1 / 9

Economics of Sports: Maximizing Profits and Fan Engagement in Major League Areas

Explore the correlation between NBA attendance and prices, supply and demand dynamics in sports economics, and the impact of fixed costs on profit maximization. Delve into the factors influencing ticket prices and fan engagement strategies used by teams, such as the relevance of player salaries and the role of season tickets. Discover the effects of uncertainty, team performance, and season ticket sales on sports economics.

avat
Download Presentation

Economics of Sports: Maximizing Profits and Fan Engagement in Major League Areas

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Economics of Sports Unit 2Economics

  2. Table 2-4Teams, Population, and Per Capita Income, Major League Areas

  3. Table 2-5Correlations between NBA Attendance and Prices, 2000-2007

  4. Supply (more supplied at higher prices, i.e. luxury suites) • Demand (more demanded at lower costs, i.e. sports programming on TV) • The irrelevance of fixed costs • Player’s salary

  5. Maximizing Profit • Recall: Profit = TR-TC Goal: Maximize profits? • Key question: What do the NY Jets sell? • Tickets! • Mark Sanchez’s salary is a fixed cost to the Jets • It is unchanged no matter how many tickets they sell • Signing Sanchez does not affect Marginal Costs

  6. Why Do Teams Raise Prices? • MC does not change – but Marginal Revenue might • More fans want to see the Jets play • Demand – and MR – increase • The Jets charge more because they can – not because they must

  7. Uncertainty • Are the Yankees bad for baseball? • Are dynasties a bad idea? • How often should the home team win? • Why do teams sell season tickets? • Why do fans buy them?

  8. Can Losing be Good? • Cleveland Browns dominated the old AAFC • Fans lost interest • Even Browns attendance fell • Attendance fell in MLB in 1950s • Dodgers, Giants, or Yankees were in every World Series • Why bother seeing Pittsburgh play Cincinnati? • A study has looked at attendance in MLB • Controlled for day, time, weather, quality of opponent • Attendance highest when home team won 60% of time

  9. Season Tickets • Pay for a December game in March • Transfers risk from team to fans • Why would fans assume risk? • Often pay lower price • Get preferred status for post-season

More Related