The amazing success of group-buying websites like Groupon, LivingSocial, and KGB Deals have caused many others to try and replicate that success, and use the power of group purchasing for their financial advantage. And while other places have followed suit, no company has successfully specifically focused on group sales with sports tickets…until now?
It was only yesterday, June 6th, that crowdseats.com officially launched its website. Crowd Seats is a daily deals site that offers sports tickets at HUGE discounts. The discounts range anywhere from 50-90% off face value with no fees. This is a benefit for both the consumer and the sports organization. These time-sensitive, daily deals offer fans an opportunity to get in the crowd at a fraction of face value, while teams benefit from generating significant revenue from otherwise perishable inventory. The inherent overages (i.e. additional revenue streams) that are guaranteed for each ticket sold on Crowd Seats are what makes sports tickets a perfect fit for this business model. Popular group buying sites get merchants on board by promising new customers in exchange for huge discounts. Crowd Seats’ merchants can expect more – each ticket sold on Crowd Seats will lead to more revenue through supplementary purchases such as parking at the stadium, concessions such as beer, soda, and hot dogs, and merchandise like jerseys and hats. These additional revenues make daily deals ideal for sports teams.
A handful of teams have thought about this already and have utilized group buying websites for the past two years. Many sports organizations, including the Dallas Mavericks, have experimented wtih Groupon and LivingSocial and had great results. In a case study produced by Crowd Seats, deals involving tickets for NBA, NHL, and MLS games were reviewed. The combination of revenue generated through ticket sales via various daily deals sites and supplemental revenue generated at the stadium (Fan Cost Index) has resulted in NBA teams taking in an average of over $50,000/deal. The NHL and MLS based deals also did tremendously well.
- Dallas Mavericks, October 2010, 4819 Tickets Sold, $173,000 Revenue
- Toronto Raptors, March 2011, 2368 Tickets Sold, $101,000 Revenue
- Toronto Raptors, November 2010, 3049 Tickets Sold, $97,000 Revenue
- Colorado Avalanche, February 2011, 1784 Tickets Sold, $51,000 Revenue
- New England Revolution, August 2010, 2515 Tickets Sold, $45,000 Revenue
The Fan Cost Index is the sports industry metric of measuring what a fan spends once he/she buys the ticket. This includes parking, food, beverages, beer, souvenirs, programs, etc. Each time a ticket is sold on Crowd Seats, the team will generate revenue from the ticket sale (minus Crowd Seats’ cut, which varies) on top of the guaranteed additional “overage” revenue from parking, concessions, etc. This model makes Crowd Seats very attractive to teams and sporting events of all levels (pro, minor league, local).
According to Justin Cener, Founder and CEO of Crowd Seats, “Sports ticket inventory is very similar to hotel inventory – if you don’t sell it, you lose it. Crowd Seats enables teams to generate significant revenue from otherwise perishable inventory. Moreover, unlike traditional businesses, sports teams generate large supplementary revenues after the ticket is sold through parking, concessions, and merchandise, making the sports industry the perfect partner for daily deals.”
It is clear that consumers will benefit, receiving discounts at 50- 90% off the face value of tickets to their favorite teams. Teams will also greatly benefit from the first group buying site specifically targeted towards their product. With the website now officially online as of Monday, June 6th, you can now go and check it out yourself. Fans who want to receive future offers for local events can sign up for the” Deals Newsletter” at http://www.crowdseats.com.