Monday, January 6, 2014

Why the NFL Needs a Lesson in Economics

The past few days, we have been met with a slew of four NFL playoff games. The playoffs are always an exciting time of year for football fans (should their team qualify, that is). Yet this year, 3 teams, Cincinnati, Indianapolis, and Green Bay struggled to sell out their stadiums for this special occasion.

So why is this the case? It should be noted that Green Bay has sold out 319 consecutive games. So at least for Green Bay, this isn't a lack of commitment from their fans.

Of course, the fans are still being blamed for the lackluster sales, but this is ridiculous. The NFL is a business, like any other. Every other business is required to produce a great product at a reasonable price, and should they not, they will be unable to sell their products. If a business fails to sell their products, we assume that their services aren't worth the price, not that the customer isn't loyal enough. As Bob Kravitz of the Indianapolis Star explains,
"Sports have got to be the only business where the consumer gets blamed for poor sales. Any other business, we'd look at the numbers and say, "Well, their price point is too high,'' or "The service stinks,'' or "They don't carry a good selection of inventory." And it's ridiculous. NFL fans are the most loyal fans we have in this country. If they're not purchasing playoff tickets, that tells me it's an NFL problem, not an Indy/Cincy/Green Bay problem."

This was the consensus as well from the fans down here in Cincinnati, some of whom said that if tickets were just ten dollars cheaper, they would have purchased them liberally. So you may ask why didn't the teams lower the prices of their tickets? They can't as the NFL sets playoff ticket prices "based on each market's ability to pay" and will not let teams discount the tickets. Of course, the NFL is not in these cities and does not know what prices fans of these cities are able to afford. Their estimates are unfortunately over the mark in these three cities.

The NFL should use to learn some economics from this week's poor sales of playoff tickets, and lower their prices to where they can be afforded and are worth the cost. Better yet, perhaps the NFL should let the individual teams set the prices, as they better understand how much the market in their city is able to pay.

No comments:

Post a Comment