April 06, 2010
Tax-deductible seats and the juicing of ticket prices
Just noticed the op-ed in yesterday's New York Times arguing that the tax deductibility of luxury boxes has ruined baseball:
Over the last two decades, the average ticket price for a Chicago Cubs game has increased 265 percent, more than four times the inflation rate. Add in parking, concessions and souvenirs, and a family trip to one of this week's opening day games could easily cost a few hundred dollars.
There are many reasons for the price explosion, but a critical factor has been the ability of businesses to write off tickets as entertainment expenses — essentially a huge, and wholly unnecessary, government subsidy.
These deductions have led to higher ticket prices in two ways. On the demand side, they have fueled competition for scarce seats, with business taxpayers bidding in part with dollars they save through the deductions.
On the supply side, the large number of businesses bidding for expensive seats has driven the expansion of luxury skyboxes and a reduction in overall seats in new ballparks.
It's an issue I've raised before, and Joanna and I noted it way back in the first edition of our book. The deductibility of sports tickets has bounced around a bit — it's currently at 50% of the face value of tickets — but it remains a huge incentive for corporations to pay more than they otherwise would for tickets, driving up prices overall — and helping spur teams to demand new stadiums with more luxury seating that they can sell to the artifically inflated corporate market.
The op-ed authors, Duke law professor Richard Schmalbeck and Rutgers business professor Jay Soled, argue that while it would be ideal to eliminate the business-entertainment deduction for sports tickets entirely, probably a more feasible reform would be to cap the deduction at $50 per seat. That wouldn't end the juicing of ticket prices, but it would at least blunt it somewhat.
February 12, 2010
Effect of new baseball stadiums on winning: zilch
Jeff Lubbers at Baseball Daily Digest takes a look today at the on-field effects of moving into new stadiums for baseball teams. In their first year at a new home, he finds, starting with Camden Yards in 1992, teams have spent an extra 15.3% on payroll over the previous year, as they availed themselves of heightened revenues to bulk up their talent on the field. (The Minnesota Twins, notes Lubbers, are already at work on that this offseason, acquiring Jim Thome, Orlando Hudson, and J.J. Hardy, though those were mostly at bargain prices.)
And the impact of all this new talent? Writes Lubbers:
Excluding the 2009 Twins of all the teams in the above table their collective record in the last season of their old homes was 1,421-1,430 for a winning percentage of .498. Their collective record in the first season of their new homes was 1,394-1,405 for a winning percentage of ... .498.
While that's a pretty effective debunking of the "stadiums will bring a winner!" myth, there are a couple of ways I'd love to see this study improved. First off, it generally takes more than one year to turn a franchise around; when I did a similar study a few years back for the Baseball Prospectus book Baseball Between the Numbers, I used win percentages for the five years before and after moving to a new stadium, and found that a new home was worth on average about 5.5 wins a year — still a relatively small payoff, but measurably positive. It'd also be good to see how much that 15.3% payroll hike compares to the baseline increase in player salaries, which until recently were rising substantially year to year even for teams without new homes. [CORRECTION: Lubbers does note that the average annual payroll hike for all teams is 7.49% — I missed it somehow on first read.]
Finally, one number I'd love to see added: Change in average ticket prices at new stadiums. Again from BBtN, 11 of the top 14 single-season ticket price hikes between 1991 and 2004 came with teams moving into new digs, topped by the astounding 103% single-season rise in average prices when the Detroit Tigers moved from Tiger Stadium to Comerica Park. New stadiums make players richer, even if they don't make their teams (much) better; but fans are paying through the nose for the privilege of watching their pricier teams play .498 ball.
If anyone has some Excel time handy and is interested in running such a study, you can find all the raw data needed at Rod Fort's site. Or I might give it a shot myself over the weekend, if no one beats me to it.
October 29, 2009
Sports bubble watch: Jets slash (some) prices
Another New York sports team is following the Yankees' lead in slashing ticket prices, but only for the middle class of seats — though, given the prices being discussed, maybe "the upper-upper-middle class" would be a better way of putting it. (Stadium seating pretty much bottoms out these days at the real middle class.) The New York Jets have announced they're cutting prices for seats in the Mezzanine Club at their new stadium opening next year, from $400-$500 down to $195-$395. The Mezzanine Club is the middle deck on either side of the field, amounting to about 7,000 of the new stadium's 80,000 seats.
