I'm lifting this from DOe on the IS site. It may have an impact on some of us someday.
It's an article regarding seating he copied from the Indy Business Journal.
Here, I'll edit it in:
VOL. 25 NO. 24, AUGUST 23-29, 2004
Sports teams encountering softer corporate market
By Anthony Schoettle
Are luxury stadium seats on their way out?
Click here to join IBJ's disussion forum.
Declining demand for club seats at Conseco Fieldhouse has Pacers Sports & Entertainment considering reconfiguring seating at the team's home.
The trend could signal a shift in the National Basketball Association's fan base, industry experts said, which would have a major effect on teams' marketing and revenue-generation efforts.
The 2,500 club seats at the center of studies commissioned by the Pacers sell at three price levels: $62, $74 and $96 per game. They're not the most expensive seats in the house, with courtside and lower bowl tickets selling at higher prices. But they've drawn a corporate crowd with added amenities including wider seats and more leg room, special entrances and access to exclusive Fieldhouse eateries.
Replacing some of the club seats with less expensive seats is one choice the Pacers are examining to increase attendance and revenue.
"We want to take a look at balancing the arena better than it is now," Pacers President Donnie Walsh said. "We haven't taken a look at that since we opened the arena. It really wasn't spurred by a decline in ticket sales. It has to do with our desire to better use the entire bowl, baseline to baseline."
The most likely club seats to be replaced would be the $62 seats behind the basket. Walsh said a new stairway would likely be needed for fans to access the seats, which are now accessible via the exclusive club level.
No changes will be seen this year, Walsh said.
"What you're seeing throughout sports is the refining of the way tickets are packaged based on changes in market conditions," said David Carter, principal of Los Angeles-based Sports Business Group. "Gone, at least for now, are the days when teams could rely so heavily on corporate dollars to lift the bottom line. It's vital for these teams now to take a look and see how they can build a better mousetrap."
The market shift is not confined to the NBA. Changing conditions also affect the National Football League and other professional sports leagues. The issue could become critical as talks heat up between city officials and the Indianapolis Colts over a new stadium.
"The business model for the Colts and Pacers is certainly much different, but I absolutely think this is something the Colts should take notice of," said Richard Sheehan, a University of Notre Dame economist and author of "Keeping Score: The Economics of Big-Time Sports."
"Is this a sign that there's a soft corporate market for sports consumption in Indianapolis?" he asked. "That's something that needs to be addressed by all the city's professional sports franchises."
Indianapolis' relatively small market size makes the issue more relevant for all sports properties, said Milton Thompson, president of Grand Slam Cos., a locally based sports marketing consultancy.
Club seats, Thompson said, are often attractive to small and midsize companies that can't afford a suite but like to entertain clients in a more comfortable atmosphere than standard seats. Grand Slam has had season tickets for club seats since the Fieldhouse opened.
"The amenities offered meet our demand for client entertainment," Thompson said. "But I know money is tight for a lot of firms."
Sports business experts for several years warned professional franchise owners of the dangers of pricing out average fans as a new wave of arenas came on line.
"The corporate segment has been waning, and the demand for NBA tickets in 2004 isn't what it was in the late 1990s," Sheehan said. "All the signs were out there that the real fan was being supplanted in the late 1990s, and now as certain revenue streams dry up, franchises have to deal with that."
This market shift is particularly troubling, Sheehan said, because newer venues such as Conseco Fieldhouse were specifically designed to maximize revenue through luxury suites and club seats.
While club seats seem to be an issue for the Pacers, the Fieldhouse's 69 suites are nearly sold out. Seventeen of the suites, which generally lease for $90,000 to $180,000 per season, were up for renewal this off-season. Sixteen have been renewed with multiyear agreements and the last deal is progressing, Walsh said.
In the two years after Conseco Fieldhouse opened in 1999, the Pacers were able to sell out the club seats as season tickets. But during the next three seasons, the season-ticket base for club seats started to erode. During the same period, average overall attendance per game declined from 18,345 during the Fieldhouse's inaugural season to 16,353 during the 2002-2003 season. It rebounded slightly last season to 16,612.
Walsh acknowledged walk-up sales have become a focus of marketing efforts and that club seats are a difficult sell on a single-game basis. Walsh said walk-up sales have never been as strong at Conseco Fieldhouse as they were at Market Square Arena. Part of that, he said, might be the perception that tickets aren't available at the Fieldhouse.
The Pacers could increase demand for club seats by increasing the amenities that go with them, Walsh said.
"You always want to make the clubs better," Walsh said. "You want to make it a better experience with better service. That can make a lot of difference."
The Colts have had little trouble selling out the RCA Dome's 4,200 club seats as season tickets, despite their $154 per-game price.
"We have a good mix with our club seat sales," said Pete Ward, Colts senior executive vice president. "Some of those sales go to corporations and others go to fans we've had here since 1984. We've had strong demand for those club seats year in and year out."
But the Colts' club seats are down low between the 30-yard lines. Most new NFL arenas are configured more like Conseco Fieldhouse, with the club seats up higher, near luxury suites and with access to many of the same amenities suite holders have.
"The allure of club seats is more about exclusivity and added amenities than the view of the field or the court," Sports Business Group's Carter said. "The ability to mix and network with the people in the suites doesn't hurt, either. Those things are more likely to appeal to a corporate set than your hard-core fan who is there to see the game."
Hence the difficult balancing act facing the Pacers and, possibly, the Colts.
"I'd say assessing the demand in the Indianapolis market for such things is paramount when considering the configuration of an existing facility or certainly before building a new one," Carter said.