New York City, you may have heard, has a new mayor-elect, Zohran Mamdani, who is currently working with his transition team to assemble a staff for when he takes office in January. While most of his team is made up of city political lifers, its co-chair is a somewhat unconventional choice: Lina Khan, who as Joe Biden’s chair of the Federal Trade Commission worked to find new ways to use antitrust law to rein in the power of big corporations. And as atomic news unit redesigners Semafor reported last week, one of her targets for New York, according to “people familiar with the transition,” will be “sports stadiums charging nosebleed prices for concessions.”
Semafor’s grasp on sports metaphor notwithstanding — “nosebleed” typically refers to how high seats are above the ground, not how much they cost — this is a reasonable enough goal, if maybe not the most important one to New Yorkers in making the city affordable. (Semafor did add that the Mamdani administration also plans to police hospitals that overcharge for drugs and companies that violate a new state law requiring transparency about algorithmic pricing.) And, citing no sources at all this time, the article said Khan has identified one old city law that prohibits “unconscionable” business practices as a potential route to banning the $8 pretzel.
Yesterday, though, Semafor followed up to report that “economists are fighting” on X over whether trying to reduce prices is even a good idea, with noted scholars like philosophy major Matt Yglesias arguing that “Price controls for in-stadium beer so that sober sports fan pay higher ticket prices to generate cross-subsidy for drunks is a very bad idea!!” while Columbia law professor Tim Wu replied, “This is just dumb and shows a failure to understand buyers.”
Like those two, I am also not an economist, and odds are neither are you, but we can think this through easily enough. One main reason food and drink prices at sporting events are so high is monopoly power: If you want a beer at a game, you have to buy it at a concession stand, you can’t run across the street to pick up a cheaper one at a bodega. (You can bring in your own pretzel to Mets and Yankees games, but not to Knicks and Rangers and Nets and Liberty games.) So sports fans have to make a decision before attending a game: Am I going to eat and drink beforehand and/or stuff my pockets with contraband granola bars and alcohol gummies, or am I going to factor in the cost of a trip to the concession stand before deciding whether to go to a game?
Matt Yglesias, being Matt Yglesias, doesn’t specify why he thinks “sober sports fans” will pay higher ticket prices if concessions prices are lowered — it’s possible that he thinks that sports team owners have a big number written on a whiteboard somewhere of how much money they need to bring in, and if they can’t get it from gouging on hot dogs, they’ll get it by jacking up ticket prices. If so, that’s easily enough answered: I wrote a whole book chapter about how that’s not how ticket prices work, either in theory or empirically, since team owners will always jack them up as far as they can regardless of what other money they have coming in (or going out).
If, however, Yglesias means that sports fans would celebrate the end of the $17 beer by using some of their savings to buy more expensive tickets, thus allowing team owners to jack up prices, sure, maybe? As much as sports fans also don’t have a whiteboard somewhere with their game budget written on it, as a sample size of one, I know that I have absolutely factored food costs into ticket-buying decisions: In particular, I’ve started skipping concerts when I didn’t want to pay a table food and drink minimum on top of the ticket price, especially when $18 will only get me a small plate of figs and goat cheese.
So, yes, it’s possible bringing down concession prices would allow team owners to raise ticket prices some. (It doesn’t appear that anyone has done an empirical study of this; I’m still digging.) Whether you think that’s a bad thing will largely depend on how you feel about price controls — economists generally hate them, on the grounds that they lead sellers to cut back on supply, though it’s less clear if team owners used to monopoly pricing would really start closing concession stands if forced to sell $5 beers. (Some teams have already voluntarily cut concession prices to get people to buy more food and drink, and possibly to spend more on tickets as well, it’s hard to tell from the limited examples.) And even if forcing teams to charge something closer to competitive market prices would put more money in fans’ pockets, allowing them to spend more on tickets if they want, that hardly seems like a burden — let alone a “subsidy” for fans who have the temerity to get hungry and thirsty.