"The jump from $120 a ticket or $150 a ticket to $400 just put it out of reach for a lot of people who did want to experience the clubs," Jets VP Matt Higgins told AP. "We came to the conclusion that these prices are really 2007 prices in a 2009 world."
Bleacher Report, though, notes that you still have to shell out a seat license fee — of between $5,000 and $25,000 per ticket — for the rights to even buy the tickets. Given the trouble the team has had finding buyers for their PSLs — buyers who weren't just bidding as a publicity stunt, anyway — it'll be interesting to see if half-price tickets with a $5,000 down payment are any more 2009.
October 12, 2009
ESPN buys $1200 Yankee tickets so you don't have to
If you've been wondering what those crazy-expensive field-level seats are like at Fake Yankee Stadium, ESPN writer Wright Thompson dropped $1200 so he could tell you firsthand. His verdict: It's great to watch the game from up close, hot dogs go great with a $200 bottle of French wine, and cops are nicer to you when they think you're rich people.
Thompson comes up with a novel theory for the outrageous Yankees ticket prices, saying it's thanks to Wall Street brokers who in recent years became willing to pay just about anything for good tickets, since they were using them as deductible entertainment expenses (Thompson calls them "bribes") to sweet-talk other brokers into conducting deals. But after a bunch of equity traders were caught with free hotel rooms, hookers, and a midget — it's always the midget that gets the headlines — the SEC cracked down, with potentiall huge consequences for the Yankees:
To get out front of the SEC, many firms have instituted their own internal controls requiring gifts worth more than $100 to be reported. A computer program has been purchased by more than 200 companies that, for the first time, allows statistics to be kept on ticket use, including how much business each one brings in.
So ... just as companies were trying to limit extravagant spending, the Yankees came out with the most extravagant tickets in the history of sports, designed in part for a group of people who could no longer buy them. "They killed the golden goose," a former Bear Stearns guy says. "When the new prices came out, everybody said, 'Are you kidding? We can't even give these to clients.'" ...
Yankees games went from something small to something like a trip to the Masters. One buy-sider told me: "I've been offered really good seats a couple of times, but I haven't taken tickets from a broker in the new stadium. I'd feel like I owed the guy."
Meanwhile, Thompson wonders if all the sky-high ticket pricing could risk turning off those who are there for the game, not for the derivatives. He cites ESPN pollster Rich Luker as saying the sports industry is in "harvest mode," and could be in danger of alienating its fan base for good:
A recent poll discovered an unsettling trend emerging for the first time. American families whose household income is $75,000 or less now have zero dollars of discretionary income. According to Luker, that means about 75 percent of the country can never responsibly afford to go to a live professional sporting event. Franchises want them to be fans, to buy the gear and pull for their teams and watch the telecasts the leagues are paid billions for. But they don't need them to come to their stadiums. There are, right now, plenty of rich people who love games. The prices reflect that. The reason sporting events cost so much now, Luker's research shows, is because they are designed to be affordable only to those making $150,000 or more a year.
Luker's stats show, continues Thompson: "For the first time, the largest number of sports fans aren't 12- to 17-year-old boys. The baby boomers are the group that shows the greatest increase in a love of sports, and they'll be dying soon."
All in all, a fascinating read, though I'm not entirely sure about all its conclusions. (My own research points to the massive surge in wealth towards the richest Americans since the Reagan tax cuts for the top income brackets — the increase in in the number of "rich people who love games," in other words — as most to blame for rising ticket prices.) And it's fun to hear about such perks as about the bottomless pile of Twizzlers available to high rollers, without having to plunk down $1200 to visit it.
October 07, 2009
Sports bubble watch: NBA, Yankees cut prices
More signs that the crazy inflation in sports ticket prices has found a ceiling:
- The New York Yankees provided more details on their previously announced ticket price cuts for 2010: They'll lower prices for their most expensive seats, the Legends Suite tickets behind home plate, from $2500 a game to a mere $1500, while some tickets in the $500-$1000 range (the ones that the Yanks had trouble selling this season) also will see price drops.
