Example1.pptx
Questions to Be Answered by Feasibility Studies
Is a project likely to be sensible and successful?
Is it practical?
How will it be financed?
What will be the economic impact?
Calculating Your Thoughts
What would you advise someone (in your town, city, or region) who is thinking about building a new arena?
What would you advise someone who wants to host a large sporting event?
What are the factors that should be considered?
Phases of a Feasibility Study
Phase I:
Tests whether a more in-depth analysis should be undertaken
Phase II:
Lays out specifics
Parts of a Feasibility Study
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Parts and Subsections of a Feasibility Study
Market Demand
Often drives much of the feasibility study
Typically the major portion of a Phase I study
Helps determine if there is enough demand to justify the project
Research using primary and secondary data
Subsections of a Market Demand Analysis
Individual ticket demand
Corporate demand (club seats, luxury suites, sponsorships)
Event activity
Facility specs and operating estimates
Estimating Ticket Demand
Comparable analyses of demographic and lifestyle information:
Size of population
Age
Income
Annual revenues of other facilities
Comparison of Demographics—Oakland to NFL Market (in 2005 dollars)
Estimating Corporate Demand
Corporate depth analysis
How many Fortune 500 companies are headquartered in the area?
Will there be adequate corporate sponsorship?
Suite and seat revenue potential
Naming rights and other sponsorship revenue
Calculating Your Thoughts
What are your thoughts on luxury suites?
Are they a good source of revenue for a team?
Or should they priced so more people could afford them?
If you had the opportunity, would want to watch a game from a suite? Or do you prefer to sit in regular seats with a possible closer view of the game?
Sampling of NFL Markets—What Is the Corporate Depth?
| Market | Total No. of Corporations | Total Franchises(inc. NBA, NHL, MLB) | Corps per Team |
| Chicago | 9,610 | 5 | 1,922 |
| Seattle | 3,590 | 2 | 1,795 |
| Dallas | 6,340 | 4 | 1,585 |
| Washington, D.C. | 6,200 | 4 | 1,550 |
| Boston | 5,540 | 4 | 1,347 |
| New York | 12,120 | 9 | 1,347 |
| Atlanta | 5,190 | 4 | 1,298 |
| Oakland/San Francisco | 6,740 | 6 | 1,123 |
Source: Data compiled from
Dunn & Bradstreet (2018).
Sampling of NFL Markets—How Many Suites Are Available?
| Market | Suites in NFL Facility | Total Suites(inc. NBA, NHL, MLB) | Total Corps. | Corps. per Suite |
| New York | 213 | 652 | 12,120 | 18.6 |
| Boston | 80 | 305 | 5,540 | 18.2 |
| San Diego | 113 | 175 | 2,940 | 16.8 |
| Houston | 185 | 353 | 5,320 | 15.1 |
| Chicago | 133 | 669 | 9,610 | 14.4 |
| Atlanta | 171 | 409 | 5,190 | 12.7 |
| Oakland/San Francisco | 238 | 585 | 6,740 | 11.5 |
| Dallas | 300 | 707 | 6,340 | 9.0 |
Source: CSL & JMI Sports (2019).
Estimating Event Activity
Competitive analysis of facilities
How might existing facilities compete with a proposed new one?
Facility usage and number of expected events
Estimate for Numbers/Types of Events for a New Football Stadium in Oakland
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Facility Revenues and Expenses
Market demand analysis forms the basis for facility-revenue estimates
Example: for the Oakland Raiders
Estimating Facility Specifications
Facility size and ticket return
Other facility revenues
Concessions
Merchandise
Parking
Estimating the Optimal Size of an Arena (in Sacramento, California)
Estimating Facility Revenue, from Market Demand Analysis in Sacramento
Results of Market Demand Analysis
End result: An estimate of future quantities sold and pricing
Tickets, luxury suites, concessions, merchandise, sponsorships, etc.
An estimate of revenues generated from each
Information is used in economic impact analysis, financing analysis, and engineering analysis
Other Elements of a Feasibility Study
Financing sources
Location (venues, security, geography, parking, access, etc.)
Construction costs (if needed)
Engineering
Feasibility Studies for Recreational Facilities
More than just stadiums and arenas
Swimming pools, baseball fields, soccer complexes, etc.
Principles are similar to those for spectator-driven facilities
