Sports franchises need to take a cue from airlines and Apple
With all the fuss over the empty luxury seats at the new Yankee Stadium, I was mildly surprised to find something similar happening in my own backyard. At Sunday’s A’s-Rays game at the Oakland Coliseum, all the ingredients for a great day at the ballyard were in place: sunny April weather, last year’s AL champions in town and a Sunday afternoon. What we found instead was a micro-market in disarray. As the credit markets teetered last October, the market for sports tickets has apparently fallen apart as well.
The first indication there was a problem was the total lack of online ticketing activity. There were practically no offers on CraigsList, even from brokers, and none at all on eBay. At the walk-up ticket booth, we found that we could buy any section in the house, including the Diamond Level. This should simply never be the case. The Diamond Level is a very limited “VIP” area, maybe 60 seats tops, right behind the plate on the playing field level. Seats go for $225 and include free food and drink service for the whole game.
Weirdest of all was the scene inside the stadium. The A’s bifurcate each of the two seating levels – a minimum of two pricing levels in each deck. In both decks, there was a cluster of people behind the plate, emptiness for several sections as the seating moved along the infield, another cluster in the sections where the new pricing tier begins, again fading to nothing.
The mystery is why shouldn’t the people forced out to the outfield be able to sit in these empty “mezzo-sections.” The answer could come from a nimble dynamic pricing system at game time. As airlines like Virgin and JetBlue have discovered with exit rows sold at check-in, why not ask fans as they arrive if they would like to purchase a better seat for an extra few dollars? It would be an easy thing to equip ushers with Palm-style barcode and credit card machines like those carried by the clerks at The Apple Store. Everybody gets the opportunity to move closer (or elect not to), getting rid of the weird empty spaces and (I’m assuming) presenting a better, more invigorating environment for the home team. (I know they’re supposed to ignore the crowd, but ask any actor or musician if they’d rather play to a full orchestra than have the front rows empty and the crowd loosely dispersed.)
Meanwhile across the bay, the Giants are trying out a number of dynamic pricing policies. First, the team partnered up with a firm to build elastic pricing around its unsold inventory for the least attractive games. Last week, though, came the real reckoning – and a big indication that the team is running scared about its attendance. Ticket prices were dropped 40% for the Giants series this week against the Dodgers, traditionally the most attractive opponent. Granted the team is trying to stir up interest for later in the year – it appears they’ll be competitive in a moderately challenging division – but to have to do this so early and against the team’s best natural rivarly is surprising. One wonders how scared the Giants are about advance sales for the rest of the year.
In the Oakland A’s case, the lack of a fluid ticket market is framed by the fact that the Oakland Coliseum is a horrible dump, getting dumpier every day. The tarps in the third deck look weathered and depressing, while the bathrooms, parking lot and facilities remain some of the worst for a major league sport. Nevertheless the empty seat patterns – along with all the unsold display ad inventory throughout the stadium – are clear indications that baseball is not recession-proof. There are easy ways to make profit from making markets more efficient. Let’s see if the A’s and their brethren take up the challenge.