- NBA commissioner David Stern says he expects NBA revenues to drop in the coming season, and says a large part of the reason is price cuts that teams have instituted to keep fannies in the seats. "I would love to get it closer to 2-1/2 percent, but I don't think we're going to because our teams have cut their ticket prices or frozen them, so as a result, even if we have good attendance, we'll be taking in less revenue at the gate, and that's an important component. And that's OK. We're responding to our fans."
September 16, 2009
Sports bubble watch: Yanks trim some pricey seat fees
The long-awaited decision by the New York Yankees on how to respond to their empty seat crisis is in, and the verdict is: The team is cutting ticket prices on about 6,400 of their priciest seats, while raising prices on 1,700 second-deck seats:
3,400 Field Level seats currently priced at $325 as part of full-season licenses will drop to $250 or $235 each next season, depending on their specific location. Additionally, all 1,208 Suite seats in the Delta Sky 360° Suite will see a decrease in price, as will 1,846 of 1,894 Suite seats (97 percent) in the Legends Suite. The balance of the Legends Suite seats will have no price change....
In the Main Level, 10,111 seat locations will see no increase. The remaining 1,704 seats in Sections 216-217 and 223-224 currently priced at $100 will be $125 next season. These mark the only increases for 2010.
The lesson the Yankees seem to have learned here: Fans aren't willing to pay an arm and a leg for great seats, but will give up a few fingers for good ones. Which makes sense, given that the most expensive seats are the ones that were going unsold, but is almost certainly bad news for fans hoping for more cheap seats, not more $100-$300 ones.
In related news, random Yankee fans with no last names think these prices are still too damned expensive.
September 05, 2009
Sports bubble watch: Big market, small market
Today's special September ticket offers from baseball teams out of contention:
$1 O's tickets available exclusively at orioles.com
Mets Wine Pairing * Wine Tasting Event in the Empire Party Suites * The ticket price includes the cost of food! * Tickets only $75!
Times are tough all over, but apparently some fan base's times are tougher than others...
September 02, 2009
Another theory on Yanks postseason ticket pricing
Today's New York Times notes that while the Yankees will be offering Division Series seats to season ticket holders at regular-season prices, they'll be several dollars higher for non-season plan holders lucky enough to win the ticket lottery. (All tickets will also carry a mandatory MLB "handling fee" of between $1 and $6 for all, because you don't expect Bud Selig to run his greasy fingers over everything for nothing, right?) This suggests one possible reason why the Yanks are keeping first-round ticket prices low: They may be worried about season-ticket renewals in the wake of all the uproar over this year's crazy price hikes (86% on average, according to the Times), and are hoping that the guarantee of discounted postseason tickets will be enough to lure fans back for 2010.
In any case, this should be one more data point in rebuttal of any notion that sports ticket prices are set according to some rational analysis of supply and demand — as my six-year-old says about the weather forecasts, "They're just guessing." And right now with everyone guessing about so many other things, it makes sense to expect some weirdness in ticket pricing, too.
September 01, 2009
Yanks lower playoff ticket prices; also, pigs fly
Is it opposite week at New York Yankees HQ or what? First the team relents and allows fans to bring small bags to the games, now comes word that they're lowering postseason ticket prices from what they'd planning on last year, with tickets for the Division Series largely unchanged from regular-season levels. Either they know something about the recession that we don't, or they're planning to make it back on $12 popcorn buckets. Or maybe they're just hoping to make up the difference in StubHub fees.
UPDATE: New Stadium Insider notes that with the smaller capacity of Fake Yankee Stadium, larger season-ticket base, and required set-asides for MLB and the media, fewer than 5,000 tickets will be available to the general public for the ALDS (and fewer than 1,000 for the World Series). Still, a break to season ticket holders is still a break — and the relative scarcity of generally available tickets only makes it weirder that the Yanks are passing up the chance to ask for the moon.
May 21, 2009
Sports bubble watch: Mets ticket discounts
The New York Mets, who've so far managed to duck the criticism the Yankees have got despite their own sky-high ticket prices and empty seats behind home plate, sent out an email yesterday offering field-level tickets to their upcoming homestand for as much as 33% off. (Which still isn't as good as StubHub, especially given all the Ticketmaster fees the team tacks on, but it's closer.) Meal deals, here we come.
