In 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 early-season Yankee attendance woes. At the time, the Yankees were averaging about 41,000 tickets sold per game, and tickets to weekday games were practically being given away on Stubhub. After a weak April, attendance has bounced back to 44,933 per game, but the team only sells about 89% of seats on average. I recommended switching to a dynamic pricing system, where games are priced according to their quality, with weekend games and games against major rivals becoming more expensive while weekday games against less-interesting opponents becoming less expensive, but the average ticket price remaining the same. This would result in more filled seats, more revenue from hotdogs and nachos, possibly more revenue from gate receipts, and more happy fans.
Well, the New Jersey Devils have announced their 2011-2012 ticket prices, doing almost exactly what I recommended for the Yankees. Tickets for the 41 Devils home games are priced into three different levels, Premier, Classic, and Special. Premier games will be all games against the rival Rangers and Flyers, as well as weekend games against other top teams. Classic games will be some games against the league’s top teams, games down the stretch, and all other weekend games. Special games will be against some of the less interesting teams in the league on the weekday only. The price differences are pretty big – the difference in price varies depending on the seat, but Special tickets average about 30% less than Premier tickets, while season tickets remain pretty much untouched.
What does this mean for the average fan? First, it means that games will be more filled. The Devils had the same problem, all season, that the Yankees did in April: fans didn’t want to come to mid-week games against average teams, but packed the Prudential Center in games against rivals and on weekends. By lowering prices for weekday games, the arena should be more consistently full. This is a more enjoyable experience for anyone who prefers the excitement of a full house, and should almost always result in more revenue for the team. More importantly, it allows cash-strapped fans like myself to sit in better seats, or go to more games, at a more affordable cost. I won’t be shelling out $135 for a bottom-upper level seat against the Rangers, but I’d be more than happy to buy that seat for $85 against the Hurricanes.
The second big thing it means is a loss of profit for Stubhub sellers. I know that a lot of fans will finance a portion of their season tickets by selling top games on Stubhub. Theoretically, this would lessen demand for Stubhub tickets, as pressure is lifted from quick box office sellouts and transferred to cheaper games. You’d still probably be able to sell your Stubhub tickets at a higher price in the case of a sellout, but demand would be less.
We’ll see if this improves the inconsistent attendance in Newark over the course of this season. I think it will, and I think that teams with quickly move to adopt these pricing strategies over the next few years. The Yankees could do it especially well because of the tremendous differences in pricing for their tickets throughout the stadium. We all know the seats – expensive MVP-level seats – that sit vacant most games due to a $325 price tag, but are filled when the Red Sox or Mets come to town. The Yankees could offer those seats for $150 against the Royals, and I think a lot of people would bite. The same goes for a lot of the grandstand and terrace-level seating that is constantly empty, and at times quite price. Empty seats make no money, and it would serve the Yankees very well to get them filled for more games. And it would stop being such an annoying eyesore for everyone watching.
Of course, this isn’t true dynamic pricing. True dynamic pricing would be up-to-the-minute demand-based pricing, where prices would change based upon the number of open seats still for sale. The Minnesota Twins, among other teams, have been experimenting with this system for the 2011 season. The price of all tickets rises as the game comes closer to a sellout, and falls when the reverse happens. So if you want the last seat in the ballpark, you’d better be prepared to pay through the nose for it. Its a cool way to price things, as those familiar with congestion pricing and hot lanes probably are familiar with. But for now, I’d settle for a simple variable pricing mechanism.
If you enjoyed this article, please consider sharing it!
Yeah, let’s make games even more expensive, or make them so only the affluent can attend the games the Yanks play with the Red Sox, Angels, and Rays / the good teams.
You less affluent people can go see the Royals, Orioles, and Mariners – except when Felix Hernandez is pitching, that’ll cost you equal to a Red Sox game.
And let’s make as much money for the Yanks as possible after they got a new ballpark for free, pay below-market rent, and don’t pay property taxes.
Your idea is elitist and classist.
