According to TiqIQ.com, which aggregates online ticket prices from various sources, the average price Knicks fans are paying online for a game at the Garden has shot to $313.54, up from $229.72 on February 3, the day before Lin’s improbable run began. The Knicks’ President’s Day matinee with the New Jersey Nets is going for $601.89, on average, 92% above the season average so far (though that season average is obviously growing as the season moves ahead with Lin as the headline act). The minimum price to get into the building for the Nets’ game: $149.

There’s more: for the Knick’s following home game against the Atlanta Hawks on February 22, the average online seller is getting over $750.  That’s about 300% more than a ticket was fetching less than two weeks ago. Sure, it’s New York.  But how many players would have turned mid-season dates with New Jersey and Atlanta into premium events?

I don’t follow the NBA closely, but I tuned into the Knicks game on Feb 7th after reading a bunch of tweets mentioning Jeremy Lin.   With the Linsanity storyline still going, it doesn’t surprise me to see the interest in Lin (would that make it Linterest?) reflected in the secondary ticket market.

Update (2/21/2012):  John Ourand of the Sports Business Journal had the following tweet this morning:

MSG rating factoid: last night’s Knicks game marked the 7th consecutive game-by-game increase on the NY RSN. Lin’s popularity keeps growing.

Bob correctly notes in the comments to the original post that the increase in secondary market ticket prices doesn’t necessarily mean that demand for Knicks games has increased because of Lin.   It may be a supply decrease that is causing prices to increase.

John’s tweets gives us a quantity demanded measure, albeit from a different (but related) market.  His second one I think can be safely assumed is at a constant “price” (0 at the margin assuming that the viewers of the NY RSN were already subscribers this season before Linsanity began).

whereas Puerto Ricans could previously be signed at age 16, a high-school degree (usually given at 18) is required for the draft. Since the island’s schools do not have baseball teams, its 16- and 17-year-olds had nowhere to train. As a result, the number of Puerto Rican MLB signings fell by 13% in 1991-92. Meanwhile, players from the Dominican Republic (DR) and Venezuela remained free agents. Their numbers soared

Baseball is waning in PR — fewer MLB players, cancelling of the winter season, abandoned fields.  The article notes additional influences — better alternative opportunities and competition from other sports — but this 1990 shift may well be a substantial contributor.

Now the gunsights are on the DR.  As signing bonuses have exploded, MLB and the players union agreed to cap them.  In addition, the article notes the likelihood of an international draft to begin in 2014.

Two elements of the PR story really catch my eye.  First, the age restriction.  Of course, one would suspect that would initiate a nice business in forged birth certificates, a practice not unknown in the development of Latin players.  The other aspect is the draft itself.  Superficially, this institutional change seems to be more inclusive.  Instead, instituting a system that leads to a one-sided choice in a matching problem as opposed to a two-sided choice may be more exclusive.  This is what I explored in The NFL Draft:  Shotgun Marriages v. Marriages “For Love.”

If the draft is instituted for DR players, it will be an opportunity to test these ideas.  Of course, to the DR players (and the country, as the article notes), the issue goes way beyond academics.

(I just put an idea into a marketer’s mind somewhere but moving on …) To put Tuesday’s developments in perspective, the Pac-12 and SEC released their schedules in late December and early January. The delay also means it’s a sellers’ market, if you’re a football bottom feeder willing to yourself to the highest bidder. There is talk of I-AA schools (FBS) with openings on their schedule getting $800,000-$1 million to come get their butts beat by a BCS school.

That’s Dennis Dodd at Dodds and Ends (via John LaPlante).  The price doesn’t surprise me a bit for two reasons.  First, payouts to so-called cupcakes have been trending higher in recent years and, second, the conference realignment that switched into high gear when Mizzou began looking to leave the Big XII should have accelerated that trend.

Playing schedules, which are usually set years in advance, had to be completely redone in a matter of months.   Contracts had to be broken or renegotiated.  Teams that a year ago had all their dates set now found they had open dates that needed to be filled and filled fast.  The cupcakes found themselves with new suitors.

Several years ago I asked a handyman, who was doing some work in our house, how he set his hourly price.  He said that it depended on how busy he was.  If he was very busy, he’d shoot the potential client a higher price than he would if he had time on his hands.  That makes a lot of sense because when he’s busy, the opportunity cost of his time is higher than if he’s not so busy and the client needs to make it worth his time.

The sorts of incentives that drove our handyman to set his particular price are alive and well in the market for cupcakes.    And, yes, it is damn good to be the cupcake.

