How do you fill the stands of an NFL team?
The general consensus is that as teams win more games, the fans have a greater desire to attend the games. In economic terms, winning increases the demand to attend games. However, there are exceptions. Take the Cincinnati Bengals. They have had a surprising season, lead by a strong defense and the exciting rookie combination of Andy Dalton and AJ Green, the Bengals sit on the verge of making the playoffs. They are 9-6 and if they win their next home game against AFC North rivals Baltimore Ravens, they will make the playoffs.
Under these conditions, it should not be difficult for a team to sell tickets to home games. Turns out, it is a problem. The Bengals have an average attendance of near 42,000 which puts them last in the National Football League. Six of their previous home games have not sold out and as a result the blackout policy has been in effect, disallowing local fans to watch the games on TV.
There could be several reasons why their attendance is so low. The first is that the prices are too high. The team might have thought the demand for Bengals games was higher than it actually is, thus when they determined their price, they set it too high. This might imply that the ownership made a mistake, and are now suffering as a result. But an alternative explanation is that the ownership is quite bright and they are maximizing profits, and not trying to sell out a stadium. If the Bengals franchise operates as a monopoly, in that they determine the price and quantity of tickets sold, then it would suggest that to maximize profits they would restrict the quantity and increase the price.
But as they enter into the last game of the year, there is a need to sell out the stadium. Having a full stadium can provide a significant benefit to the home team. Think of the noise created in Seattle’s Qwest field, and the resulting false starts the opposing offense commits during the game (or the small earthquake created the stadium caused on Marshawn Lynch’s TD run last season). Having fans in the stadium might also encourage the home team to play better. And if they win this game, they go to the playoffs, which might increase the demand and profits in future years.
So what can the owner do the last game of the season to sell tickets? He can’t just lower the prices, because they are set (and think of how irate loyal fans who bought the tickets at a higher price might get). A principles of micro economics course might suggest using second degree price discrimination, that is a lower price per ticket is charged when multiple tickets are purchased. So that is what the Bengals have done. Season ticket holders can buy one ticket and get one free. This also increases the value of being a season ticket holder, and might encourage more individuals to become a season ticket holder in future years.
So while Mike Brown has been accused of being one of the worse owners of all of sports franchises (this is saying a lot with the email happy owner of the Cavaliers just upstate), I would argue that he might be pretty economically sound with his ticket pricing strategy.
