The term ‘funflation’ has been coined to describe the phenomenon of rising prices for entertainment and leisure activities, such as going to concerts, museums, theme parks, and sporting events. In 2023, the average ticket price for a sporting event in the US increased by 25%, according to the Team Marketing Report. This is much higher than the general inflation rate of 8.5%, which is already the highest since 1981. What are the causes and consequences of this trend, and how are sports fans coping with it?
The Demand and Supply Factors Behind ‘Funflation’
One of the main reasons for the surge in ticket prices is the rebound in demand for live sports after the COVID-19 pandemic, which forced many events to be canceled or held without spectators in 2020 and 2021. As vaccines became widely available and restrictions were lifted, fans were eager to return to stadiums and arenas to watch their favorite teams and players. According to SeatGeek, a ticket resale platform, the average resale price per ticket jumped roughly 28% for sporting events since the start of the pandemic.
However, the demand for live sports also faced some challenges, such as the war in Europe, the new variants of the coronavirus, and the environmental crises that affected many parts of the world. These factors reduced the disposable income and the willingness to travel of some potential customers, especially those from overseas. Moreover, some fans preferred to watch sports from the comfort of their homes, thanks to the improved quality and accessibility of streaming services and digital devices.
On the supply side, the sports industry also faced some cost pressures that contributed to the rise in ticket prices. One of them was the increase in wages for players, coaches, and staff, which reflected the competitive nature of the market and the bargaining power of unions and agents. Another was the higher cost of operating and maintaining the venues, which included expenses such as security, sanitation, utilities, and taxes. Additionally, some sports organizations had to invest in new technologies and innovations to enhance the fan experience and comply with the health and safety protocols.
The Impact of ‘Funflation’ on Sports Fans and the Industry
The impact of ‘funflation’ on sports fans and the industry is not uniform, as it depends on several factors, such as the type of sport, the location of the event, the quality of the teams and players, and the availability of substitutes and alternatives. For some fans, the higher ticket prices are worth paying for the thrill and joy of watching live sports, especially if they have a strong emotional attachment to their favorite team or player. For others, the higher ticket prices are a deterrent, as they find them too expensive or unreasonable, especially if they have other options to spend their money and time.
For the sports industry, ‘funflation’ can be a double-edged sword. On the one hand, it can increase the revenue and profitability of the sports organizations, as they can charge more for their product and service. On the other hand, it can also reduce the affordability and accessibility of the sports events, as they can alienate some customers and potential customers, especially those who are price-sensitive or have lower incomes. Moreover, it can also create some ethical and social issues, such as the widening of the gap between the rich and the poor, the exclusion of some groups and communities, and the erosion of the cultural and civic value of sports.
How Sports Fans and the Industry Can Adapt to ‘Funflation’
Given the complex and dynamic nature of ‘funflation’, both sports fans and the industry need to adapt and adjust to the changing environment. For sports fans, some possible strategies are:
- Budgeting and planning ahead: Sports fans can set aside a certain amount of money and time for their sports consumption, and prioritize the events and activities that they value the most. They can also plan ahead and buy tickets in advance, or look for discounts and deals that can lower the cost of attending sports events.
- Seeking alternatives and substitutes: Sports fans can explore other ways of enjoying sports, such as watching them online or on TV, listening to them on the radio or podcasts, reading about them on blogs or magazines, or playing them on video games or fantasy leagues. They can also seek other forms of entertainment and leisure, such as music, movies, books, or games, that can satisfy their needs and preferences.
- Sharing and collaborating with others: Sports fans can share and collaborate with others who have similar interests and tastes, such as friends, family, or online communities. They can split the cost of tickets, transportation, and accommodation, or exchange or resell tickets that they don’t need or want. They can also join or create fan clubs, groups, or associations that can provide them with information, support, and benefits.
For the sports industry, some possible strategies are:
- Segmenting and targeting the market: The sports industry can segment and target the market based on different criteria, such as demographics, psychographics, behavior, and geography. They can offer different products and services, prices and discounts, and promotions and incentives to different segments, depending on their needs and preferences. They can also create loyalty and reward programs that can retain and attract customers.
- Diversifying and innovating the product and service: The sports industry can diversify and innovate the product and service that they offer, by adding new features and benefits, creating new formats and modes, and incorporating new technologies and trends. They can also create new revenue streams, such as merchandising, sponsorship, and media rights, that can supplement and complement the ticket sales.
- Engaging and communicating with the stakeholders: The sports industry can engage and communicate with the stakeholders, such as the fans, the players, the staff, the media, and the society, that are affected by and affect the sports events. They can solicit and respond to feedback, suggestions, and complaints, and provide information, education, and transparency. They can also collaborate and cooperate with other organizations and institutions, such as governments, regulators, and NGOs, that can help them address the challenges and opportunities of ‘funflation’.
‘Funflation’ is a reality that sports fans and the industry have to face and cope with in 2023. It is a result of the interplay of various demand and supply factors that affect the price and value of sports events. It has different impacts on different segments and groups of customers and producers, and it requires different strategies and solutions to adapt and adjust to it. Ultimately, it is a test of how much sports fans and the industry love and care about sports, and how much they are willing to pay and do for it.
