More than 50,000 new full-season-tickets sold, generating more than $100M in revenue

By John Lombardo, Staff Writer via Sports Business Daily

The NBA is finding that serenity sells.

As the league nears its Oct. 30 tipoff with none of the contentious labor drama of last year, it is setting a blistering pace at the box office and expects to set a record for full-season-ticket revenue. The league has sold more than 50,000 new full-season tickets, up 15 percent from last season. Total full-season sales are expected to eclipse the 250,000 mark, with more than $100 million in revenue generated from new full-season-ticket sales.

Those sales metrics are similar to those set during the blockbuster 2010-11 season, when the NBA captured so much business after a frenzy of free agent activity, highlighted by LeBron James moving to Miami. The league this year has a record full-season-ticket renewal rate of about 88 percent heading into the start of the season.

Chicago Bulls fans have put their team in the top five among full-season-ticket sales.
Photo by: NBAE / Getty Images

It’s the highest renewal rate in NBA history and is the key driver of the league’s full-season-ticket sales that will help push the league’s total gate past the $1 billion mark, of which at least 75 percent comes from the sale of season tickets.
Other leagues, such as Major League Baseball and the NHL, typically have season-ticket renewal rates in the low to mid-80s.

“We will have our best year in full-season-ticket sales and will have our highest gate on record,” predicted Chris Granger, executive vice president of the NBA’s team marketing and business operations department. “Our renewal rate is usually in the low 80s, but we have momentum from last year’s playoffs and our product is really strong right now.”

But the gains at the gate are due to more than continued momentum from last season. Since 2010, for example, teams have grown more sophisticated in using data management tools to help sell tickets. Most NBA teams now employ at least three staff members dedicated to customer relationship management where only two seasons ago, some teams had none.

In addition, NBA teams have beefed up the number of customer service employees assigned to season-ticket holders and have added a far wider and more flexible array of partial ticket plans, which in turn is helping teams post higher conversion rates of those partial plans into full-season-ticket buyers.

“For the premium

[ticket] market, the NBA has a ratio of one service representative for every 500 accounts, and for the regular full-season-ticket market, the ratio is one customer service representative for about 800 to 1,000 accounts,” said Bernie Mullin, a former NBA executive who now runs The Aspire Group, a sports marketing consultancy. “But it’s not just the quantity of customer relations people. The NBA has identified that the No. 1 opportunity area is first-year season-ticket-holders and they are doing all sorts of things to build connections to those buyers. That is what is helping drive the renewal rate.”

The five teams with the highest full-season-ticket sales totals are the Chicago Bulls, Los Angeles Clippers, Los Angeles Lakers, New York Knicks and Oklahoma City Thunder, though the league won’t disclose specific season-ticket numbers or the specific sales order for those teams.

“We have a 98 percent renewal rate and have 4,000 people on our waiting list so we backfill [non-renewals] immediately,” said Brian Byrnes, senior vice president of sales and marketing for the Thunder, which has capped its season-ticket sales at 14,100.

At least 18 of the NBA’s 30 teams are expected to have more than 1,000 new full-season tickets sold, though that number is down from the record high of 21 teams with at least 1,000 new fulls sold during the 2010-11 season.

Last season, the NBA had 12 teams with more than 10,000 full-season equivalent tickets sold for the original 41-game home schedule. Heading into this season, 15 teams are projected to have sales of at least 10,000 full-season equivalent tickets.

“Fans came back in droves after the lockout and that has rolled right into renewals,” said Adam Kanner, a former NBA executive who is now CEO of ScoreBig, an online ticket seller that counts NBA teams as clients. “A lot of teams have gotten better at pricing. When you make the value proposition more compelling, while at the same time the product is better, there is a positive impact.”

This year, almost every NBA team will use more sophisticated variable ticket and dynamic pricing strategies to push ticket revenue. Granger won’t even offer a leaguewide breakdown of ticket price changes from this year to last year because it changes so much on a nightly basis depending on the date, location of the seat, and opponent of each NBA home game.

The top teams boasting at least 3,000 new full-season-ticket sales are the revived Philadelphia 76ers, the relocated Brooklyn Nets, the up-and-coming Minnesota Timberwolves and the star-studded Los Angeles Clippers.

Notably, the Nets last season ranked last among the 30 teams in average attendance during their final year in New Jersey, but now have sold more than 11,000 full-season tickets at their new Barclays Center arena.

Rounding out the top-five teams in new full-season-ticket sales are the Charlotte Bobcats franchise, which surprisingly has sold about 2,000 new full-season tickets coming off last year’s futile 7-59 record.

“We feel good about sales from a small-market perspective,” said Bobcats President and COO Fred Whitfield. “We maintained our prices flat across the board, and to be able to sell a nice mix [of tickets] says a lot.”

The Bobcats entered the summer sales season with a projected season-ticket renewal rate of about 50 percent. Instead, the team has a 70 percent season-ticket renewal rate thanks in part to aggressive promotions that included an offer to fans to buy a season ticket for this season and get another season ticket free for next year.

“The intent was to move tickets and the promotions garnered interest,” said Flavil Hampsten, senior vice president of ticket sales and database marketing for the Bobcats. “When you win seven games, your phone is not ringing.”

Also helping push the league’s renewal rate are an influx of teams now adding year-round benefits and off-the-court events as part of season-ticket packages. About half of the 30 NBA teams now have year-round membership clubs as part of their season-ticket packages, including the Bobcats’ Cats 365 and the Washington Wizards’ DC 12 Club.

“We are clearly seeing more teams selling memberships and it’s not just about 41 games anymore,” Granger said. “Teams are taking basketball and connecting with other like-minded people.”

Those programs are helping the league have at least 19 other teams with season-ticket renewal rates above 87 percent, the most ever at that level for the league.

“If you renew well, it changes the entire business,” Granger said. “We have some breakout teams in Brooklyn and Philadelphia and those teams help pad the numbers. But it is an exciting market to sell into right now.”