Ticket pricing: Let’s get creative, people
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The Hardball Times found this 8/28/2007 on www.hardballtimes.com [flag] |
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MLB
Comments (11)
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vagennaro Rush tickets is an interesting idea, but I'm not sure it would help the Pirates or Marlins. Since they have excess capacity all the time, I think it would make it more difficult to sell advance tickets. Many would defer their purchase until the day of the game when the rush (1/2 price) tickets go on sale. There is also an element of valuing the "brand"...meaning, that if tickets (or any consumer brand) are always "on sale", it can de-value the brand. -
gotribe rush seats only work if the team is getting a cut of the concession and parking fees paid by the consumer. if this practice is adopted throughout the year, fans may wait until the seats go for sale at the reduced price rather than pay in advance. say for instance, a ticket sells for $20. the rush price may end up at 8. the ticket buyer would have to go to three games before the team begins to make money on that ticket. with revenue sharing and everything else going on in baseball, the team would rather sell one ticket at $20 than two tickets at $8.
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johnmeister I really don't want teams to employ these creative prices to ticketing. If they do, it locks poor people out of good games. Right now a poor person can pay $18 dollars to see Yanks/Red Sox at Yankee Stadium. Why should that change?
Why should free market policies be used for baseball tickets when baseball has an anti-trust exemption?
That's the price they pay for the anti-trust exemption: artificially cheap seats. It benefits the public and it benefits the teams. Everyone wins.
IF you employ free market pricing when the product is not subject to free market economics (thru the antitrust exemption), the only people who win are the owners.
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vagennaro John...you make some good points and I could not disagree with you on the antitrust exemption. Two points...first, I would almost always exempt the lowest price tickets (bleacher seats, upper deck OF, etc.) from any of the premium pricing practices, for the reason you mention...teams must make their games accessible to all fans. This strategy is not about the 10,000 cheapest seats at a ballpark. Second point...fans are already paying premium prices--in the secondary market--I'm just suggesting that teams capture more of that rather than giving it to scalpers or Stub Hub. The reality is that the best seats at baseball games have become extensions of luxury suites--they're dominated by corporations willing to pay a lot more than face value.
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johnmeister Vince,
Then you and I disagree on what percentage of seats should be made affordable to the public. The 10,000 cheapest seats would only be about 20% of the Yankee seating. As a middle class person, I can afford the $50 it cost me to see the Yanks/Sox tonight. I could not pay $500 dollars my ticket would go for on Stub Hub.
So I would have to say at least 50% of the seating would have to be protected -- not 20%.
Additionally, in the secondary market, really rich fans are paying money to scalpers, Stub Hub and other fans. In this way, the rich fans who pay premium money for Yanks/Sox tickets end up subsidizing regular fans to go to Yanks/D-Rays. I have met a few people who have season tix and sell the premium games and go to less premium games. So these people would be cut out of the loop as well. These are the people who don't wear suits and don't leave in the 7th inning. These are the people who are not too scared to hang out in the Yankee neighborhood before or after the game and support local restaurants and pubs.
Furthermore, I don't see why a team as filthy rich as the Yankees (the team that I follow) needs to wring more water from the stone. They make tons of money. They do tons of nickle and dime stuff to make even money. For example, if the Yanks make the playoffs, you have to pay for all rounds of the post-season up front -- even potential game 7s! So a $50 regular season seat for 11 postseason games would be around $1500. And there are additional costs, like stadium, security and processing fees. Now the Yanks lose in the first round. Do they refund the money immediately? No. They sit on it while they "suggest" that you use the postseason money as a down payment for next year's season tix. Eventually you get a check around January or Feb.
If it sounds like I am bitter, it's because I am. I go to fewer games because of this kind of absurd behavior. And so I see no need to help teams try to capture more money -- unless the teams want to give back public subsidies for their stadiums for a start...
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vagennaro John--for an initiative like this, I think you need to divide MLB teams into two groups--the Yankees and the other 29 teams. Most revenue oriented intiatives have an entirely different meaning/impact when you place it in the context of the Yankees. I believe there are many mid-market sized teams that could add to their revenues, presumably to invest in talent and field a better team. Also, implicit in this idea...and I only touch on this point towards the end of the article...is my notion that the "baseline price" of most teams' tickets are too high. Teams (I'm generalizing) are trying to simplify their pricing by failing to differentiate it enough. I'm of the mindset that lower prices for some games (April-Tuesday-Tampa Bay) are in order, while prices are artificially low for other games. Again, I just think that teams should try to get more of the revenue that fans are already paying to see the games they produce.
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illgamesh Boo to this. Why make it even more difficult for people who don't make 6 figures a year to go to a game? -
John Beamer Vince -- this is a thoughtful article.
One thing you may be able to enlighten me on, which I don't know the answer to, is the extent to which teams can flex their pricing. My understanding was that there were fairly strict rules about the different tiers of ticket prices between seats and games.
Is that right or am I just making this stuff up?
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vagennaro Thanks, John--I'm not aware of any restrictions. There may be some local laws that limit a team's flexibility, but I don't think it's significant. In fact , I believe17 of the 30 teams premium price for opponent, albeit very modest premiums (except Tampa Bay, which is very aggressive). All in all, I would say about 27 teams have some differential pricing by game, but it's usually across only one of the dimensions that I discuss.
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gotribe vince-
the best thing for the teams to do is somehting that the cleveland cavaliers have done and create their own stubhub-type enterprise where the tickets are handled and sold through the teams. why pay the premium to stubhub when they could add a link through their team website where fans can buy and sell tickets? it would be a simple operation for the team's website design team and would generate revenue that goes right to the team. if the surcharge is even $3 per ticket, the team recoups even more per ticket than the discounted price of the ticket. this way, there is only perceived devaluing of the product. they take a cut of the profit on the ticket from the seller AND a surcharge from the buyer.......
chances are, too, that the fan buying a discounted ticket would not have otherwise gone to a game in the first place. if the team is getting a cut of the consessions and parking, this casual fan is contributing even more to the teams coffers.
thanks for the great writing.....
Mr. Gennaro,
Wouldn't teams like the Pirates and Marlins benefit more from something like rush tickets? You probably know what those are, but if you don't, it's where something like the symphony, which probably can't count on a big walk-up, puts its unsold seats up for sale at a discount two hours before curtain. I'm pretty sure the theory is, an unsold seat isn't making any money, so putting a butt in that seat at whatever price is a bonus. This would seem especially true at the ballpark, where a sold seat multiplies with concesslon sales etc. The tradeoff of, course, is that the buyer takes the risk the game (or the rush-ticket block of seats) will be sold out by the time he gets to the window. So there's still some urgency to buy at face value before you get to the ballpark.
It can't be hard to do if it's already being done.
I don't see how anybody can lose here. The team fills a seat that would have gone empty, and the fan gets a seat at a discount and is probably so happy about it that he spends more at the beer stand.
Your thoughts?