General

Who Needs Fans?

This article in yesterday's Wall Street Journal highlights one Italian soccer team's attempts to deal with empty seats: fill them with cardboard cutouts. Unlike the large, blue canvas tarps that are commonplace at poorly attended teams such as the Oakland A's and Florida Marlins, Triestina's tarps are covered with images of fake fans, primarily to give a better appearance on television. While the story really focuses on the novelty of the idea, it is also full of great sports economics tidbits. Here are a few:

1.  Triestina's poor attendance is primarily a result of its population base. With a potential fan base of a mere 200,000 residents, there is no way Trieste can compete with the likes Rome, Milan, and Naples. While exceptions to this rule exist there are generally easy explanations to why small-market teams can thrive:  massive revenue sharing (Green Bay and the NFL), severe restraints on team spending (NCAA football and basketball), short seasons (college football), or deep-pocketed owners with little profit motive (Hoffenheim in Germany's Bundesliga). Otherwise expect a lot of wins out of teams in the major population centers of their league like the New York Yankees or London's Chelsea and Arsenal.

2. The demographics of the population play an important role. Trieste's population is small and shirnking as the population ages. Of all the major American sports, looking for an aging demographic to play a major role in the popularity of baseball, America's pasttime, over the next several decades.

3. Triestina cited the cost of operating an over-large stadium as a major reason to believe that closing off a large portion of the stadium will actually add to the bottom line. Indeed, getting stadium size right is a major key to maximizing profit for sports teams. By 2012, 17 of the 19 teams in Major League Soccer will be playing in soccer specific stadiums, all of which are a fraction of the size of the NFL stadiums most teams shared at the league's debut fifteen years ago. 15,000 fans in a stadium built for 15,000 certainly creates a much better atmosphere for fans than the same 15,000 in an 80,000 seat stadium as well as doing so at a lower cost.  Similarly, the majority of the 26 new stadiums built or refurbished in MLB since 1990 are smaller than the facilities they replaced.

4. Finally, Triestina pointed to the widespread availability of Italian soccer on television as a major hindrence to live attendance. Apparently, Triestina's biggest competitor is, well, Triestina.

(Thanks to Bob Petersen for pointing out the original story.)

2 Comments

  • Avatar Of Tom
    Tom September 23, 2010

    At the Superbowl haltime they give tickets free or undervalued to fans who are willing to wait a long time and then come in and be on the field for the entertainment. They do this so young fans will be in front of the band thus creating a rock’n’roll atmosphere that the corporate types can enjoy from a distance. It has been suggested that someone build a stadium with all high revenue producing suites; but this would never work because part of the luxury is looking down (physically) on the frenzied masses. I could see a day when NFL tickets are undervalued and sold on college campuses in order to create an atmosphere that drives demand for box seats and looks good on TV.

  • Avatar Of Duane Rockerbie
    Duane Rockerbie September 25, 2010

    I guess we are meant to feel some compassion for Triestina. Perhaps it is just economics. A local monopolist maximizes profit by maintaining excess capacity in many instances. Before airline deregulation, many flights typically ran with half the seats empty. Why don’t clubs in this situation just lower ticket prices? If they did, they would diminish their profit when they are facing the elastic portion of the demand curve. Perhaps this is why many North American clubs have moved into smaller stadiums, besides ambiance and so on.

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