Tag: dynamic pricing

Cubs Lower Season Ticket Costs While Mostly Raising Individual Ticket Prices

The Cubs announced their new ticket prices for 2013 and Alvin is doing a victory dance with his bologna sandwich tonight because he is getting a ~10% reduction on his seats up there in the last row of the bleachers.

In fact, all season ticket holders are holding basically even or getting a slight discount next year from the 2012 prices. In addition to the cut in bleacher prices, the Upper Deck Box Outfield folks are also getting a ~10% reduction and the the Terrace Reserved Outfield people are getting ~5% off.

Everybody else pretty much holds even at the old levels. If we averaged them out weighting them equally (which I know isn't 100% accurate, but it should be close enough for our purposes), the Cubs lowered their overall ticket prices by about 1.6%.

What's interesting is how the Cubs re-jiggered their individual ticket prices to come to this final overall reduction:

You'll notice that only 9 individual ticket price points were reduced. 37 price points were raised and 19 remained steady. Wait… what?

How did the season ticket prices come down while 56% of the price points actually went up? The key is how the games were distributed in the five pricing tiers. The tickets in the seating bowl have 4 fewer games in the Marquee tier than last year and 3 more in the Bronze tier.  The Bleachers have 7 fewer in the Marquee tier and 7 more in the Bronze. They also have 8 more Gold level and 8 fewer Silver. So even though many of the price points were raised, over the course of the season the total amount to purchase every ticket was lowered because there were fewer of the most expensive tickets available.

This is clearly a move to appease their season ticket holders and indicates to me that the Cubs are extremely nervous about the attrition rate of their waiting list. They'll still claim that renewal rates are strong and the number of the people on the waitlist still tops 100,000, but when it comes to ticket revenues, actions speak louder than words.

For individual ticket purchasers, the news is not as good. For one, the prices listed above are generally $1 to $2 lower than they will be when single game tickets go on sale. That doesn't alter the percentage change on the tables above very much because season ticket holders saved $1-2 per ticket last year as well, so while the percentages might change by a tenth of a point or two, that doesn't mean a lot when we're talking about general trends.

Secondly, unless you buy Upper Deck Box Outfield seats, your individual tickets will generally cost you more than last year. Remember, the savings is a result of there being fewer Marquee games on the schedule. So while it is less likely you will be buying an individual ticket for a Marquee game than last year, if you do go to one, chances are you'll pay as much or more for that ticket.  If you go to Gold, Silver, or Bronze level, you almost assuredly will pay more. In fact, the average Bronze level seat will cost you over 13% more than a Bronze game from last year.

I'll restate that. You can expect to pay about 13% more per ticket to watch two 90-loss teams play each other on a cold September weekday afternoon than you would last year. In some cases you'll pay significantly more than that. If you sit in the Terrace Reserved section for that horrid game, you'll pay 33% more than last year ($16 compared to $12 last year).

It's a bold strategy that seems on the surface like it may have been Todd Rickett's idea. Those Bronze level tickets were selling for less than a dollar on StubHub last year because season ticket holders were dumping them for anything they could get. Knowing that as we know now and knowing the team will most likely be shitty again next year, why would anyone buy those tickets at the old face value, much less the new one?

The answer might lie in some upcoming scare tactics that the Cubs like to employ to falsely inflate ticket demand. 

As reported by Paul Sullivan, the Cubs are ready to expand their dynamic pricing experiment:

The Cubs also will use dynamic pricing in the entire ballpark, Faulkner said, after experimenting with the concept in the bleachers in 2012. As ticket inventory decreases, the price of the unsold tickets will go up.

So while people might normally be inclined to wait and see if the team does, in fact, suck as much balls as it did last year before running out and buying tickets to see the Cubs play the Padres, they may feel compelled to buy the tickets early to make sure they get the tickets at the lowest price point. If they wait and the team is actually better than they expect, it could cost more to buy the tickets later.

And don't think the Cubs won't be driving that point home all winter long.

Plus, remember that dynamic pricing allows them to sell fewer tickets overall while maintaining a decent revenue stream because the price point keeps rising as the tickets are sold. So they can make up for lost revenue in the crappy games by selling lots of ever-more-expensive tickets to the popular games.

But I guess as long as Alvin is happy. That's the main thing.

Cubs Dynamic Pricing Probably Not As Dynamic As They’d Like

I've been keeping an eye on the Cubs' bleacher ticket prices for a little over a week now because I got curious about how their dynamic pricing model is actually working out for them.

Previously, I had hypothesized that overall revenues would not be taking so much of a hit, because the Cubs would be selling some high profile games at exceedingly inflated prices to make up for the unsold tickets to the crappier games.  That assumed that there would be a number of high profile games that people are excited about and would be willing to spend $100+ on a single ticket.  But what I didn't know at the time was how few games the public seems to consider "high profile" versus what the Cubs considered "high profile" when they designated them in their multi-tiered pricing system.

Out of the 81 home games this season, 13 of them are considered Marquee (the highest level), 9 are Platinum, 21 Gold, 27 Silver, and 11 Bronze.

Since they are using their dynamic pricing model, the Cubs do not publish the base ticket prices anywhere on their website that I can find, so I had to do a little deducing. With the help of intrepid commenter, Wennington's Gorilla Cock (WGC for those uncomfortable with the visual), I managed to determine the base prices are: $78 for Marquee, $52 for Platinum, $38 for Gold, $27 for Silver, and $17 for Bronze.  If you bought a single ticket for every game of the year, it would cost you $3,196.  If you bought a single season ticket for the bleachers, they charged $3,055, so the season ticket holders are saving a little less than $2 per ticket per game. I'm going to round to $2 exactly for simplicity's sake.

