Wednesday, October 21, 2009

Report: Lower Ticket Prices for Women's Basketball is Due to Institutional Sexism 

From the Chronicle of Higher Ed.:

"Colleges charge a premium for admission to see males play, even when women's basketball teams are ranked as among the very best performers in the nation," write the authors, Laura Pappano and Allison J. Tracy, both of the Wellesley Centers for Women. By charging less for admission to highly ranked women's games, the authors say, athletics departments engage in "institutional discrimination that is camouflaged as sensible economic practice."

The report analyzed ticket prices at every level, from single-game to season tickets, at 292 Division I colleges. The results showed that ticket prices for women's games lagged far behind those for men's games at the same institution at all of the top 25 women's basketball programs in the country—even at colleges where the men's team ranked lower than the women's team.

Here is the abstract to the report.

Tickets to college sports—and men’s and women’s Division I college basketball in particular—may appear on the surface no different than tickets members of the public may buy to attend professional sporting events. But unlike professional franchises, colleges are non-profit organizations and, in many cases, public institutions. Decisions around ticket prices do not reflect an actual marketplace, but internal calculations and decisions that necessarily reflect a value placed on the event by the institution. This distinction is critical because previous research shows that lower-priced events are perceived as lower quality and less worth watching or attending. Our review of ticket prices for men’s and women’s Division I college basketball for the 2008-2009 season considered entry fees charged by 292 institutions at various seating levels, including season ticket packages and single game tickets. Our results showed significant gender gaps at every pricing and seating level with colleges charging a premium for male play. This gap persisted even among teams identified by the NCAA as top-ranked women’s teams with large fan followings. Analysis of attendance figures further showed that the gender differential in price across schools is not accounted for by differences in attendance. Because athletics, and particularly college basketball, have an increasingly prominent cultural profile, the practice of effectively de-valuing women on the court has implications off the court as well. The results support the broader contention that women athletes—as women in traditionally male arenas—continue to face institutional discrimination that is camouflaged as sensible economic practice.

I do not doubt their findings, but I wonder if they took into consideration something: that basketball fans are more willing to buy men's tickets than women's tickets, and not because of sexist attitudes. Perhaps, just perhaps, sports fans find men's games, on average, more exciting to watch than women's games.

I wonder if the authors asked themselves this question: why would those in athletic departments be willing to "leave money on the table" to feed their sexist attitudes? They note themselves that top-ranked programs tend to charge less for women's games than men's games. If fans are willing and able to pay the premium, why aren't they charged the premium?

One "solution", if you want to call it that, would be to force all colleges to charge exactly the same price for men's and women's ball (and to not set lower prices for men's games). Then let's see what happens to attendance at women's games.

Here's Stacey Brook with a similar take that it is the demand side of the market that the authors of the paper are ignoring.

Cross-posted at Market Power

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Wednesday, October 07, 2009

Fans as Inputs 


After last night's Twins/Tigers game - helluva game, no? - the announcers for TBS mentioned that the fans played a big part in the Twins win. 54,000 Twins fans hollering and waving their rally towels would have been impressive to see.

This isn't the only time that fans have been noted as an important part of the game. Texas A&M officially calls their student body the 12th Man, and the team honors one of its players by having him wear the number 12. Basketball teams call their crowds the 6th man because of their effect. Gary Pinkel, the university of Missouri coach, has asked his team's fans to wear gold to tomorrow night's game against the Nebraska Cornhuskers. The last time this happened, Faurot Field in Columbia looked like grass meadow surrounded by maples turning color in fall: bright golds with reds interspersed throughout.

I'm the guy in the gold at the top of the picture.

There are a lot of things unique to the sports industry that make it interesting to economists. For instance, unlike other industries, a monopoly position is impossible to hold because the product is competition and, well, it takes two to tango (Billy Idol excused).

Another quality is that the consumer of the product can also be thought of as an input. I know that this has been mentioned in the research Cairns, Jennett, Sloane (1986), but I haven't seen it discussed much. So I ask you, Sports Economist readers and co-bloggers, this: if fans are indeed both consumers and inputs, what are some of the qualities we should see in sports that we would see if fans were mere consumers.

