How are FIFA World Cup concession prices set?

[00:00:00]a lot to cheer about with the Canadian men's first World Cup win. From Toronto to Los Angeles, a growing number of FIFA fans are frustrated over the cost of food and drink at the games.

[00:00:10]>> Two hot dogs and two soft drinks.

[00:00:13]Okay, as a combo. Two weenies and two Cokes, $57.

[00:00:18]I think maybe we'll just all say it together. All at once, we'll just say, "Wow, that's ridiculous." And we'll just move on because I can't >> So, you might have seen posts online like these showing prices at different stadiums. At Toronto stadium, for example, fans are paying nearly $15 for a footlong hot dog. In Vancouver, a footlong costs you $13. So, people have been wondering, who sets the prices?

[00:00:37]Where does the money go? What's the breakdown? So, we reached out to find some answers for you. For closer look this morning, we're joined by Victor Matheson, sports economist and professor of economics at the College of Holy Cross. Victor's also a former referee for Major League Soccer. Hey, good morning to you. Nice to have you with us.

[00:00:53]>> Good morning. Uh, obviously, a big win yesterday for Canada.

[00:00:56]>> You I'm so sorry. I couldn't hear you, Victor. Could you repeat that for me?

[00:01:00]>> So, big win yesterday for Canada. So, uh, happy to be here.

[00:01:03]>> Yeah, listen. How did you celebrate?

[00:01:06]>> Uh, well, uh, we were watching, uh, with everyone else, uh, the World Cup. There's been, uh, there's been complaints in the in the run up to the World Cup for all sorts of reasons.

[00:01:15]But again, like usual, once the games actually arrive, it seems like there's a lot of joy coming out of everyone.

[00:01:21]Especially Canada after, again, couple good results here in, uh, their first job hosting the men's World Cup.

[00:01:27]>> Right. We've got a lot to smile about and a lot to cheers about. Speaking of cheers, let's talk about food and beverage at the games. Looking at the food costs between Toronto and Vancouver stadiums, there is a bit of a difference. So, what people are wondering is, who sets these prices?

[00:01:41]>> So, they're set at stadiums, uh, with basically three things in mind. There's individual vendors that are often contracted out by the stadium. There's the stadium itself, and then there is the entertainment act coming into the stadium. So, there's actually three people in in charge of this. Uh, usually the stadium is the one who's uh really in charge here. They uh they look for vendors who are willing to provide various things at stadiums. Uh sometimes we provide that themselves.

[00:02:09]Uh and from that they get a a portion of those uh of those revenues that are generated. And then when individual acts come in like uh you know, national soccer teams from Canada, there's an agreement between them about whether there will be individual concession uh concessions being shared as well. And this varies from uh league to league, uh from stadium to stadium, uh and from event to event.

[00:02:31]>> All right. I So, basically, there's a partnership that's made with the uh suppliers and with the stadium. And then FIFA will get a a portion of that. We reached out to FIFA. They gave us this statement. It says, "Contrary to previous FIFA World Cups, where a central concessionaire model was in place, FIFA has retained the existing concession operators at each FIFA World Cup 2026 venue. Food and beverage pricing at FIFA World Cup 2026 stadiums is broadly in line with pricing at regular events held at each respective venue. As a result, prices may vary between venues. So, can you give us just a clearer sense, Victor, of how the profits are divided?

[00:03:07]>> And so, typically, what happens is a individual vendor will come in. Uh they will set prices in line with with uh suggestions by the stadium as well. So, for example, you're going to have the same beer prices across all the vendors in a in a stadium, typically.

[00:03:23]Uh then out of that money, uh the revenue that they generate there, they'll give a percentage of that uh revenue to the stadium itself. Uh often that percentage is fairly high. It might be a 30% of total gross revenues. Uh they also may pay a rental fee for the uh for the venue as well. So, that money goes back. Uh whatever's left over, that that operator then um retains on their self. The stadium itself then uh from the revenue they're generating will share it or not with the uh individual teams that or events that are coming in.

[00:03:58]So, for example, in the NFL, all those concession monies stay local to the individual team. In other events, that that money is shared with the folks coming in as the entertainment.

[00:04:12]>> Okay. There seems to be an exception to all of this. I want to ask you about it.

[00:04:16]Atlanta's Mercedes-Benz Stadium, in for example, a classic hot dog there is $2. Pretzels and popcorn are $2. Bottled water is only three bucks. $2 Everything is five bucks or less.

[00:04:30]How are they able to keep their prices so low? And is it more profitable?

[00:04:34]>> So, that's the question. We don't know whether it's more profitable or not, but the owner of the Falcons, that's the NFL team there as well the Atlanta MLS team, has said let's take let's take a chance on this and let's make our fans happy with cheap concessions and see whether that actually generates more concession sale sales and whether that generates a lot more repeat business. So, Atlanta has done something different than basically every other team in the country. They've said, "Hey, instead of having sky-high prices, and of course FIFA's right, you know, go to any event, right? Go to a Blue Jays game, go to a Canadiens game, and you're going to have wildly expensive prices.

[00:05:16]Let's try a different tack here in Atlanta and they're trying cheap food and the fans love it and apparently it's fairly successful as well. So, we'll see if that catches on in other stadiums around the United States and Canada."

[00:05:28]>> I understand that you are on your way to you're in Boston right now. You're on your way to the game a little bit later in the day. Listen, prices for drinks are a lot less at the bars and pubs outside the stadium than in. So, how much are you expecting to spend today, Victor?

[00:05:41]>> Well, my family went to Iraq, Norway on on and my 21-year-old, I should be clear my 21-year-old daughter paid $20 for a beer there.

[00:05:52]So we're expecting that but everything we've heard about the Scots so far here in Boston says they'll be more than happy to pay those prices especially if they get a good result tonight against Morocco.

[00:06:05]>> All right, go Canada go. Victor Matheson is a sports economist and professor of economics at the College of Holy Cross.

[00:06:10]Thanks for joining us from Boston this morning. Have a great weekend.

[00:06:13]>> Thank you very much.