Executive Summary on Revenues and Profits: How a Local Professional Football Team Makes Money
It’s all comes down to (1) the league itself (with revenues that are then shared with the teams) and (2) the individual franchise team LLCs.
It is my contention that any local franchise can generate a positive bottom line while the league works to complete a national media deal to get the league into a positive bottom line as well (given recent histories, media companies now want to see proof of consistency and continuity). My analysis is based on 40 years experience as a consultant dealing with the “mixed-use” concept (new towns,, commercial centers, stadium complexes) and 10 years with revenue models for professional football (NFL and UFL). Earlier presentations have been done for/with The Rouse Company, Disney, Mall of America’s HyperPort, among others, along with stadium complex proposals to such NFL teams as the 49ers, Vikings, and Chargers, plus five web sites listing revenue solutions. Each team franchise needs to be an incubator that adapts and learns and informs the others about what they have found to work and why, with lessons learned (see “Earth Moves on UFL Incubator…,” article Tri-Valley Central newspaper, June 19, 2009; URL link is dead).
Seven Point Summary
The revenue solution is to incubate revenue. This is part of the bottom-up approach as opposed to the dictated top down approach. Let me show you seven points that demonstrate how to incubate of multiple revenue streams.
- Revenue Components
- Fan Plans To Build Attendance, Sustain Sell Outs, Increase Revenues
- 40 Ways in 26 Categories to Generate Revenue (mostly local)
- Media (half of the 40 ways to generate revenue are media and media related)
- A Multi-Use Sports-Entertainment Model For Profitably Building and Operating A Professional Sports /Team/Franchise (with any foreseeable building being for practice facilities if that is the decision to execute to provide first rate facilitate leasing during the season)
- IPO (one for the league and one for each team)
- Naming rights
- Signage (electronic advertisement for the league, plus one for each team)
- Five other “Revenue Generation Models” to adapt from PJJ – GPA
- Programming Origination Components
- Producing video, print and Internet products, either as single, set number series, or on-going daily/weekly programming
- Maintaining the media edge by utilizing as desired or required, 47 communications models (see also Communications), that have been further broken down into 200 executable models, including rapid response protocols to news and events related to the team and its players/coaches or professional sports
- Dealing with events interrupting programing that require conflict resolution (see 18 Models of Conflict Resolution)
- Market Components
- Pacific Rim
- Broadcast, satellite, print, and online
- Subsidies to Accrue Components — for example, subsidies in Bandon, Ore provided to the golf course
- Three Revenue Levels / Plateaus
- Traditional seasonal revenue components (game day, TV contracts, sponsors, gear, highly seasonal specific, etc.)
- Mixed use revenue stream approach year round, utilize the team and its facilities as an anchor for multiple revenue streams for the rest of the calendar year, not just for the season related revenue (I developed this approach in 2000 and posted on Peter Jessen – GPA in the “Success With Stadiums [Teams] As Anchors” section. This was further developed and refined on my 2004 Beacon Sports on the Hill Sports Marketing web site)
- Disrupt professional sports revenue models further by establishing future growth by expanding on the “anchor” concept by being an incubator for innovative entrepreneurs who figure out how to generate revenue for themselves and the franchise by joint venturing at their underwriting (see Hambrecht on disruption here)
- This was further developed and refined under Starting and Operating Leagues and Their Franchises, added in October 2013 to my site; see especially:
- One Page from Sports Illustrated 2011 on the Six Main Revenue / Wealth Drivers of the NFL
- One Page Executive Summary on Revenues and Profits: How a Local Professional Football Team Makes Money
- [Article Coming Soon] 15 Page Detailed "YES!" Answer to "Can a Local Professional Football Team Profit and Make Money?"
- Disruption Component — an aspect central to Bill Hambrecht's media disruption success strategy, following the concept of Clayton Christensen's as developed in his The Innovator's Dilemma: The Revolutionary Book that Will Change the Way You Do Business and in Christensen’s The Innovator's Solution: Creating and Sustaining Successful Growth (he also has one on health care, The Innovator's Prescription: A Disruptive Solution for Health Care, and one on education). Some have said that the first two chapters of The Innovator's Solution are the best two business chapters of the decade. See list of examples of innovative disruptive technology.
- Grow Sustainable Revenue Streams in Each Team’s Revenue Generating Incubator — the franchise will serve as an anchor for multiple revenue streams based on franchise city and franchise activities; that is:
- Defining the "go to" destination
- Packaging retreats off-site, such as team-themed vacations, cruises, camping, other travel
- Creating programming across media platforms such as print, broadcast TV, cable, radio, satellite, Internet, film, and social media
Page content written / posted: 10-29-13