Sunday, February 22, 2009

Life at a sports team

Noted Tall Thin Guy Glenn Locke asked about the thinking that goes into ticket prices in a comment on the last item, and wrote about it on his own blog. Having spent six years working for a pro sports team, let me make a couple of points about my now-ancient experiences on the matter. (It will be good practice for when I talk to a sports management class at Syracuse University next month.)

1. The idea of "variable pricing" was at least discussed by the Sabres in the early 1990's. We knew darn well that the Maple Leafs, Canadiens and Bruins were the biggest draws, and that, as a team that was losing money, there was at least an opportunity to raise ticket prices for those games.

Here's the funny part. The opposition for the idea came from the hockey department. Loud opposition. The people there didn't like the idea that a team could come into Memorial Auditorium and be told it was part of a "bargain-basement value ticket plan." They thought it would motivate the opposition. That line of thinking obviously has died.

2. The Sabres averaged something around 14,000 to 15,000 during much of my time there. The catch was trying to get the number of 16,433 on a regular basis. One thing that surprised me was that when the team won a few games in a row, fans did not immediately go rushing to the ticket window to buy tickets for that night's game, or the next game. They looked down the road, saw a game and date they liked, and bought tickets for that game. You win four straight in November, and suddenly you are sold out at Christmas.

The biggest argument came down to two conflicting points: maximizing revenue vs. filling the building. Those aren't the same thing, of course. If you try to squeeze every dollar out of every game, that means you don't have packages with restaurants for pizza and a game for a family of four, or offer much of a discount on group sales. When you are losing money, it's obviously tempting to take this approach.

Me, I was a "fill the building" guy. I thought the Sabres should get fannies in the seats at all costs. A sellout makes it much more likely that people will think tickets have value. "Wow, I have a ticket for the game, but Joe doesn't. Bet he's jealous." A filled building also is a better, more exciting experience for the fan. As I said in the last post, fans look around in such circumstances and think they are part of something special.

Then, once you are filling the building regularly and have established the scarcity of tickets, you can slowly cut back on the discounts and maximize those revenues.

I'm not sure who won those arguments with the Sabres, but I think my side did fine. But it still is a little odd to see the fun-and-games that go on with ticket prices these days. Hockey was a much simpler business way back when.

1 comment:

Glenn Locke, The Tall Thin Guy said...

It's funny how teams seem to look at the opportunity to raise prices, but not to lower them. A ticket isn't worth $50 if nobody is willing to pay it. An empty seat "spoils" like old can't be sold. Considering the small marginal cost of admitting another fan, teams are going to have to start looking at those empty seats and thinking that a couple bucks is better than nothing when you are trying to stay alive in a tough economy. I am looking forward to seeing what happens, particularly in hockey and baseball, in the next year. If the Colorado Rockies are smart enough to realize the market value of a ticket when the Cubs come to town is higher than usual, they should also consider that a tuesday night game against the Pirates should cost about $1, with a beer included and free parking.