The Now Constant Crisis of Empty Seats in Sports

by David Wyld 12 months ago in culture

American sports, and indeed sports around the globe, are seeing more and more consumers vote with their feet—or really, their backsides—and choosing to not attend live sporting events. Is there a way to reverse the attendance decline and create new opportunities in the process?

The Now Constant Crisis of Empty Seats in Sports

At the end of the year, we have the annual rite of publications—those on the web and those few that still remain in print—naming their top sportsperson/man/woman for the year. Most notable among all of these is the annual award given by Sports Illustrated—and with the winners of the past, one can easily see why. There are best of lists, and then there's the best of... period. Sports Illustrated's award is clearly the best of the best of when it comes to annual sports lists.

Of course, no one can really argue with this year's choice of the entire Golden State Warriors team as SI's "sportsperson" (or would it be more correctly "sportspeople") of the year for 2018.

Now taking a bit of a contrarian view, since we have broken the singular "person" model already, I would propose that rather than recognizing a sports human (or humans) of the year for 2018, we should instead name a "thing" as the "Sports Object of the Year." And what might that be you ask? Before adding a cynical "smart ass" to that question, of course? I would posit that one object best symbolizes the trend of the year not just in one sport, but in all sports. That is the empty seat...

When you watch any sporting event on TV today, you are struck by one continuing and constant image. Whether you are watching the NFL, NBA, NHL, or any professional sports game with a group of friends or in your favorite watering hole, someone invariably will be the first to make an observation something like: "Gee, those stands sure are empty!" We are currently in the midst of college football's bowl season, and save for the games involved in the College Football Playoff, almost every one of them will have stands that are either largely empty or covered by the huge tarps that have become commonplace in stadiums today.

With precious few exceptions—and those being only the most important of games and events (i.e. the Super Bowl, the aforementioned College Football Playoff, The Masters, The Final Four, The Kentucky Derby, etc.)—what you see occurring is an unmistakable trend. That is the fact that attendance is off, in some cases way off, at almost all live sporting events. And this is a national, even global, happening. Indeed, the "empty seat phenomenon" is not just limited to American sports. Watch a Premier League, Ligue 1, La Liga, Bundesliga football (soccer) game, and you will see the same thing taking place in the world's most popular and richest sport: Empty seats in stands that were may have been standing room only just a few years ago.

You can even follow Empty Seats Galore on Twitter, which, you guessed it, posts pictures of empty stadium sections—and increasingly empty stadiums as a whole—from all of sports. Now, their collection has photos submitted from not just football and baseball games, but sports as diverse as cricket and rugby. It is an interesting, but kind of sad follow, I must say. However, the pictures do speak volumes as to what should be a concerning—a most concerning—development in the sports industry worldwide.

So, it is time for the owners of sports teams and all who are stakeholders in them—and these days, let's face it, that's just about everybody, thanks to taxpayer subsidies of sports facilities—to ask a serious question: Why is the attendance problem for sports so bad, and continuing to get worse? And then there is the follow-up question that is even more important: What, if anything, can be done to reverse the dwindling attendance numbers? With the rise of e-sports and the never-ending list of alternative activities available in modern life besides actually watching—let alone going to an actual game—the sports attendance problem is squarely at the top of the list of important issue for all leagues, all teams, and all colleges and universities today.

Why do people increasingly choose not to go to games in-person? There are a multitude of reasons that one could list that are negative to the fan experience that contribute to the problem. Certainly, the time commitment, the monetary commitment, and yes, the social commitment to actually go to a stadium or arena only seem to increase each and every year. Traffic is worse. Tickets are more and more expensive (as are parking, food, beverages, souvenirs, and everything else that touches the confines of the sports facility). People are ruder, and increasingly drunker and more "salty" with their language (which, of course, may be strongly correlated). Wi-fi... maybe? And the games themselves—with the notable exception of soccer, which has the most fixed time limit of all—tend to get longer and longe, thanks to the need to insert more and more commercials in them for broadcasting purposes. Try selling folks with shorter and shorter attention spans on watching—let alone going to—the average baseball game or a four-hour college football game, that is not a winning proposition!

Technology certainly has a great deal to do with the worsening empty seat problem across sports. This is because today, almost no one can argue that the in-person experience does not compare favorably to watching a game sitting in your living room—or increasingly, in a specially designed and equipped media room. Today, we routinely can watch any game from anywhere, and view it in the climate-controlled comfort of your own home. At home, you are eating your own snacks. You are drinking your own beverages. You are sitting with, or without, people of your choosing. And you are watching the game unfold in spectacular, high definition on a big, big screen, while having reliable wi-fi to be able to use a second—and perhaps even third screen—to interact with others on social media to enhance the experience.

