Teams in the NFL contribute all their revenue made off ticket sales into a pool, which is then divided evenly between the 32 teams. Despite not coming close to selling out in their temporary home, the Los Angeles Rams contributed more than any other team last season.
The Rams contributed a league-best $27 million to the NFL ticket revenue sharing pool for the 2016-17 season. What’s most remarkable about the Rams’ accomplishment is that they were able to generate that revenue despite being in a temporary home that would be considered outdated by most standards.
The Los Angeles Memorial Coliseum served as the Rams’ home in 2016-17 and will continue to do so until the team’s new facility in Inglewood, California, is completed. The nearly-94 year-old stadium has a capacity of 93,000, though the Rams closed that down to 80,000 for their purposes. It ties AT&T Stadium in Arlington, Texas (the home of the Dallas Cowboys) for the fourth-largest capacity in the NFL and is the oldest stadium currently in use by an NFL team.
Conventional wisdom says that a large capacity means that charging a premium price for tickets will be difficult. It’s simple supply and demand. The more of something that exists, the lower a price consumers will be willing to pay to acquire it.
In 2016-17, Rams tickets sold on the secondary market for an average of $187 dollars in 2016-17. That was an increase of 76 percent from the team’s final season in St. Louis. Despite the increase in price and a 4-12 season, the Rams ranked third in the NFL last season in total attendance.
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The Rams took advantage of three factors to make those sales: scarcity of the product, familiarity with the product, and market demographics.
While seats inside the Los Angeles Memorial Coliseum were available in abundance, NFL games within the Los Angeles market were something that the Rams had a monopoly on. Football was available elsewhere, as the team shared the venue with the USC Trojans, but that’s on a collegiate level. Only the Rams were delivering NFL football to the most populous sports market in North America.
The Rams also took advantage of familiarity with the brand. The Rams played regular season games in the exact same facility as recently as 1994 (when the team also went 4-12, ironically enough), meaning that all residents of Los Angeles born as recently as the late 1980s were familiar with the team in the market. Reviving the brand after 22 years of absence also proved the truth of the moniker, “absence makes the heart grow fonder.”
This is the same market that pays a premium price to attend Los Angeles Lakers games just to see and be seen. Expendable income is at no shortage in Los Angeles, and it’s only growing. The median per capita income in the city grew by almost 46 percent from 2000 to 2015.
In summation, the Rams were able to get a much higher price for the tickets they sold because they were in a market that supported that price increase. Whether the franchise will be able to make such a large contribution in future seasons, when it will share the market with the Chargers, remains to be seen. For now, however, the Rams seem to be having some success in Los Angeles.