It’s bad enough Yankee Stadium crowds suck and have sucked for years because too many casual / here and there / I wanna be seen to hell with the game heads come out, you make Yanks-Red Sox games the most expensive and you will all but kill the real-fan vibe thus the roaring crowd in the eighth with the game tied 1-1.
BTW the Devils should be happy anyone even attends their games, so they have some nerve charging more for some games and less for others. Hockey is the least popular of the four biggest American professional sport leagues thus needs all the fans they can get.
The idea isn’t elitist, it is capitalist. It assigns value to goods based on demand. Yes, some games would be more expensive, but others would be cheaper. Fans with no money can’t get in the door for Red Sox games under the current system anyhow. This at least gives them a chance at an affordable ticket to some of the games.
“The idea isn’t elitist, it is capitalist. It assigns value to goods based on demand.”
Oh come on. Is that sophomoric right-wing tripe the best you can do?
It isn’t about assigning “value to goods based on demand”. It’s about the elitist strategy of catering only to those customers who can afford to pay a lot more than the actual “value” of the merchandise or corporate types who can use other people’s money (in other words soaking the shareholders and taxpayers since the price of the tickets will be written off as a “business expense”).
Ticket prices for most sports events have become an absolute disgrace in recent years. Hundreds or even thousands of dollars to watch one single game? Even a 50-75% discount off those gouge-level prices is hardly affordable for the average fan and his or her family. And I love seeing those seats behind the “moat” stay empty at YS3 as proof that even the crowd that has enough money to set some on fire thinks that $2500 is a little steep to watch one single game (even if you can get sushi and champagne served to you and maybe catch a glimpse of Jack Nicholson or Paul Simon in their presumably comped seats nearby).
Baseball used to be a democratizing social force as people of all walks of life could afford to buy more or less the same seats and mingle at the park. Everyone ate the same overcooked hot dogs and drank the same slightly flat, warm beer. Now it’s become like everything else in this country where the rich want to wall themselves off from everyone else in their gated communities, private schools, concierge medical services by bidding up the price of everything beyond any rational valuation and well beyond what ordinary folks can afford to pay. Teams are only too happy to cater to this demographic but still want the general public to treat their franchise as some sort of public trust that is entitled to government handouts and sweetheart deals on stadiums and associated infrastructure and financing (or haven’t you ever visited this website: http://fieldofschemes.com/?)
I am highly suspicious of this “dynamic pricing” model as I suspect that it will be something as opaque and impenetrable to the consumer as airline pricing and end up with people paying vastly different prices for the same exact merchandise. I could give it a limited endorsement if it is completely transparent and serves to bring the outrageous prices down but I am highly skeptical.
Right now, the fixed price system allocates tickets on a first-come, first-serve basis, with every single ticket pricing out the same. My ability to get Red Sox vs. Yankees tickets rests upon how high in line I can get. That’s nice for me, a guy without much money, because on the primary market, I am on a level playing field with much more wealthy ticket-seekers.
However, it creates an inefficiency: I have to pay those same prices for those same tickets for every game. While its easier for me to get Red Sox tickets, its harder for me to get tickets to see the Blue Jays, Royals, etc. With an efficient, dynamic pricing scheme, I could see more games for the same amount of money, and in better seats. I struggle to see Red Sox games more, but only if I’m one of those guys who sits in line the day tickets go on sale, or gets lucky online, or buys on a (more expensive) secondary market.
Its a clear win/win from my perspective.
The Buffalo Sabres (and possibly other teams) have had this tiered pricing for years. Seems to work out well for them overall.
[...] more: Yankees Should Adapt the NJ Devil's Ticket Price Innovation | New … AKPC_IDS += "32441,"; AKPC_IDS += [...]
The Yankees sort of do this now. If you go to the box office on game day for non-sellout games, you can get tickets for substantial savings. One of the doormen in my building went to the A’s “Grand Slam” game last week for $5, and sat behind home in the 200-level. He paid $5 a ticket, and said he does this all of the time. It won’t work on a Boston series, but works for the non-premium match-ups.
