Last Friday, the Chicago Bears announced that they were increasing ticket prices for the 2010 season. From chicagobears.com:
The Bears on Friday announced that the price of most ticket categories at Soldier Field will increase for the 2010 season. Approximately 25 percent of the stadium—all of the seats in the 400 level of the west grandstand—will not see a price increase for the second straight season.
That is, the seats up top on the west side of the stadium, where the wind comes off lake in the winter and punches you in the face, will remain at current cost.
Many have taken outrage at this, as they feel that the substandard product on the field the past three seasons does not justify a price increase. While a completely understandable opinion, that doesn't change the fact that it really is...
Simply A Matter of Business.
The Bears aren't the only team in the league to be raising prices. They're not even the only team in the division raising prices. The Packers announced over a month ago that they would be raising ticket prices. The Vikings haven't announced anything yet, while the Lions, well, they had an announcement also. The Lions said they are lowering ticket prices, having endured nine local tv blackouts in the last two years, and many times failing to even fill 2/3rds of the seats in the stadium. This is largely the exception to the norm--they're in serious attendance crisis mode, and if they continue to move that direction, we could possibly see a shake-up in the NFL.
Kevin Seifer suggested in January that the move to raise ticket prices could possibly be a negotiation tactic with regards to the CBA.
Owners want the NFL Players Association to accept a smaller portion of its revenue pie, and raising ticket prices is one way to demonstrate the owner claims of continuing financial peril.
That is, indeed, a quick way to not only help demonstrate the need for financial restructuring, but a way to simultaneously bring more revenue into the team, for any and all kinds of improvements you make.
I don't think, though, that's the Bears reasoning.
Let's take a quick look at some numbers. The Bears, as mentioned in the press release, and verified by this Wiki list, have the smallest stadium capacity of any team in the NFL.They also pay one of the highest amusement taxes to their governing bodies of anyone. However, being one of the most popular teams in the NFL, they are constantly trying to draw a balance to be as economic as possible, while still obeying the basic rules of supply and demand.
As you can see in the above graph, if the supply of tickets is low, and the demand is high, that will naturally drive the price up. The Bears could, and from a pure money-making standpoint, probably should, be the highest ticket team in the nation. But they aren't. They know for a fact that if some people can't afford it, others can. They actively try to balance the costs of the tickets against the general nature of the economy.
Last year, ticket prices were frozen, and did not go up at all. Most teams had no increase. But to remain competitive, and to keep the team and it's facilities in line with the times, ticket prices will need to go up on a fairly regular basis. It'll be hard to stay ahead of the Packers without the funds to get better.
But Forbes said that the Bears are worth a billion dollars. Why should anyone worth a billion dollars need to do it?
Yes, they sure did. In fact, you can view the 2009 rankings here. Simply put, there's a difference between worth and liquidity. Would you say you're only worth what's in your bank account right now? Of course not (unless you're extremely conceited). That said, while they're worth a billion, it's not like they're raking in a billion a year.
If you sort the Forbes chart out to this list, you'll see the teams ranked out in terms of operating income. That is, the incoming money, minus all the money you spend, what's left over. Here's a snapshot of the top 10 teams by operating income.
The Bears rank about the same in the league in terms of operating income as they do in overall value. The number is interesting, though. For a team that is valued at 1.08 billion dollars, operating income is only 41.6 million.
I realize I say "only", as if I'm Scrooge McDuck and I swim around in a vault full of metal coins. But let's think of some of the expenditures we've asked them to take on. A short list:
- Eat Lovie Smith's contract, and the contracts of any associated coaches, then hire a brand new set of coaches, who will also cost money.
- Bring in, by some accounts, three-five reasonably high priced Free Agents for the defense alone.
- Then go get a wide receiver and new offensive linemen.
- Eat the whole cost of replacing the field surface.
Amongst many others. In addition to the demands placed by fans, keep in mind that they're installing 1000 new flat screens in Soldier Field, and installing new led scoreboards for down and distance at various locations. They're not doing these things because they think the stadium will just look more awesome with them, but they're doing them because it's the kinds of things that add to the fan experience.
It's easy, as diehard fans like we are, to make these kinds of things seem really personal. I'll admit, my first thought when i read the news was "Wow, that's what I get for my fandom." That's why it took me a week to get this note up. I had to step back, take a look at everything and realize what the situation is. While I can't honestly say that they aren't excited at the prospect of making more money for the family, a lot of the ticket price will legitimately go towards making the Chicago Bears a more pleasant, and successful, fan experience.