Friday, February 20, 2009

Someone Finally Getting It

I have written in the past about ticket scalping. I see nothing wrong with it, yet in many locales there are laws against it. Why is this? Simply because a team significantly under priced their ticket for the current market. And had enough political muscle to deny people to sell their private property (ticket) to make money on that certain team. Of course, it is OK for the team to do it themselves, but not OK for you to do it.

When you have season tickets, especially in football, you automatically may under price - or over price - your late season games. If you have your season ticket priced at X and your team is in the playoff hunt late in the year and have an important game with a division rival, the true worth of that ticket at kickoff for that game is more than likely X + Y. Also, any game with certain teams with an insane fan base is always worth X + Y, such as the Steelers and Packers. Or if you like college, Florida, Oklahoma, and many others.

Conversely, if you price a season ticket at X and stink up the joint for the whole season, the market for those tickets is almost always X - Y (again, this doesn't usually affect value of certain teams, mentioned above).

Football has a lot of teams that sell out every game and there are very few games to start with - only 8 regular season games per team. Baseball is not so fortunate. 81 games over six months = the need to generate a lot of walk up sales, especially when it is cold, or during the week, or when the kids are still in school. Not to mention the fact that many, many teams are totally out of the playoff picture by halfway through the season. In football, if you are 3-5 at the halfway point, you still have a shot at the playoffs. In baseball, that same winning percentage at the halfway point gives you a record of approximately 30-51 and virtually zero chance of making the playoffs. Attendance will decline. Especially if the Pirates, or Royals, or some other crap team is in town.

But the Cleveland Indians are doing something that every team should do, except maybe the Yankees. Variable pricing. The Brewers started doing something like this last year, as they upped the price for the Cub games at Miller Park. It worked - the place was still sold out for every Cub game, and there was still a dramatic influx of Cub fans from Chicago that came to Miller Park. Through statistical analysis the Indians have tried to figure out what keeps fans away (cold weather, rain, weekdays, crappy opponent) and tried to adjust their prices. Very interesting stuff and I would imagine they will be successful putting more butts into the stands for those games where they would usually have very few. Everyone likes a bargain, and if you have empty seats, why not give them away for a fiver and get someone there to buy parking, hot dogs, beer and whatever else? Better than zero.

3 comments:

Carl from Chicago said...

The Cubs and Sox both use a limited form of variable pricing. The highest price Sox tickets, for example, are the Cubs / Sox series. Then they also price the Yankees / Red Sox games higher.

Cubs do the same thing.

Discounts also for some of the early season games and Monday nights.

I don't think that the differential is enough to impact decisions that much. For example they could probably price the Cubs / Sox games at 5x face value and still sell out.

They also tweak their game packages. They used to have an 11 game package for the Sox, you could pick certain days of the week, and maybe one of the cubs / sox games. They seem to change the rules on those every year.

For the Cubs, pretty much everything sells out right away always, so I guess they are just trying to figure out what the market will bear overall.

Dan from Madison said...

Cubs and Yankees are total outliers to this, and maybe the Red Sox too, as every ticket for every game is pretty much sold at the beginning of the year. That is why the Cubs scalp their own tix.

Interesting to hear that the Cubs and Sox use variable pricing wrt to certain games. If there is no sellout (usually Sox, not Flubs) they should do the inverse, and discount the Pirates/Royals/whatever other suck team series. And they should seriously discount the early season frigid snow games.

johnnyj said...

Well, gentlemen...There are plenty of seats available in Seatown...Get 'em while they're HOT...

-I guess living in a city with "looser" teams doesn't suck so bad...(if they keep the loyal fan base)...