I think you’re going to run into problems when you start changing the pricing, unless the “cheap games” get cheaper than the current ticket price is now – and we all know that will never happen. The Yankees haven’t been able to sell out premium games, you can easily find tickets on StubHub a few days prior to them.
Innings hit the nail on the head when he said about the crowd at the stadium – I’ve been a season ticket holder since I got out of the Marines in 1995 and I’m considering not renewing next year because the place has lost its character with the abundance of casual fans. Nobody goes to the game to get a better view of the game, they go for the experience – and that has changed dramatically. The fans lately all seem to think they’re watching a Little League game, because they clear out after the 6th. The bleachers are the last bastion of the old crowd.
On to the Devils – they have NEVER been able to fill their arena with their own fans – hence the premium pricing. They’re subsidizing the losses due to lack of interest from their own fans with the ticket prices from Flyers, Canadiens, and Rangers fans. Don’t believe me? Watch a Devils game when they play the Rangers at home – there will be significantly more Rangers fans at the game than Devils fans. No wonder why Rangers fans call that place “MSG West” – since playing there is essentially a home game. Now watch when the Devils play Phoenix at home – the attendance is pathetic.
I’m a Rangers season ticket holder too – and as much as it pains me to say it, the Rangers treat their season ticket holders with much more respect than the Yankees do. Then again, supply and demand – it is hockey, and if the Rangers piss off the few hockey fans in NY, they’re going to be looking for real estate in Canada. The Yankees could care less because there are always tourists and an influx of non-NY’ers moving to the area looking to go to a game to say that they were there – which drives the StubHub market.
So, I think that having to sell tickets for that cheap on gameday is a weakness of the current system, which would in part be corrected by tiered pricing. The Yankees could sell more of those seats for $30 instead of $5.
As a big Devils fan, I’m going to disagree with you a little bit. One of the big reasons by the Devils struggle to fill seats is that tickets are prohibitively expensive. They built a beautiful new Arena with a poor ratio of cheap seats to expensive seats. The new scheme helps to correct this. And yeah, the Rangers (and hell, the Canadians) pack the place when they are visiting, but whatever. The Rangers have all of NYC a quick Path ride away. Those games get more intense because of their attendance.
Those seats have to be at least $200 each – the Yankees would never put them on the open market at $30, which brings us back to the “Should the non-premium games be discounted from where the prices are now, or should the premium games be jacked up even more than the current prices?” dilemma.
I’m positive the Yankees run the numbers on this, it’s not hard to if you have all of the data. They know down to a seat how many tickets were sold, and how many fans came to the game. The electronic readers at the gates are much more reliable than the old way of counting the tickets of years ago. I’m sure they’ve run these numbers a zillion different ways, and this is where the revenue curve maxes out.
The Devils have had trouble in Brendan Byrne Arena too. I used to go there all of the time with tickets that nobody wanted. Saw a ton of Devils/Winnipeg, Devils/Nordiques, and other match-ups. The arena was always empty as could be. I was even give free tickets in 1988 to the Wales Conference finals against Boston, and there were more Bruins fans than Devils fans there.
The NHL attendance data is online – they go back more than 10 years, I think the new arena was 2003 or so, check it out. I think the Devils problem is the location of their arena and the fact that they’re in the shadow of NY. The Devs fans have to drive or take the train to the game, where a lot of NY’ers (including myself) walk to MSG.
[...] Should the Red Sox change their ticking policy? I have no idea, but according to EJ Fagan at Yankee Analysts the Yankees should. [...]
I think the Devils tiered pricing is a good idea and also being a Yankees fan they should do something similar.
Goose, sorry but you have a vivid imagination.
I have been a long time Devils season ticket holder and your Rags have never had more fans at a Devils home game, at least since about 1990 on.
Sure a lot come, just like Habs fans got to Toronto and visa versa.
Same thing with Yanks/Mets and Jets/Giants, your bravado is curious considering your team has only won a single cup since 1941 while the Devils have won 3 and the Islanders have won 4 in that same time period.
