NBA Ticket Prices

Perhaps the biggest profit margin stems from the correlation that the more fans that attend NBA games, the more they can spend on a player. It is well known that if an athlete is being paid a higher salary compared to his fellow NBA players, than he is most likely a superstar. Keeping this in mind, fans are willing to pay that much more to witness the skill and drive an amazing athlete demonstrates. Thus when superstars such as LeBron James, Steph Curry, Kobe Bryant and many more play in their home cities or visit other teams, ticket prices tend to be higher than usual.

According to The New York Times, "the league's owners will soon be reaping the benefits of a new television contract that will pay out $2.66 billion a year, nearly triple the amount of the current deal." This new television contract will result in the player salary cap being increased by millions which will most likely be followed by an increase in ticket prices.

I believe that this television contract will result in the NBA targeting a bigger audience which will lead to an increase in consumer demand. Due to the relationship between supply and demand, and in this case, demand most likely being far greater than supply, the NBA can risk setting higher than normal ticket prices and still achieve sold out crowds and higher revenues.

Do you think that the NBA will substantially increase ticket prices once the salary cap increases?

Sources:

Schonbrun, Z. (2015, February 12). N.B.A. Is Having an All-Star Party (and You’re Not Invited to the Main Event). Retrieved from The New York Times: http://www.nytimes.com/2015/02/13/sports/basketball/nba-is-having-an-all-star-party-this-weekend-and-youre-not-invited.html?_r=0&module=ArrowsNav&contentCollection=Pro%20Basketball&action=keypress&region=FixedLeft&pgtype=article