Ticket Price Determination in Professional Sports: An Empirical Analysis of the NBA, NFL, NHL, and Major League Baseball

Abstract

The purpose of this paper is to explain both cross-sectional differences in ticket prices among teams and causes for the size and direction of seasonal price changes for each of the four major sports leagues in the United States. Based on data from 1996-2002, playing in a new stadium and population size are important determinants of cross-sectional differences in average ticket prices among teams. Playing in the first year of a new stadium and reaching the postseason the previous year are important determinants of the size of seasonal increases in average ticket prices for a given team. Larger payrolls lead to higher ticket prices in baseball and basketball, but not in hockey or football. Seasonal changes in team payroll significantly affect the size of ticket price increases only in baseball, where the correlation between winning and payrolls is strong, and the variability of team payrolls is higher than any other league.