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Baseball Teams to Use Airline Pricing Model

2008 December 4
by Phil Miller

From Darren Rovell:

In 2002, while I was still at ESPN, I was asked to do predictions for the following year. When I predicted that more teams would institute variable pricing, I don’t think I was going too far out on a limb. But when I said “the sports world could eventually adopt the airline practice” of price fluctuation, I was definitely ahead of my time.

Six years later, the San Francisco Giants are going to bring airline pricing to sports. The walk-up sales for hundreds of seats for each of next season’s home games could dynamically change, based on supply and demand.

Brokers have done it forever, but teams haven’t taken a shot at it. But the weak economy probably forced the issue, as teams are now going to look to get the most bang for their buck based on true market factors.

This only makes sense, but I’m skeptical that the weak economy had much to do with it. Because the marginal cost of letting fans into a stadium is zero when attendance is below capacity, it only makes sense to broker deals with fans in order to maximize revenue (and profits). This is true in good times and in bad.

HT to student Chris Kaufman

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