Owen Krumenacher
As the NBA playoffs are now underway many teams are winning, and winning big. Not only are they winning games they are winning when it comes to their profit gained during these next few weeks to come. The playoffs started April 12th and will be going until at least May 31st when the finals begin. In this time teams are going to racking in big money and TV networks are really going to be bringing in the money.
When the playoffs start, for the 16 teams involved it is a big opportunity to gain money. Ticket prices are going to increase about 4.5%, and ticket sales will increase various amounts. The ticket sales increase changes due to stadium seating and what a teams average sales was during the season. In addition to ticket sales, most venues through all games played will sell-out. For example, the Milwaukee Bucks played their first home game during their series against the Boston Celtics at the BMO Harris Bradley Center on Friday. It was the first game all season in which the stadium sold out and had all 20,000 seats filled. What helps with sales is the demand for tickets. Playoff games are more rare to see, and have more consumer interest, which means it’s much easier for a consumer to buy that $98 ticket during the playoffs, compared to a regular season game ticket that costs $98 As the average ticket costs around $98, for the Bucks that means they made around $1,960,000 off the one game. This story is the same for all teams that are participating in this years playoffs.
It’s not only an increase in ticket sales that is bringing in the money, there’s concessions sales and merchandise sales. When your team makes the playoffs, instantly merchandise that states somewhere that the team is in the 2018 playoffs is made and then sold at the stadium. With people coming in, now that the shirts or sweatshirts say 2018 playoffs people are sure to buy it, and when one sweatshirt costs upwards of $40 and possibly $50, just off two sales that’s $80-$100 dollars for the team. In addition to the merchandise, many teams have even stated they are rising concessions stand prices. An example of this is the Boston Celtics. The stated they will be increasing prices of the their concessions stand items. The percentage they increased their product buy is not known, but not matter what it is, an $11 Cheeseburger and fries is always going to be a lot, and always going to be profitable.
Outside of teams making money, it expands to the companies who provide the games on TV. ESPN, ABC, TNT, and many other companies are making around $3 million a game off of viewership and ad revenue. For a company to make an ad and get it put on during the game comes at a hefty price. It isn’t close to what it costs for the Superbowl, but it has the same increasing trend. WIth these prices in place it makes gaining profit much easier for both the NBA and the network companies.
Lastly, cities hosting make money off the playoffs. Just like any other sporting event you get people coming in from the opponents state, and you also have your own fans coming to your area for the day. With this, cities are seeing an increase in spending each day there is a game held. Many fans after the game or before are going to go out and eat, or spend their time doing something that is going to cost them, and the local businesses and city win in this case.
Overall all sporting events have an economic impact on their team and local area, but the playoffs help more than others. Although prices aren’t as high as Superbowl tickets, or World Series prices, what makes a big impact is the length. When the playoffs almost span an entire two months, that’s two months of high spending and a high revenue increase.
Works Cited
“2018 NBA Playoffs Schedule, Matchups and News.” ESPN, ESPN Internet Ventures, 19 Apr. 2018, www.espn.com/nba/story/_/id/23027084/2018-nba-playoffs-schedule-matchups-news.
“Boston Celtics Tickets.” Boston Celtics, www.nba.com/celtics/tickets.
Himmelsbach, Adam. “Rising Ticket Prices and a Waiting List Are Byproducts of Celtics' Upward Trend - The Boston Globe.” BostonGlobe.com, www.bostonglobe.com/sports/celtics/2018/04/01/celtics-continue-hot-ticket/Xv6EiRaxSGpJdbWqXGSf6M/story.html.
Imgur. “Concession Stand Prices at the NBA Finals.” Imgur, 5 June 2015, imgur.com/gallery/mI8eT34.
“TD Garden – Boston Celtics.” Stadium Journey, stadiumjourney.com/stadiums/td-garden-s93.
Owen: You are right that the NBA playoffs bring in a lot of money not only for themselves but for other companies too such as T.V companies. A lot of people who do not have the channels will purchase them to watch the games. The teams also bring in a lot of money because unlike normal games these games are nearly always sold out or very close to so this alone brings in a ton of money. Also when people go to the games the home team can raise money of the food because people are going to get hungry and want to buy food. This is another way that these games bring in so much money. Also small 3rd parties make a lot of money too. Such as people who do not want to go to the game they will go to a local sports bar or something to that nature and spend a lot of money on drinks and food and games while enjoying the game, instead of going to the game. Hotels are another example of a company that will profit greatly if they are in the city of the game. They know people are coming and need a place to stay so they will all raise their prices greatly because people will still pay the big bucks to stay there.
ReplyDeleteI've always noticed that playoff games get more attention than any other regular season game, and rightfully so. I would definitely pay more money than normal for the same type of seating. It's interesting how everyone just accepts the fact that prices will increase. They could raise concession food prices by 2-3% and people would still be okay with it during the playoffs.
ReplyDeleteThe NBA Playoffs are a great time for the teams that are involved to grow a lot economically and therefore increase revenue. For example, in the article it said that the Milwaukee Bucks made almost two million dollars in just one game of the playoffs. This kind of economic growth will boost the spending of the Bucks while revenue will continue to grow at the same time.
ReplyDeleteI enjoy watching the playoffs and I haven't really researched how much money they bring in but it is crazy. I have noticed that tickets that cost $60 for the normal season reach around $120 for the playoffs. Overall the NBA creates a lot of revenue and they do this by raising the prices. It's almost like playoffs become inelastic and people will buy tickets, concessions, etc. no matter the cost.
