ECONOMICS: Inshore sailing changes sailing events
Published on April 16th, 2013
By Stephen Barclay, CEO, AC Event Authority
The America’s Cup World Series has been important in terms of ‘proof of concept’ for many of the things we’re doing this summer. We’ve learned a lot about our television production, our race management systems and about how we can deliver compelling racing, close to shore, for our fans.
Another aspect of what we’ve learned at the America’s Cup World Series – ticketing – is influencing what we do this summer in San Francisco, and hopefully beyond.
Ticketing was trialled at our America’s Cup World Series (ACWS) event in Newport, R.I. in 2012. To gain permission to utilize the historic Fort Adams, we had to ensure fan numbers would be limited to daily maximums. This was achieved by paid tickets, albeit at relatively low purchase price. Newport was sold out and this gave us the confidence to ticket bleachers for the two ACWS events in San Francisco last year. Again we were sold out.
This coming summer in San Francisco, we have struck a balance between ticketed and free areas. As you would expect, a number of the best areas are ticketed but the majority of places to view the races are free and open to the public.
For the racing this summer, bleacher seats, starting at just $15, have been on sale for a week here in San Francisco and we are already a third sold out. The $999 Summer of Racing season tickets (one bleacher seat for every race day) have been on sale for a month and two-thirds have been sold. From this, you start to get the picture that the economics of this America’s Cup is a little different than previous editions.
Historical revenue sources for America’s Cup events have been sponsorship (80%), TV (10%), merchandise, licensing & on/off water hospitality (5%), with the balance made up from berthing and other ancillary items. Apart from the 32nd America’s Cup in Valencia, Spain, Event Host Fees have been negligible, if paid at all.
Stadium sailing has changed this model. If we add ticketing, exclude event fees and make a conservative estimate of future TV revenues, the economics look more like sponsorship (65%), TV (10%), ticketing (10%), merchandise, licensing & on/off water hospitality (10%) and other revenues (5%).Yes, sponsorship is still the main revenue driver, however ticketing and increased revenues from licensing and hospitality, due to fans being shore-based during racing, have added considerably to overall revenues. In other words, the pie is bigger!
Why are the economics important? – Read on