Posted on 09/16/2012 11:31:19 AM PDT by blam
Understanding Deflation, Pro Football Defense, Downside Pressure On Prices Has Only Begun
Economics / Deflation
Sep 16, 2012 - 07:43 AM
By: EWI
You've heard (and probably used) the phrase, "I'd rather watch the game on television."
It's what a sports fan says if he doesn't want to face traffic jams, inadequate parking, overpriced tickets, noisy crowds, and possibly a poor view of the game.
These days, however, something else is keeping professional football fans at home: deflation.
Since the economic slowdown that started in 2007, fewer people are willing to fork over money to attend games. In turn, NFL teams are forced to play defense with ticket prices.
A Sept. 10 Yahoo Finance article points out that "10 teams lowered ticket prices this year," and that, "average ticket prices to attend [an Atlanta] Falcons home game are down 8.1% this season. This is the biggest drop among the 30 NFL cities."
Overall, NFL attendance has dropped 4.5% since 2007.
The article goes on to say: "It's telling us that the overall economy still isn't as strong as it was back in 2007 ... . It's also telling us that the upper-end consumer is still retrenching, they're still pulling back. They haven't felt the burst of either better employment numbers or better income and they're actually attending fewer games."
A weak economy leading to lower game attendance leading to lower ticket prices is a "domino effect" -- and it says plenty about how deflation works in the larger economy.
The psychological aspect of deflation and depression cannot be overstated. When the social mood trend changes from optimism to pessimism, creditors, debtors, producers and consumers change their primary orientation from expansion to conservation. As creditors become more conservative, they slow their lending. As debtors and potential debtors become more conservative, they borrow less or not at all. As producers become more conservative, they reduce expansion plans. As consumers become more conservative, they save more and spend less. These behaviors reduce the "velocity" of money, i.e., the speed with which it circulates to make purchases, thus putting downside pressure on prices. [emphasis added] These forces reverse the former trend.
Conquer the Crash, second edition, p. 91
Even so, many observers say the economy is past due for a recovery. They promote this view despite the evidence, which points to the new deflationary trend.
Most economists are unwilling to abandon the growth consensus, but the reality of an economic contraction is starting to become unmistakable.
The Elliott Wave Financial Forecast, August 2012
Here in Tampa, where the Bucs still can’t sell out a game, and are thus blacked out at home for the second straight year, ( even under the NFL’s new, easier guidlines for determining “sellouts”) you can get a ticket to see a game cheaper than it costs to park your car at Giants/Jets stadium in NJ.
Not deflation. Just good old fashioned supply and demand.
Our local paper had an article on a local horse betting parlor that opened up in the fall of 08. Betting has been in steady decline since it opened. The best year was 09, believe it or not..
Pardon my LOL while reading this...but while I am reading this, I have on TV the OAK Raiders and Miami Dolphins, playing at SunLife Stadium in Miami....and there are about 30% of the seats filled (75K capacity).....Miami has probably the worst attendance issues, but some wealthy folks buy up the empty tickets to get the game shown on TV to get around the NFL blackout
All 3 Florida NFL teams (MIA, Tampa Bay, JAX) all have serious attendance issues. With JAX....you can actually find cheaper tickets than it costs to park your car (25-30 dollars)
All pro franchises are finding out their ticket prices, parking, and concessions, are too high. People are just going to stay home instead of going to the games
And...this “deflation” with pro sports will eventually happen to other things
Deflation, supply and demand, FEAR. It’s difficult to say why, but people are being more frugal. This will not change until consumers feel like their jobs are safe. I don’t see that happening any time soon.
For those with money in the bank and/or a recession proof job, this is a great time to ensure future comfort.
The feds are going to hand banks $40b a month to prime the pump, BUT the banks do not want to take on risky loans, so there will be little demand for this new, boundless supply of greenbacks. This could push mortgage rates to historic lows for people who do have jobs and/or are not upside down on their mortgages.
Looks like Ben is going to help the rich get richer.
50-60 inch TV’s and a case of beer keep people home
>>50-60 inch TV’s and a case of beer keep people home<<
Just like movies. I haven’t been to a movie theater in over 10 years.
I just moved from L.A. where there are no sports but I spent time in sports towns. I saw some NFL games there but for the most part the games are better to watch from home.
The NFL needs to convince people the experience of going to a game is worth the hassle.
Ben is stealing the value of cash in hand. He is no friend to anyone but the bankers holding bad mortgage debt from parties who were not credit worthy. We are all left holding the bag. Finding a place to preserve the present value of your cash is difficult.
It’s part of Obama’s “War on the retired”.
Going Galt nationwide.
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