For Profit Business Adopts Capitalism
The Mariners announced today that they’ll be adopting a variable priced ticketing system, where seats at certain games cost more than others and people get a discount for purchasing early. The headlines, of course, will simply read “Mariners raise ticket prices”, and articles like the one in the P-I will make useless connections between the players salaries and the price of admission to one of their games, but that’s not the story here.
The Mariners, just like Microsoft, Boeing, Starbucks, or whatever other profit minded enterprise you’d like to pick, are in the business of maximizing revenue. Pricing based on supply and demand is, of course, a basic tenet that every one of these companies use. The sports world is just finally catching up, eliminating inefficiencies in their ticket pricing and putting basic capitalism to work for their businesses.
This isn’t the Mariners raising ticket prices because they’re raising payroll, or those greedy players costing you more money to take your family to the game – this is the Mariners charging more money for tickets because people are more than willing to pay the price to attend games.
Despite what you’re going to be told, there is no link between the team’s payroll and ticket prices, and the raising of ticket prices doesn’t mean anything in relation to the roster. It simply means that a for profit business is figuring out ways to make more profit by applying simple capitalistic strategies to selling its product.
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Duh.
No kidding. Plain and simple Econ 101 (which, given by most people’s comments, should have been a required high school course….).
Hopefully, this will limit the attendance of Red Sox Nation during Mariners-Red Sox games.
“Hopefully, this will limit the attendance of Red Sox Nation during Mariners-Red Sox games.”
It seems more likely to me that this would increase the attendance of Red Sox Nation, given that they’re more likely to overpay for 3 games a year than the typical M’s fan who just wants to go to games in general. Then again, I suppose the trendy fan who just wants to make an appearance might also overpay, thus increasing the number of “M’s fans.”
The great thing about the Hickey article, though, is the snark. Check out these juxtapositions:
and
Hee hee hee. Okay, but seriously
This is ass. I know, it’s seven games now, and they can charge whatever they want, it’s a business, but if you think it’ll stay only seven games, well… it won’t.
The variable pricing puts a huge incentive in there for scalpers, too — if you’ve bought a strip of seats for $40/each and the day-of-game price is $65, you can sell them for below-face… you see the problem. Ugh.
Or, for the price of one lower box ticket, you can now put your season ticket deposit down for the new MLS team. I’m just saying.
Actually the big story is how the Mariners just don’t have a clue. Their season ticket base was at 27,500 in 2002, but they’ve lost tons of season ticket holders every year since (chalk this up to fans pissed off when they refused to make deadline moves in ’02 and ’03 — thanks for Doug Creek and Jose Offerman though — and fans pissed off by the losing seasons in ’04, ’05 and ’06. The season ticket base was around 14,000 last year.
Instead of trying to win back some of the lost season ticket holders now that they’ve had a winning season again (whether it was a mirage or not) they’re trying to make a money grab. They’re so pissed off that they weren’t able to raise ticket prices after the three losing seasons that they just had to raise ’em for 2008. Way to win back those disgruntled fans!
And the continued raising of the single game prices is just incompetence. They think if they raise the single game prices artificially high they’re gonna con people into keeping their season tickets. Their most loyal customers (the season ticket holders) are canceling and not willing to pay $38 a game so they think the casual fan is going to pay $60 a ticket? It didn’t work in the past and it isn’t going to work having the single game tickets be $25 more than the season ticket price. All it does is make sure that nobody buys any tickets at the box office when the team is losing. Are they so sure that this turnaround of ’07 is gonna continue that they’re willing to see ticket sales decline even more than they did before?
This team will never win anything so long as Armstrong, Lincoln and Bavasi are around.
I don’t get why they would make tickets more expensive on the day of the game. Wouldn’t that discourage impulse purchases?
I would think that the more rational approach would be to cut prices on gameday, since otherwise the seats go unsold and the revenue is zero.
Then again, I suppose the trendy fan who just wants to make an appearance might also overpay, thus increasing the number of “M’s fans.â€
Those fans were wearing Yankee gear a few years ago. They’re wearing Red Sox gear now. They’ll only be “M’s fans” if the M’s have been winning. And they’ll be no less obnoxious in their personal behavior.
I would think that the more rational approach would be to cut prices on gameday, since otherwise the seats go unsold and the revenue is zero.
Yeah, exactly. They’re selling a perishable product. Just like you can get deals on hotel rooms late at night, since the room is going empty and their fixed costs don’t change (unless they’re really anal about their housekeeping accounting). They should be trying to get more butts in seats, particularly since it looks better on TV and those people might buy concessions. The people who truely are exposed to market forces understand this: I’ve gotten tickets from scalpers in the Bronx and elsewhere at below face value by not buying until the first inning has started, and the value of their inventory has started to evaporate.
Of course, the M’s are also concerned about preserving the “value” they’re offering season ticket holders. How do they get any presales of that KC series if everyone knows the stadium is going to be half empty and prices are going to be dropping through the floor at game time?
2 – Doubtful. The casual Mariner fans who already see a ballgame as too expensive, and assume their team will likely lose, will want to go even less.
It is too bad the Mariners aren’t as good at finding ways to maximize their winning as they are at maximizing profit.
