August 8, 2019

Keeping Eyes on the Game—How Sports Stadiums will Shrink or Swim

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The live sports experience has always been about maximizing the occasion for everyone present, especially between and even during the action. But in our digital-first era, turnout is dropping thanks in no small part to a shift in viewing habits. As a result, stadiums are changing their layouts and introducing features to shift their revenue stream, which includes greater support for sports betting.

Why is this happening?

We’ve written about how theaters and stores are closing because, nowadays, more people would rather enjoy their entertainment from the comfort of their home where they can adjust every second of the experience to their liking. The same is happening to sports arenas.

This is part of a greater trend towards the atomization of entertainment, where the individual experience is becoming more fickle yet financially crucial to impact large-scale entertainment spaces. Because holding onto hearts and minds is the key to maintaining profitability, the whole sports industry will have to play ball (I apologize).

Across America’s big three

The drop in attendance is tangible enough that stadium architects are rethinking the upper deck and dedicating that space to lounges and other social spaces:

  • MLB: The Braves, Marlins, Twins and Yankees have all downsized since 2009, and the Rays plan to reduce seating at Tropicana Field from a league-low 31,042 to roughly 25,000 this season.
  • NBA: New arenas in Sacramento, Calif., Milwaukee and San Francisco will all have 40 or fewer traditional suites, a huge decrease from their predecessors.
  • NFL: The 65,000-seat stadium the Raiders are building in Las Vegas will be one of the league’s smallest.

More than a love of the game

While this might seem like a bad thing, it’s simply the latest stage of evolution for the professional sports industry. In addition, the profitability of sports teams — or more specifically the venues that host their matches — has never been solely about ticket sales; to support that much infrastructure, it could never be.

Even an airport’s revenue is almost evenly split between both aeronautical (from airlines and landing fees) and non-aeronautical (parking, concessions, hotels) streams. With upkeep so high, these massive facilities have to think of other ways to make bank.

For a sports venue, that means finding new ways to tap into fans’ powerful and diverse love of the game, whether that means the worship of athletes and their reality TV-style drama, their obsession with stats or the thrill of a shared live sports experience. In short, there remains plenty of spectacle to monetize besides the match being played and to an extent, teams and leagues have already adapted ages ago. Today, they’re supported by cable TV and online-based media contracts to the point they’re not concerned about empty seats anymore.

There is a future, it just looks different

So long as economics don’t negatively impact how the sport grows, old-school hardcore sports fans will still show up, but for those who leave, there will have to be others to take their place.

  • Gaming: statistically the most profitable form of entertainment, could bring the physical presence back to stadiums with the popularization of video games and the rise of esports, their athletes and their teams. In fact, many of these teams could be owned and sponsored by traditional sports teams in the future.
  • New Audiences: But before that, there remains immense potential in the form of fans that can be converted with a repackaging of sports culture for underserved demographics. This is already happening with the rise in media coverage and awareness of women’s football. The other half is changing the in-person experience so that it’s safer (ie: zero tolerance for douchey fans) and thus more inclusive for families and a casual fanbase.
  • Gambling: And for those who care more about numbers than the actual game? There remains plenty of potential in the sports gambling industry for both traditional and digital sports (in the States for now, at least).

In short, stadiums and arenas still have many cards to play in order to stay afloat. They might start to shrink, but they’ll never sink.

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