It has finally happened. The prices of tickets for concerts and sporting events have gone through the roof and it is finally beginning to affect the attendance. This problem came to the forefront during the American League Championship Series at Yankee Stadium. For the first time in recent memory there were empty seats available for a Yankee Playoff game. The NFL is also very concerned about this trend as even their most storied franchises have empty seats for regular season games. Smart concert goers are waiting until the last minute to buy their tickets for concerts in the secondary market. Typically, most shows don’t sell out. Tickets a few days before the show are often half price, or you can get two tickets for the price of one. There is no incentive go out and buy tickets the day they go on sale anymore. There will be tickets left in the secondary market and they will be cheaper in most cases. As a result concert promoters are struggling. The acts still want to get paid top dollar, even though the promoter is having trouble selling tickets. That is why the price of concert tickets is so high. Also, a lot of younger, affluent people, who may not have gone to many concerts when they were younger, are now just discovering the Rolling Stones and other classic rock bands. It has become the thing to do. Rent a limo, go to an expensive dinner and go see a show. That is if you are willing to drop a thousand or two on a night out on the town.
In sports the reason is essentially two-fold. The two most obvious ones are price and the advancement in technology…specifically HDTV. In baseball, tickets in the outfield or upper deck for the Yankee ALDS games were $100 each. If you bring your two kids and your wife, you were spending at least $600 to see a game that you could see on TV for free. The view on TV would be better and the food would be better and you could take a nap if you wanted to. Why bother going to the game?
I don’t know about you, but I would rather sit in my TV room, with my wife and watch the game. I can see better. I don’t have to hassle with traffic and the money I saved could be used to spend a night or two at a great hotel on vacation.
We are just seeing the tip of the iceberg. Locally the Giants and the Jets are not selling out for the first time in decades. They have instituted PSLs (Personal Seat Licenses) for most seats at Metlife Stadium. This means you are forking up anywhere between $5,000 to $20,000 a seat, just for the privilege of being able to buy tickets for up to $1,000 a game. Unless your company or business is paying for the tickets, does it really make sense? Even then, how much is it worth to take a client to a game. $4,000, plus a piece of the PSL? It better be a great client.
There will be a tipping point. More and more people will stay home and watch sporting events on their big screens. It has already started. There will be several consequences. Only the wealthiest people will be at sporting events. The players salaries will have to be scaled back. Perhaps the final alternative may be the dreaded Pay-Per-View for even the most mundane sporting event…say the Yanks vs KC on a Wednesday night at the stadium. I know the Twins tried this years ago and it was a disaster. Imagine PAYING money to sleep through a Twins game!! Hopefully the fact that most of the best franchises in baseball at least own their own networks. The Dodgers recently were sold. The team was worth far less than the television network. The money raised by the network allowed the Dodgers to go out and buy superstars to fill up their lineup. By the way, the Dodgers were probably the most superstar laden team NOT to make the playoffs in a long time.
The NHL is struggling with their players. There are several NHL franchises that lose money. Despite the fact that the revenues for the league were up significantly last year the owners want to change the deal they have with the players. Right now the players share in 57% of the revenues of the league. The owners want to scale that back to 50%. Don Fehr, one of the most feared union leaders, has been brought in by the NHLPA (Players Union). At this point the first month of the season has been lost and the sides are far apart. There is a fair chance that there once again will not be a hockey season.
Just as technology has changed the financial paradigm of the music business and the publishing business. It is about to do the same to sports. The motion picture industry is holding its collective breath as well.
Thousands of industry jobs have been lost in the music business. All but the most elite artists make less money than they did five or ten years ago. Executives make far less than they did at the end of the millennium. Newspapers and publishers are going out of business right and left. Sooner or later professional athletes and team owners will have to face the facts. They can’t defeat technology. They must be prepared to make the changes. Scale back player’s salaries and ticket prices or the fans will stop showing up. It is just like Global Warming. Everyone knows it is coming, but not enough people are willing to change. The ending to both scenarios will not be good.