Event Revenue Generation & Risk Management

Event Revenue Generation and Business Model

• Events module part 4 focuses on event revenue generation and the business model.
• A case example is provided, analyzing an event's total impact and revenue generation through the tour.

Seven P's of Event Revenue Generation

• Similar to marketing, events have seven P's to guide revenue generation:
  • Purpose
  • Place
  • Promotion
  • Performers
  • Public
  • People
  • Platform
• These P's lay the foundation for successful events and positive revenue outcomes.

Purpose

• Purpose is defined as having a clear objective for the event.
• Some events are not revenue-based but are focused on return on objective.
• Example: A college athletic director giving away tickets to fill the stadium.
• Objective: Fill the stadium to look good on TV and show alumni/donor support.
• The main guideline is to educate, entertain, and close business.
• To generate revenue, educate people about the objective, entertain them, and create a vision to close business (sell tickets or engage).
• Fyre Festival Example:
  • Marketing created engagement to entertain and educate potential concertgoers about it being the best festival in food, art, and music in the world.
  • The actual accommodations were subpar, demonstrating a failed purpose.
  • The event organizer's purpose was a scam.

Place

• Place includes the venue, design, and ambiance.
• Prioritize location, create unusual/unique experiences, have a design that is different, and use lighting/sound to stimulate all senses.
• Creative seating systems, immersive technology, and exclusive access are important.
• Premium seat experiences offer exclusive access and a feeling of being part of the game.
• Examples:
  • Hayward Stadium (Oregon) is a track facility with individual seats, offering great vantage points and a European feel.
  • Yankee Stadium allows fans onto the field for unique experiences like proposals.

Promotion

• Engagement starts before the event.
• Connecting with the audience before the event is vital for driving spending.
• Create a strong story and content to make the audience feel part of the process.
• Develop in-depth, year-round, organic content to drive engagement.
• This drives ticket purchases and savings that turn into revenue at the event.
• Word-of-mouth marketing is the strongest form of promotion.
• Life is Beautiful Festival Example:
  • Promotion of artist headliners for each day.
  • Content individualized the experience, making attendees feel it was all about them.
  • Different artists were promoted differently to their target fanbases, driving the event close to a sellout.

Performers

• Talent and draw matter, including who is performing and who is the main attraction.
• Prioritize audience representation and crowd-pleasing experiences.
• Curate content that makes sense together and develop a narrative about the performances.
• Introduce performers ahead of time, connecting them with the audience.
• Connecting opening acts/sub-acts to the audience ahead of time helps draw them in early.
• Grammys 2021 Example:
  • Unveiled the full lineup of performers to drive ratings and attract viewers to see their favorite artists.
  • The marketing team used performers to help drive rating.
• NSYNC, Backstreet Boys, and 98 Degrees Examples:
  • Resurgence of these acts has created revenue generation opportunities.
  • Created relevant content to connect with fans.

Public

• The public is essential for revenue generation; without them, no money is made.
• Connect, engage, and create a community among attendees.
• Facilitate one-on-one meetings before the event, ask for opinions, and engage the audience.
• Use voting/polls for opening acts, food options to make fans feel part of the process.
• Engage the audience to make content to make them feel like they can make the same.
• Gamify the experience to drive engagement.
• Examples: Fantasy sports, esports events, concerts, and sporting events.
• Basketball Game Example: Playing with limited to no fans reflects in the interest of the public.
• Sporting Events Example: Sporting events reflecting that they have standing room only.

People

• People refers to staff members who deliver the experience.
• Prioritize the staff; they make or break interactions with the public.
• Training, communication, rehearsing, recognizing, and incentivizing staff are critical.
• Frontline staff (parking, ushers, ticket takers) touch the public first and must be well-trained.
• Taylor Swift Concert Security Staff Member Example:
  • Security staff member went viral for dancing, enhancing the fan experience.
• ASM Global and Arizona Cardinals' Top Flight Service Program Example:
  • Frontline employees recognized for good service with cards, redeemable for tickets/swag.
  • Helps with buy in of frontline employees.

