Everyone is change their spending habits as prices rose at a rate not seen in four decades, make choices that benefit the experience. That means great demand for live sports.
“Demand to attend sports often ‘doesn’t respond to price changes’,” said Dennis Coates, a professor of sports economics at the University of Maryland, Baltimore. “Good times, bad times, high prices – it doesn’t change consumer behavior” around sports spending.
Now that pandemic restrictions are being eased, even as cases continue to rise in some places, people are looking for more ways to get out. “I think people want the premium experience, want to get out, and they’ve been pent-up for a few years now,” said Ari Emanuel, CEO of Ultimate Fighting Championship owner Effortsspeak recently on CNBC. “They want to live life a little bit.”
That was illustrated earlier this month, when ticket prices for upcoming NFL games in 2022 averaged $307 shortly after the release of the tournament’s fixtures, secondary market platform SeatGeek said. While that price is down from the $411 average when bought last year, it’s well above the $305 average in 2020, when attendance was limited due to Covid. The average in 2019, before the disease raged globally, was $258. Ticket prices reflect demand, and they often fluctuate throughout the season.
As demand grows, teams and organizations are raising prices. Discount Menu for This Week’s PGA Championship showcase $18 beers. Spending per fan has increased 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 the cost of seats without gas, two beers, four cans of soft drink, two hot dogs, merchandise and parking costs, according to the company’s CEO, Chris Hartweg.
This spring, fans are preparing 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 Brooklyn Nets.
“Work hard, play hard,” Figueroa told CNBC last month while standing inside the Nets fan shop at the Barclays Center in Brooklyn. He said he bought a beer at the game but “had eaten before I got here because I didn’t want to pay for the food.” Concessions are often marked higher at sports and entertainment venues than typical restaurants and food courts.
Figueroa says he works two jobs, so he can face rising prices. “I work so I can spend,” he said.
Sports fans shop at the Brooklyn Nets Fan store in Barclays Center.
Jabari Young | CNBC
According to Judd Cramer, a sports economist at Harvard University who served in President Barack Obama’s administration, consumer balance sheets are strong, underpinned in part by programs that support and former Covid stimulus payments.
“It looks like consumers have been able to deal with it,” Cramer said. “When I look back at history, we’ve had low inflation for a long time – but during the recession in the early 1980s, when GDP fell, spending on sports was really strong.”
If the ticket price is too high for some fans, “there will be someone else there” to buy the inventory, Cramer said.
Emily Ushko, 32, told CNBC she has “a little disposable income” and wants to spend it on sports. She said she paid more than $600 for two tickets to the Nets-Celtics playoff game last month.
“It’s a once-in-a-lifetime thing,” said Ushko. “You want to see these players live, get the feel of the audience and experience it.”
In this October 4, 2020 file photo is an empty Levi’s Stadium before an NFL football game.
Tony Avelar | AP
However, while consumers remain resilient in the face of explosive inflation, there are concerns that the US economy could tip into a recession, forcing some middle-class and working-class fans to come up with new ideas. tougher choices about spending.
“People can get a little hurt,” says Harvard’s Cramer.
Team Marketing Report’s Hartweg warns many consumers could end up “squeezing the brakes” if prices of essentials rise.
Figueroa, an NBA fan, said he “will reconsider going to” Barclays Center next season if inflation persists.
Still, there are fans that will keep coming, even as prices continue to rise and economic uncertainty increases. Philadelphia fan Kevin Washington, 58, and his wife, Tawana, 53, are Sixers season ticket holders for five years and don’t want to lose their seats.
“Never entered my mind,” Washington said. “You just need a little better budget. You still need some enjoyment. You need some time away from the realities of life.”
However, a recession has yet to materialize and it may not happen at all. Coates, a professor of sports economics, said it would take a “major disaster” with high unemployment to trigger another recession. The unemployment rate is 3.6%.
“If it’s a normal-size recession,” he said, “I think the majority of people would dismiss it.”
