Sep 10, 2010

The 2010 NFL season began last night.   Amidst all of the excitement of the fans, the players, the coaches, and the various television stations has to be at least the tiniest shadow of doubt. The idea of a lockout will more than likely hang over everyone’s head for the entire season and, more recently, its been reported that NFL attendance will fall for the third straight season.

This recession thing just refuses to go away, doesn’t it?

The NFL racked up an impressive $17.4 million in ticket sales in 2007, but has seen a decline every year since.  Last year the NFL brought in $16.7 million.  Certainly nothing to sneeze at, but the decrease is certainly notable.

Eric Grubman, executive VP of NFL Ventures & Business Operations was quoted by USA Today as saying that he expects attendance to drop to its lowest level since the 1998 season.  He expects overall ticket sales to drop by at least 1% and maybe up to 2% this season, while total season ticket sales may be down by as much as 5%.  Although Grubman does expect many teams to make up any revenue short fall with other ticket based revenue streams (single-game tickets, partial season ticket packages, secondary ticket companies like StubHub).

Recession aside though, the single largest factor effecting NFL ticket sales is…NFL TV viewing.

It’s almost like taking money out of your left pocket…to put it in your right pocket.

The rise of high-definition TV, instant replays from nearly every angle and the RedZone Channel (which whips viewers to scoring situations in different games), have made it easier and cheaper for fans to watch games from the couch without the expense and hassle of attending a live game.

That’s made TV a huge bright spot for the NFL. For the 2009 season, the league drew its biggest audiences in 20 years. Regular season games were watched by an average 16.6 million viewers, up 2 million from the season before, and the highest number since the pre-Internet days of 1990. (via USA Today)

A bright spot for the NFL, yes.  But also a source of competition.  And don’t expect the rise of television to end any time soon; the NFL had their first broadcast in 3-d back in August, and lets not forget that the NFL’s television contracts are guaranteeing the league roughly $4 billion in revenue this year.

The increase television viewer-ship also creates an “extra-ordinarily” cumbersome catch-22 for the NFL; the fewer people watching the games in person, the more likely the game is to be blacked-out.  Numerous teams were blacked out last year, some multiple times (see: Jacksonville Jaguars, Detroit Lions, etc.), and if television viewer-ship continues to rise, blackouts would seemingly only become more likely.

To review: A game is blacked out in the local market if it is not sold out within 72 hours before game-time.

The continuing rise of television also means that two things need to be considered:

  • How much longer before the NFL changes their black-out policy…and at some point are they not maximizing revenue if they fail to do so?
  • That secret black-out rule…is that ever going to be brought to light?

Of course, everyone is making a big to-do about in-game attendance falling, and lowered revenues, etc.  So, how do you explain this?

According to a USA TODAY survey, 18 of the league’s 32 teams have increased prices on tickets — a stark contrast to last season, when 24 clubs didn’t raise prices.

While modest increases typically range from 3% to 7%, many are coupled with decreases and new tiers of pricing. Two struggling teams in hard-hit markets — the Detroit Lions and Jacksonville Jaguars— reduced prices without any increases. (via USA Today)

Fewer fans are attending games, television viewership is on the rise…and you increase the ticket prices?  I know that you’re hoping to make up some of the lost ticket revenue by increasing prices for those fans attending the games…but when television is a more than viable option…aren’t you just daring those fans to leave? (regardless of how much money you spend to enhance the experience for your fans *cough* Jerry Jones *cough*)

That leaves me with this question…How important are ticket prices, really?

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