Desperate Men Do Desperate Things
Mon, 04/01/2013 - 09:20 — Steve DeLay
WHEN THINGS LOOK MOST BLEAK, FEED ‘EM
No bones about it. We were desperate.
It was January 2007. Mandalay had recently bought the Staten Island Yankees in a partnership with the New York Yankees. The SI Yanks hadn’t sold out a game in six years. In fact, they averaged only about 1,000 people in stadium in a 7,100 seat ballpark. There was no demand for tickets.
We sat down with the New York Yankees and crafted what we thought was a tremendous season ticket package. The perks included:
• Priority access to New York Yankees regular season games before the general public.
• Priority access to Yankees playoff tickets before the general public.
• A free ticket to a New York Yankees game.
• A private New York Yankees “Old-Timers Day” at Staten Island’s ballpark, just for SI Yanks season ticket holders.
We launched all these perks with huge fanfare, a big press conference and ads in the New York Daily News and Staten Island Advance.
In the next three weeks, I think we sold ten season tickets. It was time for Plan B.
IT’S THE FOOD, STUPID
For politicians, it’s all about the economy. For sports teams, if your team is at the bottom of the standings, it’s all about the food.
Plan B was a five game plan. Here’s what we put in to it.
• The five best weekend games including two games against arch-nemesis the Brooklyn Cyclones.
• Three fireworks shows.
• Two entertainment acts.
And, most important of all, free food. We included all the hotdogs, hamburgers, chicken sandwiches, water and soda a fan could eat and drink.
We priced the five game plan at 75 bucks per person. Not $75 per game, $75 for the entire five game plan, $15 per game. In New York City, you can’t go to Chili’s for less than $15/person. In this case, we were giving our fans unlimited food and drinks AND a baseball game for that price.
DID IT WORK??
You better believe it worked. We sold 7,000 five game plans in six weeks. Those five games sold out lickity-split. The next year, we launched three five game plans and sold out 17 games. The third year we expanded the all-you-can-eat program to group sales and sold out 28 of the team’s 38 games.
NEGOTIATING WITH THE CONCESSIONS OPERATOR
“Hold on there pal,” I can almost hear the Naysayers shouting at their computers as they read this. “No way our concessions operator would allow that type of deal without charging us an arm and a leg.”
Not true I would respond. Here’s how we did it.
We went to our concessions operator and simply told them we’d pay all of their costs for the food and the labor. We would also pay them $1 per person that came through the line. That $1 was their profit for each person. Our costs to the concessions operator worked out to about $5.50 per person. They made a profit of roughly 18% on each customer. We became our concessions operator’s best customer. We recommended to the concessions operator that they put beer stands, ice cream stands, peanuts and popcorn nearby so the fans would still reach in to their pocket and buy something. Since the fan felt like they were getting the first part of their meal (the sandwich and drink) for free, they didn’t mind still spending money on other stuff. In fact, when you factor in what we paid our concessions operator, our per caps went way up.
Your concessions operator may still push back, not believing the per caps. Remind them that even if the per caps stay flat and the fans don’t spend another nickel, these are still brand-new fans coming to your building. Fans that likely wouldn’t have come without this offer. It’s not like you’re giving free food to people who were already coming to games. We had to do something big to draw fans. The concessions operator’s gross revenues sky-rocketed. That helps their profit margin because their fixed costs stay the same regardless of how many people are coming in to the building.
Plenty of teams have done the All-You-Can-Gorge for single game buyers. We never did that. Those fans want to challenge themselves to see how many hotdogs they can stuff down their throats. We weren’t interested in single game buyers stuffing themselves. We wanted our fans to enjoy a nice night out at the ballpark and get in the regular habit of coming to Staten Island Yankees games. That’s why we did it with the five game plan initially. Even for the group buyers, we started to see plenty of repeat groups who simply felt we were the best deal on the island.
BUT, YOUR PROFIT MARGIN PER FAN WENT DOWN, RIGHT??
To cover our costs, we simply priced the game ticket at $15/ticket instead of what it used to be at $10 per ticket. Since nobody was coming to the games before, nobody knew we had raised the price $5/person. The fans just saw it as a tremendous deal. Remember, these were brand-new fans that weren’t coming to the games before.
Even better, the few full season ticket holders the team had called us up and asked how they could get the deal. We told them we’d give them the same offer, but they had to pay $5 more per ticket for each game. 85% of the season ticket holders gladly spent more. Ironically, we kept track of our ticket usage for the fans with the All-You-Can-Eat package. The ticket usage ran about 75%. That meant, for 25% of their games, we had their extra $5 and never had to pay the concessions operator. We kept all the float. In essence, the fan still paid for food but never went through the line and ate anything so we never had to pay for it.
WHAT’S THE NEXT STEP?
To get this idea approved, you’ll have to do a little research on food costs and ticket usage. Then, you’ll have to stick your neck on the line a bit and make some projections on how many packages you’ll sell. Think of it this way. If you’re desperate to sell tickets, you may as well go down swinging with your best offer.
Instead of discounting to draw fans and ruining the perceived value of your tickets, go the opposite direction with value-added. The Staten Island Yankees had been famous for discounts and nobody was buying their tickets. We actually raised prices and still sold more tickets.
Don’t let your finance guy or your accountant run your team. You absolutely, positively have to sell tickets or your team will fail. The team will either move, fold or lose millions. In any of those scenarios, it’s not a fun place to work while you’re there and you’re most likely going to lose your job in the long-run. If you’re desperate to sell tickets, think food first.
Steve DeLay has worked in the team sports business for more than 20 years for teams in Major League Baseball, Minor League Baseball, the NBA and NHL. He presently consults for teams on ticket sales and sponsorship sales. If you want to know more about free food or any other revenue ideas, he can be reached at email@example.com or @SteveDeLay2.