December 18, 2011 Washington Redskins vs New York Giants
America’s most popular sport has experienced a noticeable setback in attendance. Recent years have brought a steady decline in average NFL attendance. In fact, 2011 marked the lowest average attendance the NFL has seen since 1998.
The reasons vary.
In a still tough economy, attendance decreases stem from the upsurge in the costs of attending an NFL game. According to a report conducted by Team Marketing Research, a leading publisher of sports marketing and sponsorship information, the average cost of an NFL ticket has increased nearly 14% from 2007 to 2010. Furthermore, the average cost for a family of four to see an NFL contest live has risen to $420 per game.
Subsequently, more fans would rather kick back and watch a game at home. A recent ESPN Sports Poll has revealed that only 29% would rather watch a game in an NFL stadium. Compare that to a similar poll taken in 1998 in which 41% of fans would rather see a game in person.
NFL teams that fail to fill their stadiums risk "blacking out" locally televised games. Dating back to 1973, the NFL has embraced a blackout policy that prohibits a home game from airing locally if it is not sold out 72 hours prior to kickoff.
Prior to 1973, blackout rules were exceptionally restrictive and even several sold out games did not air. One of the most notable instances was the 1972 NFC Championship game between the Washington Redskins and Dallas Cowboys.
Fans in the Washington, D.C. area were unable to see the game unless they were fortunate enough to hold tickets. However, the game was seen in over 200 other markets.
Where would you prefer to watch an NFL game?
Meanwhile, the NFL and its teams are weighing options to persuade fans to attend games. Unfortunately, there are many challenges to overcome.
Traffic and parking are issues at just about any stadium. The lines are long at rest rooms and at concession stands, which tend to serve overpriced, fat-laden foods. "TV time outs" seem longer in person. Weather plays a role at outdoor stadiums—especially during the colder weeks of the season.
NFL teams recognize these issues and are looking to address them. Talks include technology improvements such as smartphone applications—including exclusive instant replays and sideline talk—and Wi-Fi capabilities to enhance fan experience at the stadium.
Another challenge is that affordable seats are usually far away from the action, and thus fans watch the plays on the big screens at the stadiums—the same as they would do at home for a lot less money. Further, because of the secondary market, fans feel they can now get tickets for any contest.
Ironically, this accessibility means that the experience has to be extraordinary—for instance, a game between two playoff contending teams with exciting players—to inspire fans to pay the premium charged by the secondary market.
It also means that sometimes, if the battle is between two disappointing teams, the ticket brokers wind up selling the tickets at less than face value. Thus, it becomes harder for teams to charge and get full price.
To combat blackouts, some teams and sponsors have opted to buy back their own unsold tickets. Last season, the NFL only blacked out 16 games and aims to cut that number even further by adding a new rule that allows teams to benchmark their ticket sales as low as 85%.
Teams must reach their newly benchmarked attendance minimum to avoid TV blackouts, but in turn are subject to paying a higher percentage of gate fees to the NFL’s revenue fund.
Despite the apparent incentives, several teams don’t feel the tradeoff is worth it. For instance, the San Diego Chargers were forced to blackout one of their home games (Week 3) despite being 2-0 entering the matchup. Interestingly, San Diego's home opener, at which the team honored Junior Seau’s career, was also threatened with a blackout.
While blackout rules were originally instated to allow teams to preserve revenues from shrinking, the NFL as a business has evolved dramatically over the last 50 years. In fact, starting in 2014 the NFL is set to make revenues totaling nearly six billion dollars a year from TV contracts alone (CBS, NBC, Fox, ESPN and DirecTV).
Newly modified blackout rules in conjunction with an enhanced "in-game experience" for fans are necessary to help reduce the overall number of TV blackouts in the future. As the NFL maintains its position as the most popular sport in America, the league must address the fact that fans are increasingly happy to watch the games on TV rather than paying to see them in person.
Jed Hughes is Vice Chair of Korn/Ferry and the leader of the executive search firm's Global Sports Practice. Among his high profile placements are Mark Murphy, CEO of the Green Bay Packers; Larry Scott, Commissioner of the Pac-12 Conference; and Brady Hoke, head coach of the Michigan Wolverines. Earlier in his career, Mr. Hughes coached for two decades in professional and intercollegiate football where he served under five Hall of Fame coaches: Bo Schembechler (Michigan), Chuck Noll (Pittsburgh Steelers), Bud Grant (Minnesota Vikings), John Ralston (Stanford) and Terry Donahue (UCLA). Follow him on Facebook, Twitter @jedhughesKF.