The sports money machine: Are fans getting left out in the cold?
Source
Two weeks ago, I attended my first NHL hockey game of the season. I love attending live sporting events and to watch the pros in action is an absolute treat. When you are there you get to see just how fast and skilled the players are and you see the game from a different perspective than you get on television. I was going to the game because my favourite team was in town, the Edmonton Oilers, and they have arguably the best player in the world on their team, Connor McDavid. I had yet to attend a game where he was in town and I was able to find tickets for an extremely cheap price. I got my ticket for $80. This was a great deal because the price of this ticket is usually $235. I mentioned that this was my first game this season but in fact, it was the first game that I had attended in over 3 years. I used to attend professional sporting events as often as I could find time but that has changed as the price of tickets and the whole sporting experience has skyrocketed over the years. I simply can’t afford to go to games anymore. Realistically, not many people can.
Source
Professional sports has become so much more than just a game being played at an elite level and for fans. Professional sports has become a massive entertainment business. Professional sports has turned into a multi-billion dollar industry that is fueled by enormous media contract and television deals.
The sports market in North America was worth $60.5 billion in 2014. It is expected to reach $73.5 billion by 2019. The biggest reason for such growth is projected increases in revenue derived from media rights deals, which is predicted to surpass gate revenues as the sports industry's largest segment.
Source
The profits being made on the entertainment side of things have prompted a huge spike in salaries as the players and players unions look to ensure that the people providing the product are getting compensated fairly. This means that high talent players who the fans want to see are getting paid very high salaries because they are what the fans come to see. They are the ones making it possible for team owners and the media companies to make money.
Source
These are just the average salaries. The most talented players in each of these sports can make a salary that is well beyond the league average. Many of these players can make up to and more than 10 times the league average. Some of the highest paid players in the world are:
| Player | League | Salary |
|---|---|---|
| Connor McDavid | NHL | $12,500,000 |
| Steph Curry | NBA | $32,642,550 |
| Cristiano Ronaldo | UEFA | $58,000,000 |
| Clayton Kershaw | MLB | $35,571,428 |
| Kirk Cousins | NFL | $28,000,000 |
In professional sports, a salary cap (or wage cap) is an agreement or rule that places a limit on the amount of money that a team can spend on players' salaries. It exists as a per-player limit or a total limit for the team's roster, or both.
Source
As the product has become more valuable and the game becoming more popular there has been a tremendous amount of money being spent on facilities. These teams need arenas and stadiums to play in and there is a demand for the biggest and best when it comes to these things. Owners spend hundreds of millions of dollars to build new facilities for their teams to play in. Some of the newest constructions have cost as much as $1 billion dollars and more. Between salaries, stadium/arena costs and the fixed day to day costs of running a franchise the owners have a lot of money to shell out.
Source
This has created a vicious cycle of money and profits being shared between players, owners, leagues and media that has left the average fan on the outside looking in. The cost for fans to attend professional sporting events had climbed significantly over the past 10 - 20 years. There is statistical data called the Fan Cost Index (FCI) that calculates the average cost for a family of 4 to attend a sporting event.
The FCI is designed to somewhat mimic what a family of four would pay to take in a sporting event. For each club in a given sport, Team Marketing Report creates the FCI which comprises the prices of four (4) adult average-price tickets, two (2) small draft beers, four (4) small soft drinks, four (4) regular-size hot dogs, parking for one (1) car, two (2) game programs and two (2) least expensive, adult-size adjustable caps.
Below shows the average FCI for each of the major leagues in the most recent season:
- Major League Baseball - $212.46
- National Basketball Association - $326.60
- National Hockey League - $359.17
- National Football League - $459.65
Source
This has made it very difficult for the average family to attend sporting events these days. It requires a large amount of disposable income in order to be able to afford to pay for these events. It is possible to reduce the cost a little but even just the price of a ticket and parking can be overwhelming. Parking alone can cost upwards of $30 or more. Just to buy a beer at a game at a Canadian Hockey game can cost $11 and a soda can cost up to $5. With prices so high, fans are being forced to choose where they are going to spend their entertainment money more wisely. For me personally, the only reason I was able to attend the game two weeks ago was because I was able to get a great deal on the seats. I could never afford to pay full price for those tickets. The costs above are average costs. A premium ticket can more than double the cost just to get in the door.
Source
These ticket prices have started to have an impact on the attendance at major sporting events as fans are finding different ways to view the games and using their disposable income for other things. With the evolution of television and the extremely high viewing quality, fans can watch the games in the comfort of their own home and not have to spend all the extra money. There are also cable packages that can be purchased for a fraction of the cost of going to an event and they get you access to all the games. Last year, I used a sports streaming cable provider called DAZN get access to every single NFL game and it cost me only $20/mth.
Sports franchises and owners are starting to feel some of the impact of this as the average attendance at sporting events has been declining in recent years.
24/7 Wall St. reviewed 10-year changes in average home game attendance for professional hockey, baseball, basketball, and football teams across North America to identify the teams that are losing the most fans. For 17 teams, average home game attendance declined by more than 10% over the past decade.
Source
As long as the cost of running teams continues to grow at an exponential rate, I see no way that the ticket prices, parking costs, concession cost and merchandise cost will ever reduce. Watching live sports is becoming an event for those who are considered wealthy or higher middle class. This is an unfortunate shift because watching a game live has a tremendously different feel than watching it on T.V. The emotional connection with the team and the other fans. Being part of special moments. This can be where a young athlete's dreams are born. I am a huge fan of attending live events but I can no longer afford to attend the professional games. I couldn’t just give up attending live sports so I have shifted my live sports viewing to minor leagues and amateur sports. The quality of the games can still be very good and in many of these leagues, the players are fighting to get to the pros. They are giving their best efforts every single night to prove just how good they are. It can be very entertaining product and for a fraction of the cost to attend a professional sporting event. Next time you are itching to attend a sporting event, head out to see some o the amateur talent out there. You won’t regret it.
)Source
Some food for thought
If you sit and look through the numbers and see the amount of money being spent in this industry it will blow you away. These are huge amounts of money being spent by sports teams and being made through player salaries. Billions of dollars plus the money shelled out by media corporations all in the name of entertainment and PROFIT. Not only are these numbers already excessive, it is expected that they will continue to grow over the years to come. These numbers become even more staggering when you compare them to the Gross Domestic Product of some of the poorest countries in the world. If you take the expected value of the entire sports entertainment industry in 2019 as shown above ($73.5 billion) and compare it to GDP rankings of all countries in the world the results are eye-opening. The sports industry would rank in the top 75 in total GDP or revenue per year. With 195 countries in the world, this would have them ranked higher than over 100 other countries. Ahead of countries such as Guatemala, Costa Rica, Croatia and Belarus. The reality of this is stunning.
Source
Source
Thanks for reading. I would love to hear your thoughts on watching live sports. Do you attend games often? Has the cost become too much for you? What do you think of the amounts of money being paid in player salaries and ticket prices? I look forward to hearing your opinions.
Authored by: @broncofan99
Click on the coin to join our Discord Chat
Witness proposal is here:
Go To Steem Witness Page
In the bottom of the page type: adsactly-witness and press vote.
Use small letters and no "@" sign. Or, click here to vote directly!
Thank you!