12.23.12

Why Rising Ticket Prices and Technology Lead NFL Fans to Stay Home

High ticket prices, bigger televisions, and expanded free coverage spur NFL fans to watch at home instead of brave the elements at the stadium.

When the cameras pan the domes, parks, fields, and other arenas during NFL games this weekend, viewers are likely to notice a common feature: empty seats.

In some ways, professional football is more popular than ever. The average football television rating is up 15 percent from five seasons ago. But in contrast, live game attendance has steadily dropped since 2007. Despite a 1 percent increase this year, 4.5 percent fewer fans are attending games in the current season than they did five years ago.

With each passing year, it seems, more die-hard fans are choosing to forgo the intimacy and atmosphere of stadium seats for the ease, comfort, and low cost of their living room TVs. “We’re in essence competing with ourselves,” says NFL spokesperson Brian McCarthy. “Our fans are still going to stadiums, but the majority of our games are still free on TV, which is different than the other sports leagues. So there’s an incredible value for being an NFL fan and it doesn’t cost the fan to watch the game over the TV.”

Economists and sports buffs are at odds as to what has caused the shift from the thrill of the stadium to the comfort of a couch or bar. Some say it’s the technology that has naturally made television a better story teller for America’s new greatest pastime.

“The at-home experience continues to get better. It’s really the golden age for fans,” says McCarthy. “They are watching games on their 50-inch HD monitors, they have access to NFL.com … there is NFL Redzone, where you can watch every single score in real time and you have access to food and other comforts at home.”

Others speculate the reason for increased television viewing is that stadiums are failing to captivate audiences and instead focusing their efforts on TV deals. After all, that’s where the majority of the money is. Consider for a moment that each team made $102.5 million from the national TV deal last year and that the NFL’s revenue from broadcasting is more than double what it made from ticket sales. In other words, smaller numbers of fans and declining sales of beer and popcorn may not put too hurt the bottom line of owners too much.

Nicholas Colas, chief market strategist at technology firm ConvergeEx, says it’s the economy that has rendered tickets too expensive for the average Joe. He says a significant factor of lowered NFL attendance is that fans simply can’t afford to go to games. “If you take a family of four to a football game and you get the average seat—between the parking and making the day for the kids a good experience [with concession items] you are spending about $600, which is the price to pay for a good TV back home,” he said.

According to Statista, the average NFL ticket price this season is $78.38 a 2.5 percent increase from last year. Tickets averaged only $67.11 in 2007, the year that the NFL saw record-breaking game attendance and the year the recession began. That’s a 17 percent increase in a period where incomes have generally fallen.

But despite recent, declining turnout, numbers show that stadiums have done little to make games more affordable. The average price of a seat has continued to increase every year. Colas says teams try to price tickets “right to the marginal level so they don’t leave any money on the table,” but stadiums are continuing to have empty seats at games.

Other sports have faced a similar dilemma with filling their arenas.

In three straight baseball-playoff home games this past season, the New York Yankees drew fewer than 47,200 fans to the big stadium in the Bronx, 3,000 short of capacity. The Anaheim Angels saw an attendance drop of 14 percent, the largest in the major leagues.

Consider for a moment that each team made $102.5 million from the national TV deal last year and that the NFL’s revenue from broadcasting is more than double what it made from ticket sales.

Revenue from NASCAR ticket sales is also in sharp decline. According to securities fillings, earnings fell 38 percent over the past five years in the three companies that host 35 of the 38 race weekends. NASCAR’s largest track operator has also lost more than 40 percent of its ticket revenue.

NASCAR racetrack companies say the economy is largely to blame and that it has began offering deals to increase attendees. “We’ve done discounts for folks, the four-packs and the six-packs—maybe food and beverage is included in the ticket,” SMI president Marcus Smith told Charlotte’s Sports Business Journal. “It’s not the model that you would look to in the short term because it has resulted in some lower admission revenue. But it’s the right thing long term for our fan base because more and more fans are able to attend and continue their tradition.”

Some analysts like Colas worry that if the NFL doesn’t do similar price reductions or deals it will get to a point where the cost of attendance is too high to fill capacity. As a result, it will be difficult to raise funds to keep up stadiums. “A lot of consumers are telling me that it’s becoming a luxury good rather than a consumer treat,” said Colas of NFL tickets. “The question is: has the NFL bumped up against a price ceiling?”

John Greenberg, executive editor of Team Marketing Report, argues there will always be profit to be made from NFL games, regardless of seat prices. “Every year I always wonder, ‘Where does this end? Where do ticket prices go?’ You would think there is a kind of ceiling,” he said. “But it’s the fact that there are only eight regular-season home games. So the scarcity drives up the prices. That’s why you are going to see prices stay high.”

He adds that real football aficionados will never stop attending live games, despite the rising prices of seats. “Everyone likes to use the economy. I’m sure there are people who have given up season tickets because they have lost their jobs and are worried about money, but I don’t think it’s going to go dramatically in one way or another,” he said. “There’s always going to be value in seeing things live.”