MLB Sent Memo Warning Players About Prediction Markets
If sports fans have made one thing clear in 2023, it’s that they have been more eager than ever to attend live games.
The headlines throughout the year provided almost uniform testament to that, as the NBA, NHL, MLS, NWSL, and tennis’ U.S. Open all reached record attendance levels, with MLB posting its best year at the turnstiles since 2017, the WNBA its best year since 2018, and the NFL on track to set its own record this season. That clear direction spanning numerous leagues showed a marked divergence from normal, more up-and-down attendance patterns.
But will the good times last?
A series of economic storm clouds are threatening to dampen the bullish totals in 2024. And even if many of the overall attendance totals still look strong, reaching those numbers will likely require price cuts and other adjustments. Some of that recalibration has already started, as San Diego State recently announced a 20% price cut for 2024 football tickets.
“Teams are going to have to work significantly harder to make less money,” Tony Knopp, CEO and co-founder of TicketManager, told Front Office Sports. The California-based ticket management company works with many pro teams and Fortune 500 companies. “The sky isn’t falling, but it’s definitely not as rosy as is being depicted.”
Knopp has been sounding the alarms of slowing sales for some time, writing recently in his weekly blog that “behind closed doors, there’s a lot of concern.” He’s not alone.
“Demand for in-person events surpassed expectations in 2023, leading to record-breaking ticket sales,” said leading insurance brokerage Hub International. “But soaring business costs, extreme weather, and staffing challenges … could hamper the entertainment and sport industry’s ability to generate revenue [in 2024].”
Leading Indicators
The developing ticket sales situation in sports resonates with many current economic conditions across the U.S.
On the surface, health in topline indicators such as gross domestic product and unemployment levels suggest a strong and growing economy. But credit card balances reached a new U.S. record during 2023’s third quarter, extending a largely unimpeded three-year growth wave, and delinquencies are rising. Inflation, meanwhile, has been on its own three-year run. While that inflation is now slowing, it’s cut heavily into fans’ buying power.
Indeed, the inflation has reached sports and live entertainment with force, and with its own term: “funflation.” The U.S. Bureau of Labor Statistics recently found that prices for sports tickets soared 25.1% between October 2022 and the same month this year.
Thus far, fans have largely absorbed that price jump as the demand for live events has continued to grow, particularly after the pandemic and the isolation it created. But the inflation and ongoing stress on fans’ personal finances make more sports attendance growth — particularly more escalation in ticket revenue — less likely.
“The attendance numbers themselves won’t necessarily change that much,” Knopp said. “But as money teams take in changes significantly, the attendance figures become something of empty-calorie numbers.”
Already, there have been some notable symptoms of the stress, such as how the ticket market for the inaugural Las Vegas Grand Prix softened considerably leading up to the race.
“Money simply buys less now. Everything is more expensive,” Knopp said. “Companies are already cutting costs, and they’re usually first. For consumers, it’s a trailing indicator.”
Also fundamentally changing the nature of sports ticket sales, and by extension attendance counts, is the ongoing decline of traditional season tickets. Already shrinking in importance in recent years, standard full-season packages are increasingly being replaced by a series of more customized ticket offerings, such as flex packages and subscription-based tickets where fans choose which games they want to go to, often without a fixed seating location, for a set monthly or annual fee.
The National League champion Arizona Diamondbacks recently announced plans to revive such a ticket offer, allowing fans to see the entire 2024 home schedule for just $299, amounting to less than $4 per game. Even if fans use a plan like that less frequently than every home game, average per-game pricing still is often way below standard rates.
“There are fewer and fewer people out there that are fixated enough to buy a [full] season ticket,” Steve Delay, a 30-year veteran of sports ticketing and current industry consultant, told Front Office Sports. “Those hardcore people are getting older, they have less disposable income. But the casual fan, the family that wants to go [to a game] maybe once a month, twice a month, that’s becoming more and more relevant.”
Women Buck The Trend
A key outlier to the more downcast attendance outlook is women’s sports, which remains one of the fastest-growing areas of the entire industry and is drawing both increased crowds and higher revenue.
In addition to the NWSL attendance record and strong growth for the WNBA, other signs include record-level turnout of 1.98 million for the 2023 Women’s World Cup in Australia and New Zealand, a draw of more than 92,000 for a college volleyball game in Nebraska that made it the highest-attended women’s sports event in history, and an indoor NCAA volleyball record with a crowd of 19,598 on Dec. 14 in Tampa.
The power of women’s sports is such that it was a central component of StubHub’s recently released 2023 Year In Live Experiences report. The document outlined how NWSL ticket sales on the resale platform shot up 101% this year compared to 2022, increased 92% for the WNBA — including a company-record total for that league’s Finals — and rose 30% for the U.S. Open women’s finals.
New teams in both those leagues and the scheduled 2024 debut of the PWHL seek to extend that exposure for women’s sports.
“Looking ahead to 2024 and beyond, we expect to see continued momentum for female athletes, with league expansion promising to offer even more opportunities for the community that fans crave,” StubHub said.
That energy is helping fuel what Deloitte projects to be the first global $1 billion revenue year for women’s sports in 2024.
“In 2024, it’s likely that very high attendance (more than 60,000) will be achieved for certain marquee matches, with records likely to be broken, as they were in both 2022 and 2023,” the professional services firm said.
If overall sports attendance in 2024 ultimately proves resilient to the economic storm clouds, women’s sports will undoubtedly be a key factor.
