It's actually good news that Super Bowl tickets are still available -- and at rapidly falling prices. It’s a reminder to all of us that sports isn’t some strange and esoteric realm to which the ordinary rules of economics don’t apply. It’s a market like anything else. Demand curves slope downward.
That’s why, if you’re looking for something to read during the commercial breaks Sunday night -- or during the long, bleak football-less months between Sunday night and summer training camp -- you could do worse than a pair of recent books: "King of Sports: Football’s Impact on America," by Gregg Easterbrook, and "15 Sports Myths and Why They’re Wrong," by Rodney Fort and Jason Winfree. Both make important points about the economics of sports in general, and football in particular.
Among the myths that Fort and Winfree successfully demolish are two that have special application to this weekend’s game. For fans of teams that didn’t make the Super Bowl -- or didn’t come close -- they warn against the instinct to fire the general manager for picking the wrong players. “Sportswriters/broadcasters are with very few exceptions very poor economists,” they note, and then lay out, in very readable fashion, a series of explanations for why journalists and fans too often wrongly perceive management as being at fault. My favorite is their analogy to the efficient capital market hypothesis: Even if market prices rationally integrate all available information, lots of investors lose money.
They also explain why it’s so terribly difficult for a team to improve via the draft. Quite simply, players are resources, and resources tend to find their way into the hands of the highest-valuing users. It’s true that ownership of a valuable resource (a high draft pick, a good young player) can lead to a high return, but it’s not hard to appreciate the difference between adding a good player to a good team and adding a good player to a bad team. (There’s a reason Peyton Manning was interested only in teams with a realistic chance of making the Super Bowl.)
While Fort and Winfree want to improve our understanding of the economics of football, Easterbrook (a friend of mine) is more interested in the political economy of football. Much of the book is devoted to his proposals for improving the game itself, particularly for young people who play, at risk to their health, and are never going to receive a paycheck for their efforts. At the professional level, he is particularly hard on the enormous subsidies that the National Football League receives -- not only in the form of publicly subsidized billion-dollar stadiums, but also via a limited antitrust exemption and (lest we forget) the nonprofit status of the league itself. And he includes this little vignette, which I’d quite forgotten:
“For Veterans Day 2012, the NFL announced its owners would donate, to veterans’ groups, $300 for each point scored in designated games. ... The NFL was extensively praised for its generosity. Not mentioned was the total donation, which would come to $432,000. ... Annualized, NFL stadium subsidies and tax favors total perhaps a billion dollars.”
Although some NFL teams built their stadiums privately, most are publicly financed -- and yet the owners are generally allowed to keep all or nearly all revenue from tickets and concessions.
At the outset, I mentioned the falling ticket prices for this weekend’s game. This, too, is a useful datum. Fort and Winfree remind us that the driver of ticket prices is entirely on the demand side. Football is expensive to watch not because of big player contracts but because lots of people are willing to pay lots of money to watch it. When this isn’t so -- when, say, the NFL schedules a game in icy weather -- prices fall, even the price of a ticket to the Super Bowl.
(Stephen L. Carter is a Bloomberg View columnist and a professor of law at Yale University. He is the author of “The Violence of Peace: America’s Wars in the Age of Obama” and the novel “The Impeachment of Abraham Lincoln.” Follow him on Twitter at @StepCarter.)
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