May 18, 2009
Sports bubble watch, mid-May edition
Pete Toms at Biz of Baseball alerts us to a Sports Business Journal article examining the sports ticket glut on the resale market:
"There is so much inventory out on the markets right now, particularly for baseball," said Mike Janes, co-founder and chief executive of FanSnap, a Bay Area-based startup that acts as a metasearch engine for secondary tickets. More than 15 million tickets are accessible through the site, and the majority of those tickets are for sporting events. "I joke now that you're going to pay more for your beer or your parking to go to a game than your actual ticket. Heck, you could pay more for your large mocha latte. But we're living in a very, very different world now."...
StubHub, perhaps the most dominant and recognizable player among all American ticket resellers, says the average sales prices for sports events on the site is $81, down 9 percent from the same time last year [see chart, page 14] and 28 percent below 2007's full-year figure of $112. Independent sellers, similarly, have seen prices fall 10 percent to 15 percent over the past 12 months, and profit margins drop from the 20-30 percent range to around 10 percent. Industry estimates point to as much as 40 percent of all ticket inventory currently available on the secondary market being listed at or below face value.
SBJ reports that much of the ticket glut is due to "individual sellers" — in other words, regular fans, not ticket brokers or professional scalpers — who have increased the number of tickets they're listing this year. This raises again the question: What happens next season, when fans realize that rather than rushing to get tickets to go on sale, they can get a better deal waiting to buy at a discount on StubHub later? The first signs should be visible this fall, when the NBA and NHL become the first major sports leagues to go through a full season and then a preseason sales cycle since the economy fell over and broke last fall.
April 28, 2009
Yanks field-level seats now a mere $1250!
CNBC's Darren Rovell reports that the New York Yankees have cut prices on some of their highest-priced seats in an attempt to fill those embarassing empty sections at their new stadium:
The $2,500 per game seats, that weren't selling as the Yanks had hoped, will now cost $1,250 per game.
The $1,000 per game seats will now cost $650 per game.
Fans who already purchased these seats on a season basis at their old value can either get a credit on the difference or a refund.
Rovell says "about 600" seats are affected, so it's safe to assume that most of the muckety-mucks in the "Legends Suites" won't be looking at refunds, only those who until now had bare plastic for neighbors. (The official press release seems to confirm this, but I'm not gonna be the one to sit with a seating chart and decode it.) It remains to be seen whether the blizzard of press attention this is sure to get helps the Yanks look less greedy, or merely feeds the fire of the public's schadenfreude.
Meanwhile, New Stadium Insider, which posted the press release above, also analyzed the available Yankees seats listed on FanSnap.com and came up with this:
Doing math based on the rounded numbers of tickets available according to the site (which does not include all ticket brokers, or Craigs List), an average of 16,900 Yankee tickets are available on the secondary market for each game. In other words, 35% of the per-game inventory sold by the Yankees is now back on the market, presumably with the intent of making a profit.
Whether the buyers will be able to make their money back is as yet unclear; NSI notes that some tickets are selling at above face value, but also that plenty of other people are dumping tickets for next to nothing. Too bad there's no way to see "Completed Sales" on StubHub.
April 24, 2009
Seatgate: Our long national nightmare continues
The controversy over those empty seats at New York Mets and Yankees games has reached MLB commissioner Bud Selig, though he was typically uncritical of the teams in his response:
"Hal Steinbrenner did say a couple of weeks ago that he thought that they may have overpriced tickets, and they ought to look at it. Well, good for him," Selig said at MLB's New York headquarters in a meeting with the Associated Press Sports Editors. "And I know the Wilpons are very sensitive about all of this, and I'm sure both clubs are doing that. And I'm not suggesting that they shouldn't be doing that. Because they should."
Which is all well and good, except that it was reported the day before that Yankees president Randy Levine revealed the team intends to raise premium ticket prices 4% next year. Guess Selig doesn't read the Times.
As for Levine, he's said he considers the issue closed: "We're done talking about seats," he told reporters on Wednesday. "We're not talking about seats." You may not be, Randy, but everybody else still is.
April 20, 2009
Sports bubble watch, mid-April edition
I have a short op-ed in today's Metro NY about the deflating sports bubble, prompted by my visit last week to the New York Mets' Citi Field last week at which a large chunk of the expensive seats went unfilled. Other recent signs that $110 ticket prices and 8.5% unemployment rates don't mix:
- The New York Yankees failed to sell out their second home game of the season, breaking a streak of 39 straight sellouts, and the empty seats continued into the weekend. After Sunday's game, New York TImes columnist George Vescey wrote: "Yankees management claimed an attendance of 43,068 on Sunday, but you could not prove that by the gaping sections of expensive seats from dugout to dugout. Either the Yankees have not actually sold those seats, or the bankers and brokers with the corporate seats are taking weekend jobs to make ends meet in this rotten economy they helped create."