ReplyDeleteI agree that it is completely crazy how much money the NBA is truly making in the regular season alone and now looking at what they make in the playoffs is just surreal. The NBA has emerged as one of America's most watched sports in recent years and it shows how the demand for tickets always seems to increase at any level of the playoffs. It shows how people are truly willing to buy the tickets the hotel rooms and the food no matter what the cost as it is viewed that the experience would be well worth it.
ReplyDeleteI think that it will be very interesting to see how the Bucks perform in the playoffs because that basically decides how much revenue the Bucks can generate from the playoffs. Currently they are down in the series to the Boston Celtics, but if they can win the next two games, the Bucks will advance to the next round of the playoffs. If this happens, the Bucks will see a huge increase in merchandise sales and the demand for tickets. And if the demand for the tickets increase, the price level for tickets will increase creating a bigger potential revenue for the Bucks.
ReplyDeleteI feel like people who don't usually watch NBA tune in for the playoffs which helps bring in money. People need to buy tickets to the games, hotel rooms, and provide transportation so a lot of money goes into going to playoff games. Especially with the bucks playing in the playoffs that brings a lot of money to the team and a lot of publicity to the city, which could potentially help the building process of the new stadium.
ReplyDeleteI think that it’s always interesting to look at how the success of teams affect the cities they are in. It brings it back to the argument about who should pay for stadiums, the team or the city, and is an especially interesting topic in Milwaukee right now. I would be curious to know if the playoff difference is enough to make a noticeable difference on the overall Milwaukee economy or just a few businesses around stadium.
ReplyDeleteOne theory that has been made by many is that the NBA fixes games to go to a game 7 for increased revenue. Personally, I think this idea is inane. The recent bucks and bulls playoff series saw both teams go to suspicious game 7 in which the bulls showed their true colors and blew out the bucks and winning the series. Although there is solid evidence for the theory, I feel like basketball is already too unpredictable to fix games.
ReplyDeleteAs someone who went to game six of the Bucks vs Celtics playoff series, I've seen first hand how the NBA playoffs can generate an unfathomable amount of revenue. The stadium was packed and the energy of the people was at an all time high. Playoff basketball is supply and demand in its simplest form. The supply of games is decreasing, so the demand to watch the games is increasing. Also BUCKS IN 6 NEXT YEAR.
ReplyDeleteI feel like this can be seen in all sports. Every team that makes the playoff is successful and wins a lot of games. Normally when you win games and are successful there is an abundance of fans and demand that is generated. Demand is generated by success in sports. And once their is a constant demand teams can sell more tickets and increase prices and then the revenue skyrockets.
ReplyDeleteI agree with Hannah above on how most people who aren't into basketball that much or never watch often start watching basketball games when it's getting close to the finals. The excitement from others around them generate persuasion and excitement to watch the games. By those extra people watching the games that normally don't, will generate more money for the NBA! The crazy prices for tickets don't drive fans away as they will do/pay as much as they can to watch their favorite teams.
ReplyDeleteI think it is cool how if a team wins a series and goes onto the next one they get a lot more revenue if they wouldn't have. It is almost like a reward to the team for playing well and motivates them to play more games. I think this is also a great time for teams to take advantage of a large turnout by increasing their ticket prices to get more money from making the playoffs.
ReplyDeleteIt is incredible to see how much an NBA team an make in revenue. From going to regular season games, I know the tickets are somewhat expensive and they just get higher during the playoff. Also the price for merchandise is already high and that helps increase the amount of revenue an NBA team can make. The money they the teams increases a crazy amount during the playoffs.
ReplyDeleteI agree with jack that this can be seen through many sports. when teams win it increases demand for many of the goods related to that team. Once teams become good and the demand increases for goods, teams can increase prices and that will increase the revenue greatly. Great post Owen, love it!
ReplyDeleteThis idea can be seen in many different sports. However, this concept relates directly in basketball because basketball is such a huge sport. Playoffs generate so much hype because generally the favored teams make it pretty far. The basketball game itself is not the only thing that rakes up the profits. Food stands and merchandise stores get loads and loads of money because fans need souvenirs, and food.
ReplyDeleteI think it is interesting that there is such a surge in sports, and therefore revenue and profits, just because it is the playoffs. Fans had all year to watch, but there is still such a huge surge to attend games, and many businesses profit off of this fact. Businesses know when to increase prices and target merchandise as the fan base is on the rise, and winning games, only adds to the increase.
ReplyDeleteWhen looking at this I find it very interesting to see how the success of the teams affects the cities that they are in. This also helps when looking at the argument over who should pay for the stadiums whether it be the team or the city. This is a really big topic right now in Milwaukee I would like to see and know if the playoff difference is enough to make a big enough difference for people to notice in Milwaukee’s overall economy or just increase the profits of a few businesses around the stadium.
ReplyDeleteI completely agree with all of the information given. I think that it is really cool how much sports teams affect the economy. I really liked how you brought up things like the TV companies because that is something that I never really thought of before but then when you bring it up it really makes me rethink all of the companies that are earning money off of these sports teams playing. I like that you mentioned a comparison between the $98 ticket because that really is true to the fact that $98 for a regular season game doesn’t sound that appealing but $98 for a high intensity playoff game sounds like a blast and something that a lot more consumers would be interested in. I wonder if the MLB playoffs or the NBA playoffs real in more total revenue for all of the companies involved. It would be super cool to know which sport is more watched and what sport people are willing to go out and spend more money on.
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