Ticket prices can have a major impact on professional sports. The difference in ticket prices are what helps and hurts attendance at professional sporting events. When it comes to ticket prices there are many factors that can affect the price per ticket. In this review there are three main categories that are being focused on: (a) attendance, (b) pricing strategies and (c) ticket sales. Each category has different factors that affect ticket prices differently. In attendance, there was the economic crisis that started in late 2007. Strikes can happen at any time in professional sports. There is also the probability about the opposing team and its affect on ticket prices for those events. For pricing strategies, there are two main strategies that can be used for a professional sports team: (a) variable pricing and (b) dynamic pricing. The final factor discussed is the team’s decision process of setting ticket prices. There are four main areas that are being reviewed for ticket sales: (a) tactics used to increase ticket sales, (b) team owners’ role, (c) second hand ticket markets, and (d) price inelasticity. This review will show substantial evidence in each category that affects ticket prices for professional sports in America.
Attendance
Economic Crisis
Attendance at sporting events can be affected by many different factors. One factor that affected Major League Baseball (MLB) was the economic crisis that started in late 2007. In a study conducted by Hong, Mondello, and Coates (2013), they investigated how the economic crisis affected attendance in MLB during the 2008 and 2009 seasons (p. 140). In the 2009 season, the average attendance dropped 6.77% below what it was in the 2008 season (Hong et al., 2013, p. 140). Da...
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... ticket packaging, (c) money-back guarantees, and (d) web-based ticketing. There are benefits to using each tactic, but it depends on the professional sport organizations needs. In addition, professional sports ticket prices are price inelastic, which means the price for the ticket changes based on demand for that event. As stated previously, there were several different factors that can affect ticket prices in professional sports teams in America. Since there are many factors that can affect ticket prices, it would be beneficial to focus on the core factor that affects ticket prices and analyze it. Take pricing strategies for example. With two main types of pricing strategies, it would be valuable to identify which strategy would work best for each professional sports league. This study would help every sports league improve ticket prices and maximize revenue.
What Michael describes in his new book is very sensational. Michael handles a topic which in the reality would be interesting only to sport s fans and makes it fit into the field of economics. Michael outlines the way Oakland Athletics’ general manager, Billy Bean, who is described as very charismatic, used all means including statistics to transform his team. Apart from bringing out this exceptional move by Billy Bean, the author goes further to discuss an inspirational story regarding superior database management. This means that Lewis’s book is packed with a lot of items which makes it not only a reserve for those who can differentiate between a screwball and a slider. The book has some broader lessons for everyone to read. The main focus of these lessons is to clarify the efficiency of labor markets as well as the limits of human rationality. Lewis outlines the confusions and blunders of those managing baseball teams. Through this tale about baseball team managers, Lewis goes to explain how the tale has a lot to reveal about confusions and blunders in different other domains (Lewis, 2003).
The way they can make money, is if fans come out to watch games, buy drinks, food, memorabilia, etc. There are a lot of “bandwagon” fans in all sports. In baseball the biggest bandwagon team is the New York Yankees. That is huge for the Yankees, because fans are how teams can earn money. Which also might be why the Yankees are the richest team in the game. Teams can sign star players and still earn money from it. For example, right after the Texas Rangers signed Alex Rodriguez to a long term deal, ticket sales started to go up. “The organization sold 400 season ticket packages. By comparison, it had sold only 74 ticket packages by January of the previous year” (Deschiver). There is a positive relationship between star players and attendance, regardless of how the team is doing.“This is because some spectators may be attracted to the celebrity quality of a team’s players rather than the team’s reputation of a playoff contender” (Deschiver). The small market teams could have a good run at a World Series title, then they could bring in more fans, which leads to more money. “A close pennant race
Noll, Roger, and Zimbalist, Andrew. Sports, Jobs, and Taxes: The Economic Impact of Sports Teams and Stadiums. Brooking institutions press, Summer 1997. Vol. 15 No. 3.
Baseball used to be a simple game, associated with the smell of hot dogs, the sweet dew of the night air as fans rose for the seventh inning stretch, and the beautiful spectacle of the field with its freshly cut grass and newly chalked base lines. Now it seems like each game is won by at least five runs, the stadiums are half empty, and the pride of a baseball radio announcer, once an honorable career, has dwindled along with the game. Additionally, since 1976 players’ salaries have increased 168% a year, numbers too high to be blamed on inflation (Breton 4). These current conditions reflect the growing corruption of baseball.