Platform

• Platform refers to the technological platforms used to engage.
• Technology provides data/analytics, engagement opportunities, and ease for apps/tickets.
• Allows for Instagram moments and keeps fans talking about the event.
• Coachella Example:
  • Full-fledged app connects with other platforms to engage, facilitate, and socialize the event.
  • AI makes festival experiences animated and shareable on social media.
  • Drives immersive experiences, marketing, and FOMO.

Business Case: The Eras Tour

• The Eras Tour (Taylor Swift) is a traveling show at NFL venues (55,000+ capacity).
• Impacts revenue generation unlike any other tour.
• On opening night in Glendale, AZ, the concert brought in more revenue than the previous year's Super Bowl.
• Swift performs the equivalent of 2-3 Super Bowls every weekend.
• Typically, 100 spent on live performance tickets generates an estimated 300 in ancillary local spending.
• For the Eras Tour, fans spend an estimated 1300 to 1500 in additional ancillary revenue.
• Projected Total Gross Revenues: 2,200,000,000.0
• Total Consumer Spending: 5,000,000,000
• The Eras Tour will generate more revenue compared to 50 countries’ total GDP.
• 91% of fans would go again this year.
• The movie release of the tour is expected to be the highest-ranking concert film ever.
• Music Streams: 80% spike in her music stream.
• Album Releases: Released and rereleased 2 albums during the Eras Tour time.
• Shortages: Shortage of tour stops, tickets, and sequin worldwide.
• Canada's Government Appeal: The Canadian government pleaded for tour stops in Canada.
• Added Tour Stops: Era's tour has been extended and Toronto was added as a tour stop.
• This event significantly impacts the economy

Conclusion of Total Events Module

• The events module covers what an event is, the economic impact of sports/events, bid processes, and event revenue generation.

Risk Management for Mega Events

• Risk management is understudied and underappreciated.
• The case study focuses on risk management from a sponsor's viewpoint at the Commonwealth Games.
• Good risk management is unnoticed by spectators.
• The Commonwealth Games is an international multisport event involving athletes from the Commonwealth Nations (former British Empire).
• The US does not compete.
• The lecture analyzes the activation of the 2014 Commonwealth Games from a risk management perspective.
• "If you fail to plan, you are planning to fail" - Benjamin Franklin.

Importance of Risk Management

• Revenue generation is as important as revenue protection.

Three Takeaways

• Broad understanding of major event operations.
• Appreciation for risk assessment and management.
• Highlight the importance of staff health and safety.

Role/Responsibilities

• Role: Member of the SSE Commonwealth Games project team (September 2013).
• Objective: Learn about event operations for the coming games.
• Focus Areas: Organization, risk assessment, crisis management, training, staff welfare, and how to survive the games period.

SSE's Approach

• Well-defined organizational structure and leadership team.
• Thorough risk management.
• Daily reporting to key stakeholders.
• Alert system for all personnel.
• Rapid response team.
• Focus on staff welfare.
• Extensive training and testing.

Communicating Value

• Communicating organizational values to stakeholders is critical.

Games Operation Team

• Task Force
  • Command Center
    • Accreditation
    • Staffing
    • Training
    • Transport

Projects

• Ticketing
• Guest Programs
• Product and service showcasing
• Game security plans
• Games business continuity management
• Crisis communication
• Media relations

Understanding SSE

• SSE's priorities are displayed on a sign inside the SSE warehouse.

SSE's Golden Rules

• Always assessing risk
• Always wear PPE (Personal Protection Equipment - hard hat, safety vest, steel-toed boots)
• Accept challenges
• Reverse park (safer when leaving and entering)
• Everyone holds the handrail
• No debates, no excuses, no accidents

Critical Operational Success Factors

• Ensuring health and well-being for SSE staff, guests, and customers.
• No adverse impact on BAU (business as usual).
• Protect and maximize SSE's reputation.