How popular is soccer? Popular enough to bring financial markets to a halt, it seems. A new paper (pdf) from the European Central Bank finds that during the 2010 World Cup, the number of stock trades plunged an average of 45 percent in countries whose teams were playing at the time. (A goal caused a further 5 percent drop.) “We conclude,” write Michael Ehrmann and David-Jan Jansen, “that stock markets were following developments on the soccer pitch rather than in the trading pit.”

But something tells me that FIFA isn’t going to publicize this paper by telling everyone, “Thanks to the World Cup billions of dollars of financial transactions are lost every four years.

The latest proposal replaced an intention to fund the plan via sales taxes with user fees at the stadium. In discussions of paying for public services, the benefit principle of taxation has a prominent place; the people who benefit from a service are the people who pay for it. Indeed, user fees for stadium usage are a step toward having individual consumers pay for the services they get from the stadium. This includes the fans of visiting teams who go to Minnesota to see their team play, so some part of paying for the stadium is exported to football fans from around the country. What could be better to a Minnesotan than having Packer, Bear, and Lions fans helping to pay for the home for the Vikes? By contrast, if you don’t derive benefits from the stadium, you don’t attend events there and you don’t pay for the facility.

Use of the sales tax, on the other hand, makes all citizens pay for the stadium, even those who never attend games in it. This, of course, includes people who never watch games played there on television or listen to them on the radio, and even those who dislike football. In other words, funding the stadium with sales taxes is redistributive, taking money from non-users to provide benefits to users, and, if one believes that beneficiaries of a good should be the ones to pay for it, unfair.

Of course, under the sales tax approach, the ability of the Vikings to generate revenues from the stadium is greater than it is under the user fee. Suppose the typical fan is willing to pay $100 to attend a game, if the stadium is paid for by the general sales tax increase, little of the $100 willingness to pay is siphoned off for stadium financing because ticket purchases are a tiny fraction of all sales. On the other hand, if the user fee is imposed, it falls entirely on ticket purchases, taking a much larger share of the $100 willingness to pay than would happen under the general sales tax. In short, the user fee is not viable to the Vikings because it leaves less of the fans’ willingness to pay for them than does the broad-based sales tax increase.

It will be interesting to see if Minnesota circles back to one of its earlier proposals. Alternatively, the state could just offer Mr. Wilf the keys to the state treasury to get him to stop his flirtations with Los Angeles and commit to staying in Minnesota.

The presence of imported exotic dancers actually illustrates one of the primary economic factors that reduces the economic impact of mega-events on host cities. The money earned by these out-of-town performers during Super Bowl week would be counted by consultants attempting identify economic impact since any spending at Rick’s Cabaret by Super Bowl visitors would be figured into direct economic impact calculations. However, the money wouldn’t be earned by Indianapolis residents but instead would immediately head out of town in the pockets (well, maybe the g-strings) of the dancers when they head home. Furthermore, the earnings would not stick in the city to be spent and respent, lowering the multiplier and any potential indirect economic impact. Yet, it is the residents of Indianapolis who are on the hook for over $600 million in public funds that spent building Lucas Oil Stadium.

Interesting economic examples pop up in the darned places. Now if I can only get my Dean to pony up some funds for a little field research…

Prior to 2003, the Raiders held the award for the lowest ranked team to reach the Super Bowl in terms of  point differential at 6th in the AFC in 1979.  From 1978 to 2002, four teams ranked 4th made the Super Bowl.  On the flip side, of the 50 teams making the Super Bowl in the time frame, 40 (80 percent) ranked either 1 or 2 in their conference in terms of point differential.  Since 2002, 50 percent have ranked 1 or 2.  Some of the Super Bowl winners with eye-popping regular season differentials have been ’85 Bears (+258), ’84 49ers (+248), ’99 Rams (+284), and ’96 Packers (+246).  The 2003-present era contains the ’07 Patriots with a whopping +315.  (Stats from Pro Football Reference).

What’s driving this shift?  I have read suggestions of greater parity but that merely restates the question in a different form.   The most obvious change has been the playoff format.  In 1978, the league introduced Wild Card” playoff format in 1978 and adjusted it in 1990 and 2002, suggesting a possible explanation.   This maybe the answer, but it’s not simple even with it.  The top two teams have received Wild Card “byes” under under all three WC systems (1978 2 Wild Card play each other, 1990 — three Wild Card teams + 1 of three division winners, 2002 — two Wild Card teams and two of four division winners).  The format change and league divisional restructurings have increased the number of teams in the playoffs, providing the opportunity for lower point differential teams to play whether they enter as a WC team or a divisional winner.  This may increase the likelihood of a team with a marginal overall regular season but jelling at the end of the season reaching the playoffs and disturbing the outcomes.