- MLB teams have already officially abandoned their "baseball is recession-proof" line, and teams are responding by rolling back ticket prices: The Milwaukee Brewers are offering some seats for $1, the Minnesota Twins are selling tickets pegged to the Dow, and there's a long list of other discount plans. (Reports that the Houston Astros and/or Toronto Blue Jays were offering season tickets for $76 total look to have been erroneous, or at least I couldn't confirm them.)
- Fans who've bought pricey seats figuring they could sell off those they didn't want to use are finding few buyers on sites like StubHub and Craigslist. Reports Bloomberg News: "Sion Nuseiri, an accountant from Brooklyn, said he bought two season tickets with the idea of selling off enough to wind up with a profit. Instead, the offers he gets are below the $15- $35 face value for his tickets. ... 'I actually thought I would make some money,' Nuseiri, 23, said in an interview. 'Every time I put something on Craigslist, people are trying to lowball me.'"
- Speaking of StubHub, if you want to go to tonight's first-ever night game at the new Yankee Stadium, you can get upper deck seats ($22 face value) for as little as $6, and seats in the $55 second-deck "main level" for as little as $10.
So far, no signs of the Mets and Yanks rolling back prices to reflect the new economic realities, but if the empty seats continue — and, more important, if fans start eschewing the team ticket windows when they realize StubHub is so much cheaper — things could get mighty interesting.
April 05, 2009
Sale prices of Boston Red Sox opening day tickets on the secondary market — that's "legal ticket scalpers" to you and me — are down almost 50% from last year, yet another sign that the economy is having a major effect on demand for high-priced sports tickets. The New York Mets have also announced they're auctioning off unsold seats for their opening game at Citi Field, though given you're not allowed to bid less than the face value that was the reason the tickets went unsold in the first place, it'll be interesting to see how many bids the auction draws.
(Thanks to The Sports Economist for the links.)
March 29, 2009
Yanks and Mets preview: Empty seats and pricey beers?
You can't walk past a newsstand in New York &mdash yes, we still have newsstands here, and walking — without seeing a passel of articles hyping the soon-to-be-opening Mets and Yankees stadiums. I've long since given up hope of following it all, but here are some of this weekend's highlights:
- The Newark Star-Ledger is wondering whether the teams will be able to sell all their pricey new seats, with sports marketing consultant David Carter saying ticket-buyers are likely to be more price-conscious during a recession: "For a long time, fans haven't done that kind of assessment. Now they're looking at it that way."
- The Daily News' Bob Raissman, meanwhile, wonders if the Yankees' cable network will show any empty seats on TV. That is, if they ever stop complaining about the lousy camera angles at the new stadium.
- Bucketloads of new Yankees stadium photos keep turning up. Note the $9 beers and $5 bottled water. (You'll still be able to bring your own bottled water into the ballpark, but juice boxes will be at the discretion of security guards.)
- The Times' Richard Sandomir reports that the Mets' goal in reducing seating at Citi Field by 15,000 from Shea Stadium was "stoking demand for far fewer tickets." (Yeah, no duh.) Though Sandomir also buys into the Mets' argument that the new stadium is more "intimate," notwithstanding that it's actually almost as tall as the one it replaced, despite offering 25% fewer seats.
Which brings us to the other contender for dumbest observation of the day:
As for the all-important matter of restrooms, here's what Jeff Gold, a season-ticker holder from Bellmore, N.Y., had to say said when I asked about Citi Field's biggest improvement: "Have you been to the bathrooms here? They're clean and they're huge. It's a first class facility."
As FoS correspondent David Dyte remarked: "And here I was expecting them to pre-age the bathrooms with assorted human waste from local sewers."
March 27, 2009
Plenty of overpriced Mets seats still available!
