Professional Sports Teams & Organizations
Brief Excerpt from Industry Overview Chapter:
Organizations in this industry include professional and semiprofessional sports teams and clubs. Major organizations include the New York Yankees, Dallas Cowboys, Los Angeles Dodgers, and New England Patriots, all based in the US; as well as Real Madrid and Futbol Club Barcelona (Spain); Manchester United (UK); and Bayern Munich (Germany).
Demand is driven by consumer income and corporate entertainment spending. The profitability of individual teams depends on achieving high fan attendance and a large TV audience, both of which are enhanced by effective marketing and competitive play. Teams in large metropolitan areas have advantages in the population base and TV audience they can draw on, though they may face competition from other teams. Teams in smaller markets, along with less popular sports and minor league teams, can compete by building fan loyalty through local marketing promotions and an appeal to civic pride. The US industry is concentrated: the top 50 organizations generate about 60% of revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major revenue sources for US professional sports teams are admissions and tickets (35% of revenue); television and broadcasting rights fees (30%); advertising, sponsorships, and endorsement fees (10%); and concessions and merchandise sales (5%).
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