Take Me Out to the Ball Game?
Fewer people are going to baseball games. Even with a new stadium and a winning season, the Yankees are luring fewer fans. According to Forbes, as of the end of June, stadium revenue was sinking for the Chicago Cubs, St Louis Cardinals and Atlanta Braves, and attendance at LA Dodgers games has plunged.
Responding, owners maintained higher ticket prices but then gave discounts. For a month, the Baltimore Orioles sold $1 tickets for games against all teams except the Yankees and Red Sox. Still, attendance remained low.
On the other hand, some teams are okay. 12 of 30 MLB teams have not seen their attendance sag. The San Francisco Giants and the Texas Rangers are in good shape. And, Forbes tells us that the Cincinnati Reds are enjoying “a bump.”
Trying to explain how the economics of baseball is shifting, sports economists John Siegfried and Tim Peterson concluded that more affluent households went to games during the 1980s and 90s but now, not as much. Meanwhile, online resellers like Stubhub have facilitated bargain hunting. People seem to be waiting for a cheap deal before committing.
The bottom line? It is tougher for teams to earn revenue by filling up a stadium. The Great Recession may be a cause but not the only one.
To see more about sports economics, you can look here at a previous post on unaffordable stadiums.
The Economic Lesson
The Great Recession affected many households’ willingness to spend on discretionary items like baseball tickets. Called the income elasticity of demand, when our income drops by a certain percent, purchases fall even more for certain types of items.
An Economic Question: When income falls and home values decline, on which items will consumers initially cut back?