I actually had to stop and think about the math to believe the recent Walmart commercials about savings from bringing lunch everyday. Sure it makes sense that saving $5 dollars a day adds up, but unless you think of it over a period of time then it doesn’t seem like much money.
The basic premise of the commercials is that by bringing your lunch 2 times a week rather than buying for an entire year, you can save over $500 dollars. At first this seems like a huge number but then remember that it’s really just saving $5 dollars x 2 times a week = $10 a week x 50 weeks a year = $500 dollars. Proving that the little things really do add up. So, since this is my sports blog, it got me thinking about applying this to sports.
Want an additional $1M in revenue? If you run a MLB team just find a way to charge people $0.50 more per game either through concessions, ticket prices, parking or some other avenue. It’s that simple. 81 game season x avg of 25k attendance per game x 50 cents per person >$1M. You run an NBA team? Just find a way to generate an additional $1.25 per person per game. NFL? Just $1.75 extra gets you to $1M.
This is one of the reasons it’s so amazing that the NBA refs might be locked out over a $700k difference in pay.
Now how do you generate this extra revenue without angering fans? One idea:
- Raise ticket prices by $5 on expensive tickets. It won’t seem like much more to a consumer paying $100 vs $105 for a ticket, but it will allow the team to generate enough revenue to not have to raise prices on the cheaper tickets. This is the same concept that applies when buying a car. Most people would not even bother haggling over paying $20,010 vs $20,000 for a car. But if instead they had to pay $20 vs. $10 for a shirt, it would be a much tougher decision. In either case its the same $10 one-time payment, but since in the car case its such a small percentage of the total price. This also keeps ticket prices low for the people who need it most.