In other words, suppose two theoretical models were built to explain a sport, say baseball. One of the models treat fans as simple consumers and the other model treats fans as consumers and inputs, what would be the difference in terms of the results?

Here's one off the top of my head: inputs are paid for their effort. Consumers pay for their products. My sense is that ticket prices would be lower than if fans were merely consumers and not inputs.

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Thursday, June 11, 2009

2009 ticket demand in Chicago 

From UC's Casey Mulligan:
Gloomy Economic Indicators in Chicago

Two real time crude sports-based indicators of economic activity in Chicago look bad:

(1) My ebay auction for 4 tickets to the (usually wildly popular) Sox @ Cubs game next week has zero bids, even though the price starts at face value.

(2) After my begging them for 10 years in vain to have my season ticket location improved, the Chicago Bulls asked me multiple times today if I would like some better seats next year. I am thrilled to be asked (I said "yes"), but these circumstance must indicate that ticket demand is seriously depressed.
That's the entire post, but do go to Casey's blog to see what he has to say about Keynes.

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Tuesday, April 28, 2009

Yanks Slash Ticket Prices 

WhoDaThunkIt.com?

The New York Yankees slashed prices on more than 40 percent of their front-row seats by up to 50 percent Tuesday and announced many of those who bought tickets closest to the field for $325-$2,500 will be eligible for additional free seats.

Those initiatives could help pack previously unfilled areas that were an eye sore on television broadcasts during the opening homestand at the $1.5 billion ballpark.

“There are a few hundred suite seats in our premium locations that have not been sold on a full season basis,” Yankees managing general partner Hal Steinbrenner said in a statement. “As a result, and for many of our fans who have already purchased full season suite seats in such premium locations, the Yankees are announcing today a program that adjusts certain prices and benefits.”

We'll see how this goes. Meanwhile, the politicians continue to be blustery.

“It’s the public that built Yankee Stadium, and even at these prices, the public has been excluded from the very stadium they built,” Brodsky said. “It’s a continuing disaster.”

First the financial disaster. Now the swine flu that has hit some areas of NY. Will we see prices slashed even more?

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Thursday, December 04, 2008

Baseball Teams to Use Airline Pricing Model 

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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Friday, July 25, 2008

Downsizing 

At Baseball Prospectus, Nate Silver provides a thorough analysis of the downsizing of Major League Baseball stadiums in recent years. (Silver's piece is free until 7/27, gated thereafter). I'm struck by two things. New stadia have almost 10,00 fewer seats, a considerable decline. Yet the trend in the English Premier League is the reverse - the top clubs adding a significant number of seats to their stadia. Second, Silver mentions an problem at Wrigley Field which strikes me as moderately serious: "Wrigley Field’s bathrooms can require an inning-long trip once everyone has had their fill of Old Style, and it can take 15-20 minutes to exit the ballpark from the upper deck." In light of yesterday's post on unitized ownership of the Cubs and Wrigley, if this issue is as serious as Silver makes it sound, why hasn't ownership addressed it? (On second thought, I suppose waiting for the subsidy solution applies here too.)

Here the reasons offered by Silver [numbered by me] for why downsizing makes sense in MLB:
1) Firstly, although the number of seats has few theoretical constraints—there are soccer stadiums in Latin America and college football stadiums in the United States whose capacities exceed 100,000—the number of desirable seats is limited. Baseball, more so than football or soccer, is a game that loses a lot when viewed at a significant distance, and particularly when the pitcher-batter confrontation cannot be watched adequately. Dodger Stadium is probably fairly close to the theoretical maximum of "good" baseball seats at 56,000, and more modern facilities will eat into that number by using space on luxury boxes and the like.

2) The availability of cheaply-priced seats might cannibalize one’s market for premium seats, as fans may purchase the cheapest seats available and attempt to 'upgrade' them later. Although such strategies can be combated by hiring ushers or creating firewalls between different parts of the stadium, this may make the ballpark experience less pleasant for fans going to and from their legitimately-purchased seats.

