Are the Suns crazy for going to local TV?
186: May 5th, 2023
I actually cover this Suns’ TV situation twice this week. Point 3, I wrote when I first saw the article and announcement.
Point 1, I wrote on Thursday morning after reading Corey Leff’s analysis in his John Wall Street newsletter.
As I was going through the note, I realized I had hit the same idea twice and figured I would leave it so you can see how my thinking can change as I learn more about a topic.
Also, graphics in the later one!
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Yo!
How are y’all?!
I’ll have a new webinar to announce in the next few days. I’m partnering with Audience View on a webinar around brand management and marketing for folks that sell tickets.
This is the kickoff event for a series of webinars that they are going to produce to help folks sell more tickets.
Work with me:
To the Tickets!
I. The Suns put their games on public TV:
Success comes down to creativity.
Think Innovation:
I’m not as pessimistic on this as the consultant in the article above.
I think that has to do with my guiding belief that marketing is everything you do so that when you are thinking about your overall business success, you can’t isolate sections of the business, everything counts.
If you just look at the TV numbers in isolation, I’d imagine that it would be difficult to make them up with just your standard TV media business plan.
I’ve broken the numbers down differently:
Reports are the Suns are leaving behind $40M in local TV revenue.
But they’ll reach the full metro population of 2.8M, a 3x increase in reach.
This means that the Suns need to find $14.28 a person each year to make up the old money.
Where do you go?
The current RSN model is in the low/low corner of my graphic. This means that the reach is lower and the opportunities are often lower.
Why?
Not every family has cable or a package that enables them to see sports.
The lower opportunities come due to two reasons:
Contractual obligations
Security of guaranteed payments puts emphasis on other areas
What is the bet in the Suns’ plan?
That they can hit the upper right corner: high reach/high opportunity.
When I flesh out my thinking, I think about what Professor Byron Sharp calls “sophisticated mass marketing”.
A simplified definition means you want to hit the entire addressable market.
In combination with that, you have the magic of creativity and innovation.
Where will innovation come for the Suns?
First, more eyeballs.
This helps you hit a different spot on the rate card.
Second, top-of-funnel brand building like this gives you more ways to convert your audience into customers.
We’ve talked about “light” buyers a few times in the last few weeks.
Here you go.
An opportunity to get them and non-buyers into your funnel.
This might mean:
Profit sharing with DTC on customer acquisition campaigns.
Expansion of email/social/etc that generates increase CPM for this inventory.
A stronger preference for the team in the market, enabling more pricing power even if the team isn’t a championship contender.
More ticket sales for the Mercury.
More merchandise sales.
More opportunities for sales/marketing activations in the community.
This is uncharted territory, but that is what makes it exciting.
What’s your take?
Let me know.
II. Streaming or Theatrical…does it have to be one or the other?
25% of Americans stated they were likelier to go to a movie in 2023 than in 2022.
Why is this here? I see the parallel between the arts, opera, sports, and other entertainment options.
Dave, I trust you, but what are you saying…
It isn’t streaming vs. theatres, these are alternatives.
They each have a market.
You need to know what people are really buying.
This is why market research matters so much.
Using my son as an example, he goes to the movies because that’s his relaxing, family-date place.
In surveying folks I know, a number of reasons that people go to the movies:
Nostalgia for the excitement of a blockbuster.
A shared experience, alone together.
The entirety of the movie: the drinks or dinner, the movie, and the conversation afterward.
I’ve spoken about the augmented product in the past. This is the entirety of the experience.
That’s what we are all always selling.
Theatres aren’t the only avenue to a successful launch of a movie. They are an avenue.
The theatre owners want the monopoly on the release dates of movies because that’s how it has always worked the best for them.
There are more alternatives to going to the movies now.
Why does this matter?
Because that means that the experience needs to be elevated.
How so?
Better movies.
Better experience.
Consideration for the entire event.
What does this mean for people like us?
