ADV 378S Lecture Notes - Lecture 18: Oakland Athletics, Anabolic Steroid, Personalized Marketing

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10 May 2016
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Course
ADV 378 Apr 13th:
Revenue Streams
oPersonal Seat Licenses
oIf sales fall short, construction could be halted (Oakland A’s)
Luxury Boxes
oSecond most important revenue stream behind TV
oMets new facility: 54 priced between 250,000 and 500,000. Old stadium had 45
at 4,000 to 8,000
oMadison Square Garden: 20 at 1 million
Suite Holder benefits
Multiple TVs
Private entrance
High end food and premium liquor
Luxury theater style seats
oLuxury suite buyers can benefit for tax benefits
oDeduct up to 50% of cost
What drive the increased income of new facilities
oWith more luxury seats, regular seats are decreased. The increased scarcity of
regular seats means the owner can go up on the prices of those seats
oRevenue is not shared with the league which promotes more luxury suites, but
does go into the income shared with the players. This could change some
motivations
Public/Private funding vehicles
oPublic sector contribution can be in the form of
Cash
Pledges
Revenue from taxes, tax abatements
Bond proceeds
oPrivate financing includes
Private investment
Private debt
Funds borrowed from the leagues credit facilities
oUsually, new income opportunities for the team will pay back the team’s private
investment long before the public debt will be retired. (exception: 49ers deal)
Stadium Lease Issues
oTeam negotiates right to use facility and the right to limit use by others.
Considerations include:
Wear/tear
Competition for ticket sales
During season vs. out of season
Cancellation of events due to postseason conflicts
Reserve dates prior to schedule being released
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