Schooled: The Price of College Sports. Dirs. Ross Finkel, Trevor Martin and Jonathan Paley. 2013. Online.
Baseball remains today one of America’s most popular sports, and furthermore, baseball is one of America’s most successful forms of entertainment. As a result, Baseball is an economic being of its own. However, the sustainability of any professional sport organization depends directly on its economic capabilities. For example, in Baseball, all revenue is a product of the fans reaction to ticket prices, advertisements, television contracts, etc. During the devastating Great Depression in 1929, the fans of baseball experienced fiscal suffering. The appeal of baseball declined as more and more people were trying to make enough money to live. There was a significant drop in attention, attendance, and enjoyment. Although baseball’s vitality might have seemed threatened by the overwhelming Great Depression, the baseball community modernized their sport by implementing new changes that resulted in the game’s survival.
One of the many positives externalities that professional sports teams can generate is increasing the city’s revenue. With a city having a professional sports team, the people that
Ticket scalping has shown much benefits to both consumers and sellers, and where demand meets supply. For the ultimate consumers, scalpers offer an alternative to purchasing the much sought after tickets without waiting in line. However, at a higher monetary value! Demand for these "easy" tickets has been great that keeps ticket scalping going on for years.
Financial aspects and profitability of college athletic programs is one of the most important arguments involved in this controversy. A group of people expresses that college athletic programs are over emphasized. The point they show on the first hand, is that athletic programs are too expensive for community colleges and small universities. Besides, statistics prove that financial aspects of college athletic programs are extremely questionable. It is true that maintenance, and facility costs for athletic programs are significantly high in comparison to academic programs. Therefore, Denhart, Villwock, and Vedder argue that athletic programs drag money away from important academics programs and degrade their quality. According to them, median expenditures per athlete in Football Bowl Subdivision were $65,800 in 2006. And it has shown a 15.6 percent median expenditure increase fro...
Second, market growth, which is measured by attendance at NBA games, has leveled recently, so increasing competition among teams for a fixed number of fans.
Jiobu, Robert M., “Racial Inequality in a Public Arena: The Case of Professional Baseball”. Social Forces , Vol. 67, No. 2 (Dec., 1988), pp. 524-534 Oxford University Press
The Fan Cost Index (FCI) is a statistic used to measure the average cost of a family of four to attend a sports event. Included in this statistic are the average ticket price for four averaged priced tickets, four hot dogs, two small beers, four small soft drinks, parking for one hour, two hats and two game programs (Greenberg, 2014). The FCI for the NBA during 2015-2016 was just over $339. The NBA has the third lowest FCI of the four major professional sports in North America. Only the MLB was cheaper.
For the 2019 major league baseball season, the New York Yankees should employ the dynamic ticket pricing strategy in order to essentially maximize on the overall excitement generated by both the fanbase and sports media outlets due to the influx of premier talent that has worked to transform a rebuilding franchise into a legitimate championship contender within the league as well as the favorable perception of the organization throughout their history of success. The dynamic ticket pricing strategy is a unique approach that ultimately work to increase the organization’s potential revenue streams due to the fluctuations in price based on the supply and demand for the product. Through this specific strategy, the organization would be able to
Sports stadiums are one of the most exciting additions to a city. Everyone loves for their team to get a new stadium. However, a new stadium may appear to bring new jobs to a city however it just reallocates them. Typically this means that workers will be only gaining temporary, low paying jobs. As fans go to a new sports arena for a game this draws customers away from local restaurants and venues. This cuts into the revenues and profits of these businesses and eventually causes them to cut employees. These employees. So as employees are hired at the new sports venue other workers are losing their jobs with local businesses. Moreover, people are drawn from surrounding areas to
Sports are one of the most profitable industries in the world. Everyone wants to get their hands on a piece of the action. Those individuals and industries that spend hundreds of millions of dollars on these sports teams are hoping to make a profit, but it may be an indirect profit. It could be a profit for the sports club, or it could be a promotion for another organization (i.e. Rupert Murdoch, FOX). The economics involved with sports have drastically changed over the last ten years.