Friday, November 21, 2008

NBA Attendance Numbers Begin to Sag

There's a story at YaHoo! Sports about how NBA teams are seeing noticable declines in attendance. One commenter proposes the following theory, with which I agree.

1. Yuppie fans are flush with money, can pay high ticket prices and prices for merchandising, which leads to
2. increase in the NBA's operating costs and salaries.
3. The financial crisis hits, and yuppies have better ways to spend their money.
4. However, NBA teams have to generate revenue based on an earlier financial model. They assumed these free-spending yuppies would always be there. In order to raise more revenue, they....
5. ...raise ticket prices.
6. This drives the "financially marginal fans" out. The "financially marginal fans" are the ones most sensitive to ticket prices, which leads to....
7. ...notable decreased attendance at NBA games.

First, yuppies generally don't go to WNBA games. The purpose of a yuppie is not to watch the game, but to be seen by the power elite. Since a NBA (and not a WNBA) franchise is a massive vanity purchase, it's more likely that the power elite would be at an NBA game and not an WNBA game. You're more likely to see a) lesbians, b) ordinary families bringing their daughters and sons, and c) women's basketball fanatics - these groups can overlap by the way - than the elite in the audience at a WNBA game. The disappearance of the yuppie contigent would have less impact on the W than on the NBA.

Second, the salary cap in the WNBA isn't that large. Hell, it's only around $1 million dollars. This is the cost of two replacement NBA players, neither having any NBA experience. I'm sure that most of the money involved in running a WNBA franchise is in operating costs, and not salaries. Unless NBA teams sharing arenas with WNBA teams attempt to charge more in arena operating rents to make up their decreased incomes, that shouldn't change.

Third, WNBA fans don't pay much in ticket prices compared to their NBA counterparts. Rises in ticket prices would hit them more proportionally than the rise in NBA tickets - remember the concept of "utility" in ECON 101?
There are probably more financially marginal fans in the WNBA. It's a game that people without a lot of money (but a lot of heart) can affordably attend.

Either one or two things would happen - either a rise in WNBA tix prices would drive out the marginal fans, or the cost of the rise would be so much smaller (compared to a similar percentage rise of a NBA team's tickets) that the WNBA fan would be more willing to pay the difference. The NBA has basically priced poor and middle class fans out of attending games; WNBA fans that aren't making $100 K a year can actually afford tickets.

Fourth, WNBA fans are probably more...uh...fanatical than NBA fans. There's the joke among WNBA fans that you can't give away WNBA tickets to your friends...because your friends are also season ticket holders. WNBA fandom is a real labor of love, and I think the community there is a bit tighter. The yuppies can take a casual attitude toward game attendance; WNBA fans arrange their whole evening around it.

In the NBA, the price is above the quality of the product. In the WNBA, the price is either at quality or below the product quality - in which case, you get a bang for your buck.

In this recession/depression/deflation, will the WNBA be taking a financial hit? Yes. Everyone will be taking a financial hit, particularly sports like the WNBA. But as a commenter at RebKell put it, "The WNBA will be the first to feel the pain...but the NBA will be doing all of the hemorrhaging."

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