What the NFL Season Is Saying About the US Economy
Forget Friday's employment report. A better economic indicator just might be the one that kicks off Wednesday night: the National Football League.
Although attendance at NFL games last season was down, some major markets such as New York, Dallas and Boston showed improvement—indicating the US economy is recovering, according to an analysis by ConvergEx that came out Wednesday.
Even so, ”it’s likely the American upper-middle class is still feeling the pinch from a weak economy,” ConvergEx said.
The software and technology services firm believes NFL attendance is an unusual but accurate bellwether of economic activity. So as the New York Giants and the Dallas Cowboys prepared to face off on Wednesday night, the firm sifted through a combination of ticket prices, sales and fan demographics to take the pulse of the U.S. economy.
Like most other economic readings, ConvergEx analysts found a mixed bag in its study. Although stadium attendance fell to an average 64,706 last season, down about 4.5 percent from the record in 2007, attendance in the NFL's largest markets have tracked improvements in the broader economy.
“The cost of a football game is more than just the tickets, after all,” they said. “American consumers are less and less comfortable shelling out hundreds of bucks for nothing other than a few hours of fun, especially when the 50 inch flatscreen [television] in the family room lets you see the same game at no additional expense.”
Using Case-Schiller's closely-watched home price index, ConvergEx crunched numbers from the top and bottom NFL markets. Their research suggests that while many fans are struggling, certain markets are faring better than others.
The numbers revealed that last year, the average stadium capacity in the top five markets — Dallas, Denver, Boston, Cleveland and New York — fell slightly but still outperformed its 2008 showing. Meanwhile, consumer sentiment, while weaker than before the 2008 financial crisis, still exceeds last year's levels.
Indeed, the weak economy is one of several headwinds the NFL is facing as it uses marketing, special events and tricked-out stadiums to woo fans away from an unlikely source of competition — the television set.
The league is trying to pry cash-strapped fans off their couches – where football is free and the food is cheap – and coax them into stadiums across the country. Falling attendance is a sign of a weakening economy. And the decline is noteworthy, given that football has surged in popularity, coming close to displacing Major League Baseball as America’s favorite pastime.
For its part, the NFL recognizes how high the stakes are, and how tight family budgets remain. Through a combination of modest cosmetic flourishes and larger, more substantive changes, the league is engaging in an all-out marketing blitz.
The rise of social networking has made certain teams – like the beleaguered Miami Dolphins, which hasn’t made the playoffs since a Wild Card appearance in 2008 – resort to outfitting their stadium with Wi-fi and trying to lure in fans with rock-bottom ticket prices.
In the pursuit of filling seats, league officials and owners have taken to using buzzwords like “enhancing the fan experience” to encourage potential ticket-buyers to open their wallets.
In a CNBC interview Wednesday, Mark Waller, the NFL’s chief marketing officer, said that football officials were trying “very hard” to make its brand more accessible to fans, with an eye toward a mix of cheap and free events that struggling consumers could appreciate. That includes a concert in Rockefeller Center that precedes Wednesday night’s opener, which features defending champions New York Giants taking on their division rivals, the Dallas Cowboys.
“The beauty of our sport is that the passion of the fans is unbelievable. We try to constantly look at new ways to engage them. we're looking for ways to take our product and engage it with different communities.” (Watch: How the NFL Plans to Bring Fans Back to Football)
NFL commissioner Roger Goodell joined a cavalcade of team owners who described the lengths to which the league is making strides to bring the fans closer to the game.
“We're encouraging all of our teams to get focused on what they do to make the stadium experience a better experience,” Goodell told CNBC in an interview last month.
As for the challenge posed by flat screen and high-definition TVs at home, Goodell said that the league has to “counter that by making the experience in the stadiums terrific, and we have. New technology is a part of that,” he added.
Still, the NFL is offering a few sops to die-hard football fans still reluctant to leave the security of their homes.
The league-run NFL Network is expanding Thursday night games – which normally don’t take place until the second half of the season – to 13 games. The first will kick off Sept. 13 between the Chicago Bears and Green Bay Packers. (Read More:Thursday Night Football Schedule Kicks Off with Bears-Packers)
Several years ago, the NFL started playing games at London’s Wembley Stadium. This year, the St. Louis Rams will face off there against the New England Patriots. Those games will be broadcast over U.K.-based British Sky Broadcasting’s Sky Sports.