Is the NFL "inelastic for demand" in regards to it's officials?

Is Steve Young right in his assertion that the NFL is inelastic for demand with regards to it's officials?

I believe that we first need to define what it means to be inelastic for demand. As referenced in Chapter 3 of our textbook, inelastic demand essentially means that the demand for a good will be unaffected when the price of that good or service changes. In this case, "price," represents the difference in the officiating between the normal officials and the "substitute officials."This is why Steve Young made this comment. He said that viewers of NFL games will watch whether the officiating is good or bad. It can be assumed that the league knows this, and that is why they are taking such a hard stance on the labor issues in the referee's holdout. So is Steve Young right? Is the NFL inelastic for demand? Will viewers of NFL games watch even though the quality of the games is diminishing? Will the NFL start to feel pressure that is being applied by the players, coaches, and commentators to quickly rectify this situation? If they do not come to terms quickly, will reputation of the NFL be seriously damaged?

I tend to agree with Steve Young that the NFL is inelastic for demand. The NFL is so beloved as a franchise that  lower quality officiating will not impact the demand for NFL games. Viewers will continue to buy tickets and watch games on TV no matter how bad the officiating gets.


Dave Tufte said...

Michael: make that link look pretty or I'll take off more points! At it is you get 94/100 for a word missing from a sentence.

I love this idea. We all knew Steve Young was smart, but this is smart and insightful. I think he's absolutely right: the demand is inelastic with respect to refereeing. The NFL can supply a lower quality product (essentially a shift of supply downward) and not see much change in the equilibrium quantity at all.

Patrick said...

I also agree with Steve Young that the demand is inelastic when the "price" is refereeing. Fans are upset about the poor officiating but they will continue to watch and support their favorite teams and players as humorously shown by DJ Gallo.

If the "price" was the level of play on the field, then I believe the demand would be elastic. For example, if the NFL decided to use replacement players last year during the lockout, demand would have dropped significantly.

Dominick said...

I agree with Steve Young as well, but I would not go as far as to state: "no matter how bad the officiating gets." Since the NFL tends to be inelastic, the officials would have to reach an extreme pinnacle of making bad calls in order to turn fans away, but that limit does exist somewhere.

I think the primary reason for this inelasticity is due to the NFL holding a "natural monopoly." The degree of elasticity rises with available options. If fans were to turn away from the NFL due to some "bad calls" (which still exist with the regular refs; now that an arrangement has been reached, it's not like games will now suddenly be called 100% correct...) what are their alternative options? The NFL appears to expel a great deal of effort in scheduling games on different days than collegiate ones, and that doesn’t even address the degree to which college games are a valid substitute to the NFL. I would actually argue that college football is a relatively weak substitute. Thus, consumers will continue to participate in the NFL due to a lack of a legitimate alternative professional league.

Dave Tufte said...

Patrick gets 50/50. Dominick gets 47/50 for misuse of a word.

Patrick: it's OK to think of the quality of refereeing as part of the "price". You might need quotes outside an economics class, but inside one we should all be used to thinking of the price as including more than money: waiting times, quality, and so on.

Dominick: I think you're mostly right. The NFL's market power is what makes demand inelastic, but it is by no means a natural monopoly. The USFL case back in the 80's hinged on the NFL using unfair tactics to preserve their market, and the judge agreed. A natural monopoly wouldn't have to to do that.

FWIW: The NFL plays on Sundays so an not to compete with college ball. This is because college was the dominant gram until the 1960's. Also, in the early days of the NFL, players played college on Saturday and pro on Sunday if they could do it without getting caught.