Elasticity of Demand

[Randy Carson]

Elasticity of demand refers to the degree in the change in demand when there is a change in another economic factor, such as price or income.

Assume the following:

• Bobby Dodd seats 55,000
• 2021 Average Attendance = 35,000
• Price per ticket = $50

35,000 x $50 = $1,750,000 in ticket sales revenue per home game.

What if:

$1,750,000 / 55,000 = $32/ticket

Could we lower ticket prices, fill the stadium and have the place rocking for every game? Concession sales go up, etc. But this assumes that there is elasticity of demand. What if we lowered prices, seats filled did not increase, and all we did was lower our revenue per game?

Thoughts?

 

[bobongo]

Even if revenues were reduced in the short term, it would pay off in the long term. I would imagine this must be a tactic taught in marketing, because I see it in effect all the time.
We're at the point where we need to reduce ticket prices and do other things. like giving tickets away to some underprivileged folks in the neighborhood to select games, to increase our fan base for the future.

And, like you said, get Bobby Dodd Stadium rocking again.

Oh, and reduce the price of parking, too.

 

[tmhunter52]

Perhaps a good survey would answer the question without implementing it to find out. While they are asking about ticket prices, maybe the surveyors could also inquire about the elasticity in attendance based upon won-lost records. That might provide TStan some valuable guidance…

 

[RamblinRed]

I don't think GT has enough fans to fill a 55K stadium and likely hasn't for generations. Building it to 55K was likely a financial mistake.

College football attendance continues to decline with no suggestion that it is likely to change anytime soon (most conferences are back to attendance levels of the late 1990's or early 2000's). College football continues to do well on TV but is likely to continue to struggle with in-person attendance especially with fewer students also attending nationwide.

 

[bobongo]

I don't think GT has enough fans to fill a 55K stadium and likely hasn't for generations. Building it to 55K was likely a financial mistake.

College football attendance continues to decline with no suggestion that it is likely to change anytime soon (most conferences are back to attendance levels of the late 1990's or early 2000's). College football continues to do well on TV but is likely to continue to struggle with in-person attendance especially with fewer students also attending nationwide.

Probably not. But one question is, should we reduce ticket prices even if it reduces revenue in the short term?

Agree that adding seats to 55,000 was an expensive blunder and a misdirection of revenue.

 

[Randy Carson]

If fielding a winning team is the key to ticket sales, do you suppose the Braves will fill Atlanta-Fulton County Stadium this season?

 

[Randy Carson]

I don't think GT has enough fans to fill a 55K stadium and likely hasn't for generations. Building it to 55K was likely a financial mistake.

College football attendance continues to decline with no suggestion that it is likely to change anytime soon (most conferences are back to attendance levels of the late 1990's or early 2000's). College football continues to do well on TV but is likely to continue to struggle with in-person attendance especially with fewer students also attending nationwide.

One challenge is that football is better on television than it is in person. you get: instant replays, multiple camera angles and close-ups, play-by-play commentary, etc., and no bad weather.

You don't need as much of that to enjoy a baseball game.

 

[RamblinRed]

Good article on changes in ticket markets both professional and college.

Attendance Is Down Across Sports, and Ticket Markets Are Flooded - Yahoo Sports

In the SEC, some pleading appears to have paid off. After urging University of South Carolina season ticket holders to show up last month, or at least give their tickets to someone who would, coach Shane Beamer credited the home crowd with helping the Gamecocks upset Florida Saturday. Then he...

sports.yahoo.com

Attendance numbers generally track the number of tickets distributed, whereas scan rates are used to see how many fans actually show up. According to a 2019 study in The Wall Street Journal, for instance, scanned numbers could be 50% of announced attendance for college football programs. Even at Alabama, the numbers increasingly didn’t line up, as the scanned-to-attendance ratio dropped 12 percentage points between 2014 and 2019, to 70%.

TicketManager CEO Tony Knopp said that in 2019, a scan rate around 70% was typical. Now, he’s seeing scan rates dip below 40% at times.

“That’s how we know demand is soft,” Knopp said. “A lot of the teams are playing the Aaron Rodgers game, like, I’m immunized, where they’re saying we distributed 16,000 tickets tonight, and 6,000 people showed.”

