A couple of days ago, Doc Blume wrote an interesting post about the obvious lack of demand for Cubs tickets this year. There are still tickets available for every game on the schedule, including Opening Day and the Red Sox series. There are large numbers of tickets available for most of the other games on the schedule. That is all true, but Doc concludes two things from this: 1) The Cubs ticket revenues are going to suffer and 2) The ticket brokers are going to get killed this year.
As I've thought more about it, I would have to disagree on both of those conclusions.
First, the Cubs dynamic pricing in the bleachers could potentially grab the Ricketts an absolute huge pile of money, and they don't have to sell out the bleachers to accomplish it either. To illustrate the point, I created a scenario using a theoretical dynamic pricing model. I can not stress this enough. I DO NOT HAVE ANY INFORMATION FROM THE CUBS ABOUT HOW THEIR DYNAMIC PRICING CHANGES ACCORDING TO SALES. I am only theorizing using examples that I feel are close enough to accurate to illustrate the point.
I'm assuming the Cubs have 4,000 bleachers seats for sale for each home game. The renovation in 2006 added ~1,800 seats and I don't think they doubled the capacity, so I'm guesstimating and keeping it fairly conservative. I'm also assuming that the Cubs jump the price of their bleacher tickets by 10% every time they sell enough at a certain level to jump to the next highest tier. Again, I don't think that is outrageous, as the Red Sox bleacher seats are currently selling for $140 per seat and that is exactly what it would be if the Cubs jumped the price 8 times at a 10% increase each time since they went on sale.
So if the Cubs stuck with a flat ticket rate, the potential revenue would break down like this
|# of Games||13||16||26||16||10|
|$ 3,744,000||$ 4,096,000||$ 5,720,000||$ 2,880,000||$ 960,000|
That would come to a total of $17,400,000 for the year.
Now let's assume that after every 500 tickets are sold, they bump the price up 10% (rounded to the nearest whole dollar). So 500 tickets would sell at the original $72 mark, but then ticket #501-1000 would sell at $79, #1001-1500 would sell at $87, and so on. That would complicate things a bit, but it would work out to something like this:
|500||$ 72||$ 36,000||$ 64||$ 32,000||$ 55||$ 27,500||45||$ 22,500||24||$ 12,000|
|500||$ 79||$ 39,600||$ 70||$ 35,200||$ 61||$ 30,250||$ 50||$ 24,750||$ 26||$ 13,200|
|500||$ 87||$ 43,560||$ 77||$ 38,720||$ 67||$ 33,275||$ 54||$ 27,225||$ 29||$ 14,520|
|500||$ 96||$ 47,916||$ 85||$ 42,592||$ 73||$ 36,603||$ 60||$ 29,948||$ 32||$ 15,972|
|500||$ 105||$ 52,708||$ 94||$ 46,851||$ 81||$ 40,263||$ 66||$ 32,942||$ 35||$ 17,569|
|500||$ 116||$ 57,978||$ 103||$ 51,536||$ 89||$ 44,289||$ 72||$ 36,236||$ 39||$ 19,326|
|500||$ 128||$ 63,776||$ 113||$ 56,690||$ 97||$ 48,718||$ 80||$ 39,860||$ 43||$ 21,259|
|500||$ 140||$ 70,154||$ 125||$ 62,359||$ 107||$ 53,590||$ 88||$ 43,846||$ 47||$ 23,385|
|$ 411,692||$ 365,948||$ 314,487||$ 257,307||$ 137,231|
|$ 5,351,995.63||$ 5,855,174.71||$ 8,176,659.99||$ 4,116,919.72||$ 1,372,306.57|
That comes to a total potential revenue of $24,873,057, or more than $7 million more than they would with a flat pricing model.
Demand is lagging, but it is most lagging in the lower level Silver and Bronze games, but those were the low revenue games anyway. The Cubs are now able to charge $140 face value for a seat 400 feet away from home plate. They are making up for the lost revenue from the crappy games by charging premium prices for the games they know will sell no matter what.
Think about it, for every ticket they currently sell at $140 for the Red Sox (and eventually the White Sox, Cardinals, etc.), that extra $68 on top of what they would have charged last year makes up for almost 3 full unsold tickets at the Bronze level.
I'm actually a little shocked the top of the scale is only $140, but it is only the first year trying this. If they bump the price after every 400 seats (setting the top of the scale at $170 per ticket), they can get over $27 milion in potential revenue.
So between selling ~26,000 seats per game to season ticket holders (guaranteeing a floor of about 2.1 million for total attendance) and then making a money grab for the most popular games in the bleachers, the Ricketts can deal with a decrease in actual attendance a heck of a lot better than they could with a flat pricing model. My guess is that their revenue will stay relatively flat from last year even if they fall short of 3 million fans. Even if people aren't tripping over themselves to get at tickets, I'm guessing the Marquee and Platinum levels will sell out or come awfully close.
But can't people get tickets from scalpers for cheaper than face? Maybe, but the tickets on the secondary market won't be as plentiful this year. I think part of the reason we are saying such lagging pre-sales is that the scalpers aren't sucking up the tickets like they normally do. Why would they? Why get stuck with all that merchandise again? If you sell t-shirts and got stuck with 1,000 t-shirts last year, why would you buy the same amount of t-shirts to sell in a year where you KNOW the demand won't improve?
Ticket brokers and scalpers aren't stupid. In fact they understood the market for Cubs tickets a hell of a lot sooner than the Cubs themselves did. I'm sure they have a stash that they have purchased from season ticket holders looking to dump off their tickets now for whatever they can get for fear that later in the season they won't be worth the paper they are printed on. But I'd bet my life they have kept the capital invested in Cubs tickets to a minimum.
So the scalpers will make some money by still underselling the Cubs prices at the ticket windows, but the Cubs don't care because they got full price for the tickets when the season ticket holders bought them. Meanwhile they are making up revenue by selling the actual games with high demand for absolutely ridiculous prices. The people footing the bill for all of this remains the season ticket holders and the people who can't help themselves from paying exhorbitant prices to leer at scantily clad young women while the Cubs get annihilated by premium opponents.
Like I've said before, that wait list and the mythology of the bleachers gives the Cubs tremendous license to pull this shit while fielding an inferior team. That is how they can preach patience and let the Superfriends enact a longer range building plan than most teams would be able to.