Why sports teams are selling subscriptions

VCs salivate when they hear “monthly recurring revenue,” but it no longer applies to just tech companies.

Sports teams, too, are now offering ticket subscriptions to generate predictable revenue.

How it works

Fans pay a monthly fee for a certain number of games, with seat location dependent on availability (so nosebleeds are a possibility).

• The NHL’s Philadelphia Flyers’ $99 Flyers Pass gets fans tickets to four games per month.
• The NBA’s Cleveland Cavaliers’ unlimited passes are $49 and $89/mo., depending on seat locations.

The model targets casual or budget-conscious fans who don’t want to shell out thousands for season tickets.

Cash is king

A ~$25 Flyers Pass game sure is cheaper than the average standalone ticket, but the upfront revenue boosts cash flow — and cash flow can drive a franchise’s valuation.

Plus, like movie theaters, sports teams make wild margins from concessions, merchandise, and parking.

• For example, drinks have 90%+ margins, while popcorn brings home ~80%.

By subsidizing tickets, teams could entice fans to splurge on $8.50 nachos.