Where there’s demand, there’s a way

We talked about the StubHub thing here yesterday, and the only real defense, offered both here and at Pinstriped Bible by William Juliano, was that the move is in the best interests of season ticket holder. Juliano’s claim is that StubHub is unfair to sellers, who are seeing the value of their tickets (to non-premium games they overpaid for in the first place, mind you) eroded by the secondary market. However, as Wendy Thurm gets at over at Fangraphs, that’s pretty much nonsense, and wouldn’t you know it, it all comes back to demand:

Not all teams disliked the StubHub arrangement. The Giants loved it because they made money twice on the same tickets. Beginning in 2010, and continuing through last season, the Giants have played to sell-out or near sell-out crowds. Strong demand and limited supply for Giants tickets meant higher prices on StubHub. It also meant the Giants didn’t lose many same-day ticket sales to bargain-basement prices on StubHub.

It really is that simple: if prices are too low for your liking on StubHub, it’s because there’s insufficient demand for the tickets in the market. This is even more true if you assert that the sellers would like to be getting much higher prices, and aren’t deliberately flooding the market with cheap tickets or something. If more people wanted to go to Yankees games, tickets would be selling for higher amounts on the secondary market. Period.

Not that I don’t see how it’s hard to fully grasp that. The Yankees are the premier franchise in Major League Baseball, can generally be counted on to put a playoff team on the field every year, and occupy the sport’s biggest market. By all rights, they should have the game’s most in-demand tickets (excluding the Red Sox due to the smaller capacity of Fenway Park, anyway). That they don’t suggests that the Yankees need to be doing more to make people want to come to the Stadium, not that they need to engage in further price gouging of fans.

Born in Southwestern Ohio and currently residing on the Chesapeake Bay, Brien is a former editor-in-chief of IIATMS who now spends most of his time sitting on his deck watching his tomatoes ripen and consuming far more MLB Network programming than is safe for one's health or sanity.

25 thoughts on “Where there’s demand, there’s a way

  1. billy

    The Yankees dont need to be doing more to make people come to the stadium, they actually need to do LESS of what keeps us fans AWAY from the stadium, i.e- overpriced non upper deck tickets, the moat, being yelled at to stay behind the white lines while watching the field in the lower decks when no one is in the last row of seats, overpriced food/beer. Lower the "premium" seat prices, and the place can be rocking like it was in the late 90s/early 2000s. Once the prices skyrocked to where only corporations can afford the good seats, fans arent going to pay the same price to go. No wonder the lower deck is usually only half full.

  2. roadrider

    Well Juliano says up front that he's a season-ticket holder so his self-interest is no doubt influencing his position on this.

    IMNSHO baseball tickets are too damned expensive. The idea that seeing one game, and I don't care if it's against the RedSox on a Saturday afternoon and first place is on the line, is worth hundreds or thousands of dollars is ludicrous. Yes, because of the income distribution patterns in our society there are enough people living in (or visiting) a large metro area like NY who can afford these tickets to (mostly) fill the stadium. However, even in NY the population of potential fans who have enough money to set some on fire has is limits which is why the moat seats aren't always filled and the weeknight games against lesser opponents might not sell that well.

    The current pricing scheme is undoubtedly the best way to milk the most cash out of the current situation. However, how many kids from non-affluent households can afford to attend games the way I did in my youth when I used to buy GA seats in the upper deck behind the plate with my allowance money? Now those same seats go for nearly $100 (or more) – even on StubHub. Is this the way to build the future fan base?

    Hell, with the price of cable TV it even costs a lot just to watch from home. I wonder if there's going to be a bubble bursting sooner or later with the price of sports tickets and sports media. There is, you know, a pretty strong recession still in progress.

    • I would argue that self interest has educated my position, but not really influenced it because I have also benefited from being on the buying end. If the SH relationship continued, I would have probably dropped my account and purchased tickets exclusively on SH for less money, so, if self-interest was my only motivator, I'd probably have preferred the status quo.

      Having said that, my main point is the Yankees need to be sensitive to season ticket holders because they make up the lion share of ticket sales. Even if my interest is purely selfish, if other season ticket holders feel the same way, the Yankees would be foolish not to address the concerns.

      • roadrider

        Even if my interest is purely selfish, if other season ticket holders feel the same way, the Yankees would be foolish not to address the concerns.

        And the way to do that would be to lower the prices so that the risk associated with purchasing a season plan is lower and plan holders are not so dependent on being able to re-sell tickets at prices that are unaffordable to most fans, particularly for the less attractive games.