3) Teams are increasingly able to reap the benefits of price discrimination by introducing tiered pricing schemes, and by participating in the resale market through partners like StubHub. Therefore, they can recoup some of the loss stemming from excess demand by charging higher effective ticket prices, without having to bear the negative public relations impact of higher face values.

4) There are some marginal costs associated with each additional fan that attends the game, such as security and janitorial services. The price of such services is trivial in comparison to premium seats that are booked at $50 or $100 each, but become more tangible as compared to the cheap seats.

5) In addition, higher seating capacities can create additional congestion both in and around the ballpark, making the experience less pleasurable for all those that attend. Indeed, some existing stadiums are not especially well equipped to handle a capacity crowd. Wrigley Field’s bathrooms can require an inning-long trip once everyone has had their fill of Old Style, and it can take 15-20 minutes to exit the ballpark from the upper deck.

6) Larger seating capacities may require a larger ballpark footprint, and therefore higher rents or land-purchase prices.

7) The easiest place to add seats is usually in the outfield, but this may impair aesthetics by blocking views of city skylines or natural landmarks.

8) Stadiums with empty seats look less attractive on television—the importance of which should not be understated.

9) In addition, stadiums with empty seats may create a less intimate experience for people at the ballpark, thereby potentially reducing demand. Baseball tickets may be what is known as a "mob good", in which there are mutually-reinforcing, positive externalities conveyed by crowd behavior. To limit the number of seats is arguably to select out the most intense and passionate fans, who are (within certain boundaries) good fans to have sitting around you.

10) Limiting the supply of tickets may create a greater endowment effect (basically, a sense of ownership) for those fans who do hold seats, thereby increasing the amount of repeat business and encouraging fans to purchase season tickets.

After having articulated all of this, you might conclude that I think teams like the Mets are making the right economic decision by substantially reducing their seating capacities, but I do not. I think it may be the right near-term decision, but I do not know that it is the right long-run decision. By limiting their number of seats, a large fraction of which will be occupied by season ticket holders, corporate clients, or fans that are wealthy enough to pay above-face prices to scalpers and brokers, teams risk shutting out a large fraction of their fan bases from the ballpark experience.
Reasons 4,5, and 6 make the most sense to me, particularly in light of the move back towards the inner city, where land prices are higher. I'd not thought about the issue of spending resources to serve and monitor $5 seats, when more lavish attention to the $50 seats might pay higher dividends. I'm with Silver on the future costs of high current prices though. There is so much televised sport now, that I'm not confident that baseball (or basketball, for that matter) on television will generate the fan base like it did when there were only three channels on the dial.

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Friday, July 18, 2008

Just like the airlines 

MLB will set a new attendance record if current figures hold up through the second half of the season. Given high gas prices and shaky consumer confidence, this is somewhat puzzling. One factor that might help account for this is an increasing use of discounts and promotions. Here are some snips from an article on demand for sports in Atlanta:
The Braves recently added to a long lineup of discount offers, which range from two-for-the-price-of-one outfield seats to four-game packages that come with $25 gas gift cards.

...The Braves' Eurton said the team's most successful discount offer has been a "stay-cation" package that offers tickets for a game and up to four other Atlanta attractions — the Georgia Aquarium, Stone Mountain Park, World of Coca-Cola and Six Flags. Savings are as much as $52.99, or 37 percent, depending on how many attractions are chosen.

...Eurton said the Braves were "ahead of the curve" with value-added packages in the past — such as their two-for-one Tuesday tickets and all-you-can-eat seats — but developed more such offerings this year. Because of the state of the economy, "I think fans are paying more attention to what we have to offer," he said.
A stadium has something in common with an airplane: filling a seat with a fanny has very low marginal cost, so it makes sense to price discriminate like crazy to get them filled. That's what the airlines do. The trick for baseball teams is finding creative ways to do it. If the Braves are in any way typical, the increased use of promotions may have something to do with record ticket sales, but not record demand.