Just got an email from the New York Mets offering tickets to opening day at their new Citi Field, providing one buys tickets to four other April and May games as well. The email continues: "Available seating: Secure your choice of Metropolitan Box, Field Box or Caesars Club Bronze seats." A look at the insanely complex Mets pricing chart reveals that these are the seats in the lower level along the infield, and will set fans back a mere $210, $175, and $161, respectively. The prospect of empty seats on TV when the Mets open their new home is looking more and more likely.
(Note: It looks like the Yankees are still having similar problems.)
March 16, 2009
Sticker shock continues for Yanks, Mets fans
Opening day for the New York Yankees and Mets new stadiums are less than a month away, and more and more people are noticing that the teams will be charging through the nose for the privilege of enjoying all those new cupholders. The latest developments:
- Jay Jaffe was finally offered seats for less than $85 a pop, but remains unhappy about the whole experience.
- The Yankees are offering first dibs on buying single-game tickets to season ticket holders, with the hoi polloi (and holders of smaller miniplans) going to the back of the line.
- With single-game Mets tickets going on sale to the general public today, fans are starting to notice what I noted last week during the pre-sale: They're crazy expensive. "I'm speechless," one Mets fan and blogger told amNewYork. "I was shocked by the pricing, especially the outfield seats."
It's pretty shocking, no doubt — as much as $70 a pop for seats in the front sections of the outfield, the kind that used to be known as "bleachers." It's little wonder, then, that fans look to be heading for the rafters as fast as possible — though this isn't helped by the team's online ordering system, which when a certain section isn't available (in my experience looking for tickets yesterday) appears to automatically offer much pricier seats closer to the field as a substitute.
As for the latest indignity to Yankees fans, it seems odd to offer season ticket holders first crack at buying individual game tickets — these are the people who already have seats after all. But there could be method to the madness: Doing it this way not only helps strong-arm fans into coughing up for season plans, but it effectively pushes the risk of whether tickets will sell onto fans, who will be the ones waiting and watching if their excess ducats draw buyers on StubHub. Not to mention that the Yankees now get commissions from every resale on StubHub, meaning they can effectively charge twice for selling the same tickets. Nice work if you can get it.
March 10, 2009
Mets fans heading for the cheap seats, too
The "pre-sales" for New York Mets tickets began today, and what's available to pre-sell gives a glimpse into the shape of the collapsing sports bubble. As I report on the Village Voice blog:
Flushing nights in April and May providing a good imitation of the South Col, let's try for a Sunday afternoon game against the Nationals, a Bronze selection. Promenade Boxes, the new term for the front of the upper deck, are only $28 — but they're sold out. As are the $20 Promenade Reserved Infield seats. A handful of $15 tickets are available, if you don't mind sitting in the last section of the outfield upper deck, seats so bad they didn't even exist at Shea.
Other Saturday and Sunday games produce the same message for almost all tickets under $30: "Unable to secure seats in this Price Level." You can, however, get tickets in the Caesar's Club Platinum section in the second deck — for only $140 a pop.
One possibility that occurred to me after posting the Voice article: In addition to Mets fans all scurrying for the cheap seats, it could well be that professional scalpers are focusing their energies there, figuring that the profit margin on reselling $140 seats is going to be pretty slim, in this economy or any other. Either way, it's going to be very interesting to see how the Mets respond if, say, Citi Field is one-third empty for its second game ever, and it's the bottom third — which looks more possible than anyone could have imagined last fall.
March 08, 2009
Brodsky v Levine III: Yet another Yanks stadium hearing
If you were dying to hear how Friday's hearing by New York State Assemblymember Richard Brodsky into the Yankees' stadium deal went, I didn't go, but apparently there was lots of shouting, which should surprise no one. Yanks president/former city deputy mayor Randy Levine apparently brought some of the documents that Brodsky had subpeonaed, but not all, meaning we may yet have to go through more of these hearings.
Brodsky also revealed at the hearing that he's signed on in support of an assembly bill to require that 7% of tickets be kept "affordable" at sports facilities that receive public benefits. Reading the bill itself reveals that "benefits" is defined as "any direct or indirect grant of funds, tax reducations, tax preferences, subsidies, payments in lieu of any tax or tax obligation, or any other form of public support," which seems to cover all the basis; "affordable" is defined as "within the economic ability of persons whose income is at or below the area median income for a four-person household to purchase tickets without economic hardship," which is a bit more vague. A potentially bigger problem: What with StubHub serving as teams' official ticket reseller, many of those "affordable" tickets would likely be snapped up by scalpers and resold at unaffordable prices — that is, if the teams didn't just scalp them themselves.
