Pimento Profits: The Economics of Augusta Concessions

For years, Augusta National has defied normality when it comes to how they handle concessions at the Masters. The low prices have not only pleased those in attendance but boosted the overall brand of the four-day tournament.

After a discussion with my co-host earlier today on Overtime with Jeff Thurn and Bert, I figured it may be a good time to take a look at what drives the Masters to be different.

For what it's worth, let's just say their current prices are far from ordinary. Below is an image of their menu, not from 1991, but from 2021!

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Per a recent New York Times Article from 2021:

Economists believe the enduring bargain, at odds with an era of sticker-shock prices at many athletic events, is not merely a matter of Southern hospitality. Instead, they see hard-nosed, soft-power genius: a thrifty way to cultivate the mystique that has helped make the Masters brand one of the most valuable in sports.

“They want to take you back to the days of Bobby Jones — the good old days, if you will,” said John A. List, a professor of economics at the University of Chicago, referring to Augusta National’s co-founder. “They haven’t followed prices, and they’re understanding that their real bottom line is over years. I think they purposefully don’t follow inflation and economics, and that makes the message even stronger.”

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“Economically,” said List, who attended the Masters in 2019, “I actually thought it was brilliant.”

Other sports leagues and individual franchises have definitely noticed not only the popularity of the prices but the willingness of patrons to pony up more when at the events:

The concept has slowly spread throughout sports. The Baltimore Ravens, San Francisco 49ers and Charlotte Hornets, among other professional teams, have rolled out their own so-called fan-friendly concession pricing initiatives, which have helped draw spectators into stadiums earlier and encouraged others to attend in the first place.

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Finally, the big question of if the Masters makes more than other events per capita? Well, that remains a mystery...

Exactly how much money runs through Augusta National is unclear, a multimillion-dollar mystery that satisfies a tradition of privacy...But whatever Augusta’s financials look like, they are almost assuredly helped by the simplicity of the club’s menu.

It's safe to say that the affordability of the concessions at the Masters in Augusta has increased the popularity of the event, and paid dividends to its branding and beyond.

We'll see if more friendly concession prices are on the horizon elsewhere, should other major leagues and franchises take notice of what goodwill can do when it comes to support and patronage at events.

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Source: The New York Times

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