The Price Is Wrong

The Price Is Wrong

The Price Is Wrong

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The stadium scene.
Feb. 8 2001 11:30 PM

The Price Is Wrong

Since 1991, ticket prices for the four major professional sports have risen 80 percent, four times faster than the Consumer Price Index. The average NFL seat has gone from $25.21 to $48.97. The average NBA ticket is now $51, and the average NHL ticket is $49. Those prices keep many fans at home, but for businesses the cost of going to a game is less onerous.

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That's because individuals and companies can deduct half the cost of a sports ticket from their taxes, as long as business is discussed before, during, or after the game. There is little that government can or should do to reduce ticket prices, but it shouldn't be propping them up. It's time to eliminate the business tax deduction for sports tickets.

Congress reduced the deductible on sports tickets to 80 percent in 1986, and in 1993 the write-off was further lowered to 50 percent. Luxury-box deductions were restricted to half the cost of a top box seat plus reasonable food and beverage expenses. Obviously, those cuts in the deduction rate didn't reduce ticket prices. And fully ending the write-off would not necessarily lower prices, either. But it couldn't hurt. Most likely, eliminating the deduction would either slow the growth of ticket prices, or it would have no impact. The latter result would underscore the superfluousness of the deduction.

The industry argues, correctly, that high ticket prices are a result of the extremely popular product it provides. But the government should not be stimulating that demand. Pro sports already receive special antitrust exemptions and stadium construction subsidies. Do taxpayers need to chip in for the price of admission, too? Team owners also defend the rising prices by noting the need to meet their soaring player payrolls. But again, that vicious cycle should not be abetted by the U.S. tax code. The deduction is a textbook example of a law that provides concentrated benefits to few while distributing costs among many.

President Bush, the former owner of the Texas Rangers, would gain new fans if he struck out a tax break that benefits his former industry.

John Solomon, a New York-based journalist, writes often on sports and politics.