This threatens the viability of the exclusive internet broadcasting rights agreements negotiated by Australian sports. Telstra, Australia’s largest telecommunications company, holds exclusive rights to the live internet streaming of two largest Australian sports, the Australian Football League (AFL) and the National Rugby League (NRL).  Optus was opposed by Telstra, the AFL and the NRL in the case, which tested the Australian Copyright Act 1966 (Cth) and the right of individuals to make recordings for private or domestic use. 

Such internet rights were evidently a AUD $153 million component of the AFL’s AUD 1.25 billion broadcasting rights deal (2012-2016) negotiated last year.  Four of nine regular season AFL games will be broadcast on FTA TV each week, along with the entire AFL Finals Series.  The Optus service allows all such FTA games to be time-shifted.  Negotiation of the next round of NRL brodcasting rights will formally commence  some time this year. NRL executives and analysts had previously talked up the NRL rights as being worth a similar amount to the AFL rights. 

The case will almost certainly be appealed by Telstra, the AFL and the NRL to the Full Court of the Federal Court. The Australian Government may also amend the Copyright Act in due course and the sports will lobby the Australian government hard if future judicial decisions uphold the decision of Justice Rares.  In 2011, the Australian Government announced a review into media policy in light of the convergence of technology, so this case will doubtless be considered.

From an economic perspective, interesting questions arise as to whether Optus is a free-rider, and the appropriate public policy response to such behaviour (the argument of the sports and Telstra), whether the decision is good for sports consumers (the argument of Optus) as well as whether courts and/or legislatures should construct walls in the form of property rights that individuals have been unwilling, or unable, to construct themselves via contract.  

If Optus prevail in the long-run, this decision will certainly put a significant dent into the value of sports internet media rights and exclusive internet rights will be worthless, at least until sports devise new ways to protect such rights.  It could feasibly also diminish the value of FTA rights. Whether the benefit to consumers is offset by the utility lost to those who benefit from such revenue flowing to a sport is open to debate.

Why does men’s tennis use a best-of-5-set format in grand slam events?  The quick, Econ 101 answer is that it must be profit or revenue maximizing.  I’m willing to be proven wrong, but my default position is that 300 minute matches don’t maximize viewership in the short run or long run.  Sure, there are hardcore fans that may stick in there, but I am the marginal tennis fan.  I watch quite a bit of women’s tennis and very little men’s tennis for the very reason that I enjoy a 1-2 hour match such as Clijsters-Azarenka, but at 2 hours, a competitive men’s match has barely started.  I once referred to the NBA, where hardly any game matters.  In men’s tennis, hardly any set matters in terms of sets played where both players face elimination.

A longer version of the Econ 101 answer might go like this:  fans like to see the best players matched up; 3-set matches lead to more upsets and fewer semis and finals between highly-rated players, and therefore, less viewers.  Ok, Matchups between highly-rated players in semis and finals raise viewership, but that a partial impact.  Fan enjoyment of upsets and uncertainty offsets it to some extent, and match length certainly pulls viewership the opposite direction.  Why not play 9-set matches?  For that matter, why not make tennis like cricket and extend matches over 5 days?  If 5 sets over 6 hours is epic, wouldn’t  25 sets over 30 hours reach  “mega epic.”

My guess is that the answer goes beyond Econ 101.  Political economy enters the picture.  Why does FIFA play the World Cup in South Africa and not only endure but sometimes seem to promote faking. (FIFA: Money, Control, or Both).   Yes, the FIFA aristocrats like money (that’s obvious) but they have other interests and internal disputes between, for example, the English Football Association and continental associations.   Four different associations organize the tennis grand slam events.  All of them care about money, but all are also  subject to a variety of internal politics and by somewhat aristocratic organizations, with the exception of the Australian Open.

WPS’s announcement follows one day after CONCACAF finished up its women’s soccer Olympic qualifying tournament in Vancouver, BC that attracted record crowds that exceeded 25,000 fans for the U.S.-Canada final. Other international women’s soccer matches have also demonstrated an impressively broad level of popularity. Last summer’s Women’s World Cup final, for example, attracted a television rating of 8.6, a figure that exceeded the average rating for games in the 2010 World Series between Texas and San Francisco.

Clearly a market exists for women’s soccer, but attracting fans outside of international events like the Olympics and the World Cup remains an elusive goal. I don’t really have a brilliant economic point to make here other than to note that the saga of women’s soccer in the U.S. serves as a testament to the impressive ability of existing leagues in other sports to regularly attract large crowds, even for those meaningless late season games when both teams are out of the hunt, and without the pageantry and national fervor that women’s soccer has managed to capture on occasion.