Sports bubble watch: NFL fans would rather watch on TV

It’s not just the New York Giants and Jets: Attendance is down across the NFL, with average game attendance projected to fall to its lowest level since 1998.

While the media have been quick to blame easy access to big-screen TVs, there’s another factor that just might be at work here: The average price of an NFL ticket is now $252. With prices like that — and economic figures like these — you might expect increasing numbers of fans to stay home even if the alternative were listening to the game broadcast on their crystal radio sets.

With sellouts diminishing, Senator Sherrod Brown (D-Ohio) has asked the NFL to reconsider its rules blacking out games with unsold tickets, but so far his plea has fallen on deaf ears. Instead, the NFL has focused on making going to a game more like watching on TV. Only with an extra $252 price tag. Sign me up!

Tax-deductible seats and the juicing of ticket prices

Just noticed the op-ed in yesterday’s New York Times arguing that the tax deductibility of luxury boxes has ruined baseball:

Over the last two decades, the average ticket price for a Chicago Cubs game has increased 265 percent, more than four times the inflation rate. Add in parking, concessions and souvenirs, and a family trip to one of this week’s opening day games could easily cost a few hundred dollars.

There are many reasons for the price explosion, but a critical factor has been the ability of businesses to write off tickets as entertainment expenses — essentially a huge, and wholly unnecessary, government subsidy.

These deductions have led to higher ticket prices in two ways. On the demand side, they have fueled competition for scarce seats, with business taxpayers bidding in part with dollars they save through the deductions.

On the supply side, the large number of businesses bidding for expensive seats has driven the expansion of luxury skyboxes and a reduction in overall seats in new ballparks.

It’s an issue I’ve raised before, and Joanna and I noted it way back in the first edition of our book. The deductibility of sports tickets has bounced around a bit — it’s currently at 50% of the face value of tickets — but it remains a huge incentive for corporations to pay more than they otherwise would for tickets, driving up prices overall — and helping spur teams to demand new stadiums with more luxury seating that they can sell to the artifically inflated corporate market.

The op-ed authors, Duke law professor Richard Schmalbeck and Rutgers business professor Jay Soled, argue that while it would be ideal to eliminate the business-entertainment deduction for sports tickets entirely, probably a more feasible reform would be to cap the deduction at $50 per seat. That wouldn’t end the juicing of ticket prices, but it would at least blunt it somewhat.

Effect of new baseball stadiums on winning: zilch

Jeff Lubbers at Baseball Daily Digest takes a look today at the on-field effects of moving into new stadiums for baseball teams. In their first year at a new home, he finds, starting with Camden Yards in 1992, teams have spent an extra 15.3% on payroll over the previous year, as they availed themselves of heightened revenues to bulk up their talent on the field. (The Minnesota Twins, notes Lubbers, are already at work on that this offseason, acquiring Jim Thome, Orlando Hudson, and J.J. Hardy, though those were mostly at bargain prices.)

And the impact of all this new talent? Writes Lubbers:

Excluding the 2009 Twins of all the teams in the above table their collective record in the last season of their old homes was 1,421-1,430 for a winning percentage of .498. Their collective record in the first season of their new homes was 1,394-1,405 for a winning percentage of … .498.

While that’s a pretty effective debunking of the “stadiums will bring a winner!” myth, there are a couple of ways I’d love to see this study improved. First off, it generally takes more than one year to turn a franchise around; when I did a similar study a few years back for the Baseball Prospectus book Baseball Between the Numbers, I used win percentages for the five years before and after moving to a new stadium, and found that a new home was worth on average about 5.5 wins a year — still a relatively small payoff, but measurably positive. It’d also be good to see how much that 15.3% payroll hike compares to the baseline increase in player salaries, which until recently were rising substantially year to year even for teams without new homes. [CORRECTION: Lubbers does note that the average annual payroll hike for all teams is 7.49% — I missed it somehow on first read.]

