NFL Teams Walk a Fine Line on Price Increases
It's the fourth-and-1 decision of NFL economics that every team in the league grapples with at various times: Raise ticket prices?
"They do it very carefully, to make sure they keep those stadiums full and sell tickets," NFL Commissioner Roger Goodell says. "You can increase ticket prices, but does it reduce the number of people who buy them and your overall revenue? (If so), that's not a very smart decision.
"They're trying to find the right balance. It's not an exact science."
The number of NFL teams raising ticket prices for the 2010 season (17) more than doubled the amount that upped the ante last season (eight), a USA TODAY survey found. The decisions are made delicately with respect to the economy and other factors.
In several cases, teams that raised prices on some tickets also lowered others as pricing tiers were rescaled to better match supply and demand.
The Miami Dolphins, for example, have raised prices for the first time in three years, increasing revenue on 56 percent of general admission seats - including the most desirable lower-level seats between the 20-yard lines that have premium value on the secondary market. Yet they have also decreased or left flat 44 percent of tickets (about 25,000) and created six new pricing categories that range from $34 to $120.
"We looked at it holistically," says George Torres, the Dolphins' marketing director. "We rescaled the house according to demand, but the other part was to enhance the benefits for the season ticket packages."
In addition to discount rates as much as 25 percent off single-game prices, the Dolphins are providing handheld mobile devices to season ticketholders that are capable of displaying replays, statistics and other content. That amenity is at the forefront of thinking throughout the league that more must be done to enhance the stadium experience.
"We're competing against living rooms with big, plasma TVs," Torres says. "But we think there's nothing like the live experience."
Increased pricing tiers reflect another trend.
"It's an opportunity to give customers different price points to choose from," said Minnesota Vikings President Mark Wilf, whose club has raised prices about 3 percent on 85 percent of seats at the league's fourth-smallest venue.
Minnesota, though, kept its NFL-low entry point with a $15 ticket.
Says Wilf: "There's a demand at all levels that we try to accommodate."
Raising ticket prices is more sensitive for teams in the midst of efforts to secure taxpayer support for new stadiums, such as the Vikings, San Francisco 49ers and San Diego Chargers.
"That creates some issues," Wilf said. "On the other hand, we're trying to put a very competitive team on the field."
Generally, the increases were modest.
The Vikings' increase averaged 3 percent, while at the higher end of increases the Houston Texans went up 6.67 percent and the Pittsburgh Steelers' across-the-board increase was about 7 percent.
Industry experts don't consider the increases large enough to fuel backlash. Teams typically raise prices about every three years.
"With only 10 games (including preseason), fans are far less price-sensitive in the NFL, compared to other sports," says sports consultant Marc Ganis, president of Sportscorp, Ltd. "A 5 percent increase in the NFL doesn't generate as much as 5 percent does in the NBA or in Major League Baseball because of the number of games."
Andrew Brandt, a former NFL executive who writes for NationalFootball Post.com, says fans have come to expect increases at various intervals.
"When I was with Green Bay, it seems like we raised ticket prices every other year," Brandt said. "In explaining it, you always want to play the card that it's all about competition."
Then again, some teams can't afford to raise prices. Not now.
That explains why the Jacksonville Jaguars - one of three teams to average less than 50,000 for home games in 2009 - haven't just cut prices in an effort to boost sales.
They are also offering interest-free payment plans, hoping for a fourth-and-1 conversion.