Rags may announce around 18k vs Phoenix but no way 18k are in attendance.
Go Yanks, Go Devils!
Okay, so what’s the average concession spend per person?
What are the numbers on reducing the prices, vs attendance, vs the attendance of where the prices are now?
What are the operating costs (security, cleanup, maintenance) per person in attendance? How does this cost average into larger crowds that will come if the prices are lowered?
If the Yankees dramatically lower prices will they attract a demographic that is frugal and won’t drop $200 on concessions for the family?
Plot those on a curve for us, and show us where the prices should be. Guess what? The Yankees have a dozen MBAs that have done this. The bean counters with credentials other than being “NJ’s biggest Devils fan” have done this and the tickets are where they will maximize revenue. That’s how you run a business…and the Steinbrenners have been doing this since day one.
Dynamic pricing is VERY active in MLB with 8 teams already participating (with upwards to another 6 also doing it in 2012), two of them doing the the entire stadium, every game. Further, the technology used goes well beyond just pricing weekend vs, weekday, or rivalries. It factors in who’s pitching, match-ups, win streaks for the home and away teams, expected weather, and even how the secondary market is doing, just to name a few. It’s not a new concept and there are several companies that specialize in this technology. So, the Yankees are well aware and could also do this at any time.
What you aren’t considering is the impact that dynamic pricing has on the season ticket holder. Where as in the airline industry or hotels where you know the guy sitting next you could have paid less for his airline seat, fans don’t accept this behavior and baseball is sensitive to this. Would you really renew your season ticket package if you kept learning the guy next to you paid less for his ticket? Many teams have heard from the season ticket holders regarding these practices and for those not aware, season ticket holder sales are the cornerstone for all teams ticket sales (I’d venture to guess across all sports, not just baseball). So, cannibalizing those guaranteed sales for a few more butts in seats is something the teams monitor very very closely.
Of course there is also the flip side to dynamic pricing and that’s when prices go UP, and the teams capture more revenue (the Giants are masters at this). You’ll need to consider the fact that it’s possible you end up paying even more than you do today if the Yankees or any team were to go to dynamic pricing.
What the Dewils have done is extract a premium price from fans of the Rangers, Flyers, Penguins and Canadiens. By adapting the tiered pricing they are trying to tell their fan base to sign up for full or partial plans at a discount to box office prices and you will be able to see each of these teams at least once anyway. Fans of the opponent will only want to see their team so they will pay a price comparable to what they would have to pay in their usually sold-out arenas. Devils fans will see their team play just about anyone if the price and date are right, so the discounted weeknight games are the economical opportunity and the non-premium weekend “Classic’ games are just about flat to last year’s price (perhaps a 5% markup).
The sliding scale model makes most sense to me for basebaqll. Price a game based on demand and tickets remaining to be sold relative to the game date. Also, the Red Sox have gotten the process down to a science, selling tickets for the dog season (April, May and Sept) first before the Christmas holiday so that folks are assured of seeing at least one game; plus they sell multiple game packs (4 games) that include one premium opponent (Yankees or NL team) and 3 AL dogs. They move less desirable inventory weeks before they open up the rest of the season so people end up buying tickets in both campaigns so they have at least one cold-weather and one mid-season game covered.
Lots of teams do this, I know when the Yankees go to places like Cincy this year, the Reds sold seats to the Yankees/Reds game as part of a package, with additional non-premium games included.
That makes sense when you have a team that has trouble filling their seats – like the Devils do. All kidding (and whining aside) you can’t overlook the fact that the Devils attendance is abysmal. They do this to try to get the seats for other games filled.
Do the Yankees really have a big enough problem to warrant this kind of action? In most scenarios, the Yankees would just jack up the premium games even more and keep the non-premium at the current prices. Anyone who is for that kind of system doesn’t get to the ballpark often or has an interest in seeing the Yankees make even more money from the fans. They’re doing well enough as is.