NFL to improve in-stadium attendance
The National Football League announced on Thursday, April 4th, that all teams would have cameras in their locker room for the 2013 NFL season, to provide video to be shown only on stadium scoreboards. Teams will also be required to show all replays available during a video review on the video boards. These two mandates from the league were made as part of Commissioner Roger Goodell’s initiative to enhance the in-stadium fan experience.
These ‘benefits’ are only the latest in a number of improvements Goodell has proposed teams to adopt on a league-wide scale. Over the past few seasons, we’ve seen marked improvements in stadiums around the league in terms of Wi-Fi accessibility, quality of video boards, and various initiatives that are perceived to add additional value to the attendees of games. NFL teams still have a long way to go in terms of justifying the cost of attending a game versus the comfort of a fans living room. Commissioner Goodell acknowledged the need to get Wi-Fi in all stadiums, to allow fans to stay connected while at the game. Other attempts to keep fans involved included the league directing all 32 clubs to display real-time fantasy football statistics prior to the 2011 NFL season.
While the league may believe that the additional value added by sharing unique content in-stadium and giving fans exclusive access may justify the price of attending an NFL game, the attendance over the past five years tells a different story. League-wide attendance reached a high in 2007 when it reached 17,345,205. League-wide attendance fell for four consecutive seasons before rebounding in 2012, albeit rising less than one percentage point. Since 2007, the average ticket league-wide rose 16% from $67.11 to $78.38 in 2012.
Some of the biggest expenses and inconveniences for fans in attendance are parking, concessions, and the traffic to and from the stadium. Teams around the league have gotten creative trying to offset the unforeseeable expenses of attending a game by minimizing these expenses for the fan. Amtrak offers 25% off for fans going to Oakland-Alameda County Coliseum for Raiders games, allowing them to save on parking, gas, and the frustration of traffic after the game. The Jacksonville Jaguars allowed fans in 2012 to bring outside food in to EverBank Field (although no outside liquids or beverages were permitted).
The alternative to traveling to the stadium, and experiencing the game in its purest form, is to sit in the climate controlled comfort of your home. NFL audiences have grown on each of their television partners (NBC, Fox, CBS, ESPN) by over one million viewers since 2007. In December of 2011, the National Football League owners voted to approve $27.9 billion in TV deals with Fox, CBS, and NBC through 2022. After including their preexisting ESPN deal, the league will begin splitting approximately $6 billion per season in TV revenues entering the 2014 season.
Until this season, the league had enforced a strict blackout policy in local markets that had said teams had to sell out games or receive an exception from the league for the game to be shown on local TV. The change came as league-wide attendance continued to decline, originally the blackout rule was meant to spur fans to attend games. During the time of the blackout rule, the number of blackouts league-wide fell from approximately 25% to only 6% of games in 2011, the final year of the original blackout policy. The league allowed the clubs an option to lower the blackout threshold, but doing so would cost the team a percentage of ticket revenue. Only four organizations took advantage of the option to lower the black out threshold (Raiders, Vikings, Dolphins, and Buccaneers). The number of blackouts in 2012 was down only one (from 16 to 15). Of the teams to take advantage of the blackout policy, two would be blacked out even with the reduced threshold. The Tampa Bay Buccaneers were blacked out for six of eight home games, and have been blacked out 25 of their last 29 in local markets. The Raiders were blacked out once. The other teams to be blacked out during the 2012 season were the San Diego Chargers, Buffalo Bills, and Cincinnati Bengals, all had been blacked out for at least one game in 2011, and did not take advantage of the new blackout policy.
Of the five teams to be blacked out in local TV markets during the 2011 and 2012 seasons, only the Cincinnati Bengals and Buffalo Bills saw increases in attendance. The Bengals were a playoff team in both 2011 and 2012, and saw their attendance increase 18.2% for the season. The Buffalo Bills stumbled to identical disappointing 6-10 finishes, but were still able to increase their attendance by 3.1% over the 2011 season.
The San Diego Chargers, Tampa Bay Buccaneers, and Oakland Raiders weren’t as lucky. The San Diego Chargers have had difficulty drawing crowds in the season. The 2012 season was no different, as their attendance at home decreased by 7.6%, albeit a very similar product on the field. The Buccaneers increased their win total by three, but were unable to increase their crowds, as attendance declined 2.3%. In 2011, the Raiders were in the playoff hunt for the first time in almost a decade, filling the Coliseum to 94% of capacity! In 2012, they fell back in to the cellar, finishing at 4-12. The crowds declined with their lack of success, falling 8%.
Meanwhile, two teams that optioned to lower the blackout threshold were able to avoid a blackout this season. The Minnesota Vikings hadn’t been blacked out locally since 1997, and 2012 was no different as the team went 10-6, successfully bouncing back from a disappointing 2011 campaign. The Dolphins were able to avoid their first blackout in over a decade, but only after the team and sponsors purchased the remaining tickets to 7 out of 8 games this season. The NFL allows teams to purchase unsold tickets by paying $.34 on the dollar in order to reach the threshold and avoid a blackout in local markets.
On the surface, it may appear that the NFL has an issue in regards to attendance. Perhaps, the downward trend of attendance is really just an issue in isolated markets, and less reflective of the league as a whole. The NFL has some teams in less attractive markets, and their attendance suffer for an abundance of reasons, such as the climate in Buffalo, a city effected worse by the downturn in the economy, or a team with an underperforming on-field product.
Teams in the upper echelon of the NFL in terms of attendance have the advantages of new state-of-the-art stadiums, in prime locations, with competitive teams on the field for the most part. The salary cap and draft slotting helps maintain competitive balance throughout the league. A few teams in the lower third (Chicago, Detroit, and Pittsburgh) are actually capped by the capacity of the respective stadiums, not allowing them to escape the bottom of the leagues attendance report, although they routinely find themselves at or above 100% capacity.
The league is doing itself a favor by developing the game-day experience, in order to remain competitive with the “HD-TV” option. Instead of mandating these measures on a league-wide basis though, it may be time to evaluate the markets that are struggling to sell tickets. A few of these teams will be able to solve their issues by commissioning new stadiums, or updating their current homes. San Diego, Miami and Oakland all play in multi-purpose venues that either currently host an MLB club, or have in the past. Relocating a struggling team may be a realistic option. Currently we see the ownership groups in San Diego, Miami, and Oakland exploring new stadiums, which probably seems like the easiest way to increase attendance and generate new revenues.