Even as professional leagues and teams, and similarly, the NCAA and all of its universities, seen rights fees increase tremendously over the past few decades, sports industry analysts have repeatedly predicted that changing viewing patterns will mean peaking or even declining revenue streams from broadcasting games. However, even with the shifts occurring in the media world and advances made to enable us to watch any sporting event anywhere on a world of devices, the demand for sports content is still steadily increasing. Indeed, live sporting events seem to almost be the best way for broadcasters and advertisers to reach mass audiences in an age of on-demand entertainment. So, that side of sports revenue stream seems to be assured for some time to come, even with shifts in viewing patterns, demographics, and of course, technology.

However, with the many problems associated with the in-person sporting experience, the threat that declining attendance at these live events simply can not be understated. Increasingly, professional sports, and big-time college football and basketball, has been based on a simple economic premise—that being more! Team owners and university heads have been accustomed to building bigger and bigger facilities with fancier amenities and more expensive tickets for not just the average fan, but especially for the richest and business-affiliated, who would pay ultra-premium prices for the best luxury experiences that could be offered to them. The market seemed to be inelastic, as fans would pay more not just to be at games, but to park, to eat, to drink, and to savor the experience. It seemed that big-time live sporting events could command big-time premiums on an ever-increasing basis, and that "more" was never enough. Add to that equation sweetheart lease deals and taxpayer funded stadiums and, well, it is good to be a billionaire owner!

So, since the empty seat conundrum comes as the result of many factors, one would think that there would not be a rather simple solution to it. However, that is exactly wrong!

OK smart guy then, what is the solution? To me, as both a strategic management consultant and sports fan, I think there is only one course of action for owners of professional sports teams, for organizers of events such as pro golf and tennis tournaments and auto races, and for colleges and universities trying to market their team sports. And really, there is no other alternative course of action, unless you are willing to do what legendary Dallas Cowboys General Manager Texas (E.) Tex Schramm (yes, that was his real name!) once envisioned. He predicted way back in the 1980s that pro football would someday be played on a TV studio sound stage—with no live audience. The answer then is simply one word: Marketing!

The only way to make pro and college sports survive over the long term is to drive more fans to the games themselves! You can have fan bases far and wide who may never get close to seeing their favorite teams in person—witness the popularity of sports like the NBA , the English Premier League, and La Liga across Asia and the Middle East. However, for a pro sports franchise in the US of any kind or for a college or a university football and/or basketball program, I do feel that you need to make the connection viable and personal. After all, what we see more and more is that the game day experience may be far better and draw far larger crowds than the games themselves—witness the tailgating at major universities on Saturdays across the country and the fan "experiences" surrounding pro sports championship and all-star games. For the excitement to be there on your TV or your iPad viewing a sporting event, I truly believe that you have to have fans there cheering, booing, etc., if not for any other reason than to make the video production look, feel, and sound better. Without the fans, you have an antiseptic, TV studio like environment, much like what Tex Schramm forecast for the future of sports almost 40 years ago.

So, you need fans—and not just hardcore fans, but casual, occasional, and just plain "testing the waters," possible fans—to want to attend games in person. How do you do that—in short, how do you put "butts in the seats?" How do you get the "extras" that you do need for the "TV show" that is professional sports and big-time college football and basketball. In short, it will take upending the economic model of more, more, more revenue (and more expensive pricing) with more of a value concept. An empty seat in a stadium for a given sporting event is like an empty seat on an airliner or an empty seat in a theater for a performance—it is the perfect chance for the elasticity of demand to show—and to be tested. What is happening on secondary ticket markets and exchanges today is a truer indicator of market-based pricing for a sporting event. Prices for a Super Bowl or Final Four ticket can reach astronomical levels, while tickets for a midweek game between the Trailblazers and the Nets or a late season game between the Raiders and the Bengals—with no playoff implications and in the cold of wintry Cincinnati—can be often be had for less than the cost of going to a movie, or even a McDonald's combo meal at times! The problem is that those tickets do start with a face value and are sold—or are attempted to be sold—by the sports entities for those face-value prices.

And so, I'm a huge proponent of what yes, would be a revolution in the way sports operates. We need to go back to the fundamentals of good marketing, as the old model of "let's gouge our customers as much as they can stand and still buy tickets to our games" is no longer working. What we need to do is upend the strategic mindset of maximizing ticket prices and instead, focus on incremental revenue. And how do you maximize that measure? It is simply a matter of answering the question: How can we get the most people in the most seats?

