A recent KAGR (Kraft Analytics Group) study determined that while the average cost for a family of four to attend a Major League Baseball game rose 8.2% from 2019 to 2021 (to $253.64), attendance at a league level declined 16% over the time frame. That’s a drop that nearly doubles the slide the sport took between 2016 and 2019. If it were more affordable to attend an MLB game, would more people do so? As it turns out, price and attendance are not necessarily correlated. Multiple factors influence a fan’s willingness and ability to attend a sporting event, and the significance and weight of those key inputs have changed since March of 2020. Jessica Gelman (CEO, Kraft Analytics Group) says the teams and leagues that get to re-know their fans, and subsequently recalibrate and personalize the ticketholder experience to suit each one of them, will be the ones best suited to drive attendance growth in the years ahead. It must be noted that ‘21 attendance data only include games in which the MLB team was able to be at full capacity, and not those where attendance was limited by COVID restrictions.
JWS’ Take: KAGR’s MLB Fan Cost Index only dates back to 2016, but Team Marketing Report produced similar studies that showed game attendance increased on average by nearly 5% annually (4.8%) between 1991 and 2018. Looking at it through that lens, ~8% over three years seems insignificant.
Times have changed, though. Throughout the 1990s and 2000s, teams largely took a one-size-fits-all approach to ticketing and would raise prices year after year. Of course, ticket costs were significantly less than they are today, and the methods used to differentiate pricing within a venue were less sophisticated. Over the last decade, sports organizations have become more data driven and as a result, more sensitive to how increases will influence fan demand (which helps explain why the Fan Cost Index number hasn’t been rising as fast).
If teams are relying on data more than ever, why would the cost of attendance (not just within MLB, but across professional sports) rise at a time when they knew fan demand was tempered? Inflation is part of the answer. “The cost of staffing [has been] more challenged,” Gelman said. “In general, a lot of [costs] are going up, and that is playing out and showing [itself] in a variety of different ways, including expectations of fans for their experience when attending a game.” Pro sports organizations are also coming off a pair of COVID-impacted seasons where many lost significant money.
While the cost of attendance may be a factor in MLB’s steep attendance decline since ‘19, Gelman was not prepared to say teams across the board would fill more seats if coming to the game were less expensive. “It doesn’t have to be an end sum game. If you are creating the right amenities around the experience, some [fans] are likely willing to pay more for amenities.” (Think: interactions with the coaching staff, discounts at the team shop.) This is true outside of sports, too. The hotel and airline industries are among those allowing customers to pay for upgrades.
In fact, she noted, “We see a bifurcation of experiences going on.” After a year without live events, some fans are looking for a premium experience when they go to the ballpark, and they are willing to pay more for it. Conversely, others want to pay less to get in the door, have a no-frills experience and may not even need a seat assigned until the game starts.
Putting cost aside, there are several other drivers negatively influencing fan demand and attendance post COVID. “We look at the market itself in terms of how employment is looking, inflation in [the area]… How the local government is dealing with the various geographical challenges. During the Omicron COVID surge, some local municipalities enforced masks for indoor venues, which played a huge factor in some parts of the fan base not wanting to attend games,” Gelman said. KAGR also evaluates fan avidity in the city, the quality/competitiveness of the home team, the venue infrastructure and the visiting clubs coming in to understand what is driving (or not driving) fan demand. KAGR incorporates hundreds of variables in their Fan Demand Index and identifies unique drivers within each market.
The significance and weight of those factors have shifted during the pandemic, but Gelman said the data seems to indicate many teams and leagues are still adjusting to fan behavioral changes and expectations. “Holistically, the product the fans experience when attending a game has changed, the fans expectations for their experience has changed, and how the fan wants to consume sports has expanded,” Gelman said. “Attendance and viewership, aside from the NFL, is down. We think engaging fans must be done on a more personalized and segmented basis, which is what we provide to our many clients across the sports leagues.” The analytics executive believes teams and leagues need to be more aggressive in leveraging tech and data to better understand the key drivers and to arm themselves to deliver a more personalized experience to fans.
To be clear, MLB is not the only sport to have experienced a “very significant” drop in attendance since 2019. MLS did as well (-15%).
The NFL was the outlier among the leagues that KAGR looked at. While its cost of attendance (at a league level) rose 5% over the last three years, attendance has declined just 3%.
Paul Ballew (chief data and analytics officer, National Football League) thinks the league’s efforts to capture the names of new customers and connect with fans on a meaningful basis has been a factor (along with the quality of the game and emotional connections Americans have to the sport). “We continue to make investments to develop additional capabilities to connect on a personalized level with our fans—a key part of our strategy to deepen engagement,” he said.
NFL teams are trying to appease changing fan preferences. Some are “doing deep dives into pricing. Many are looking at improvements to the venue. Others are adding new amenities and adjusting the value in what [the fan] gets,” Gelman said (think: ability to exchange tickets for a different game).
Lou DePaoli (managing director, General Sports Worldwide and a former New York Mets and Pittsburgh Pirates EVP) is not convinced data and intelligence explains the variance in fan demand across leagues. He sees it as a byproduct of supply-and-demand theory and timing. “Playing once per week works to the NFL’s advantage. I would posit that if MLB played once per week their attendance would be comparable to the NFL, if not higher. Comparing totals, MLB drew 68.5M in attendance in 2019 and the NFL drew 17M…so MLB drew almost four times [the number of fans] in 2019. It all depends on how you look at the numbers and what story you are trying to tell.”
As for timing, DePaoli reminds the NFL had the advantage of starting its 2021 season later than the rest. “By the time the NFL kicked off in 2021, MLB was already around 2,000 games played in 2021.” By that time, fans were more comfortable returning to the stadium.
With that said, the General Sports Worldwide executive agrees with Gelman that consumer preferences have shifted during the pandemic, and that teams and leagues need to be gathering data in order to understand and cater to their fans.
