Arena

Types

Arenas (also called coliseums, gardens, domes, forums, field houses, pavilions, civic centers) are enclosed structures containing seating surrounding a playing floor large enough to accommodate basketball, ice hockey, and other indoor sports. Such venues have large seating capacities (1,000–25,000), are able to host a multitude of events, and are not subject to weather conditions. These qualities yield the best opportunities to generate revenues from space rental, advertisement, concessions, private suites, novelties, and food/beverage sales, in addition to ticket sales. Today, any space left open by the main tenant in an arena's calendar is filled with revenue-generating events.

Stadiums are large, mainly open structures with oval, round, or horseshoe-shaped seating. These venues are commonly used for either football or soccer. They have large seating capacity (from a couple thousand to more than 100,000 spectators), but their use is contingent upon weather conditions and ownership preferences. Because of this they are commonly considered single-use venues. Stadiums' larger seating capacities make up for the revenue they do not generate because of their single-sport use and shorter seasons. With the exception of a few concerts per year, most stadiums rely on football or soccer games as their main revenue streams.

Unlike stadiums, ballpark seating does not surround the field of play. Seating capacity of these venues ranges from a couple thousand to more than 50,000 spectators, and they are mainly used to host baseball games (with perhaps a few concerts and other events happening throughout the year). A ballpark's large seating capacity and baseball's long season help to minimize the impact of the revenue lost by not hosting events other than baseball.

The type of funding utilized to build the venue generally determines the venue's ownership. Arenas, [Page 71]stadiums, and ballparks can be public, private, or a combination of both. The type of ownership influences the decision about who will operate the venue. Sports venues may be operated by their owners, main tenants, not-for-profit organizations (government authorities), or private management companies (e.g., Global Spectrum and SMG).

Management and Marketing

As integral parts of a venue's operation, each specific function of a sporting venue (including administration, finance, sales and marketing, ancillary services, and facility operations) is equally important to the financial success of the venue and must be managed efficiently. The financial success of a sports venue depends on how well its management controls each of those functions, and balances variables such as time, space, monetary resources, staffing, stakeholder demands, and expectations of the general public. Most types of operation depend on the existence of in-house expertise to be effective. In the absence of such expertise, it is very common for venue owners to outsource the venue's entire operation to a private management company. It is also very common for venue owners to retain overall control over the venue's operations, and yet have services such as concessions, box-office, and event booking individually outsourced to private management companies with expertise in these areas.

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