Ten years ago, brokers “were just making piles of money” reselling tickets, Stage Front head of partnerships and marketing Mike Guiffre said. Teams understandably started raising prices to collect more of that value. But that led to season ticket holders dropping off, especially as fans grew more comfortable buying tickets as needed on secondary marketplaces.

Of course, increased supply and dropping prices will only further encourage season ticket holders to flee, exacerbating the problem. Many are already opting for partial-season offers. “If the pricing continues the way it is now with this supply,” Guiffre said, “it’s just going to be a race to the bottom.”

Today, teams are left playing a dangerous game. They’re attempting to fill seats—and in many cases recoup losses from a year without fans—without flooding the market or upsetting season ticket holders.

The real test of how well the sports ticket market will bounce back from COVID will likely come next year. Teams often let season ticket holders defer their 2020 tickets a year, decreasing volatility for now and leaving a big question mark for 2022 when a wave of season ticket decisions get made.

 

[RamblinRed]

One challenge is that football is better on television than it is in person. you get: instant replays, multiple camera angles and close-ups, play-by-play commentary, etc., and no bad weather.

You don't need as much of that to enjoy a baseball game.

I've even seen one article suggesting that betting on college games is hurting attendance. It is easier to follow and place bets if you are at home than if you are in the stadium.

 

[bobongo]

Good article on changes in ticket markets both professional and college.

Attendance Is Down Across Sports, and Ticket Markets Are Flooded - Yahoo Sports

In the SEC, some pleading appears to have paid off. After urging University of South Carolina season ticket holders to show up last month, or at least give their tickets to someone who would, coach Shane Beamer credited the home crowd with helping the Gamecocks upset Florida Saturday. Then he...

sports.yahoo.com

Attendance numbers generally track the number of tickets distributed, whereas scan rates are used to see how many fans actually show up. According to a 2019 study in The Wall Street Journal, for instance, scanned numbers could be 50% of announced attendance for college football programs. Even at Alabama, the numbers increasingly didn’t line up, as the scanned-to-attendance ratio dropped 12 percentage points between 2014 and 2019, to 70%.

TicketManager CEO Tony Knopp said that in 2019, a scan rate around 70% was typical. Now, he’s seeing scan rates dip below 40% at times.

“That’s how we know demand is soft,” Knopp said. “A lot of the teams are playing the Aaron Rodgers game, like, I’m immunized, where they’re saying we distributed 16,000 tickets tonight, and 6,000 people showed.”

Ten years ago, brokers “were just making piles of money” reselling tickets, Stage Front head of partnerships and marketing Mike Guiffre said. Teams understandably started raising prices to collect more of that value. But that led to season ticket holders dropping off, especially as fans grew more comfortable buying tickets as needed on secondary marketplaces.

Of course, increased supply and dropping prices will only further encourage season ticket holders to flee, exacerbating the problem. Many are already opting for partial-season offers. “If the pricing continues the way it is now with this supply,” Guiffre said, “it’s just going to be a race to the bottom.”

Today, teams are left playing a dangerous game. They’re attempting to fill seats—and in many cases recoup losses from a year without fans—without flooding the market or upsetting season ticket holders.

The real test of how well the sports ticket market will bounce back from COVID will likely come next year. Teams often let season ticket holders defer their 2020 tickets a year, decreasing volatility for now and leaving a big question mark for 2022 when a wave of season ticket decisions get made.

We all know college football attendance is down across the board. The question is, how do we improve our attendance?

 

[RonJohn]

Elasticity of demand refers to the degree in the change in demand when there is a change in another economic factor, such as price or income.

Assume the following:

• Bobby Dodd seats 55,000
• 2021 Average Attendance = 35,000
• Price per ticket = $50

35,000 x $50 = $1,750,000 in ticket sales revenue per home game.

What if:

$1,750,000 / 55,000 = $32/ticket

Could we lower ticket prices, fill the stadium and have the place rocking for every game? Concession sales go up, etc. But this assumes that there is elasticity of demand. What if we lowered prices, seats filled did not increase, and all we did was lower our revenue per game?

Thoughts?

