Yankee attendance is down. Even though attendance is usually low in early April, mostly due to weather, per-game attendance is at its lowest levels since the new Stadium opened. (Hat Tip RAB)
If the trend continues, a lot of people will probably start to offer explanations for why Yankee Stadium attendance is down. The weather is bad. The Yankees failed to acquire a big-name free agent or trade target this off season. The new stadium isn’t as cool as it used to be. The economy is bad. New Yorkers are suffering from Yankee fatigue. I’m sure that creative people will come up with other excuses as well. I’m sure that some of these have some truth to them, but I don’t think that even the sum total of all of them is significant. I’d like to offer one simple explanation: elasticity of demand and prices.
The Yankees have been steadily ratcheting up prices since the new stadium opened, even after a very steep rise in prices when they moved in. In the short run, not a lot changes. Yankee fans pay more for tickets and eat the costs elsewhere. But over the long run, habits and behavior adjusts. We may watch more games on television. Instead of paying $60 for a not-so-great seat to a Yankee game, I may pay $60 for a pretty good seat to a Devils game, or put some more money toward a $160 Orchestra seat to see Jersey Boys. Or I may just decide that Yankee games are not worth the cost and save the money.
I’d like to add one important substitution effect that is unique to baseball: with fixed ticket prices, I may elect to only go to higher-quality games. For $50 on the primary market, I can buy the same ticket to a cold, April Monday-night Twins game as I can to a nice, warm June Saturday game against the Texas Rangers. That means that we can actually see an increase in the prices and quantity of higher-quality games, while simultaneously seeing record-low attendance for lower quality games.
To help illustrate my point, I graphed home-game prices for April and May from Stubhub. I took the highest minimum price for a game in each series.
You can pretty much get a ticket to see the Yankees beat the Orioles or Twins on the weekend for free. Minimum prices are $1 and 2$. No one wants those tickets. Prices increase a little as the weather warms up, and really shoot up on the weekends. Season ticket holders who bought 81 tickets without intending to go to 81 games are probably taking pretty big losses. Speculation, be damned.
I’d wager that if you compared these prices to previous years, you would see a big drop in the undesirable weekday games, but a much smaller drop or even an increase in the more desirable games. So don’t expect to be able to pick up cheap tickets for Red Sox games this year, even if attendance remains depressed.
This may sound all doom and gloom, but I think its good news for us fans. First off, if you’re as broke as I am, you’ll be able to attend Yankee games for cheap. Those games might be against the Royals, but I’m fine with that. I pay $20 for tickets to see the Nationals get killed every once in awhile, so Yankees vs. Royals is a big step up from that. Second, the Yankees will probably adjust ticket prices downwards over time, since the marginal cost of adding another person into the stadium is actually negative (that is, the Yankees would still make money if they filled 5,000 empty seats by giving tickets away, mostly from concessions), resulting in lower ticket prices for the rest of us.
One more thought: this whole ticket pricing scheme makes no sense at all. This is a problem created by fixed ticket prices for a seat over the whole 81-game home schedule. Why should the face value of a Saturday game against the Red Sox be the same for the same ticket as a Wednesday game against the Royals? One of these days, some baseball team (Update – Looks like several teams do it already to some degree) is going to adjust prices per game. Average ticket prices (and therefore, season ticket prices) would remain the same, but certain games will get much cheaper, while games against the Red Sox and Mets will be enormously expensive. This is also a good thing – the Yankees will make more money, and more fans will be able to see more baseball games. I’d be willing to shell out $50 for non-season ticket seats close to the field when the Yankees host the Cleveland Indians, and I’m sure some investment banker will be willing to shell out $500 for that ticket against the Red Sox. People selling their tickets on StubHub, on the other hand, will lose out, but I’m fine with that.
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Great post. I would like to point out that there are teams that price tickets based on the opponent in the season ticket context, including the Mets.
Really? I had no idea. My universe is limited to the Yankees and Nationals.