The incentive should be there to maximize that number—and put plainly, that means yes, the most butts in the most seats. The entire stadium's operations have to be provided for, so why not attempt to get the most people into those operations? And the more you can focus on maximizing total revenue through making certain that you capture the most butts in the seats, that makes for a more exciting environment—both for those in the stadium and those watching the event on TV. That means making the experience the best it can be: Make parking, concession prices, and everything associated with the in-stadium experience as convenient and affordable as possible. You not only help create a more memorable, enjoyable experience, but you also heighten the possibility that the marginal fan could become a regular attendee—a repeat customer for the in-person, in-stadium experience! If you go back to basic marketing, make the customer feel that they are getting a good bang for their buck and an enjoyable experience, they will be positive on your brand, your team, and good things (i.e. eyeballs, sales, etc.) will come from that positive sentiment.

Even more important than the actual in-person attendance though is to try and move fans to higher and higher levels of fandom! More "brand loyalty" to the teams means better things come for the entity, the pro sports franchise, and the league as a whole, or the university. Hard statistics show that loyal fans buy more team stuff, subscribe to more team info, watch more games and affiliated team entertainment. In short, more fans—and more intense fan interest—will drive more total revenue to the sports entities: The leagues, the teams, and yes, colleges and universities. And for those institutions of higher learning, research consistently shows that alumni who attend football and basketball games tend to be some of the biggest contributors to those universities—and yes, winning does help spike those contributions to higher and higher levels—just ask the University of Alabama about how the "Nick Saban Effect" has worked out for the university in terms of contributions across the board; it is simply amazing!

Overall, I am optimistic that American sports across the board can do things to attract fans into, or back into as the case may be, those empty seats. To me, the parallel model for big time sports to emulate are the music industry and Broadway-scale theater production, where live events—specifically the biggest names and biggest events—draw top dollar and have little problem filling seats across the country. In short, if you create excitement for your production and make it accessible, and yes, perhaps even a value, then you will be able to create bigger live audiences and in turn, bigger total markets for your team and your sport overall. Now this may mean a move toward smaller stadiums (think more intimate venues), or yes, more tarping or draping of stadiums/arenas to make existing facilities work in this way. Also, in sports like pro baseball, basketball, and hockey—where there are so many games in season—one could see teams playing more games in an area and not in a single city, or even mid-sized metro areas sharing teams. This would help stimulate demand across larger population zones, and lessen the supply of seats to be sold for any one city in such sports, making the economics work even better.

The real challenge though—as with the middle and second tier acts and theaters who do struggle with attendance problems—will be for smaller colleges and universities and minor league baseball and basketball leagues/teams. This mid-market will be a much tougher sell, and the marketing will need to be even more aggressive to reverse the slide in attendance in these venues. That is worth a whole other discussion, as these entities will have to be "Bill Veeck-level" creative in their work to fill the seats—and yes, maximize their incremental revenue in the process!

And on a final note, the wildcard in all of this over the next few years—and really over the next decade, will be how the sports industrial complex will adapt to the availability of legalized gambling, and specifically, how much in-stadium wagering is allowed in various states and locales.

I believe that if we see American sports evolve to a model akin to European soccer with in-stadium wagering—and there are many, many details to be worked out and obstacles to be overcome in bringing this about—but that this could be transformative for live sporting events. If the stadium becomes a focal point for those interested in wagering, perhaps in unique forms/types of gambling not offered outside of the live venue, then this could drive interest in and attendance at the games themselves. So, as states begin to set up their enabling legislation for legalized sports wagering in response to the 2018 Supreme Court ruling allowing for such gambling, there may well be a push for nationalized standards by leagues so that all teams could operate with the same rules—and the same opportunities.

One could well imagine a stadium someday filled with fans, many of which would also be wagering on the game, on specific plays, or even specific players and their stats, working with seat-based or mobile devices that would enable such gambling, with, of course, likely the teams/leagues taking their small percentage on the wagers. This future could be tremendously lucrative for American sports entities with the right marketing, and if the regulators enable it—or in other words, don't mess it up—this could be the way to transform the "live" part of live sporting events across the board. It may be the only way for live sports to keep-up with the explosive growth of e-sports, which, by the way, are also very conducive to gambling in the gaming that goes on; it truly is a new, wide world of sports!

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David Wyld
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David Wyld

Professor, Consultant, Doer. Founder/Publisher of The IDEA Publishing (http://www.theideapublishing.com/) & Modern Business Press (http://www.modernbusinesspress.com)

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