NFL Ticket Prices Rise While Attendance Drops: What Are Owners Thinking?
Thanks to rising ticket prices, overall cost, and the quality of NFL broadcasting, the majority of professional football fans will be staying home this season. The USA Today ran front-page news this morning that most Americans no longer have the urge to actually attend games.
The average NFL fan has been making that clear for years.
Meanwhile, NFL teams (and their profitability) are not suffering in the least.
Paradoxically, while team values are rising steadily, total attendance is trending downward and a larger ratio of total fans are watching games from home.
Even more crazy, is that owners seem to be doing nothing to stop it.
The Cost Of An NFL Game
NFL games are not cheap.
This year, 18 of the 32 NFL teams raised their prices.
$252 is the average price of an NFL ticket. Of course, that is offset by the massive cost of tickets at "Jerry World" in Dallas, Tx. The average NFL fan isn't going to spend much time eating $60 pizzas with the former Bush Presidents. So what will the plebeians spend?
For a family of four, a trip to the nearest stadium will cost $413. That includes $74.99 for tickets, $15.96 for a souvenir (NFL licensed cap), $4.53 for a program, $24.13 for parking, and a whole lot for food—hotdogs, beer, and soft drinks.
About that food—how much is a hot dog worth? In 1991 a hotdog cost $1.85. Now? Thanks to the obvious advancements in wiener technology, it costs $4.40.
With a $0.75 markup between "pretty good" and "New York's best" inflation is clearly out of control.
In this economy, paying extra just for the pleasure of sitting amongst the sweaty throng just isn't feasible anymore.
Staying Home is Definitely Cheaper
For the price of taking a family of four to the local stadium, that same family can afford a full season's worth of DirecTV's most premium satellite package and add its Sunday Ticket package to it. That customer would also have money left over to purchase a DVR, hook up as many TVs as they want, and get free HD.
With the money still left over, that family could make their own gourmet meal that would rival any stadium fare. At worst, they could afford enough takeout to feed themselves and any friends they would like to invite over—one would assume to celebrate all the money they've saved.
If a hardcore football fanatic wants to see each of his home team's games, he could either spend up to $6,000 on season tickets ($24,000 if he's bringing his family.) Or, that same person could get every game on a brand new HDTV and sit on a brand new couch while making mortgage payments on his new home.
The NFL has priced out the common fan.
Sitting at home is just more frugal.
Watching a Game From Home Is Quickly Becoming Better
Purists will cry foul, but going to a game doesn't have the luster it once does.
The NFL knows where its bread is buttered and has spent considerable money and effort improving the TV experience of the average fan.
Every NFL game is available in both standard definition and now in HD. This year the NFL will experiment with its first 3D football telecast.
More games are becoming available than ever before. Contests once languishing on local FOX and CBS affiliates are now being played on Sunday's "Football Night in America" (NBC) or Thursday games on NFL Network.
That network, owned by the league, is improving as well—hiring Jay Glazer as resident "insider" adding him to the already stellar job done by Jason La Canfora. Mark Shapiro—long credited with much of ESPN's success—is not consulting on all of their programming. Earlier this year, the network also tried to add household names like Peter King and Chris Berman.
Of course, the NFL Network becoming must-see-TV means more cable channels will be forced to play ball with the league owners who won't drop the price for their premium content.
As of today, Insight Communications will be bringing the channel to nearly 725,000 homes.
Time Warner, one of the country's largest cable companies still does not carry the channel. Neither does Bright House Communications—the nation's seventh largest cable company (mostly in the South)—or Cablevision which is the primary cable company for the Eastern Seaboard.
For the many who are deprived of the NFL Network, DirecTV offers every NFL game for a (negotiable) price of around $250. Those who can't get DirecTV, can get every NFL game online for a (non-negotiable) $350.
DirecTV pays a premium for this service and the exclusivity of the arrangement—a billion per year for the right to broadcast each game. In fact, in a stunning arrangement, DirecTV is paying the NFL in 2011 whether the games are played or not!
What Is The League Thinking?
In the words of Puff Daddy, "It's All About the Benjamins."
The NFL makes an insane amount of money to do what they do.
While the economic woes of America affect the majority of NFL fans, NFL owners like Paul Allen (Seahawks), who co-founded Microsoft, and Bob McNair (Texans), who made a fortune on energy investments, are not lining up for government cheese.
In fact, while the value of everything in America is plummeting, the value of NFL franchises are holding strong. Declining only 2% this year and still holding immense value over franchises in any other American professional sport.
Even though the average value of an NFL franchise has decreased slightly, no owner would take a loss if they sold their franchise today.
Frankly, the fans who sit in the stands at NFL games don't support the league in a meaningful way anymore. Private seat licenses (PSL) in box seats and luxury box accommodations are far more profitable and take up far more space in stadiums than ever before.
So Why Raise Prices With Attendance Going Down?
The NFL knows its fans.
Corporations will not stop awarding their mid-level executives with expensive box seats because the price goes up. Groups of friends who have sat in the same seats for years are going to complain about a larger price but still purchase tickets.
Supply and demand doesn't operate the same with a football team.
In Green Bay, the Packers could raise prices through the snow-filled clouds and the waiting list for tickets wouldn't shorten by a single year (let alone the decades some wait). In Minnesota, the Vikings have raised prices knowing that the product on the field is better than it will be once Brett Favre retires for good.
In Dallas and New York, the fans of the Cowboys, Jets and Giants pay a premium for accommodations their taxes helped build—so owners can make a greater profit on an investment they paid a very small percentage for.
The NFL Needs To Wise Up...Quickly
The NFL is not untouchable.
With the owners set to lockout the players, football could suffer a fate similar to the drop in popularity Major League Baseball suffered in the 1990s.
How can the next generation of football fans appreciate the atmosphere of game day when their parents can't afford to take them to the stadium?
Why would their parents take them when sitting at home is cheaper and fundamentally becoming a better experience?
While it seems ludicrous now, the NFL could be approaching MLB-like attendance levels—selling out only the most premium of games of the most premium of teams. With games not selling out, the NFL would be forced to revisit their blackout policy.
Last year, NFL Commissioner Roger Goodell cited the economy and sounded the warning alarm, announcing that the economy could force 20 percent of league games to be blacked out.
When only 9% were blacked out, the majority of owners were not forced into the drastic measure of lowering prices.
Will this be the year that the effects of the economy and the greed of the owners combine to form a perfect storm of low attendance and blacked out TV sets?
With the lockout looming, everyone from fans to owners better hope not.
Michael Schottey is the Managing Editor of the College Writing Internship at Bleacher Report and an NFL Featured Columnist. Follow him on Twitter.
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