CHICAGO (AP) — As he sat on a bench in front of Soldier Field and about to watch his beloved Chicago Bears play in person, money wasn’t exactly a big issue for Corey Metzger.
Or any concerns, really.
“This journey has taken a long time, and I’m spending a lot of money to make it happen,” said the 45-year-old butcher, who works in law enforcement in Fargo, North Dakota.
Metzer’s zealous pilgrimage is familiar to sports fans, especially now that the COVID-19 pandemic has abated. But continued high inflation and gas prices loom over the monetary pipeline, which resumed when fans returned.
US inflation rose 8.2% yoy in September, the government reported this month. That’s not far from a four-decade high of 9.1% in June. Higher prices for housing, food and medical supplies were the main contributors to the increase.
Given the industry’s reliance on disposable income, the inflation figures are a worrying sign for sports business executives.
“What’s historically accurate for teams is that they’re trying to take less on the ticket side because once someone comes in, they’ll usually make up for it once they’re in,” said Ron Li, senior vice president at Navigate, a consulting firm based in sports and entertainment. “But with post-hub costs rising across the board, I think they have some decisions to make.”
According to the Team Marketing Report, the average cost for a family of four to attend a 2022 major league baseball game was $256.41, a $3.04 increase from the previous season. Ticket costs were the main driver of the increase, with the average overall ticket price increasing 3.6% to $35.93.
Despite the price jump, Americans have largely maintained their spending, particularly on entertainment and other services like travel that they’ve missed out on during the pandemic. Still, there are signs that solid spending won’t last: Credit card debt is rising and savings have fallen as consumers, particularly those on low incomes, have been hurt by the surge in inflation.
Casey Lynn, 43, a low voltage engineer from Minneapolis, and his wife Lori, 44, a commercial lender, aren’t big football fans, but they decided to check out the Bears on a trip to Chicago. While Casey Lynn said he was bothered by the ticket surcharges, the pair didn’t want to pass up the opportunity to see the game.
“The gas is a necessity. Electrical is a necessity. Sport is not a necessity,” he said. “But if you are in Rome, why not?”
Dan Coyne, 38, a life insurance wholesaler from Harrisburg, Pennsylvania, makes a trip to Chicago every year to see the bears with his brother Dave, 47, from Valparaiso, Indiana, who has season tickets. But this time it was different.
“If you fly here, rental cars have roughly tripled in price, that’s definitely factored in,” he said. “But this is a one-time thing.”
The brothers were fed a few hours before the game. Dave Coyne usually stays away from the concessions at Soldier Field, but “I just had to pay for myself tonight,” he said. “I had neither a child nor my wife with me.”
Concessions typically have higher profit margins for sports teams and vendors, but increased costs for goods, transportation, and labor have impacted these profit margins. The changes come after concession companies have already been badly hit by the pandemic.
“The whole model has been disrupted quite a bit because we’re dealing with inflation at 10, 15, 20, 25, 30% when we’re usually underwriting at 2 or 3%,” said Jamie Obletz, president of Delaware Sportservice North . “And you can imagine the impact that has had on us and what has compelled us to think and act on it like a lot of companies over the last six to 12 months.”
Paul Pettas, vice president at Sodexo Live!, estimates that overall costs have increased by 10% to 15% over the last 12 to 24 months.
“The reality is that costs have gone up across the board, but we’re certainly trying to do as much as we can to keep this down and not impact the average fan or guest that comes to our events,” he said .
Concessions companies also have ongoing problems with their supply chains, which have improved recently but continue to be a factor. Obletz recalled his company running out of peanuts in the middle of the 2021 World Series in Atlanta, so two workers drove a truck to another venue, loaded it up, and then drove through the night to return to Truist Park.
“Things aren’t great,” Obletz said. “They are better than they were three to six months ago and we hope it continues to improve.”
The issues have forced concessions companies to get creative to manage rising costs with minimal impact on consumers in terms of culinary options and prices.
Chefs are redesigning menus to replace items facing significant increases in cost and consolidating other options. You use analytics to study portion sizes – do consumers need six chicken fingers, or five will suffice instead? – and take a closer look at their providers.
“There are dozens of things like this that we have tried and are doing as we speak and are trying very desperately to offset the price increases that we are seeing,” Obletz said.
Alison Birdwell, the president and CEO of Aramark Sports + Entertainment, said the company is leaning on analytics and its data science team “more than ever” when it comes to menu strategies and new concession items.
“Through this guidance, we’re working to give fans the items they’re looking for while being efficient with our product and mitigating significant increases in costs,” Birdwell said in a statement to the AP.
Christopher Rugaber, author of AP Economics, contributed to this report.
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