Sports On Shaky Ground?
You can’t pick up a newspaper or watch the evening news these days without a segment on the state of the U.S. economy. Daily headlines track rising gas prices, real estate foreclosures, business slow downs, etc. Meanwhile, no one seems to make the connection between these factors and the consumption of sports.
In fact, the price of attending sports keeps steaming along — seemingly oblivious to what may be lurking around the corner. Discretionary spending from sports fans is under attack from all sides. According to the Team Marketing Report, the cost of a ticket to an MLB game has gone up 28 percent in the last five years, 27 percent for an NFL game, 17 percent for an NHL game and 9 percent for an NBA tilt.
Why the disconnect? So far, the market for attending sports continues to support these increases. Attendance for the most of the leagues is up — or at least stable — in the last few years. So, it would seem that sports have been mostly immune to strains in the economy.
However, take a look at households with less than $50,000 in annual income and you can see the trouble brewing. The average annual discretionary income for these households is only $2,431 — not a lot there to spend on sports or other forms of recreation, especially when you consider that a whopping 53 percent of U.S. households fall into this category. Making matters worse, our research at Relay shows that the rise in gas prices over the past three years has cost the average household a total of $2,250 — leaving a mere $181 left over for those households making under $50,000 per year.
Meanwhile, the average cost for a family of four to attend a single NFL game last year was whopping $367 (according to Team Marketing Report’s Fan Cost Index).
So while some people may be sick of reading about the economy every day, I’m amazed that it has not been a bigger story in sports as an increasingly large group of consumers are being priced out of the market (or forced to support their sports habits with increased debt and lower personal savings).
While some people in our industry might disregard these statistics as showing any real threat, be sure to ask anyone who dismisses these points how much they make.
Matt Pensinger is vice president of consulting for Relay Worldwide.

