People are changing their spending habits as prices surge at rates not seen in four decades, making choices that favor experiences. That means big demand for live sports.
Demand for sports attendance is usually “unresponsive to price changes,” said Dennis Coates, a sports economics professor at the University of Maryland, Baltimore County. “Good times, bad times, high prices — it doesn’t change consumers’ behavior” around spending on sports.
Now that pandemic restrictions are easing, even as cases remain elevated in several places, people are looking to get out more. “I think people want high-end experiences, want to get out, and they’ve been pent-up for several years now,” Ari Emanuel, CEO of Ultimate Fighting Championship owner Endeavor, said recently on CNBC. “They want to live life a little bit.”
That was illustrated earlier this month, when ticket prices for upcoming 2022 NFL games were averaging $307 immediately following the release of the league’s schedule, said secondary market platform SeatGeek. Though that price is down from an average of $411 out of the gate last year, it’s higher than the average of $305 in 2020, when attendance was restricted due to Covid. The average in 2019, before the disease gripped the globe, was $258. Ticket prices reflect demand, and they usually fluctuate throughout the season.
As demand surges, teams and organizations are raising prices. A concession menu for the PGA Championship this week showed $18 beers. Spending rates per fan grew for the NFL and the NBA in their most recent seasons, according to the Fan Cost Index produced by Team Marketing Report, a sports marketing firm in Chicago. The index calculates what it would cost for nonpremium seats, two beers, four sodas, two hot dogs, merchandise and parking costs, according to the firm’s CEO, Chris Hartweg.
This spring, fans are packing arenas for the NHL and NBA playoffs. Hugo Figueroa, 29, said he paid $1,200 for three tickets to a playoff game between the Boston Celtics and the Brooklyn Nets.
“Work hard, play hard,” Figueroa told CNBC last month as he stood inside the Nets’ fan shop at Barclays Center in Brooklyn. He said he purchased a beer at the game but “ate before I got here because I didn’t want to pay for food.” Concessions are typically marked up higher at sports and entertainment venues than at typical restaurants and food courts.
Figueroa said he works two jobs, so he can contend with rising prices. “I work so I can spend,” he said.
via CBS