  3. ProfRobert

    Do I infer correctly that Ticketmaster will re-sell the tickets for face value only? That actually does every fan a disservice, whether a season ticket holder or not, be artificially restricting the market through price. For example, let's say I'm a season ticket holder, but I don't want to waste my time seeing the Royals on my $500 ticket. On Stub Hub, I might be able to recover, say, $100, from someone who is a Royals fan, or someone who wants to sit in a great seat for a change or for a special event, but who is not going to pay $500 for the privilege. Conversely, let's say it's a really hot game — September and the Division is on the line. I could recoup a lot of my investment if there's a bidding war among to get to the game (hell, I paid multiples over face value to get a ticket to the Subway Series in 2000).

    • ProfRobert

      Continuing because this got too long for one post:

      It may also even hurt the Yankees, though obviously they've made a calculation that it won't. Until now, season ticket holders might decide to buy a very pricey package knowing they could recoup some percentage, even if sold below face, on the Stub Hub market. Now, knowing it's unlikely they can get any recoupment for certain types of seats and games, they may not buy as pricey a package to start with..

      • BrienJackson

        I sort of doubt that. At the most, I think the Yankees are just using the season tickets silly complaint as a cover for the move, and I guess placating them at the same time (until they figure out they won't magically turn a profit on those tickets they have to see the Royals in May, anyway). I doubt this is going to change season ticket buyer behavior much, at all, if only because the ones who care aren't that economically literate.

    • BrienJackson

      Yeah, that's the other side of the coin for season ticket holders. Even granting that there's a somewhat better chance of re-selling the ticket for face value, there's a much greater chance that you won't be able to sell the ticket at all without eating some amount of loss on it. And if the tickets could draw face value, presumably sellers wouldn't be dropping prices.

      FWIW though, tickets will still be available on StubHub, just not e-tickets you can print off with a barcode.

    • That's not correct. I've heard the TM price floor will be $10, versus the new $6 floor for StubHub. That's a small difference, but at least it doubles the $5 credit the Yankees give season ticketholders for unused tickets.

      As I argued yesterday, without knowing the exact terms of the deal, it's hard to criticize, much less depict it as a greedy maneuver. Unfortunately, the narrative of the money hungry Yankees seems more important than waiting for the facts.

      • michael

        If a stock share for $100 drops to $10 instead of $5, are is the return doubled, or is the loss offset by a mere 5%?

  4. jay_robertson

    So, how much IS an average, middle tier type Yankees ticket?

    Just asking – since I whine about having to pay a "premium" price to see the Twins vs the Yankees, but it sounds like my premium Stubhub price is still less than an everyday Yankees ticket…

    As I've said (ad nauseum,) Yankees/Twins tickets were available between $20 and $40 per game last year, on StubHub. With ticket prices far less than that for non-Yankee games.

  5. Thanks for the link….I think you intended to also link to my blog, but it seems to be broken.

    That aside, Thurm's example doesn't prove my opinion is offense for a few reasons. Every team has its own set of circumstances, so what works for one doesn't necessarily mean it has to work for the others. In the Giants example, they use dynamic pricing, while the Yankees use a static model. As a result, their secondary experience should be different.

    Another difference is capacity. The Yankees have 10,000 more seats. That makes a huge difference. How one could even make a comparison between the two teams without mentioning as much is telling.

  6. Keith

    Just to play Devil's advocate, do the Yankees have some sort of a legal, ethical and/or moral obligation to ensure that every fan who wants to attend a game (or multiple games) is able to? If the Yankees make attending the Stadium too much of an elitist experience, then they may end up alienating a part of their fan base. If this part of the fan base is large enough to impact the Yankees' bottom line then obviously the Yankees have shot themselves in the foot by not having enough foresight to recognize the potential ramifications for their actions. If not, then that part of the fan base gets squeezed out, and (unfortunately) that part really does not have any recourse.

    Your general premise (which I do not disagree with) seems to be that that Yankees have overvalued their tickets, and season ticket holders have (for the most part) brought into this overvaluation. But it would seem that if enough people (corporations are people too) are willing to buy the tickets at the prices set by the Yankees to allow the Yankees to make enough money to justify the prices of their tickets, then the tickets are not in fact overvalued. What you (and a majority of fans) may consider to be "price gouging" may be considered a good enough deal by a large enough group of people to allow the Yankees to support such ticket pricing. It stinks if you are on the short end of the stick, but is not the way that most things work?