What do their price levels looks like?
http://metspolice.com/2010/11/02/mets-announce-2011-ticket-prices/
This is already done, is a form of “price discrimination”, oddly, its very much opposed, since people wind up perceiving the lowest price as the “true price” and everything above that, as price gouging (even though a team like the Yankees, the maximum price, would actually be the “true price”). Its not that rare, but not that common, and has caused a great deal of controversy, not just where it is applied, but even where its considered…
Orioles do this too. They call games against the Yankees/Red Sox “Prime” games and the cost of the ticket goes up like $6 or something like that
I know I mentioned this in our daily e-mail this morning, but to add to the discussion here, I would probably almost never go to the Stadium if I had to spend my own money on a game (pretty much any time I go to a game it’s because someone’s given me an extra ticket). Between the exorbitant cost, not to mention the fact that, now that everyone has high-def TVs in their living room, there’s a pretty strong argument for it being far more comfortable/enjoyable to watch the game from the comfort of your own home these days than trekking up to the ballpark, strategically timing when to go to the bathroom, paying a billion dollars for food and beers, and dealing with insane crowds leaving the Stadium and taking the subway home.
Don’t get me wrong, nothing replaces the experience of being at Yankee Stadium, but I certainly see the appeal of watching at home — especially in April, when the weather is pretty lousy. I was trying to convince my buddy to pick up a ticket to tonight’s game — as you noted, StubHub has tickets to tonight’s game for as little as $2 — and he doesn’t want to be bothered because of the weather (although in fairness, he also lives pretty far away from the Stadium).
You guys really know how to live up to your “Yankee Analysts” name. This is a very logical and well-researched post.
Dynamic ticket pricing IS the future for events tickets. Do a quick Google search on dynamic ticket pricing and you’ll find some really interesting stories of its success, especially with the San Francisco Giants. Lonn Trost claims it doesn’t make sense for the Yankees because they have such a large season ticketholder base, but as that adjusts down, I think even the Yankees will change their tune. Neil Best wrote about that last week:
http://snipurl.com/27praq
This is also an extremely common practice in the NBA. The Celtics do this constantly.
“One of these days, some baseball team (Update – Looks like several teams do it already to some degree) is going to adjust prices per game.”
I beleive that the Mets were the first to do this in MLB (and they did it at least 5 years ago – maybe more). Also the Yanks aren’t oblivous to this and do offer several $5 days where mid-week games prior to the summer have the whole upper deck and bleachers for $5 (I assume they still do this). That said 4 games into a season you can’t make much and the weather hasn’t been much of a help, as has the early start to the season and the fact that you really need to throw out 2009 as a comparison because it was the first year and many people just went to the stadium for the novelty and were more likely to go to an April game that year than in any other year.
Utlimately, it doesn’t matter what the Yankees charge as we now have a free market economy where anyone can buy or sell tickets to any game for the true market price – i.e. what a willing buyer will pay from a willing seller. Thank goodness for the elimination of scalping laws and the invention of the internet.
Are ticket revenues up or down? Do the price increases offset the lower attendance?
The Yankees brought in $319m in gate receipts in the 2009 season, and $300m in 2010. I’m not sure how much of that could be accounted for by the slightly longer playoff run. But basically, they’re making less money.
I agree, prices in Yankee stadium are by far to expensive. I think the Yankees need to give this a serious look.
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Hey the twins beat the yanks last night.. looks like a bad year in the bronx
I have not bought a ticket from the Yankees directly in 4 years. I think perhaps the novelty of the new stadium is dying and less people are buying directly from the Yankees now. Oh, I just bought a really awesome TV set, and its the best seat in the house! Oh, and after paying $60 to sit in the outfield corner, $50 on booze and food, $35 to park your car, you get to feel like a 2nd class citizen because you don’t have a ticket in the “Legends section”. Are the Knicks on?
[...] noticed a lot of empty seats in the stadium this year and they’ve already had some of the lowest attendance figures in the stadium’s 2+ years. I really hope they see the writing on the wall. Fans are fed [...]
This Yankee season ticket holder is likely enjoying his last year of season tickets. We use about half of our tickets and sell the rest on SH or to friends/family/coworkers at face. In the past we’ve either broke even or made enough to pay for a game or two. So far in 2011 we’ve had to discount significantly to sell the April games, and I don’t see much improvement for May. I know a number of other season holders in my section and everyone has lost money and many have already decided to drop their plans for 2012. Demand is way down, simple as that.
Why should I, or anyone, pay face value when tickets on SH are a bargain.
[...] April, I looked at the Yankee ticket pricing system, determining that the one-price-any-game system was inefficient, and in part a cause of [...]