Finally, one number I’d love to see added: Change in average ticket prices at new stadiums. Again from BBtN, 11 of the top 14 single-season ticket price hikes between 1991 and 2004 came with teams moving into new digs, topped by the astounding 103% single-season rise in average prices when the Detroit Tigers moved from Tiger Stadium to Comerica Park. New stadiums make players richer, even if they don’t make their teams (much) better; but fans are paying through the nose for the privilege of watching their pricier teams play .498 ball.

If anyone has some Excel time handy and is interested in running such a study, you can find all the raw data needed at Rod Fort’s site. Or I might give it a shot myself over the weekend, if no one beats me to it.

Sports bubble watch: Jets slash (some) prices

Another New York sports team is following the Yankees‘ lead in slashing ticket prices, but only for the middle class of seats — though, given the prices being discussed, maybe “the upper-upper-middle class” would be a better way of putting it. (Stadium seating pretty much bottoms out these days at the real middle class.) The New York Jets have announced they’re cutting prices for seats in the Mezzanine Club at their new stadium opening next year, from $400-$500 down to $195-$395. The Mezzanine Club is the middle deck on either side of the field, amounting to about 7,000 of the new stadium’s 80,000 seats.

“The jump from $120 a ticket or $150 a ticket to $400 just put it out of reach for a lot of people who did want to experience the clubs,” Jets VP Matt Higgins told AP. “We came to the conclusion that these prices are really 2007 prices in a 2009 world.”

Bleacher Report, though, notes that you still have to shell out a seat license fee — of between $5,000 and $25,000 per ticket — for the rights to even buy the tickets. Given the trouble the team has had finding buyers for their PSLs — buyers who weren’t just bidding as a publicity stunt, anyway — it’ll be interesting to see if half-price tickets with a $5,000 down payment are any more 2009.

ESPN buys $1200 Yankee tickets so you don’t have to

If you’ve been wondering what those crazy-expensive field-level seats are like at Fake Yankee Stadium, ESPN writer Wright Thompson dropped $1200 so he could tell you firsthand. His verdict: It’s great to watch the game from up close, hot dogs go great with a $200 bottle of French wine, and cops are nicer to you when they think you’re rich people.

Thompson comes up with a novel theory for the outrageous Yankees ticket prices, saying it’s thanks to Wall Street brokers who in recent years became willing to pay just about anything for good tickets, since they were using them as deductible entertainment expenses (Thompson calls them “bribes”) to sweet-talk other brokers into conducting deals. But after a bunch of equity traders were caught with free hotel rooms, hookers, and a midget — it’s always the midget that gets the headlines — the SEC cracked down, with potentiall huge consequences for the Yankees:

To get out front of the SEC, many firms have instituted their own internal controls requiring gifts worth more than $100 to be reported. A computer program has been purchased by more than 200 companies that, for the first time, allows statistics to be kept on ticket use, including how much business each one brings in.

So … just as companies were trying to limit extravagant spending, the Yankees came out with the most extravagant tickets in the history of sports, designed in part for a group of people who could no longer buy them. “They killed the golden goose,” a former Bear Stearns guy says. “When the new prices came out, everybody said, ‘Are you kidding? We can’t even give these to clients.'” …

Yankees games went from something small to something like a trip to the Masters. One buy-sider told me: “I’ve been offered really good seats a couple of times, but I haven’t taken tickets from a broker in the new stadium. I’d feel like I owed the guy.”

Meanwhile, Thompson wonders if all the sky-high ticket pricing could risk turning off those who are there for the game, not for the derivatives. He cites ESPN pollster Rich Luker as saying the sports industry is in “harvest mode,” and could be in danger of alienating its fan base for good:

A recent poll discovered an unsettling trend emerging for the first time. American families whose household income is $75,000 or less now have zero dollars of discretionary income. According to Luker, that means about 75 percent of the country can never responsibly afford to go to a live professional sporting event. Franchises want them to be fans, to buy the gear and pull for their teams and watch the telecasts the leagues are paid billions for. But they don’t need them to come to their stadiums. There are, right now, plenty of rich people who love games. The prices reflect that. The reason sporting events cost so much now, Luker’s research shows, is because they are designed to be affordable only to those making $150,000 or more a year.