March 06, 2009
Long piece in today's Wall Street Journal on the bad timing by the New York Yankees, New York Mets, and Dallas Cowboys in opening stadiums geared to high-end consumers at a time when there ain't none to be found. (Best headline, though, goes not to the WSJ but to the New York Times' blog item on the story: "Luxury Stadiums Seemed a Good Idea at the Time.") Highlights:
With just weeks before their new $1.1 billion stadium opens, the Cowboys still have 2,000 premium seats and about 50 of their 300 luxury suites left to sell. The Yankees have hired [luxury real estate agent Neal] Sroka to drum up buyers for the hundreds of premium seats still in their inventory. The Mets, who once had deals for all 49 of their luxury suites, say they've had to go back to the market after one customer, whom they declined to name, backed out....
Between corporate sponsorships, naming-rights deals and luxury suites, two-thirds or more of teams' revenue comes from corporations rather than ordinary fans, estimates David Carter, executive director of the University of Southern California's Sports Business Institute. Over the years, luxury boxes, once just a few glass-enclosed rooms high above the regular seats, have become as integral to a new stadium as concession stands -- more so, because companies pay for them up front, guaranteeing profits regardless of the team's success on the field. As team owners crammed in ever-more premium seats, corporations, eager for new ways to entertain clients, happily bid up the prices.
All that corporate money, Mr. Carter says, has created what he calls the "sports ticket price bubble." Now that bubble is in danger of bursting.
If so, the question is whether sports will get that "soft landing" that everyone was talking about for the real estate market a couple of years ago, or the spectacular nosedive that we saw instead. Opinions?
Mets ticket prices go sky-high, too
Amidst all the fuss over New York Yankees ticket prices at their new stadium, the Mets' new stadium has been largely overlooked in recent weeks. But today, Citi Field gets its day in the spotlight with a love letter from the New York Times' Ken Belson and Richard Sandomir, declaring it the "anti-Shea" and raving about its waterless urinals and "intimacy" — a baseball industry buzzword that means not that it's actually physically smaller (it's just as large as Shea Stadium was in height and breadth), but that it holds fewer fans: 42,000 as opposed to 57,000 at Shea.
And what do the Mets gain by lopping off one-quarter of their seating capacity? Seating scarcity, which they hope will enable them to charge much higher prices than at Shea as demand outstrips supply. And oh, are those prices higher — Sporting News blogger "greenjet5" links to the new Mets pricing scheme and has a fit of apoplexy:
Yes, there are 140 different ticket prices! You will have to typically spend $40 to $50 to sit in the best outfield seats, and those are the worst seats in the stadium. Upper deck boxes may run from $60 to $75. There is one positive. I expect upper reserved to be pretty good seats in this stadium. I don't know what kind of maniac fan spends over $100 to see a regular season baseball game. It appears to me that the majority of tickets are over $100. Now I'm not one of those idiots that complain about high ticket prices and then pays for them anyway. I'll look for an upper deck seat to a couple games. It's a baseball game. I can afford to spend $100+, but why? That's not what it's worth. The Mets will have to find out the hard way.
As FoS reader Andrew Ross chimes in: "Which is more expensive: the most expensive season ticket at Citi Field, or buying Citibank itself?"
"Pre-sales" for individual Mets tickets begin next week, so maybe after that we'll see whether fans will swallow these ticket price hikes as they've done at past stadium openings, or whether the economic crash has changes the rules of the game. If the latter, expect to see some meal deals as the season progresses.
March 04, 2009
Yanks handling ticket sales about as well as finding a backup catcher
If you missed it, the Village Voice website yesterday had another rundown by yours truly on the latest in the New York Yankees ticket controversy. Meanwhile, another report that Yankees ticket salesfolk are still dispensing a load of horsepoop.
February 28, 2009
Ticketgate: Day six, Yankee fans held hostage
The Great New York Yankees ticket controversy hits the New York Times today, with Richard Sandomir reporting on more tales of woe from longtime ticket plan holders who are upset with the seats they're being offered in the new stadium. Included are both fans who were offered worse seats for higher prices (including one who seems to have lucked into Jay Jaffe's $85 behind-the-foul-pole plan that the Yankees swear doesn't exist), and fans who were offered worse seats at lower prices. Embattled Yanks COO Lonn Trost blamed fans for not reading the "relocation guide" the team sent out last fall, apparently referring to a line warning that seats offered "will not likely be comparable to your current seat location" — which, in angry fans' defense, is a bit of an understatement for being moved from the third-base line to the bleachers.