I only started tracking ticket costs on April 10th, so I have no idea what tickets went for during the opening Washington series and the first Milwaukee game. I do know that Opening Day itself did reach at least $100 per ticket, last I had checked, but I didn't document that anywhere. Those games averaged about 37,000 per game so I'm going to assume a good number of bleacher seats were sold and therefore moved the price off of it's baseline starting point. So I am conceding that the first four games of the season sold at least some tickets at above the starting face value, as, I'm sure, the Ricketts hoped they would.

So let's take a look and see how the tickets are moving.

Three of the 11 Bronze level games have sold tickets above $17.  None of the Bronze games remaining on the schedule are currently selling for above $17. The high point I have seen was $35 for the Tuesday, April 10 game and Thursday, April 12 game against the Brewers. I have no idea why the tickets for Wednesday, April 11 topped out at $17, when the day before and the day after were double the price.

Six of the 27 Silver level games have sold tickets above the $27 base price. The high point was $50 for Friday, April 20th against the Reds, which seems to have now sold out. I find that odd, but you can not buy tickets for the bleachers at any price for that game. The Tuesday, April 24th game against the Cardinals was selling at $35 and suddenly disappeared as an option on April 14th. Did it sell out? How come the price never climbed up to the $50 level before selling out? Did somebody buy such a shit ton of tickets for that game that it bypassed at least 2 pricing levels?  I don't know and the Cubs have not responded to any of my inquiries about it. So, for right now, it is just a curious incident. The highest remaining price in the Silver tier are tickets for Monday, April 23 against the Cardinals at $39 each.

Three of the 21 Gold level games have sold tickets above the $38 base price. The Thursday, June 14 game against the Tigers leads the pack at $70. None of these games have sold out.

None of the nine Platinum level games have sold any tickets above the $52 base price.  These are supposed to be some pretty good games with some high demand for tickets, but that doesn't seem to be reflected in the actual ticket sales at this point.

Seven of the 13 Marquee level games have sold tickets above the $78 base price.  Now we're getting somewhere. The entire Red Sox series has tickets selling for $140 each, which appears to be the absolute highest that the Cubs will charge.  The Saturday Red Sox game was listed as sold out when I started charting the prices, but then some tickets became available and they have been since. For Friday's Red Sox game, you can buy as many as 12 tickets at a time (normal limit is 19 per game). For Saturday, you can only buy four at a time (yesterday it was limited to two, but it's back up to four today).  For Sunday's game, you can buy eight at a time. So those tickets are clearly running low, but they aren't gone yet (which again makes me wonder why a weekday April game against the Reds is unavailable, when the highest demand game on the schedule has tickets remaining).

The Saturday game in May against the White Sox and the Saturday game against the Cardinals in July are selling for $110 each, with no special limits. In fact, no other game on the schedule besides the Red Sox series has a limit below the typical 19 tickets.

Since I have been tracking the prices, not a single price point has moved. The only things that have changed that would prevent me from simply copying and pasting the data from one day to the next are the two games that suddenly became unavailable, and a couple of changes in maximum tickets you can purchase for the Red Sox series. Otherwise, everything has been identical from day to day.

So what does that mean? Well, nothing definitive right now. As we are fond of pointing out when players' stats aren't what we think they should be, it is a small sample size.  It's also an arbitrary starting point.  Ideally, I should have started tracking these things when they first went on sale, but I didn't. So all we can do now is keep going forward and see what happens.

However, what we know so far does raise some questions.  Have the Cubs mis-categorized some of these games?  Saturday, June 30th against the Astros is a Marquee game? Really?  I know it is a Saturday in the summer and those tickets have typically sold themselves, but it is the fucking Astros. I know I have better things to do with my $78 than spend a day in the bleachers watching two of the worst teams in baseball bumble around on the field. That sun is just as bright in a park or on the beach.

When I look at the Platinum level games, I'm equally unimpressed by most of them. Astros, Reds, Rockies, Diamondbacks… yay!

In addition, the Ricketts essentially stated that the dynamic pricing would really only go up.  They said they would not sell tickets below what season ticket holders paid, so that means they could conceivably sell those Marquee games against the Astros at $76, but at that point, who gives a shit? In essence, the tickets are priced as low as they are ever going to get for 62 of the games left on the schedule. Unless something changes pretty quickly, that would seem to indicate that those prices are above what the market is willing to pay. So then what? Sit there and watch as unsold tickets pile up on each other, or break a promise to Alvin and have a sale?  This is why I never would have told Alvin they would set the price floor. Because now he either leaves revenue on the table or he's a liar. Somewhere they will start talking about the cost of them being portrayed as liars on BCB versus the lost revenue of unsold tickets, if they haven't already.

Do they think that demand will pick up going forward? The team is pretty much doing what we expected and what most Cubs fans feared. Namely, being terrible. I'm interested to see if ticket prices move at all for the upcoming homestand. Maybe people are in a wait-and-see mode on the weather before dedicating dollars to these tickets.  Maybe people are just waiting to purchase until they kow they won't be freezing their asses off. I know that's how I was when I decided I wanted to go see Samardzija pitch. I waited until the day before to make sure it wasn't going to be horrible. I doubt that is the case, but it's at least plausible. So we'll see.

And how did a game go from being sold at a slightly higher rate than its base price suddenly get sold out? Are the Ricketts giving away tickets and counting them as sold? Are they simply taking tickets off the market to create a false sense of high demand and low supply? If either of those are the case, then those gaudy attendance numbers to start the season are more of a farce than we had previously thought.

Like I said, I don't have many answers here. The Cubs don't talk about this stuff and my data is very sketchy at the moment, but I think it's worth keeping an eye on.