On a related note, consider this information on the NFL's Giants pricing scheme, where seat licences at the new stadium are going for $1,000 to $2,000. From Sandomir at the NY Times:
Even before the Giants released their pricing plan, which has 10 options, fans were resigned that they had to buy licenses, which guarantee the right to buy and control their season tickets — or lose their places in the new building.

John Moss, of Roseland, N.J., learned that he would be paying $5,000 each for his four front-row, end-zone seats at the new stadium. “It’s difficult to afford,” he said, “but I’m better off than the guy at the 40-yard line in the 27th row who’s paying $20,000.”

It would cost $80,000 for four seat licenses and $28,000 a year to buy the tickets in the field level behind the Giants’ bench, which will become an elite Coach’s Club in the new stadium.
There's no sign of recession in those figures.

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Tuesday, March 25, 2008

Recession and ticket demand 

Are baseball fans spooked by the recession talk? The early literature on ticket demand suggested that attendance was not affected much by business cycle swings. Let's take a look at this year's spring training attendance:


Cactus League
Despite an economy as shaky as a rookie pitcher's first big-league outing, Cactus League baseball fans are showing up in Arizona on a record pace.

At the season's midpoint, about 550,000 fans have attended 92 games, up nearly 2 percent from the same time last year, said J.P. de la Montaigne, president of the Cactus League Association.
2007 set an attendance record, so a 2% increase suggests baseball demand is holding up well.

The high price of gasoline would seem to make vacation travel to Florida vulnerable, but the Grapefruit League numbers are not off very much:

Grapefruit League:
Through 173 games, following the slate of 10 games on Sunday, March 16, the attendance total stands at 1,036,797.
That's 6,000 fans per game, down 200 from last year's record-breaking total. A 3% decline, which might be due to a change in relative prices (gas) and not an aggregate economy-wide swoon.

As for the regular season, it is clearly too early to tell. But the swoon on Wall Street doesn't seem to be affecting Yankee prices or demand very much. From Wallace Matthews:
As of yesterday, 42 of the 50 luxury suites in the new Yankee Stadium have been sold, at up to $800,000 each. Sixty percent of the park, or more than 30,000 seats, are classified as "premium" seats, priced between $250 and $1,000 each, and right now you couldn't buy one if you knew the mayor.
The same goes for tickets costing $2,500 at the new ballpark, for games that won't be played until 2009. "[T]he choicest seats in their new ballpark, right behind home plate, plus waiter services, free parking, free food and access to three private clubs." All 1,800 are sold. Russell Goldman has more on the transformation of Yankee tickets into luxury goods.

The bottom line: if you are looking for signs of recession, perhaps you should look somewhere other than the ballpark.

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Wednesday, November 28, 2007

Ticket Scalping in Missouri - Now It's Legal 

In Missouri, ticket scalping at prices above face value is now legal..

And there was some rejoicing (and economic development???).

To wit: Hal Wagner, owner of Ace Sports & Nationwide Tickets at Oak Park Mall, already has opened a location at Independence Center.

“We’ve been waiting for that ridiculous law to be repealed,” said Wagner, whose company buys and resells tickets at prices that exceed face value. “This is a great, great thing for Missourians.”

But ticket scalping was still illegal last weekend when the University of Missouri and the University of Kansas met in Kansas City to determine the Big XII North champion in football. But you wouldn't have known it had you looked at the vigorous secondary market in tickets around Arrowhead Stadium.

Before the Border War on Saturday night at Arrowhead, there was the Price War in the parking lot.

“Tickets! I got tickets!” a man named Bill yelled as cars crept by him on the way to the MU-KU game. “Two tickets, $600!”

One week before a new Missouri law will kick in legalizing ticket scalping at sporting events, scalpers like Bill, who declined to give his last name, combed their way through the crowd. Tickets with a face value of $30 to $55 sold from $100 to as much as $400.

“This is a day to make money,” he said.

