At least one-quarter of NFL teams are using dynamic ticket pricing this season, the first time the league has allowed it, and some of the clubs are enjoying significant, double-digit percentage increases on single-game ticket revenue as a result.
While the three other major sports leagues have long used dynamic pricing, in some cases for more than half a decade, the NFL had resisted the pricing technique. Dynamic pricing allows teams to reset individual-game tickets periodically as demand ebbs and flows.
NFL teams using
dynamic ticket pricing
■ Atlanta Falcons
■ Cleveland Browns
■ Kansas City Chiefs
■ Miami Dolphins
■ Pittsburgh Steelers
■ St. Louis Rams
■ San Diego Chargers
■ Seattle Seahawks
Last year, the NFL drew attention for letting teams deploy variable pricing, which allowed clubs to charge different, pre-set game prices based on the perceived quality of the contests. The league gave the go-ahead for this year to use dynamic pricing.
NFL staff updated owners this month that teams using dynamic pricing for the first few games of the 2015 season had already collectively reaped millions of dollars in incremental revenue.
“Imagine every team, over the course of a full season,” said a top team executive, suggesting the leaguewide revenue potential from such pricing. The executive requested anonymity because the league is not talking publicly about dynamic pricing.
One team executive said his club’s single-game ticket revenue was up 35 percent, which translates into several million dollars for that team.
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The Rams since Aug. 1 have adjusted lower-level prices for their Nov. 15 home game three times.
Photo by: GETTY IMAGES
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Jake Bye, the St. Louis Rams’ vice president of tickets and premium seating, said 10 percent of his team’s overall seats are now dynamically priced.
“Revenue has been significant,” Bye said.
For the Rams’ Nov. 15 game against Chicago, for example, prices have been adjusted three times. A lower-level, 20-yard-line seat originally was priced at $134. On Aug. 1, that price became $168. It increased further, to $210, on Sept. 1 and then to $222 on Oct. 12.
The team consults with Ticketmaster, which offers pricing analytics to determine how to set the values, Bye said.
Tom Garfinkel, president of the Miami Dolphins, said, “We have seen an increase in ticket revenue over the same time last year based on dynamic pricing.”
All of the teams contacted said they would not allow the value of their dynamically priced tickets to fall below the face value of season tickets in the event demand shriveled, a concern that owners had voiced in the past. There were other reasons the NFL has been slow to adopt dynamic pricing, as well.
“[T]he NFL has the highest percentage of season tickets and therefore the fewest to sell on an individual basis, which simultaneously makes dynamic pricing less important than other sports and gives teams the most flexibility on prices,” wrote Barry Kahn, CEO of dynamic ticket pricing software firm QCue, in an email.
Indeed, even some of the teams that are using dynamic pricing this year have few seats available. The Pittsburgh Steelers, for example, could sell all seats as season tickets, but they are holding back a small allotment for dynamic pricing. A team spokesman described it as an “experiment” and said that the team could choose to drop the effort in the future. The spokesman declined to disclose how many seats were available.
The Seattle Seahawks, another team that has no trouble selling season tickets, offers less than 3 percent of its seats using dynamic pricing.
There are other issues too. Nearly half of all revenue in the NFL is contractually paid to players. From the portion of ticket revenue that remains after the players’ take, NFL teams then pay one-third of that revenue into a pool that is evenly shared with all league clubs — perhaps taking away some of the incentive to try dynamic pricing.
However, one of the ideas pushed by league staff, led by Brian Lafemina, senior vice president of club business development, is that dynamic pricing helps show season-ticket holders what a good deal they are getting. Lafemina declined to comment, but team executives described the longtime MSG executive’s role in advocating for dynamic pricing.
By allowing teams to charge significantly higher prices for individual games than face value on a season ticket, teams can use that to argue in renewing those annual tickets what a good deal they are, team executives said. This could help offset any concern expressed when season-ticket holders see prices fall below face value on the secondary market.
In the case of the Rams and their Nov. 15 game, the season-ticket price for that game against the Bears is $114, about half the most recent dynamically set single-game ticket price.
Teams have tried to attack the discrepancy between face-value season tickets and lower-priced secondary market seats through variable pricing. Variable pricing allows teams to affix lower prices to their season tickets for less attractive games, so the difference with the secondary market does not appear as stark for those particular games. Similarly, more attractive games carry higher face values. The total season-ticket value stays the same as it would have been absent variable pricing — meaning unlike dynamic pricing, there is no revenue gain for the club.
Staff writers Eric Fisher, John Lombardo and Ian Thomas contributed to this report.
