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Will Owners Heed Selig’s Warning on Ticket Prices? PDF Print E-mail
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Ticket & Attendance Watch
Written by Maury Brown   
Monday, 06 October 2008 14:11
MLB and the Recession

 

Just before Game 3 of the NLDS between the Phillies and Brewers, MLB Commissioner Bud Selig warned owners not to “get too cocky” when it comes to the escalating prices for tickets next season.

“Because you do pay a price,” Selig said.

MLB enjoyed the second highest paid attendance figure in history this year, along with record breaking revenues, but the financial crisis that has rocked Wall Street is something that could hit the league harder next year.

“I think anybody in every business is concerned,” Selig said.

The comments coming in Milwaukee, MLB’s smallest market, where the Brewers saw their postseason run end on Sunday, were appropriate. The Brewers popularity is high, and with that it would be tempting for their owner Mark Attanasio to raise ticket prices.

Baseball markets like Milwaukee, Cleveland, and Tampa/St. Petersburg are different than Boston or New York. In other words, don’t think that just because Selig warned the owners on ticket prices, every club will heed his warning, or need to do so.

As an example, according to the Fan Cost Index put out by Team Marketing Report, the Red Sox increased the average ticket price at Fenway Park by 10.1 percent this season to $48.80. That comes on the heels of an increase of 2.7 percent the year prior, 4.3 percent in 2006, 9.3 percent in 2005, and 5.7 percent in 2004.

By comparison, in their final year in Yankee Stadium, the Yankees raised average prices by 18.1 percent for 2008, 2.6 percent in 2007, 3.4 percent in 2006, and no change in 2006 or 2005.

Teams with strong brand recognition at the local and national levels, such as the aforementioned Red Sox and Yankees, as well as the Cubs, Dodgers, and possibly even the Cardinals, may not need to heed Selig’s words as closely as, say, the Royals and Athletics.

The Royals had one of the largest increases in average ticket price for 2008, opening the season with a 21.1 percent increase from 2007, and the A’s posting an increase of 22.3 percent. So, when the Athletics say that they’re keeping prices for 2009 the same as they did in 2008, it may be less of a response to the national economic climate and more a case of them overshooting their projections coming into 2008.

The team that will need to be especially careful will be the Tampa Bay Rays. Attendance for the regular season has been up (largest increase for the 30 clubs at over 28 percent. However, that only moved them from being ranked 29th in total attendance to 26th this season), and ALDS games at the Trop have been sold out. Ticket prices for next season have not yet been announced, but the urge to increase prices will certainly be there for the Rays since their on-field success is likely to lead to greater demand for season tickets and individual game ticket purchases.

To put the prices for Rays tickets in perspective, they did not raise the average ticket price last season, in 2007 they raised the average ticket price 0.8 percent, in 2006 it was 24.7 percent (the year the latest CBA was reached), in 2005 they lowered the average ticket price by 5.2 percent, and in 2004 they raised the average price by 15.2 percent (this being the last year that the Rays were above the league average for ticket prices).

In reality, Selig’s comments really are targeting all clubs. The reason? All but two clubs (the Rays and Pirates) raised their average ticket price last season. Compare that to 2007 when five clubs (Nationals, Diamondbacks, Marlins, Reds, and Orioles) lowered prices.

Most analysts watching the U.S. economy believe that even with the $700 billion bailout by the Federal government, it will be years, not months, before the infusion takes hold. Selig, as Commissioner, is wise to warn the owners to mind how much, if at all, they raise ticket prices. Come April, it will be interesting to see who has adjusted to try and lure fans through the turnstiles while the economy continues to fluctuate.


Maury Brown

Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is contributor to Baseball Prospectus, and is available as a freelance writer.

Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network.

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