Going to the game? Get ready to be sacked by inflation.
While professional sports franchises receive a large chunk of their revenue through broadcasting deals, they also earn cash through ticketing, merchandising, and concession stands at the stadium during game days.
However, during the pandemic, North American major sports leagues experienced massive revenue losses due to stadium capacity restrictions that took away cash flow from game days.
As a result, franchises have been forced to jack up game-day prices to compensate for the revenue loss from the pandemic. But with prices for food and consumer goods increasing due to high inflation, affecting concession costs, the cost to attend a professional sports game in person has skyrocketed.
A boy carries a hot dog prior to a MLB game between the San Diego Padres and the Los Angeles Dodgers. (Azael Rodriguez/Getty Images)
In 2022, the average price for a family of four to attend a Major League Baseball game was $256.41, an increase of $3.04 from the previous season, the Associated Press reported citing Team Marketing Report. The outlet noted that the main driver of the rise in game day experience costs was ticket prices, which have increased by 3.6 percent since last year.
Fans react during batting practice prior to the game between the St. Louis Cardinals and the Milwaukee Brewers at American Family Field on Thursday, April 14, 2022 in Milwaukee, Wisconsin. (Jeffrey Phelps/MLB Photos via Getty Images)
Food for classic game day staples, such as hot dogs and beer, has also shot up in price, forcing concession companies to increase their operating costs.
“The whole model has been kind of disrupted in a pretty big way as we’re dealing with inflation of 10, 15, 20, 25, 30% when we have typically underwritten 2 or 3%,” Jamie Obletz, president of Delaware North Sportservice, told the Associated Press. “And you can imagine the impact that’s had on us and what it’s forced us to think about and do over the past six to 12 months, like a lot of companies.”
A view of a concession stand during he college football game between the defending National Champion Georgia Bulldogs and the Oregon Ducks on September 3, 2022 at Mercedes-Benz Stadium in Atlanta, Georgia. (David J. Griffin/Icon Sportswire via Getty Images)
Paul Pettas, a vice president with food concession company Sodexo Live!, also told the outlet that its operating costs had risen an estimated 10 to 15 percent over the past one to two years.
Some stadium chefs are also getting creative with their menu options to counter high operating costs. For example, a menu option might only include five instead of six chicken fingers.
Moreover, examples of classic game day staples that have seen price climbs since last year include beer, up by 6.4 percent; frankfurters (hot dog weiners), up by 16.5 percent; and snacks, up by 14.7 percent, according to the Bureau of Labor Statistics.
Sports merchandising apparel has also likely increased, as data shows that apparel prices are up by 5.5 percent.
Increased transportation and labor costs also contribute to higher operating budgets for franchises, which inevitably get passed down to the fans. Gasoline prices are up by 18.3 percent this year after reaching record highs this past summer.
Overall inflation has increased by 8.2 percent since last year under the Biden administration. Core inflation — which excludes volatile food and gas prices — is up by 6.6 percent, a 40-year high. There is a consensus among economists that a recession is looming as the federal reserve has indicated its intention to hike up interest rates to combat inflation.
You can follow Ethan Letkeman on Twitter at @EthanLetkeman.
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