Australia has one of the most competitive, engaged and enthusiastic sports communities in the world. One stat suggests that 92 percent of Australians have an interest in sport, and each person likes an average of six sports. Australia has 92 professional sports teams, while Texas, which has a comparable population, has 10. In Melbourne alone, there are almost 100 golf courses and over 25 professional teams.
At the recent Business of Sport Summit, the largest meeting of the sport industry in Australia, companies shared insights on what it takes to win in a competitive landscape. The annual sports conference was also an opportunity to share best practices we’ve learned working with Vision Critical customers in the sports business.
Here are three reasons why sports business is huge in Australia and what other markets can learn from it.
A focus on memberships rather than ticket sales.
The Australian sports landscape is driven by the membership model, in which teams sell annual memberships to fans. As a member, fans get access to exclusive events, merchandise, digital communications, live streams, apps and more, keeping them connected to the team in more ways than game attendance. Rather than just filling the stadium, this model provides Australian teams a much more sustainable model to grow their fan base—and their revenue—year over year.
Every professional team in Australia publicly publishes their membership numbers, which act as a kind of scoreboard for their business results for the year. In Australia each fan will basically commit their loyalty to a team by purchasing some sort of membership level (whether this includes season tickets, a package or none at all). In doing this the team is able to have a stronger connection with their fans—they even go as far as printing the number of years that a member has been with the team on their membership card—which they can use to access discounts and special areas at the game. Membership numbers are usually in the tens of thousands for each team, with some reaching close to six figures. These numbers are impressive given that many cities have multiple AFL clubs (Melbourne for example, has 10 teams).
In contrast to a season or group ticket model, this membership approach is more cost effective for fans because it allows everyone to support their club (both financially and emotionally) even if they can only make it out to a few games. For the most popular teams, such as the Collingwood Magpies, there are even memberships that don’t include tickets (as they have essentially have run out of seats). Instead, these teams provide access to exclusive media streams, merchandise, mobile or tablet apps and newsletters (see their Magpie Insider membership).
A strong local connection.
Australian teams often treat fans like family. Clubs develop a deep connection with fans early and locally. Teams organize local events (such as annual member day forums or dinner with the players) that let old fans be heard by the team and younger fans meet their idols face to face. These programs are very big for many clubs, helping them develop enduring and long-term relationships with fans.
Port Adelaide Power, a football club in South Australian, has a prime example of this with their Bequest Program, where they have over a hundred fans who have agreed to leave a part of their estates to the club in their will.
For fans, their clubs become a part of their identity. The fact that they are called clubs instead of teams shows that there is a genuine connection with fans that has been ingrained into the Australian sports culture. For Australian clubs, in-person events continually encourage supporters to buy into their programs.
A close collaboration with fans.
With so many teams and a limited number of sponsors, clubs need to ensure that they are showing the value of their brand and their audience to sponsors. Clubs need to provide value to their sponsors to ensure that they stay with the team over the years. Sponsors need to see that their partnership with clubs has resulted to increased brand awareness or has driven sales.
Landing the right sponsor can provide more than just a financial boost. When a sponsorship is done correctly, it enhances the game day, digital or overall team experience. But if fans don’t connect with a club’s partners, partnerships turn off fans and damage the reputation of both brands (called Ambush Sponsorships).
Having a community of fans can help companies find the most valuable partners and enhance those relationships over the years. Sponsors want to know more about the audience that they’re reaching and want to measure the success of their efforts. Clubs that have a community of fans could help sponsors connect with the audience directly, helping them gather insight about their brand and helping quantify their campaigns. For clubs, regular engagement also demonstrates to fans that the club is constantly looking to listen to their feedback and innovate to provide more value.
Australian clubs show what it takes to thrive in a competitive landscape. With the membership model, fans can help clubs achieve their financial goals off the field. The local focus taken by leagues helps them build their fan base and establish a long-lasting connection with the community. Finally, by bringing corporate partners into the fold, clubs are further delivering value to fans and ensuring that they have a holistic experience with their favorite clubs. The Business of Sport Summit shows that executives from sports organizations outside the country are actively trying to learn from the Australian sports landscape.
To learn about a new approach to fan engagement, watch a 4-minute tour of Vision Critical’s Sports Fan Council.