They already do this to some extent. Tickets for FCS opponents are usually $25-$35. Tickets for lower draw ACC opponents are around $40. Tickets for higher draw ACC opponents are $60-70. Tickets for Clemson and the mutts are around or over $100. The cheap ticket games are never sold out, and the expensive ticket games are at least very near capacity. (albeit with the other fans)

Marketing people can do surveys and try to figure out where the maximum revenue point is. I think it is more important at this point to work on the product than the pricing. The team isn't good, so the football product isn't enjoyable. The gameday production isn't very good. At the ND game, it was extremely well produced, and there was enough going on such that if a person was in attendance and didn't care anything about football, they could still be entertained. At GT, the video quality isn't very good, the PA announcing/music and interaction with the band seems haphazard. If GT wants to build a fan base with very cheap/free tickets as @bobongo stated, there needs to be more reason to be at the game than only football. They installed the LED lights in 2020, but I don't remember them being used to great effect as of yet. Improve video replays. Make a professional production out of the video board and PA system. Get some one the way up musicians to play a short show after some night games and utilize the stadium LED lights as part of that show. Football definitely needs to be improved, but so does the gameday operations.

 

[RonJohn]

We all know college football attendance is down across the board. The question is, how do we improve our attendance?

1. Improve the football team.
2. Improve gameday operations so that people and kids who aren't even interested in football will enjoy a day at the stadium.

 

[billga99]

I think the way the game is conducting is hurting college football. By that I mean, how long a game takes to play. The number and length of commercials is beyond distracting when you are at a game. Seeing the sideline TV timeout man hold up the electronic sign with 3 minutes plus multiple times is annoying. When you are at home, you just turn to another game and avoid the commercials. I realize the freight ESPN pays to these conferences and they are paying for it with commercials. But it really has become a serious issue for people attending games.

 

[SandySpringsJacket]

One challenge is that football is better on television than it is in person. you get: instant replays, multiple camera angles and close-ups, play-by-play commentary, etc., and no bad weather.

You don't need as much of that to enjoy a baseball game.

I love football on TV but disagree that football on TV is better than in person. To me there is nothing better than being a BDS on beautiful fall day watching a game. Of course it helps when there is a decent crowd in the stands. Last year that was not the case.

 

[bobongo]

I love football on TV but disagree that football on TV is better than in person. To me there is nothing better than being a BDS on beautiful fall day watching a game. Of course it helps when there is a decent crowd in the stands. Last year that was not the case.

Winning team - watch in person. Losing team - watch on TV.

 

[Oldgoldandwhite]

I would give away tickets to fill it up. Concessions and a full house. If you’ve ever sat in the top of the upper deck, you’ll know why no one wants to sit there. Once, never again.

 

[RamblinRed]

1. Have to have a better product on the field.
2. Figure out what you want to be as a gameday experience. I feel like the experience is sort of all over the map right now. How glitzy do you want to be, how focused on college traditions. etc.
3. Shorten the game. College football is currently the longest sport in the US. Avg game is 3 hr 28 min. NFL and MLB are both about 20 min less. NBA more than an hour less. MLS is also more than an hour less.

Three items have largely contributed to the lengthening of the college game. Increased number of advertisements, increased number of reviews, and the proliferation of passing offenses. All have lengthened the amount of time required to finish a game.
I'd say there is almost no chance for the first one to decrease as the AA's are drunk on TV money and it continues to become a larger percentage of the revenue generated by AA's, so if anything I expect it to increase.

The number of reviews (outside of targeting which are sort of untouchable due to athlete safety) could be reduced. Maybe go to more of an NFL system where you have a limited number of reviews you can use in a game.

May have to think about either shortening the time between plays to 30-35 seconds (though that could potentially backfire if it leads to more delay of game penalties) or allowing the clock to run after an incomplete pass.

 

[bobongo]

I would give away tickets to fill it up. Concessions and a full house. If you’ve ever sat in the top of the upper deck, you’ll know why no one wants to sit there. Once, never again.

I agree with you post except for the top of the upper deck part. That's my favorite seat in the house, up top. Your field of view is the whole field.

 

[bobongo]

I love football on TV but disagree that football on TV is better than in person. To me there is nothing better than being a BDS on beautiful fall day watching a game. Of course it helps when there is a decent crowd in the stands. Last year that was not the case.

For me, a full house enhances the TV viewing experience as well.

 

[g0lftime]

Perhaps a good survey would answer the question without implementing it to find out. While they are asking about ticket prices, maybe the surveyors could also inquire about the elasticity in attendance based upon won-lost records. That might provide TStan some valuable guidance…

Won/loss record directly correlates to attendance.