In the world of professional sports, the fees, luxury suites and value of media rights are just massive. It is pretty much the land-based and online casino industry like Situs but only in this case, it has a touch of physical element and thrilling action. Because of the growing revenues across professional sports, the team’s economic value proportionally risen as well. According to experts, it will keep growing to exponential levels.
How Sports Industry Earn?
While we already know that premier sports are able to generate remarkable profits, what people are wondering is, where are its revenue stream is coming from? As a matter of fact, there are several channels that sports teams are using. Given with their huge fan base, it is not surprising how they are able to become a multibillion industry.
In the next lines, we will be discussing a couple of ways that premier leagues and sports are raking in money and keep their fans thrilled of the tournament.
Broadcast Rights
In order to better understand a professional sports team, it is essential to recognize first that these sports are not only games. Sports is actually a business; and it is huge.
The general logic towards professional sports is based on the principles of buying as well as selling labor, services and goods. In majority of the professional and premier sports leagues, the revenues are divided among the league members in different percentages.
For instance, the teams in NFL or National Football League are splitting the ticket sales or the gate receipts at 60-40. Meaning to say, 60 percent goes to home team and 40 percent is to the winning team. In MLB or Major League Baseball, the split is around 80 to 90 percent to home team and 10 to 20 percent to the away team. Regarding hockey and basketball leagues, the home team always gets to keep the ticket sales.
Depending on the stipulated contract, the arena or stadium owner or outside contractor could keep revenues or there might be a split with franchise tenant.
Luxury Seats
Both the club seats and luxury suites are now among the most profitable channels of revenue for various professional sports leagues. There’s just tremendous earning potential that these luxury seats can provide. At the same time, luxury seating represents the fastest growing revenue source of the league.
For majority of the construction projects for stadiums, luxury seating becomes a crucial step in maximizing the potential cash flow per seat. The potential revenue stream for example is critical in guaranteeing financing for Oakland-Alameda’s 121 million dollar arena and the 235 million dollar Tiger Stadium in Detroit.