Acquiring and Maintaining Premium Seat Customers in the "Big Four" Leagues

The sports industry in the United States will bring in an estimated $400 to $425 billion in 2011 (Plunkett Research, Ltd, 2011). Of the overall revenue, $10 billion is derived from premium seating. Unlike general admission and television revenue, income from premium seats is not usually shared with other teams in the league (Miller & Washington, 2010). Premium seating revenue makes a significant contribution to the overall revenue stream of sports organizations. In the 2010-2011 seasons, there were a total of 12,527 luxury suites across all the professional sports venues within the National Football League (NFL), National Basketball Association (NBA), Major League Baseball (MLB) and National Hockey League (NHL) (Association of Luxury Suite Directors, 2010). Premium seats also benefit the teams because most seats are purchased through a multi-year contract where the team receives payment upfront, which is crucial where the end product (a win) cannot be guaranteed (Casselman, 2009).