Underpriced tickets create opportunities for scalpers. As I've written before, event tickets are priced with an eye towards expected demand and are oftentimes set months in advance. No one can throw anyone under the bus for underpricing this particular event. Who'd have thought, coming into this game, that MU and KU would have been ranked 4th and 2nd respectively in the BCS ratings with one loss between them and with both schools sporting national championship hopes? Not I, said the fly. The Missouri Tigers, with all their returning talent, had not had many Novembers to remember recently. The Kansas Jayhawks were coming off a 0.500 season in which they were not invited to a bowl.

The beauty of legalized scalping is that it allows tickets to go to the people who value them the most and it allows more information to be used in the setting of ticket prices. But the first article notes that scalping today has some new problems.

Missouri Attorney General Jay Nixon recently cracked down on ticket brokers, suing three of them for scalping tickets to an upcoming Hannah Montana concert at the Sprint Center. Nixon later asked for a temporary restraining order against an Illinois broker who was selling tickets to the recent Missouri-Kansas football game at prices well above face value.

“Unfortunately, the elimination of this consumer-protection tool has come at a time when the ability to take unfair advantage of consumers has grown significantly through the Internet,” said Nixon spokesman Scott Holste.

If he's talking about the ability of scalpers to snap up loads of tickets when they first go online, what amounts to butting into a virtual line, that's not the fault of scalping per-se. You can argue that legalizing scalping increases the benefits from butting-in, but it's not scalping that is the root cause of this problem. It's the butting-in.

If you are cooking a turkey and you realize you might burn your hand, you don't throw away the food to keep from getting burned. You take other precautions to keep from getting burned. Why ban an activity where people engage in voluntary trade when the problem lies elsewhere?

Why not ban computers? Technology has lowered the cost of butting in, so if you make an argument that scalping should be banned because of the butting in, you can make a similar argument about banning computers.

Of course banning computers is not the optimal solution, but neither is banning the secondary resale of tickets above face value.

(Cross-posted at Market Power)

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Friday, May 18, 2007

Demand for high school football 

We all knew that personal seat licenses were coming soon to high school football in Texas. Didn't we?
[T]his is Southlake Carroll - three-time national champs, state champs four out of five years.

You want season tickets, roll up your sleeves.

Demand is so high, they will pay $90 just for a license, a permit giving them the right to buy tickets for the next three years.

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Saturday, February 17, 2007

Demand for Luxury Boxes 

Teams in Chicago, Milwaukee, Minnesota and Seattle are tearing out luxury boxes. Some are being replaced with midscale, less private "party areas," which go for $125 a ticket. Russell Adams argues in the WSJ (free content) that demand has declined:
Bank of America's decision to cut back on suites got started last summer. The company examined employees' use of the suites to find out how many of the free tickets were actually going to customers. It found that in certain markets, which the bank declines to identify, the suites weren't attracting enough clients to justify a full-season lease. In response, the bank decided to sublease a handful of its 83 suites, and says it is considering doing the same with as many as 15 more of its suites.

Bank of America employees now have to fill out a form detailing the names and affiliations of the clients they are bringing and why those guests deserve a spot in the suite. The tickets, which are kept in a central location, are assigned a client identification number and are sent only after the company grants approval.

For other companies that are cutting back on suites, different factors are in play. One is a 2004 tax provision that requires executives to pay taxes on business expenses (like entertaining clients in a skybox) that aren't a formal part of their compensation. More broadly in the post-Enron, Sarbanes-Oxley landscape, executives are skittish about accepting both in-house freebies and outside gifts that could be construed as a conflict of interest. In Washington, Congress has already been tightening its rules on gifts such as access to skyboxes.

...In the late '90s, almost all of the more than 120 luxury suites at the Cleveland Indians' Jacobs Field were sold. The team says it has fewer than 90 suites leased for this season. The Seattle Supersonics used to lease more than enough of the 48 suites at KeyArena to cover the team and city's debt on the facility. Now only half of the suites are full and the team is deep in the hole and asking for $300 million in public funds to build a new arena.
The story is full of interesting facts. Some teams, such as the Braves and the Red Sox, are sprucing up their suites to maintain interest in the concept.

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