Dan Hornberger has been an unwavering supporter of the Philadelphia Eagles in the National Football League, a passion ingrained in him since childhood. In his adult years, his office serves as a testament to his fandom, adorned with team memorabilia that adorns the walls.
Last year, this ardent fan made the trek to attend five home games, a journey spanning about an hour and a half from his residence. However, this year, Hornberger finds himself on track to attend only two games as the associated costs reach unprecedented heights.
At 40 years old, Hornberger expressed, “I’m a huge fan. Ultimately, what it comes down to is just outright refusal on my part to pay those kinds of prices.” The surge in sports prices this fall, as indicated by federal data, has turned game tickets into the latest casualty of what economists term “funflation” – a phenomenon explaining the escalating costs of live events driven by consumers seeking to reclaim the experiences they yearned for during the pandemic.
“A huge comeback”
In October 2023, admission prices for sporting events experienced a remarkable 25.1% surge compared to the same month the previous year, as revealed by the consumer price index data from the Bureau of Labor Statistics. This surge marked the highest annualized inflation rate within the extensive array of categories constituting the inflation gauge.
While the Consumer Price Index (CPI) as a whole saw a relatively modest 3.2% rise on an annualized basis, the specific category of sporting events outpaced many others, reflecting the significant resurgence in consumer interest and spending within the leisure and hospitality sector. Victor Matheson, a professor and sports economist at the College of the Holy Cross, noted, “People are getting back to things that they enjoy doing and are willing to pay a bunch.”
One contributing factor to the observed increase in ticket prices is the growing prevalence of dynamic pricing models, according to Matheson. These models enable ticket-selling platforms to adjust prices based on the real-time demand for specific events. Furthermore, the convergence of high-profile sporting events this fall, including the recent Formula One race in Las Vegas and the announcement of soccer legend Lionel Messi’s move to the Inter Miami team, has further fueled enthusiast spending.
However, Matheson emphasized that a substantial part of the staggering 25.1% jump is attributed to the exceptionally low prices observed a year ago. In 2022, teams significantly reduced ticket values in an effort to re-engage fans who had become accustomed to watching from the comfort of their homes. A CNBC analysis of CPI data indicates that sports ticket prices in October were 14.2% higher than in November 2019, showcasing a more moderate gain compared to the entire index’s 19.6% increase. The surge in admission costs this year underscores the impact of “funflation” as consumers redirect their focus from concerts featuring artists like Taylor Swift and Beyoncé to live sports events, leading to what Matheson described as a “gigantic bounce back in prices.”
Sales for the NFL and the National Hockey League (NHL) have witnessed a significant surge in 2023, nearly doubling compared to the previous year, as reported by the ticket platform StubHub. The NBA has experienced a robust increase of almost 60% in sales at the commencement of the season compared to the previous one, and college football has seen a substantial rise of around 50%.
However, it’s essential to note that not every sport has witnessed uniform growth in ticket prices this year. According to StubHub, ticket prices for the top 10 sporting events were 15% higher in 2022 than they were in 2023.
Victor Matheson, a professor and sports economist at the College of the Holy Cross, highlighted that while there has been significant growth, the broader context of more tempered inflation could contribute to cooling down sector-specific growth. Additionally, as consumers gradually return to a more normalized entertainment spending routine following the initial post-pandemic experience boom, this can potentially alleviate demand pressures and help stabilize prices in the sports ticket market.
“Really upsetting”
Rodney Paul, the director of the sports analytics program at Syracuse University, expressed that the interest in attending games is expected to remain relatively stable even in the face of a worsening economy. This is attributed to a substantial portion of the consumer base being affluent enough to afford professional sports tickets, which he deems as essentially a luxury item. Individuals with higher financial statuses are anticipated to weather economic downturns more effectively.
However, Paul acknowledges that a substantial change in the economic landscape could prompt fans who are less financially stable to cut back on discretionary spending, consequently impacting demand for sports tickets. Consumers facing financial constraints might rationalize spending more than they initially intended this year by reminding themselves that they refrained from splurging on game tickets during the pandemic, as noted by Victor Matheson.
Financial stress in this context is exacerbated by the resale market for tickets, according to some sports enthusiasts. Additionally, the escalating prices of parking and food within the stadium further contribute to the financial considerations for fans like Hornberger and Sara Weddington.
Although Weddington managed to save enough to attend a Kansas City Chiefs game last season, she now finds it financially unfeasible this year due to the surging prices. As a long-time resident of the Kansas City area, she empathizes with individuals who have never had the opportunity to witness a game before recent cost increases.
“To have such a monumental part of the community be so out of reach for a lot of people is really upsetting,” the 23-year-old expressed. “Not being able to go to a game is like going to a candy store and not being able to get any candy.”
Nonetheless, Paul from Syracuse University suggests that sports have acquired new significance in the post-pandemic world. With an increasing number of people working from home, there is a growing need for in-person social spaces, and those who can afford it are more willing to invest.
“There’s a real craving for that kind of feeling of togetherness that the sports world brings,” he said. It’s “a really exciting experience that maybe is even more exciting now because people had lost it in the past.”