The wonky reason why deflation appears to be hitting sports tickets
The question of whether tickets for sporting events are getting cheaper or more expensive is complicated to answer.
What's going on: According to the official Consumer Price Index, there is major deflation happening in this category: The cost of admission to sporting events fell 18% (!!) in October from the same time last year. But private sector data suggests the opposite.
- Chris Hartweg, the publisher of Team Marketing Report, which compiles a "fan cost index," tells Axios that average NFL ticket prices are up 5% from a year ago. For MLS matches, average admission rose 7%. (The U.S. Bureau of Labor Statistics tracks minor league games, too.)
The intrigue: The early days of the pandemic may explain the disconnect.
- When the world shut down, it was difficult for the government to collect data used to compile CPI. Survey response rates plummeted.
- In the case of sports, it was especially hard. Many games were held without live spectators, so no tickets were being sold.
- Data was being collected from a smaller sample, and missing data was substituted with alternate values.
- Any outsized moves — say, an instance of ticket prices being slashed to attract COVID-weary fans — would affect the index more than usual. (The government didn't publicly report the index at all for months in 2020 because the sample was too small.)
When more data was ultimately able to be collected as the world reopened, it was compared to stale price quotes the government had in hand.
- The result was a massive pop in the index last year, which may have overstated the reality. Now we're lapping that period, and prices appear depressed.
- "What it is reflecting is this catch up, if you will, for prices. Those they're collecting reflect the reality on the ground, but they are being compared to a reality that existed a while ago," says Omair Sharif, founder of Inflation Insights (who helped Axios get to the bottom of this).
The bottom line: This sporting events subcomponent of CPI is tiny, and not terribly meaningful to the broader index. But it does reveal a fascinating story about how government data is still warped by the pandemic shutdown, two years on.