Maximizing revenue makes sense. To pair it with a steady decrease in product quality is dubious, though. You know what else happens in capitalism? Strikes. They are making a serious push to cause me to go on strike as an M’s fan, and the ironic thing is that the ticket prices really have nothing to do with it. I’d pay twice as much if I thought the team knew how to build a title contender.
The synergy of the ticket prices and the potential Silva signing is absolutely priceless.
Depends. Judging from my experience in ticket sales, impulse buying has shifted somewhat from day of event to web sales; having the ticket booth on your desktop/laptop has been conducive to more impulse buying from the web.
And fans will complain. And they’ll pay for tickets anyway.
That’s how it always goes.
I respect the Mariners’ business model, and their working of the clear demand of their product, which hasn’t really dropped all that much despite the leaner years that preceded last season.
8. Actually, many, many fans purchase their tickets on gameday, when they get to the stadium, and many of those fans make long trips into town to see the game, so the team has quite a bit of leverage to raise the gamday price. The one instance where you’ll see otherwise are high demand games that sell out, like the Yankees/Red Sox series or playoff games.
Hmm, I wonder how they will define “Premiumâ€. Probably when we play the Red Sox or NYY. Or will they decide “Premium†is any time Felix starts regardless of the team? Or maybe they will decide it’s when we play a team worse than us, so we have a good chance of winning?
I guess if it’s option one, then the people that will end up paying the most will actually be Red Sox and NYY (bandwagon) fans, rather than M’s fans. That’s kind of ironic in a way.
12- Agreed. Particularly for a more discriminating fan, internet sales is preferable to standing in a line hoping to score decent seats. Checking for the best available seats online before you leave your house is pretty appealing.
I live in Tampa, so most of what I have witnessed is from the lines to get in to the horrible dome. But most of the people I’ve witnessed buying day-of tickets tend to be bargain shoppers. They seem to be there for the promotional night, and are buying the cheaper upperdeck and outfield seats. If those tickets where to balloon in price that day, I think they’d have far fewer attendees.
Raising the day-of ticket prices might keep me from a game or two I might otherwise have seen. I could be an exception, though. I wonder if the Mariners think that raising the day-of price will increase advance sales, so that in the event of a collapse like last season, more people will be locked into tickets after the team tanks.
I still don’t understand why the view reserved outfield seats are the same price as the view reserved infield seats, but it’s certainly their prerogative if they want to keep pricing the tickets that way.
Every day of this increasingly pitiful offseason, I feel increasingly vindicated at having given up my 40-game package in Sec 129.
I think Dave’s title for this section should have been “For profit business adopts new model, scalpers rejoice”.
Or, maybe, “Profitable business on downward trend shoots self in foot, becomes candidate for the CNN annual 100 stupidest decisions in business list for 2008”.
Personally, I find the juxtaposition of being at the cutting edge of sports business / economics combined with near prehistoric techniques at player evaluation and roster construction to be downright humorous. If the M’s were as innovative in baseball decisions as they are in business decisions, we might actually be on to something.
20 – Precisely my thought as well.
This is beyond moronic. Charging “premiums” for the popular items is bad business – it makes people think they are getting ripped off. Instead, give “discounts” for the less popular items, then people think they’re getting a deal.
If they really felt like increasing ticket prices was important, and wanted to use differential pricing, they should have just raised prices across the board, then announced certain “bargain” games.
Just more proof that those who say the M’s don’t win because they focus too much on the business side and not the baseball side are wrong. The M’s don’t win because they make bad choices.
Speaking as a long-time Sox fan (damn you, Schiraldi)…
Screw it, I’m not paying.
I think “premium” games should be when Bloomquist is starting.
23 – Yes, you’ll pay. And if you don’t, plenty of other Sox fans will.
If you grew up adoring a team in their home city, and now are 3,000 miles away and only get 3 chances a year to see them, you’ll pay.
Its one of those things that pisses people off at the time it happens, but they forget about it later. If somehow the M’s put together another winning season, they’ll get away with it and laugh all the way to the bank.
23: 1) Sorry to say…but if the Mets hadn’t been so coked-up that year, they probably would’ve beaten the Sox sooner. 🙁
2) I absolutely DO NOT BLAME YOU!!! This “premium” pricing tier is actually quite common these days in professional sports…doesn’t mean I necessarily agree with it, though.
3) 🙂
BTW, LOOOVE the FO’s rationale on this…we’re “spending more on payroll”? C’mon guys, we all know the REAL reason — and another miserable year of HoRam crapping his pants every fifth day does NOT rationalize a $13 jack-per-seat hike for certain games. 🙁
I can’t be bothered figuring this out, but how much added money are the likely to earn with this deal? 40K seats * $15 extra * what, 20 “premium” games? = Carlos Silva, I guess.
I’m going to be VERY careful about paying ‘premium’ prices or increased prices for games that the 3 shitty-ass pitchers get on the mound.
Not. Worth. It.
If ‘premium’ was 4 dollars more for Felix kicking some ass, I might be more willing to open my wallet.
Re: the discount/premium. It’s just like Happy Hour or Early Bird specials. Then again, in Manhattan, selling something with a “Premium” has a certain cache. Who knows what the correct process should be.