The program isn’t enough.
1. You have to search for the deeper need that’s being filled. What are people really buying? Tip: There isn’t a one-size fits all answer here…even if it is the 7th game of the NBA Finals, there’s a deeper emotional reason behind the purchase.
Get to that point.
2. Recognize that there are alternatives to your offering.
I was in Philadelphia the other day, in the area around the Kimmel Center and I started counting things that I could do in the area…and let’s say it was a lot, including one of my favorite beer bars, Monk’s Cafe.
We are all dealing with this…even me, there are tons of people that you can call for ideas on growing your business: but they aren’t all “Focused! Effective! Profitable!”
3. TV vs. In-Person isn’t the real battle.
The real battle is about “value” and creating the incentives that make people pick you over the alternative.
This is largely a sports business point, but it applies to the entire conversation because TV and sports are great.
You gain awareness.
You can engage an audience from around the world.
You can find ways to monetize a non-local audience.
You create a preference so that when a purchase decision comes around, you can be there to take advantage.
Think about the “TV” or “at home” experience you are fighting and figure out why folks should pick you over the alternative.
Send me a few of your ideas…
III. Suns buck the RSN model. Why does it matter?
Mental availability/top-of-mind awareness should be prime objectives for every ticket seller.
The main idea: This is a radical change in business approach.
This decision makes a bet that if you reach more people, you increase the likelihood that you’ll be there when people are ready to buy.
I did the math: The Suns are looking at taking a smaller payment upfront and a split on advertising revenue.
2.8M potential customers to break even on the $25M lump payment would mean that you need to bring in less than $9 per person.
That’s not a ton of money to have to dig up.
I did other math previously: I did some math on a previous project and looked at how much money teams were leaving behind by not just updating their marketing/branding/sales strategies to industry standard in other industries.
In some markets, I think that teams could boost their revenues 25% or more.
TBF, I think that is modest.
Why should you care?
Everyone is going to encounter a need to update their business model in the face of the pandemic, inflation, and changing tastes. Look at the Royal Shakespeare Company in England.
If your bet is that the future will look just like the past, that’s a pretty risky bet. Thank goodness I haven’t seen any #sportsbiz tie clipping videos on LinkedIn recently. I’ll count that as progress.
You need to know your numbers. Do the math. Not just in the case of RSN, but in your marketing. Is your segmentation accurate? How many total customers do you have? What percentage of your customer base is light buyers? How about heavy buyers? The Suns don’t seem so crazy when you look at the numbers.
IV. ‘Talking Tickets’ named one of the 7 ticketing sites to keep an eye on:
Who am I to disagree?
Thank you!
I’m going to be partnering with some ticket companies in the coming weeks to deliver some webinars, talks, and other value that y’all can take part in.
If you want to hear me talk or are having your ticketing partner have me speak during a conference, webinar, or other activity…tell them!
Or, you can tell me as well.
V. Links:
Congress proposes ending exclusive ticket technology deals:
These contracts do limit competition and innovation.
My question is: would a law like this be enforceable or constitutional?
I don’t know.
People expect more from an event now:
Duh! There are more events and less money, every decision matters.
The 02’s new club sounds pretty sweet. I’ll have to use my premium bona fides to get into that when the time comes.
You should think about this because ticket prices are going up, expenses are going up, and the number of alternatives are all going up.
Ticket buyers are getting squeezed.
They demand more.
Why are they going to pick you?
Opera in a pub?! Those Australians know how to throw a party:
Creativity matters.
I’ve seen symphonies in parks. I’ve seen fine art taken to the streets. I’ve seen bands rock out on the back of trucks, taking their show around cities.
I’ve seen a lot.
I’ve never seen Opera in a pub, but I’d check that out.
What you need to think about here, creativity and changing the dynamic of your offering.
Justin Thomas is a man after my own heart!
$18 beers are absurd!
It changes the price to value relationship.
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