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Finding the Price Point for Televised Sporting Events

July 4, 2009

Growing up, it was hard to see teams other than the “big boys” in college football; especially in the New York City area, before Connecticut went to the D-I aka FBS level, and while Rutgers was just poor.  I didn’t know anyone who stopped everything for Saturday football; the teams that came on – even close ones like Penn State – had no relation to my life. I never knew of the need to see one’s football team, the wearing of college football colors, the sense of regional pride that the southern and plains and midwestern teams engendered.

One of those teams – specifically, Nebraska football – is the reason I got in to college football. In college, I lived in a 6 person suite, with a room right next to the common area, where we had a small TV.  My suitemate from Omaha was a huge Huskers fan.  Huge.  I would be working (or drinking) late into the night on Fridays. He used to wake me up on Saturday, about 11.20 AM yelling about some Nebraska foible… while they were up 14 on, say, Troy State. That made me cranky as hell, so I brushed up on my football so I could insult the Cornhuskers, especially when they played Mizzou… or some team that might actually beat them in the 90’s.

The fervor was not restricted to Nebraska, of course. And the proliferation of cable/ satellite options, channels, and regional programming means that more people can feed their need for information. There is obviously a demand to not only see one’s teams, but the get the “inside scoop,” the “candid” and “unfiltered” information – to get close to one’s team.  The best way of doing this is either to find a news outlet with a huge budget to cover the team, or to localize the news.

Those Nebraska fans, would travel from far and wide to see their team live – putting money into ticket sales, gasoline, tailgating food; there is a cost that they are willing to pay to experience Nebraska football. Now, the school will test the price tag of that dedication by showing their first three non-conference games in pay-per-view format. The linked article touches on the revenue concept for many bigger-time teams, schools, and conferences looking for ways to control their revenue streams and differentiate viewers, separating the casuals from the die-hards, who will pay much more per view than you and I might through our cable or satellite package.  And that money goes to the school and their content distributor.

I suppose that this is problematic, as we expect to get our sports television for a small fee; but there are fans who pay good money to get the aforementioned “insider” information on recruiting sites; conference specific television; and team-specific networks in major markets that might, like the Yankees will, expand into in-market online deals at an advanced price.

These moves, if profitable, start to inform both sports broadcasters, cable/ satellite tv companies (dealing with competition from online sites like Hulu), and sports fans about what the model will be going forward for sports. Segmenting fans helps bring the right money to the producers and determines the actual value of the product, on the business side.

But on the fan side, this kind of segmentation can be parsed too finely. The pay-per-view model loses the fairweather fans and the casual sports fans. And will pay per view remove the socia aspect of watching the game at a dedicated bar over wings and beer?  What value do those fans have to the schools and the media producers? This experiment will start to delve into the question.

  1. July 6, 2009 at 9:02 am

    Interesting piece. I’m not convinced that this type of segmentation will alter anything else media-related with each school’s revenue stream.

    I think the adoption and demographics of these pay-per-view offerings will be the same as those people who buy 30′ Nebraska flags or inflatable Nebraska easychairs.

    It’s difficult enough to get people to shell out PPV money for a Pacquiao-De La Hoya fight, I doubt that the market for preseason Nebraska games will be all that large. I agree that the price point would be key – I doubt that a $59 per game price would entice any less-than-hardcore afns. And even if the audience were to boom, who would try to reach each of these segmented fan bases?

    I would guess that, as a group, hardcore pro sports fans have clear product preferences and it would make sense to market say “Nivea for Men.” Hardcore collegiate sports fans are probably still predominantly male but I think it’s diluted by the alumni from other demographic groups. All that to say, there more accessible (and maybe less expensive?) ways to reach the demographic that constitutes hardcore Nebraska football fans.

  2. picodulce
    July 8, 2009 at 2:59 pm

    I’m not convinced either… but it’s interesting to watch. I think you can’t cut out the semi-interested alumni out if you want to build the brand…

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