FinancialYoung Blog

The Great Disconnect
September 25, 2009

There has been and will continue to be a giant gap between rising incomes (or lack there of) of hard working Americans and the inflation of ticket prices to entertainment and sporting events.  Call me naive, but I remember going to sporting events with my parents and things not costing a fortune (maybe because I was 8 and not footing the bill).  Now, we see stadiums like the new Yankees Palace or the monstrosity that is Jerry Jones’s new home for the Dallas Cowboys football team and it seems that the spectacle of the stadium itself is more intriguing than the game at hand.  It has been no secret that the Yankees organization has reduced ticket prices in its priciest seating sections and while watching casually on TV you can see many open seats, which I never saw before.  Many of the suites that occupy stadiums are owned by corporations to wine-and-dine clients (just ask one of my good buddies about that).  But how is that different than sending a client to a resort for a job well done?  Will corporations soon be doing away with their suite tickets?  Are sports franchises pricing out fans?  It’s an interesting debate, but many people in these times have a hard time spending $50 a ticket, $20 on parking, $8 beers and $6 hot dogs on a consistent basis.  By the end of the night a couple can easily spend over $250.  With the increase in technology and HD TV, are sports fans more inclined to stay at home and watch the game on TV for free in the comfort of their own big fluffy couch (girlfriends and wives love that)?  These are issues I’m sure professional sports franchises have discussed before.  On the other side of the coin, sports franchises are appreciating in value at a record pace and it is the only business model I know of that can potentially have a negative operating income and still appreciate in value.  It makes for interesting conversation though.