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SBJ/October 5 - 11, 1998/No Topic Name
Sport's woes hit Adams Golf Co.
Published October 5, 1998
As professional sports teams search for ways to increase ticket revenue, more clubs will start charging higher prices for big games.
This approach won't supplant across-the-board price hikes as the preferred way to boost revenue, but it can add several million dollars to the bottom line. It can also create more problems than profits.
Selective pricing may be a new concept for pro sports, but it's hardly a novel idea. Buy a ticket for a live theater performance on a weekend night and you'll pay a premium, usually 15 to 20 percent. Many colleges charge a higher price for games against rivals.
As creative as many teams are in devising ways to boost revenue, you might think pro teams would have already latched on to the idea. But in eight years of collecting ticket price information for Team Marketing Report Inc.'s Fan Cost Index, we've found few examples of teams using this tactic.
Every team could identify games that generate intense interest. When the Dallas Cowboys visit Washington, a 10 percent increase in the cost of a ticket wouldn't deter many fans. If they've already anted up for the Redskins' league-high ticket prices, what's another $5? Multiply that increase by 80,000 fans and it might be enough to give raises to everyone in the marketing and sales department.
The policy could also be instituted for games against marquee opponents. The Sacramento Kings might not have a natural rival, but they've got the Chicago Bulls in town one night a year. The lure of a popular team like the Bulls would quiet the protests of most price-sensitive fans. Likewise in baseball, where the New York Yankees or Los Angeles Dodgers are top road draws virtually every year.
If the appeal of an opposing team doesn't justify a higher ticket price, then attractive dates can be leveraged. The Chicago Cubs have two sets of prices: one for all games in April, May and September and another that covers Opening Day, all weekend and weekday games in June, July and August, and all night games. Prices jump from 40 to 100 percent for the most desirable games.
Instituting a tactic of selective pricing can have a downside. Fans will howl about any plan that results in higher prices, but charging a premium for games against the best teams is a defensible position. That's much easier to explain than why tickets now cost the same whether the opponent is the Utah Jazz or Denver Nuggets.
The policy could backfire if used for games that don't prompt special interest. Fans would feel like suckers if they paid a premium price and the game attracted anything short of a sell-out crowd.
Teams already pass along 50 percent increases for tickets to mundane first-round playoff games.
If fans buy tickets for these games, why wouldn't a regular-season visit by the Detroit Red Wings command a premium price? There are games in every league that generate the interest to justify at least a 10 or 15 percent increase in ticket prices. It won't be long before sports teams start to leverage this interest to boost ticket revenue.
Alan Friedman is executive editor of Team Marketing Report Inc., a Chicago-based publisher of sports marketing resources.