R.I.P. Season Tickets?
It used to be that buying season tickets was a no-brainer for the ultimate fan of a team. You’d get tickets at discount to what the a la carte single game price would be and you’d get all the games.
But now things have changed.
Face values on tickets have, for the most part, continued to go up.
The secondary ticket market has allowed a fan to explore the real market value of a ticket and pick and choose when they want to see a game.
And high definition television — as evidenced by the huge ratings already this year — has made the experience at home better.
Much time has been focused on the last point in recent weeks as sports executives have blamed competing with television as its newest obstacle. To combat that, the NFL has turned to products like Fanvision to give fans a TV type experience while sitting in the stands. What is just as troubling, but has hardly been talked about, is the declining value of the season ticket.
Season tickets are the lifeblood of teams. The more season tickets they can sell, the less staff they have to put on selling packages and single-game seats. But there’s one major problem.
Season tickets don’t have the value they once did and it’s not because people are busier and can’t go to all the games. It’s because the secondary market has allowed people to compare what they are paying to the actual market value of the ticket. And when they do, they find out that – even as season ticket holders — they’re at least approaching a breakeven point as compared to the secondary market.
Let me show you what I mean.
Let’s say you are a Chicago Bears season ticket holder. You paid for a $3,500 personal seat license for the right to pay $105 a game to sit in section 436. We’ll be generous and spread out the cost of that PSL over 10 years, so it’s only $350 a year. That brings the real price of your ticket to $140 a game.
We took at look at the prices of the tickets being sold in this section on the NFL’s official ticket exchange. Tickets in this section were, on average, being sold for in between $200 and $250.
How valuable are season tickets now? Miss one game and you could have bought the whole season on the secondary ticket marketplace at a price lower than what you paid as a season ticket holder.
The secondary market has been going strong for almost a decade now, but it’s only now that people are starting to realize that buying season tickets isn’t worth what it once was. More people than ever before are asking if it’s worth the hassle to unload games they can’t go to and if it’s just better to cherry pick what games they want to go to from the secondary exchange. Look around your office and I guarantee you can find one person who has season tickets who has worked hard to unload them — they'll even take face, they just don't want to lose money. It wasn't like this five years ago.
Just as teams have started to address the cannibalization of television and the effect on live gate, teams will also have to address how they can service their season ticket holders so as not to kill the golden goose.
Is it creative winning percentage guarantees?
Special incentives such as meeting the team or giving them unique experiences?
Autographs? Who knows?
What is certain is that the depletion of the season ticket base is a reality and teams — especially NFL teams who rely on season ticket sales more than any other league — who are slow to evolve will pay for it later.
Questions? Comments? SportsBiz@cnbc.com