No Dwight Howard, No Problem as Magic Keeps Ticket and Sponsorship Sales on Pace

The Magic sales are staying strong.

(from Sports Business Journal, September 10, 2012) In spite of a tumultuous season and a turbulent offseason in which the Orlando Magic traded their biggest star, Dwight Howard, the team has managed to conserve its season ticket and sponsorship support. Thus far, the Magic have sold 1,500 new full-season tickets, an amount equivalent to the previous season through the same time period. Full season ticket sales are anticipated to fall between 13,000 and 14,000 by the beginning of the 2012-2013 season. That would position the Magic amongst the top clubs in the NBA in full season ticket sales. The team’s season ticket renewal rate sits at 80 percent, which is approximately the NBA average. Orlando Magic CEO, Alex Martins, stated that the team is “pleased where we stand” and that they plan to “rebound quickly from the transition.”

The fact that the Magic’s home arena, the Amway Center, is only 2 years old helps to retain the season ticket crowd. Another factor assisting the retention of the season ticket base is the team’s choice to keep season ticket pricing the same for the coming season. The business operations of the Orlando Magic still face some tests in the future. The team fired Head Coach, Stan Van Gundy, and their General Manager, Otis Smith, resigned. This, plus the loss of the franchise’s biggest superstar since Shaquille O’Neal, Dwight Howard, may lead to mediocre on-court performance. Team profits could be harmed through a decline in single game and group sales.

The Magic have not yet finished the pricing of single game admission for the 2012-2013 season, and they are in the beginning steps of finalizing group sales and sponsorship contracts. Alex Martins stated that the Magic “won’t know about groups and individual-game tickets until we get into the season, and the story will be told in how we come out of the gate.”  Martins also expressed that he predicts sponsorship revenue to be close to last year’s amount. The team has 50 sponsors, but expects greater numbers by the regular season tip off on October 30. The Magic’s corporate base is outnumbered by other NBA teams, a number of which have at least 100 sponsorship agreements. The team has a sponsorship approach that gets more money out of fewer contracts instead of a lot of contracts with lower payouts.

The Magic are further safeguarded by having long-term premium seating deals that were agreed upon when they transitioned into the Amway Center in 2010. The arena has 60 suites, none of which were up for renewal this offseason.