Game theory of concessions

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I may just be a frugal college student, but stopping for fast food on the way to a sporting event is a must. There’s simply no way you can convince me that buying a hot dog at the stadium is worth it when I can swoop through the drive-thru to get a Chick-fil-A sandwich combo meal for the same price.

It’s obviously not as convenient, but the avoided blow to the wallet is worth it to me. To others, however, eating and drinking at the game is part of what defines the experience. But what if I told you that, instead of spending $25 on yourself for a mediocre meal and a beer, you and a friend could spend the same amount and eat enough to stuff your belly, while still having some spare change for dessert?

In 2017, Arthur Blank, the owner of the Atlanta Falcons and Atlanta United FC, implemented a revolutionary fan-first pricing model — which features the lowest food and beverage prices of all major American sports — at the then-brand new Mercedes-Benz Stadium. Immediately, it drew the attention of national media, as stadium concessions have always been known for being notoriously expensive.

Some highlights of the groundbreaking menu include: $2 unlimited refill fountain drinks, $1.50 hot dogs, $5 draft beer and a $6 chicken tender basket with fries. That’s more than enough food for one person, and it’ll set you back just $14.50 — yes, all of those prices include tax. Good luck finding that much food for that cheap anywhere in the Bay Area, let alone at a professional sports game. They stick to their values too, keeping their base prices for the Super Bowl, College Football Playoff and other major stadium events.

There has to be a catch, right? Surely the venue must be losing a ton of money? Actually, the Falcons saw total concession revenue increase by 16% in the first year with the new model, despite food and drinks being more than twice as expensive the year before, when the team played in the Georgia Dome. It’s one of the most basic rules of economics: decreasing price causes an increase in quantity of the good demanded.

Between buying a ticket, commuting to the stadium and paying for parking, game day experiences can get egregiously pricey. Fans are already spending enough money on the tickets themselves, and knowing they are about to overspend on food and drinks only increases that sour taste.

In an age where watching sports from home is easier and more engaging than ever, it is people like Blank who are vying to keep fans in the seats. The Falcons are being completely transparent about the model too. Many colleges and professional teams, such as the Baltimore Ravens and Detroit Lions, have reached out to the Falcons for advice on remodeling their own concession strategies.

Just like movie theaters and airports, it is easy for stadiums to monopolize and jack up prices, but understanding the mind of a consumer has allowed the Falcons to provide a win-win scenario where both parties benefit. Plus, the money that fans don’t spend on food may be used toward things like apparel and merchandise, which benefits the team even more.

I cannot emphasize enough how refreshing it is to see the fans actually put first. Many teams say they do, but actions speak louder than words. The term “affordable” is used quite loosely these days, but much of the menu at Mercedes-Benz Stadium is truly cheaper than comparable foods I buy at regular Berkeley restaurants.

While it will likely be a slow process, it is time for more teams and stadiums to start following the trend. Even if it means sacrificing the absurd sales margins, creating a superb fan experience is worth the trade-off. Put the fans first, and the money will follow.

Shailin Singh covers football. Contact him at [email protected].