Anyone who watched a football game at some point probably asked a questioned related to why the NFL tickets are so expensive. And rightly so. The price to attend a football game is well above the average for most other sports in the nation. In fact, the tickets are almost seen as a luxury good or a high-level commodity that is not meant for everyone. So, what led to the growth of the NFL as one of the main price leaders when it comes to the fees for attending sporting events?
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Supply and Demand
According to the basic laws of economics, the supply and demand meet at a point called equilibrium. This is a point where the buyer and the seller are equally incentivized in making a transaction. The problem, however, happens when the supplier and the person demanding something are not on the same page. For example, if a supplier has thousands of potential buyers and only a handful of products to sell, he will increase the prices so that the few buyers capable of purchasing can enter into a transaction. Similarly, if the supplier has a surplus of goods and must compete with other sellers for customers, they will reduce the price to undermine their opponents and make a transaction.
The Law of Demand Dictates the Price of NFL Tickets
As described by Investopedia, the law of demand states that the higher the price, the lower the demand for an item will be and vice versa. Given that football stadiums have limited seating, the sellers are forced to raise prices to a point where only a few buyers capable of paying the additional charge can attend. That way, the large pool of those who would want to attend a game is reduced to a smaller group of people who are capable of paying the premium price.
Although the NFL sells enough commercial time to cover most of their operating expenses a couple of times over, they also rely on ticket revenues to increase the bottom-line profits. Given that the NFL is a part of a massive entertainment industry, it comes as no surprise that it is operated as a large business. Thus, another important reason that contributes to the high price of tickets is the fact that team owners, stadiums, and the league want to ensure the cash inflows are well above the expenditures. After all, properly hosting tens of thousands of people in a stadium is financially quite demanding.
Ultimately, going to an NFL game is much more than simply watching football. The experience often includes half-time performances and other intriguing activities that engage the crowd. Thus, many people are willing to pay the premium price as they see this as an opportunity to enjoy an entire day of prepaid activities while being in one place. So, one could simply state that the tickets are so expensive because the value of what one gets in return is worth it.
Although the explanations can go on, one will eventually always land on some variation of the law of supply and demand. As long as there are more people willing to purchase the tickets that the actual tickets being sold, the buyers will be forced to treat them as a high commodity. Thus, the NFL tickets are so expensive due to the popularity of the sport.