At least, though, the unhappy bleacher resident can be glad he wasn't relocated to the auxiliary seating section in Astoria.
February 27, 2009
Yanks to charge extra to stand
New York magazine answers a question I've had for some time about the new New York Yankees stadium: "Unlike at the old Yankee Stadium, bleacher creatures can move around the rest of the stadium." That makes sense, as the Yanks management will want them to have access to all the overpriced dining and souvenir options that will fill the new place. What makes less sense: Bleacher tickets cost $12, but team COO Lonn Trost told WFAN Wednesday that standing-room tickets will cost "around $20" — meaning there will be an $8 surcharge not to have a seat to sit in.
The reason, obviously, has to do with the fact the Yanks held bleacher ticket prices at $12 from last year for PR reasons, but have no problem with charging through the nose for standing room, since there were no standing-room seats at the old stadium to compare prices with. Take it as a sign that bleacher prices will likely rise fast to meet market levels in the next year or two — or, if the signs of plummeting sports ticket demand are true, maybe Yankee fans can hope to be allowed someday to stand for three hours without giving up a yuppie food stamp.
February 26, 2009
Yanks exec: Yes, we have no seats
New York Yankees COO Lonn Trost was on WFAN radio yesterday to discuss the growing uproar over fans being displaced from their accustomed seating sections in the team's new $1.3 billion ballpark. Trost's defense: They can't offer fans better seats because, well, they didn't build them. The new stadium has a capacity of 52,325 (down from just under 57,000 in the old place), says Trost, but those aren't all seats: 1,886 are standing room, meaning only 50,439 actual fannies can be accommodated. Add in 600 seats in the bleachers that will be have obstructed views (and bear a $5 price tag), and available seats in the new stadium are down about 14% from what Yankee fans have grown used to. "We can't create inventory when it doesn't exist," said Trost.
Of course, "We don't have enough seats" may not be the best defense when it was the Yankees, after all, who designed and built the place, but there you have it. (The Mets, it's worth noting, were even more aggressive in creating artificial scarcity at their new home, slashing about 25% of their seating capacity at Citi Field.) Other Trost bon mots:
- He said that seats behind the foul poles are "really not an obstructed seat," but that regardless, they won't be offered as part of multigame ticket plans, only on a day-of-game basis. (They'll still charge full price for them, though, meaning $85 for seats in the right-field corner was not a typo.) Given Jay Jaffe's experience, this means that Trost is either lying or misinformed.
- "Ninety percent of the non-premium seats are $100 or less," reported Trost, defending the new stadium's affordability. Of course, what's considered a "premium" seat is entirely determined by the Yankees, so this is a fairly bogus statistic; moreover, this means that even by the team's math, several thousand seats are considered "non-premium" and yet are still priced at more than $100 a pop. Maybe you have to bring your own cupholders.
February 24, 2009
Yanks to ticket plan holders: How about a nice obstructed view?
Telling your loyal fans that if they want to keep their ticket plans they'll have to pay $25 more and sit behind a pole seems like bad customer service; doing so when one of the fans in question is a noted baseball writer is p.r. suicide. Jay Jaffe tells his tale of woe at the hands of the New York Yankees and their new stadium at Baseball Prospectus; I report on Jay's report, and have some further speculation on whether this is an indication of the sports bubble bursting at the Village Voice website.
In related news, Neil Best of Newsday reports on asking Yanks COO Lonn Trost about the state of the new stadium:
How are sales of premium seats going? "Over 70 percent have been sold and paid for."
It seems as if you have been marketing them aggressively, including newspaper ads. "Why are we marketing? Like any good business, you market."
Has the recession affected sales of your most expensive seats? "It's affecting the time it takes to sell them."
Is there any chance you will drop prices on your most expensive seats? "No, our prices are our prices."
Is it true there are seats in the bleachers from which you can't see parts of the field? "Yes, but we will have TVs in the walls there."
The new Yankee Stadium: It's not actually a view of the field, but it plays one on TV.