    • Sherm

      The only unethical thing in this equation is the ability of businesses to write off tickets as entertainment expenses, which helps result in the "overvaluation" of tickets for ordinary fans. Thus, a corporation's purchase of tickets is subsidized by the government, which subsidization drives up the prices for ordinary fans. I only make this point because corporations are not people too when it comes to buying tickets.

      • BrienJackson

        Well, that and taking public money to build the thing then charging $2,000 for the good seats.

  7. michael

    I guess then the market value isn't what any one idiot will pay for it, but what any idiots will pay for it twice.

  8. mcmastro

    I don't know about you guys, but it's really disheartening to watch games and see that the game is never really sold out. Looking behind home plate and realizing that their are all those empty seats just makes the stadium feel like it isn't the same place as it once was.

  9. tommydee

    Let's face it, the Yankees are doing this because the secondary market is infringing on their remaining walk-up ticket stock, and everyone knows it. I don't know anyone who buys a walk-up ticket without checking StubHub first to save money and get better seats.

    I'm not sure that the tickets prices for seats now on TM will go up enough to solve their "problem". All I know is that they're setting themselves up for battle with their own subscribers.

    • Right. And this is the polar opposite of trying to help season ticket holders sell their tickets for more money.

    • Your missing the point. Season ticket holders don't want to make money off their tickets. They just want to make sure they aren't paying too much compared to the secondary market.

      The Yankees are simply trying to restore the value proposition to their season ticket licensees. I am not sure why that point is being missed, but it explains why so many have failed to grasp the dynamic. After all, if the Yankees were trying to protect their walk-up, which is a small percentage of total sales, they wouldn't participate in any secondary market. Whether it's $6 on StubHub or $10 on Ticketmaster, fans are still going to check out the secondary market before Yankees.com.

      • roadrider

        I think what you're missing (or blinding yourself to) is that the high prices the Yankees are charging to anyone buying tickets directly from them (on a season plan or single-ticket basis) was intended to allow them to capture at least some of the high-end of the secondary market. That is, they were essentially pre-scalping their own tickets by setting the prices high enough to grab some of what ticket holders could re-sell them for. But now they want to go even further and put a floor under the secondary market which might well have the effect of reducing the opportunities for re-sale of tickets to games in less demand. They may be selling it as a service to season-plan holders (from whom they are already claiming a share of the profit that could be made by re-sale of high-demand tickets) but it's really about them – not you.

        It's your privilege to believe otherwise but I would be more skeptical.

        • How are they pre-scalping them? That doesn't make any sense because under the old StubHub deal there was no connection between secondary prices and face value. Under the TicketMaster agreement, there will likely also be no connection. There is absolutely no basis to claim the Yankees set primary market ticket prices at a level designed to increase their cut in the secondary market. You can be as skeptical as you want, but that assertion has no basis.

          Also, do you really think a $4 difference in the price floor (TM is rumored to be going with $10 instead of SH's $6) is going to limit secondary market demand significantly? Even if so, season ticket holders can take advantage of a $5 unused credit, so if the market won't pay more than $6, the impact is small.

          Finally, of course the Yankees are looking after their own interests, but, in this case, their interests are to keep season ticket holders happy. As a season ticket holder myself, I know from experience that a more fair secondary market will benefit me, so, as a result, I will likely keep my plan. In other words, the Yankees win because I do.

      • BrienJackson

        " Season ticket holders don't want to make money off their tickets. They just want to make sure they aren't paying too much compared to the secondary market. "

        That's the opposite of how season tickets work.

  10. Zipper

    I think the Yankees ditched stubhub because Ticketmaster offered the Yankees a higher kickback to sell Yankee tickets and because they could get a higher price floor. The Yankees are maximizing the brand name and getting more money in exchange for the right to sell MLB's most premium ticket. I can understand that.

    Fundamentally, this has nothing to do with season ticket holders. The Yankees care because they lose money on walk-ups when I buy on stubhub for below face value.

    The Yankees already make their money when they sell a season ticket, but care about the value of individual tickets because they don't want their own season ticket sales cannibalizing the price of individual game tickets that the Yankees sell on game day or in advance.

    Ultimately there's nothing the Yankees can do about the market correcting itself short of telling fans that they can't re-sell tickets. People can still buy or sell on eBay, Craig's list, or wherever else.

  11. Zipper

    Looking at it further, I also think the Yankees want to get the secondary market price. For them it'd be like Disneyland: pay the Yankees' price or don't go.

Comments are closed.