By Adam Grossman
One of the biggest challenges that sports organizations at the professional, collegiate, and high school levels face is filling their venues by selling season tickets for games or events. Technology, particularly mobile technology, is often blamed for this predicament. If fans can watch the game anywhere, then why do they need to be somewhere at some time? More specifically, if a fan can watch a game on their mobile device then why do they need to be at the venue for every game during a year?
The Orlando Magic faced this same predicament but was able to turn mobile technology into a solution for the team’s ticket-selling challenge by creating the concept of "Magic Money." The founding director of the Sport and Entertainment Business Management MBA at the University of South Florida, Bill Sutton, described Magic Money in the following manner:
The concept of Magic Money began to form back in 2014 as a benefit within the Orlando Magic App. Members were able to use a feature within their app to return tickets for Magic games they were unable to attend. Members received a credit for the face value amount of the returned tickets for all returns completed prior to the day of the game and received 50 percent of face value for returns completed on game day, all the way up to game time. This encouraged members to return tickets as early as possible to receive the maximum return and provided the Magic with additional time to resell the tickets. This credit, called “Magic Money,” became a digital currency stored within the app that could be used to upgrade seats at future games.
Why did the Magic use this approach? The team examined the data which said that overall season ticket usage was one of the strongest predictors of whether someone would renew their package for the following season. Yet, season ticket holders had become hesitant to buy packages because they were not sure if they were going to use all of the tickets and were “concerned about losing value from their investment when unable to attend games,” per Sutton.
The Magic also found that its fans found the secondary market “challenging” to navigate and a difficult way to recoup their investment. In addition, ticket upgrades to seats closer to the action on the court were the most “preferable” way to upgrade the gameday experience.
Magic Money addresses these issues while enabling the team to generate more revenue. Season ticket holders are assured that their investment will not be lost. In fact, it can be turned into a benefit that they wanted, ticket upgrades, with a few clicks in their Magic App. The team has now made it more likely that fans will become season ticket holders while also having the ability to resell tickets that are not used.
In addition, the Magic are generating more data about ticket purchasing behavior which will enable the team to create even better promotions to increase sales in the future. The team has already seen the benefits with attendance increasing each season since the Magic implemented Magic Money even as the team has struggled on the court during this time.
The Magic are not the first team to rethink season ticket sales in this way. In our book The Sports Strategist: Developing Leaders for a High-Performance Industry, we highlighted the Dayton Dragons. Even though the team has an 18-year, 1,000+ game sellout streak that is still going to this day, the Class A minor league baseball team determined that not all of its fans could attend of all of its games. Therefore, the team created customized season ticket packages to ensure that its season ticket holders could attend the games they wanted to attend while enabling the team to sell the remaining individual game tickets at higher price points to different fans. This approach enables the Dragons to provide its fans with the season ticket experience they want while also helping the team to generate more revenue than using a more traditional approach to season ticket sales.
It is completely understandable that sports organizations want to lock-in the revenues that come from season ticket holder purchases. However, fans often do not want to be in a position where they feel like they are buying tickets for games they cannot attend. Both the Magic and Dragons have demonstrated that there is a solution that can work for buyers and sellers of season tickets. Using data and mobile technology to provide a better customer experience while helping sports organizations generate money is the definition of a “win-win” in the sports business.
Adam Grossman is the CEO and Founder of Block Six Analytics (B6A). In addition, he is a lecturer for Northwestern University’s Masters of Sports Administration program. He is the co-author of The Sports Strategist: Developing Leaders For A High-Performance Industry. His work has been featured in publications including Forbes, The Washington Post, The Chicago Tribune, and Comcast SportsNet Chicago.