Communication and Key Protocols

• Review existing procedures to identify current strengths and weaknesses.
• Establish a games task force with representation from core project members.
• Identify opportunities to streamline and fast-track the decision process.
• Establish a games time alert process for all games staff.
• Deploy unique games crisis management procedures.
• Ensuring all stakeholders know what to do in the case of an incident/issue.

Incident management procedures

• What are the existing internal protocols for incident management.
• What were the unique circumstances presented uniquely by the games.

Incident Management

• A a unstable period of time during which impending change or developments may lead to an undesirable outcome.

Crisis Management

• A crisis may be any situation that runs the risk of escalating intensity, serious health and safety concerns for staff or general public, falling under close media or government scrutiny, interfering with normal business operations, jeopardizing the corporate reputation of SSE, or or damaging the company's financial standing.

Types of potential incidents or crises

• Natural disasters or civil disorders
• Financial problems
• Systems failures

Classifying these risks

• Important to understand how to classify different risks.

King Carlos of Spain Anecdote

• King Carlos didn’t have ID, so he held up a peseta with his face on it as ID.

SSE Risk Classification

• Incident: An event that could potentially lead to a serious or catastrophic impact.
• Issue: An event that could have moderate impact.
• Occurrence: An event that could have a minor impact.

Incident Classification Examples

• Minor: An illness on a on the guest program, infrastructure challenges such as traffic or or a water fountain being broken.
• Moderate: Infrastructure damage to, say, the hydro venue or an incident involving a staff vehicle or perhaps theft.
• Critical: This would be something like a fatality. This would be a significant BAU. Again, business as usual failure affecting the game services or a terrorist attack.

Setting up Support Teams

• SSC Games Command Center
  • SSC Group Incident Management
    • External Partners and Stakeholders: Glasgow 2014, internal excutives, partners.
    • Support Teams: Press and Communication, security, operations.
    • External Relations: Helpline calls, project and intelligence and BAU divisions.

Concept of Risk Assessment

Operational Risks

• Business processes
• Customer Treatment
• Our people
• Security of the event
• Legal regulatory things
• Power and energy support
• IT system risk
• Outsourced partners and third party suppliers

Business Risks

• Manage the cost to actually pay for these things and our brand reputation. Brand repuation through the cost to particiapte in the games.
• How to keep the business running during the games (BAU - Business as Usual).

Reviewing Planning Assumptions

• Identify the potential impacts to the core business.

Assumed Scenarios for Effective Planning Execution

• Peak time: July 23 to August 3.
• Geographical Impact: All business sites and travel within a 50 mile radius.
• Increased tourism: Tourism was gonna be up by 5%, but it'd be concentrated around the core games areas
• Transit Delays: Potential delays across the rail network, airport, and obviously increased con congestion on the roads relative to these sports venues.
• Security threat: the The terrorist threat likely raised to high. Organized criminal activity expected
• Media Attendance: 3,000 media in attendance.
• Games Information:Increased demand for games information and how do we get that out to our our fans
• Work Access: The challenging of accessing our assigned work locations.

Key Quote on Sporting Threat

• "Experience indicates that global sporting events provide an attractive, high profile target for terrorist groups." - UK home office.

Security Background

• $1,000,000$ spectators
• 6,500 athletes from over 71 nations
• 17 sporting events
• 3,000 media
• Our security budget is going to be tripled from the originally estimated up to £90,000,000, originally estimated £30,000,000 just for the security of this event.
• The office identifies the two thousand fourteen games as a top priority.
• Security threat rated high improperable.

Key Considerations for Security Review

• Internal security review of all sponsor events.
• How close can fans and customers get to these athletes and different things?
• We regularly interfaced with the organizing committee and our other sponsors to understand what are they doing? How can we keep a consistent experience for people
• We participated in management, incident management testing to where they came through and tested our scenarios
• We identified unique personal protection requirements so that we can easily identify you in these massive crowds.
• We need to participate in training exercise with the games staff.

Training Testing for a Major Event

• Training and testing.
• What is the games? What is its background? Why is it important? Why is SSE involved?