Thursday, September 26, 2013

Beyond zero? (not a Fed funds rate story)

What is the most important thing we learn from economics? High on the list would be the idea of consumer sovereignty. That goes with the idea of the invisible hand.

Consumer sovereignty leads us to the idea of subjective choice and the conclusion that consumers evaluate options in consumption in their own personal ways.  Actually, they trade-off the various (many) aspects of any consumption choice.

This is why we say that judgments of "good" vs. "bad" substitutes are in the eyes of every beholder.

This is all old stuff but it comes to mind when one sees "College Football, Minus the Students" in today's WSJ.

The scene at home football games here at the University of Georgia is almost perfect. The tailgate lots open at 7 a.m. Locals brag of the bar-per-capita rate. The only commodities in greater abundance than beer are the pro-Bulldogs buttons that sorority girls wear.

There's just one problem: Some students can't be bothered to come to the games.

Declining student attendance is an illness that has been spreading for years nationwide. But now it has hit the Southeastern Conference, home to college football's best teams and supposedly its most fervent fans, giving athletics officials reason to fret about future ticket sales and fundraising.

As it turns out, Georgia students left empty 39% of their designated sections of Sanford Stadium over the last four seasons, according to school records of student-ticket scans. Despite their allocation of about 18,000 seats, the number of students at games between 2009 and 2012 never exceeded 15,000
Winning isn't even necessarily a solution. The average student crowd to see last year's Georgia team—which finished the season ranked No. 5—was almost 6,000 short of maximum capacity. Even at Alabama, 32% of student seats went unused by students between 2009 and 2012, when the Crimson Tide won three national championships. Alabama coach Nick Saban wrote a flattering letter last week in the student paper to recruit students back.

Georgia officials have been so concerned by student attendance that they reassigned 2,000 seats previously reserved for students to young alumni before this season. "It was a significant hole, and it was very noticeable," Georgia athletic director Greg McGarity said. "It was way too obvious."The inscrutable behavior of 18-to-22-year-olds is actually understandable in this case: For students today, there are more reasons than ever to skip the game.

The cellular reception at the stadium is bad. The nonconference schedules these days are worse. And the high-definition broadcast at home (or at the frat house, the bar or wherever) is gorgeous. The result is students are focusing on the few marquee games—like Saturday's matchup of No. 6 LSU and No. 9 Georgia—at the expense of others.

We have options as never before. Being at the bar (or wherever) in front of a large HD screen with closer rest rooms, perhaps a larger selection of beers (and more), often at lower prices (and no limits) than at the stadium appeals to many. Add better smart-phone reception, a controlled climate and much more and we see the results. Video on demand will only get better and cheaper.

So the biggest straw man is the thought that there is nothing like being there. For some, yes. But this is a moving target.  Attitudes change.  Many already have.

Dropping the prices of stadium seats my not end at zero.  Perhaps it might be a good idea to pay people to attend and fill those empty seats. That would make for a great looking stadium spectacle -- for all those watching on their big-screen or small-screen devices.