“Funflation” is a term used by economists to explain the increase in ticket prices for live events as consumers eagerly seek the experiences they missed out on during the pandemic.
Last month, the cost of attending sports events went up by 25.1% compared to October 2022, according to the Bureau of Labor Statistics' consumer price index. This increase in admission prices for sports events marked the highest annualized inflation rate among the numerous categories included in the inflation basket (CPI only showed a 3.2% annualized increase). The surge in prices is evident across the entire leisure and hospitality sector as people are returning to activities they enjoy and are willing to pay more for these experiences.
One of the possible factors contributing to higher prices for sports events is the growing use of dynamic pricing models. Such models allow ticket-selling platforms to adjust prices based on the demand for a particular event at any given moment. Ticket prices might also be influenced by notably sporting events, like the recent Formula One race in Las Vegas and the announcement of the soccer player Lionel Messi's move to the Inter Miami team, which have contributed to heightened enthusiast spending. A substantial factor behind this surge is the contrast with the unusual low prices in 2022. Sports teams had reduced ticket prices significantly to attract back fans who got used to watching games from home on a television.
The interest in attending sports games is expected to remain relatively steady even in the face of economic challenges. This is because a significant portion of the consumer base is financially well-off enough to afford professional sports tickets and is likely more resilient in economic downturns due to their financial condition. However, a substantial shift in the economy’s situation could lead fans with less financial stability might spend less on things they don't really need, possibly affecting the demand for sports tickets. Some people with money constraints might justify spending more on sports tickets this year by telling themselves they didn't treat themselves to such things during the pandemic. The financial strain also affect the resale market for tickets, as some sports fans pointed out. Additionally, the rising costs of parking and food inside the stadium add to the overall money concerns for fans.
In the post-pandemic world, sports have gained a new meaning. With more people working from home, the desire for in-person social spaces is higher, and those with the money are more willing to spend on these experiences. The sports world creates this sense of togetherness, which is more than ever appreciated considering the loss of such experiences during Covid-19 time.
Source: https://www.cnbc.com/2023/11/21/funflation-drives-sporting-event-ticket-prices-up-a-whopping-25percent.html
With the wide range of streaming options available to consumers and sports fans, I am a bit surprised that attendance rates have not gone done especially since the inflated prices. Sports organizations must be doing something to bring more fans in consistently through the experience of a game
ReplyDeleteWhat's interesting about this is fans are calling for sporting events to actually be shortened. The MLB has already implemented the "pitch clock" which lowered game time significantly. Fans of both college and professional football want less media timeouts and reviews to be hurried. So with fans calling for shorter game play and the prices continuing to rise, fans are actually paying more and more for less.
ReplyDeleteAs a consumer, I noticed these prices take a drastic increase. It makes sense that these prices increased due to the increase in demand. Since the pandemic caused a decrease in these companies' revenue due to lack of attendance, it makes sense that they would try to gain as much back as possible since demand is back at the place it was before the pandemic. It is also hard to hear that these prices will not be decreasing anytime soon.
ReplyDeleteThis is very interesting, I am not a sports enthusiast so I was unaware of the rising prices. Along with demand increasing as covid comes to an end, I believe the overall increase in inflation also has something to do with the increase in tickets. With professional games, many trainers and refs are needed along with janitorial staff and people working the concessions. This is just one cost that could have gone up, there are also energy prices and many other factors to take into consideration.
ReplyDeleteI can certainly see the effects of "Funflation" in my life in ticket prices and team merchandise. It seems the prices of everything related to sports teams are increasing. Regarding ticket prices, it is a shame how expensive they are getting. Frequently on television, I see almost half-empty arenas and stadiums and I know that they would be filled if not for the price of the tickets. I hope that team owners see this and find ways to lower ticket prices themselves or at least not websites to up-charge tickets to such a degree.
ReplyDeleteMany I believe our surprised that attendance would increase even with streaming services making it easier to watch the game. I like how your article talks about the importance of what covid did to sports as a whole. I believe that sports do bring togetherness and I don't see why attendance wouldn't continue to grow.
ReplyDeleteWith the surplus of legal and illegal streaming options available today I'm not surprised that heightened ticket sales seem to be the case. As much as anyone loves to watch a live sporting event, people have to be aware that there are also hidden costs that come along with going to a game. Certain parking fees as well as overpriced concessions and merchandise bleed fans wallets dry. Ownership groups should look to make changes and make games more affordable for fans.
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