor of where a team will go TV ratings are a major deciding factor of where a team will go

Houston VS Los Angeles

Why we won LA had a larger tv market LA had a larger tv market But, Houston tax payers agreed to pay for 60% of the stadium But, Houston tax payers agreed to pay for 60% of the stadium McNair bid $700 million for the team McNair bid $700 million for the team NFL voted for Houston NFL voted for Houston

McNair cashes in A Houston Super Bowl was part of the financial contract A Houston Super Bowl was part of the financial contract It generated $300 million to the city… It generated $300 million to the city… Tickets cost $1,950-$4,800 Tickets cost $1,950-$4,800

Hosting a Super Bowl City must meet 20 pages of NFL requirements City must meet 20 pages of NFL requirements Including: Including: 17,500 hotel rooms 17,500 hotel rooms 65 limos for NFL use 65 limos for NFL use 1,000 buses for fans 1,000 buses for fans private and public golf courses private and public golf courses If a city does a good job, they can join in the hosting rotation and keep earning $$$$$

Another Option Private ownership means the team/ owners own the stadium Public ownership means the fans, or stockholders own the stadium

Green Bay sells publicly traded stock for their team Green Bay sells publicly traded stock for their team So Packers fans actually own the Packers So Packers fans actually own the Packers

This financial plan works well. This financial plan works well. It eases the finacial burden off the tax payers It eases the finacial burden off the tax payers Creates fan loyalty Creates fan loyalty Lets the fans be involved in decision making Lets the fans be involved in decision making Why don’t more teams use this plan???? Why don’t more teams use this plan????

Team Owners don’t like it Because…. Because…. It takes away their power to leave town when they don’t get what they want It takes away their power to leave town when they don’t get what they want The stockholders (fans) tell the owners what to do The stockholders (fans) tell the owners what to do

Citi Field VS Yankee Stadium Citi Field VS Yankee Stadium