Luker’s stats show, continues Thompson: “For the first time, the largest number of sports fans aren’t 12- to 17-year-old boys. The baby boomers are the group that shows the greatest increase in a love of sports, and they’ll be dying soon.”

All in all, a fascinating read, though I’m not entirely sure about all its conclusions. (My own research points to the massive surge in wealth towards the richest Americans since the Reagan tax cuts for the top income brackets — the increase in in the number of “rich people who love games,” in other words — as most to blame for rising ticket prices.) And it’s fun to hear about such perks as about the bottomless pile of Twizzlers available to high rollers, without having to plunk down $1200 to visit it.

Sports bubble watch: NBA, Yankees cut prices

More signs that the crazy inflation in sports ticket prices has found a ceiling:

Sports bubble watch: Yanks trim some pricey seat fees

The long-awaited decision by the New York Yankees on how to respond to their empty seat crisis is in, and the verdict is: The team is cutting ticket prices on about 6,400 of their priciest seats, while raising prices on 1,700 second-deck seats:

3,400 Field Level seats currently priced at $325 as part of full-season licenses will drop to $250 or $235 each next season, depending on their specific location. Additionally, all 1,208 Suite seats in the Delta Sky 360¬∞ Suite will see a decrease in price, as will 1,846 of 1,894 Suite seats (97 percent) in the Legends Suite. The balance of the Legends Suite seats will have no price change….

In the Main Level, 10,111 seat locations will see no increase. The remaining 1,704 seats in Sections 216-217 and 223-224 currently priced at $100 will be $125 next season. These mark the only increases for 2010.

The lesson the Yankees seem to have learned here: Fans aren’t willing to pay an arm and a leg for great seats, but will give up a few fingers for good ones. Which makes sense, given that the most expensive seats are the ones that were going unsold, but is almost certainly bad news for fans hoping for more cheap seats, not more $100-$300 ones.

In related news, random Yankee fans with no last names think these prices are still too damned expensive.

Another theory on Yanks postseason ticket pricing

Today’s New York Times notes that while the Yankees will be offering Division Series seats to season ticket holders at regular-season prices, they’ll be several dollars higher for non-season plan holders lucky enough to win the ticket lottery. (All tickets will also carry a mandatory MLB “handling fee” of between $1 and $6 for all, because you don’t expect Bud Selig to run his greasy fingers over everything for nothing, right?) This suggests one possible reason why the Yanks are keeping first-round ticket prices low: They may be worried about season-ticket renewals in the wake of all the uproar over this year’s crazy price hikes (86% on average, according to the Times), and are hoping that the guarantee of discounted postseason tickets will be enough to lure fans back for 2010.

In any case, this should be one more data point in rebuttal of any notion that sports ticket prices are set according to some rational analysis of supply and demand — as my six-year-old says about the weather forecasts, “They’re just guessing.” And right now with everyone guessing about so many other things, it makes sense to expect some weirdness in ticket pricing, too.

Yanks lower playoff ticket prices; also, pigs fly

Is it opposite week at New York Yankees HQ or what? First the team relents and allows fans to bring small bags to the games, now comes word that they’re lowering postseason ticket prices from what they’d planning on last year, with tickets for the Division Series largely unchanged from regular-season levels. Either they know something about the recession that we don’t, or they’re planning to make it back on $12 popcorn buckets. Or maybe they’re just hoping to make up the difference in StubHub fees.

UPDATE: New Stadium Insider notes that with the smaller capacity of Fake Yankee Stadium, larger season-ticket base, and required set-asides for MLB and the media, fewer than 5,000 tickets will be available to the general public for the ALDS (and fewer than 1,000 for the World Series). Still, a break to season ticket holders is still a break — and the relative scarcity of generally available tickets only makes it weirder that the Yanks are passing up the chance to ask for the moon.