Super Low at the Super Bowl

It has now been five days since the Super Bowl. The New England Patriots, led by Bill Belichick and Tom Brady, went on to beat the Los Angeles Rams to win their sixth league championship. The game, held in Atlanta, Georgia, was the lowest scoring NFL championship in league history with both teams combining for a total of 16 points. The score was not the only low point at Mercedes Benz Stadium, however.

This past season, the ownership of the Atlanta Falcons decided to slash concession prices during home football games. Fans could purchase a beer for $5 and a hot dog for $2. That breaks down to $0.42/oz for a beer compared to the Seattle Seahawks who charge $0.56/oz. The Atlanta Falcons cut concession prices by 50% across the board. Ultimately, football fans at Mercedes Benz Stadium (home of the Atlanta Falcons) spent 16% more money during the season.

Food at a sporting event would seem to be an inelastic good. Fans have very little options in terms of access to food and drinks inside the stadium. By keeping concession prices low, quantity demanded for concession products increased. This suggests that concession food at professional sporting events is more elastic than originally believed.

Sporting fans often feel they are being taken advantage of at sporting events with high priced food and beverages. By providing a more consumer friendly experience for fans, teams can encourage higher discretionary spending for even more revenue. As the attached article highlights, merchandise sales for the Atlanta Falcons increased by 88% this past season.

The owner of the Atlanta Falcons, Arthur Blank, hopes that the pricing model will be mimicked by other professional sports teams. He also believes that the model can be utilized in places like airports where customers often feel taken of advantage because of artificially high price points.



Leave a Reply

Your email address will not be published. Required fields are marked *