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The Future of Sports: How Stadiums Can Get Fans Back Into the Stands

http://www.fool.com/investing/general/2014/02/01/3-futuristic-ways-sports-teams-plan-to-keep-fans-i.aspx

Jake Mann
February 1, 2014

Live attendance for the two most popular American sports is in decline. Professional baseball ticket sales dropped by 1% last year, and pro football still can't recapture its all-time attendance highs set in 2007.

Put simply, it's cheaper, warmer, and easier to watch the game on TV than at the ballpark or stadium, not to mention the shorter line for the bathroom.

So just how much money are teams losing?

The problem
While neither of these sports will wither and die if fewer fans continue to cheer in person, it's still a problem that needs a solution. The average NFL team generates about 17% of its revenue from ticket sales, and in the MLB this figure is near 35%. 

Change in Annual Ticket Revenue from 2007
Sport Dollar value % of Total Annual Revenue
Average MLB Team -$5.0M 2.18%
Average NFL Team -$800K 0.28%

Sources: ESPN and Forbes.

As this table indicates, the average MLB team now makes $5 million less on annual ticket sales than it did in 2007, shaving off about 2% of total revenue. In pro football, this loss is less because NFL teams play fewer home games -- 8 per year -- but is still significant.

Putting fans back in the bleachers and box seats will allow teams to recapture this revenue, but it's not the only way to get the money back. 

Of the potential solutions, it all starts with fantasy sports.

Focus on fantasy
I chatted with Diane Bloodworth, the founder and CEO of Competitive Sports Analysis, about this topic yesterday. You may remember her company for the innovative work it's doing with coaching analytics, and it has plenty of ideas about how to improve the in-stadium experience as well.

For one, teams can leverage fans' passion for fantasy sports to boost attendance. Interactive apps that feature competitions and prediction-based games are a tactic, and prizes could be given to winners who present a valid ticket stub. For example, a "Player of the Game Predictor" would work, and social media connectivity would be a plus. 

A fantasy points feed that informs fans how their favorite players are performing is also a possibility, according to Bloodworth. "We envision that the ticker tapes that encircle stadiums will one day feature not just ads, but sports data from other teams and fantasy football predictions, so fans can be engaged with their fantasy football league-mates while enjoying the gridiron action before them."

These solutions apply to football first, and baseball second. Over half of the U.S. population follows the NFL, and the number of fantasy football participants is flirting with 30 million. Baseball accounts for most of the remaining fantasy enthusiasts.

The fantasy lounge
Stadiums can also engage with fantasy players with high-tech lounges. The Atlanta Falcons have embraced the concept, and say its next stadium, due for completion prior to the 2017 season, might include one. 

Concept via GWCCA. CBS Sports has described this image as a "cross between Best Buy, heaven, and the floor of the New York Stock Exchange."

But it's not just a concept.

Last year, Yahoo! (NASDAQ: YHOO) reached a long-term agreement with the San Francisco 49ers to be the team's exclusive sports content provider when its new stadium opens next season. As part of the deal, the company will have branding rights to the 49ers' own fantasy football lounge, according to the NFL.

The Jacksonville Jaguars, meanwhile, opened a fantasy football lounge this past season. Team executive Hussain Naqi told USA Today it addresses fans' need to, "check fantasy scores, be able to access WiFi with no problems at all, and to do so in sort of a lounge-type setting," adding in an interview with Bloomberg that boosting attendance was one of the reasons it was created.

Bloodworth believes these lounges will foster "an atmosphere of competition and community" that will hook fantasy players over the course of a season. It's difficult to imagine a future in which the majority of NFL franchises eventually don't adopt such a strategy. That doesn't mean it will happen right away, though.

Baby steps
Neither the Falcons, 49ers, nor the Jaguars have released the costs associated with building a fantasy football lounge, but many pro-football stadiums aren't even outfitted with WiFi, a necessary first step.

The Denver Broncos recently paid $10 million to upgrade their wireless Internet at Mile High, which suggests more fantasy-friendly options may be down the road. In a game late last year, the team took some important baby steps toward this reality.

Wayin, a social media start-up with software that links ads with Twitter (NYSE: TWTR), began its partnership with the Broncos in November. Through the arrangement, fans' in-game tweets are displayed on the