The Los Angeles Times published a story on December 26th about how the cost of attending a live sporting event has become “unaffordable for the typical family in the Los Angeles area.” A survey of the eleven major pro teams in the market indicated that only the Angels could guarantee “any family” (i.e. not a limited number) a weekend outing at the ballpark (includes: tickets, parking, hot dogs and soft drinks) for less than a C-note. The rising cost of fan attendance has put teams – and by proxy pro sports leagues – in a precarious position; while they’re maximizing revenues, they’re doing so at the expense of seeding new fans. The Times article suggested, “the time could be right for teams to redesign their ticket pricing, with an eye on developing fans rather than squeezing more dollars out of current fans.”
Howie Long-Short: The use of analytics within front offices across the industry has led to teams revamping their ticket pricing strategies over the last decade. Once a volume play, teams are now focusing their sales efforts on “the portion of their audience that delivers the biggest bang for the buck.” In other words, pro sports organizations are willing to sell fewer tickets to fewer fans, as long as those sales come with higher margins. From an economic modeling standpoint, the teams are coming out ahead. But Matt Winkler (director, masters in science, sports & analytics, American University) remains convinced “that the live experience matters” and with such a small portion of fans having the ability to attend games, it bears wondering “what might happen in the industry as the older generations of fans that can afford such affluence die off.”
Winkler strongly believes that [pricing out the middle class] “will have a negative impact on future fandom.” He says that “if children today are not falling in love with sports early on – and the experience of attending a game is a big part of that – then [teams and leagues] are going to have a hard time developing [those individuals] into fans; and if they’re not able to capture this next generation, they’re going to lose out on the generations beyond them too.” The data supports Winkler’s POV. According to a SSRS ‘Luker on Trends’ poll, fans that get their first taste of a live pro sporting event by the age of 5 attend 58% more games annually than those who fail to make it to a game before their 14th birthday.
It’s worth noting that at least some pro sports franchises are making a concerted effort to reach younger and more demographically diverse fans through “kids clubs and social engagements.” It remains TBD if those initiatives can create the same kind of fanaticism that originates from having experienced a game live. One thing industry experts can agree on is that “people are attracted to, or fascinated with, things they try.” A decline in youth sports participation isn’t going to help ensure that Gen-Z shares the same passion for pro sports as generations past.
Winkler says that he’s “never been more worried about the future of [sports fandom] for those that fall outside of the top twenty percent [of income earners]” and his concerns aren’t just stemming from the large portion of fans that can’t afford to go to a game, either. Transition in the telecom space – particularly as it relates to the regional sports networks – means “[eighty percent of prospective fans] might not be able to consume sports content conventionally either.” The professor called the prospect of fans not attending games or being able to watch them on television “a scary proposition” for the leagues.
If one subscribes to the theory that the RSN business is dying (as Rich Greenfield does) and doesn’t believe that a DTC solution will completely offset the lost local broadcast revenues, it’s worth wondering where teams will make up the difference (it’s safe to assume neither the players, nor the owners are interested in taking a haircut). Winkler says it’s reasonable to expect the cost of “premium priced tickets to continue to go up, further shrinking the high-end of the upper middle class” (currently, the twenty percent). Sports betting and VR are other areas teams will try to tap into to drive new revenues.
Fan Marino: It should be noted that many teams are actively working to market programs that address affordability (granted, they’re offering less desirable seats). There are also tickets to be had on the secondary market for less than face value for many events.
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