Anyway, this is all for Mamdani and Khan and the corporation counsel to sort out, along with lots of other affordability promises the new mayor is going to have to figure out how to implement. In the meantime, bring in a turkey sandwich to your next baseball game, it’s allowed. In fact, maybe outlawing sports venue bans on outside food and drink would be something that everyone, economists included, could get behind? Undoing the K-shaped economy would probably do more to provide real affordability — $8 pretzels are also a byproduct of a society where $8 is no object for a significant minority — but one unconscionable system at a time.
You could eat before a concert, you know? I rarely get food at a sporting event (unless I have kids with me) for this very reason.
That being said, an unbiased economist (i.e., one who isn’t being paid to advocate for one side) would argue that the ban on outside food grants a monopoly to the concessionaires. Free market theories are all based on the assumption that there are no barriers to entry. So people attending games should be able to acquire their food from wherever they want. If it’s a free market, that means I would be able to buy food from the vendor outside the stadium and take it in with me.
Regarding higher ticket prices in exchange for lower concession prices, in theory, if we assume someone, when deciding on attending an event, factors in all the costs before deciding to buy a ticket, then yes, it would. If I decide I am willing to spend $125 on an event, and parking is $10 and concessions are $15, I will pay up to $100 for the ticket. If concessions cost $5, then I will go up to $110.
That being said, the one live example we can look at is the Falcons, who capped concession prices a few years ago.
I usually eat before concerts, but when there’s a table food and drink minimum, I have to pay $25 for food/drink whether I want to or not. And yes, that influences how much I’ll pay for tickets.
A. I miss the good old days of the 1990s when I could buy 3 hot dogs and fries for $5 at Yum Yum Donuts on Clark St. and take it all into Wrigley Field.
B. A bigger priority for Mamdani should be to figure out a way to prevent James Dolan from banning people from Madison Square Garden.
Reminds me of when I was in the bleachers eating a big burrito from Burrito House (?) and some old rich guy gave me money to get him one, and buy another ticket to get back into the stadium. The 90s were much more chill at Wrigley.
When I used to sit in the Yankee Stadium bleachers in the 1980s, the regulars would often collect Chinese food orders and send someone out for takeout mid-game, and security would let them back in since they knew them.
That is just communism! And nobody wins in communism.
I know the Cle Guardians and other teams advertise special food discount nights like $2 hot dogs (presumably to encourage tickets sales). The fact that they keep doing this tells me they have concluded it is an effective promotion. If that’s the case, then there likely is some correlation between concession prices and ticket demand. So, yes, ticket prices would likely increase with lower concession prices (unless the concessions suck bc the team is mad they can’t charge what they want). Hmmm…
You could sell beer for 10 cents if you wanted. Cleveland did this in the 70s, with mixed results (1 riot. 1 not riot). I think teams use hight beer prices for two reasons. Number 1 make money. But number 2, reduce the number of alcohol related issues. Would you rather sell a guy one beer for $20, or four beers for $5 each. The one beer guy is going to be easier to deal with in the later innings. They seek the frothy middle where they can generate the most beer dollars with the fewest drunk fans.
How does that explain the $8 pretzels?
I’ll let the Simpsons explain it.
https://youtu.be/JMB-XiewSKw?si=vNgEu-g1GCu1jRYh
Pricey beers lead some to not drink, but do not deter semiprofessionals such as myself. When I arrive at Busch after 120-mile drive, order two beerses, two hot dogs, and some sorta beverage for Old Lady Editorb, and the total is announced at like 50 bucks, the prices have so little relation to Real Life™ that it feels like Monopoly™ money, leading to PARTY TIME!
Why does James Dolan hate pretzels (and freedom) so much?
I wonder what metric Lina Khan will use to determine the correct price of pretzels and beer. Anyway, why not lower ticket prices – they’re probably incorrect too, and there’s a lot more $$ involved.