For Profit Business Adopts Capitalism

Dave · December 18, 2007 at 10:49 am · Filed Under Mariners 

The Mariners announced today that they’ll be adopting a variable priced ticketing system, where seats at certain games cost more than others and people get a discount for purchasing early. The headlines, of course, will simply read “Mariners raise ticket prices”, and articles like the one in the P-I will make useless connections between the players salaries and the price of admission to one of their games, but that’s not the story here.

The Mariners, just like Microsoft, Boeing, Starbucks, or whatever other profit minded enterprise you’d like to pick, are in the business of maximizing revenue. Pricing based on supply and demand is, of course, a basic tenet that every one of these companies use. The sports world is just finally catching up, eliminating inefficiencies in their ticket pricing and putting basic capitalism to work for their businesses.

This isn’t the Mariners raising ticket prices because they’re raising payroll, or those greedy players costing you more money to take your family to the game – this is the Mariners charging more money for tickets because people are more than willing to pay the price to attend games.

Despite what you’re going to be told, there is no link between the team’s payroll and ticket prices, and the raising of ticket prices doesn’t mean anything in relation to the roster. It simply means that a for profit business is figuring out ways to make more profit by applying simple capitalistic strategies to selling its product.


28 Responses to “For Profit Business Adopts Capitalism”

  1. gwangung on December 18th, 2007 11:05 am


    No kidding. Plain and simple Econ 101 (which, given by most people’s comments, should have been a required high school course….).

  2. MarinerDan on December 18th, 2007 11:09 am

    Hopefully, this will limit the attendance of Red Sox Nation during Mariners-Red Sox games.

  3. everett on December 18th, 2007 11:14 am

    “Hopefully, this will limit the attendance of Red Sox Nation during Mariners-Red Sox games.”

    It seems more likely to me that this would increase the attendance of Red Sox Nation, given that they’re more likely to overpay for 3 games a year than the typical M’s fan who just wants to go to games in general. Then again, I suppose the trendy fan who just wants to make an appearance might also overpay, thus increasing the number of “M’s fans.”

  4. DMZ on December 18th, 2007 11:17 am

    The great thing about the Hickey article, though, is the snark. Check out these juxtapositions:

    Six years removed from their last postseason appearance, the Mariners are increasing most ticket prices for the 2008 season.

    Tickets for single games could go up as much as $14, […]


    The Mariners, whose second-place finish in the American League West last season was their best showing in four years, are introducing a new variable-pricing system.

    Hee hee hee. Okay, but seriously

    To use a lower box seat as an example, season-ticket holders pay $40 a seat. For the same seat on a single-game basis through March 28, the price will be $58. From March 29 on, it will be $60. And on the day of the game, the same seat will cost $65.

    In addition, the Mariners have seven “premium” games on the schedule. Opening Day on March 31 against the Texas Rangers and each of the Safeco Field games against the Boston Red Sox (July 21-23) and the New York Yankees (Sept. 5-7) are the premium games, and all tickets will have a flat $3 added to the price.

    This is ass. I know, it’s seven games now, and they can charge whatever they want, it’s a business, but if you think it’ll stay only seven games, well… it won’t.

    The variable pricing puts a huge incentive in there for scalpers, too — if you’ve bought a strip of seats for $40/each and the day-of-game price is $65, you can sell them for below-face… you see the problem. Ugh.

    Or, for the price of one lower box ticket, you can now put your season ticket deposit down for the new MLS team. I’m just saying.

  5. The W on December 18th, 2007 11:18 am

    Actually the big story is how the Mariners just don’t have a clue. Their season ticket base was at 27,500 in 2002, but they’ve lost tons of season ticket holders every year since (chalk this up to fans pissed off when they refused to make deadline moves in ’02 and ’03 — thanks for Doug Creek and Jose Offerman though — and fans pissed off by the losing seasons in ’04, ’05 and ’06. The season ticket base was around 14,000 last year.

    Instead of trying to win back some of the lost season ticket holders now that they’ve had a winning season again (whether it was a mirage or not) they’re trying to make a money grab. They’re so pissed off that they weren’t able to raise ticket prices after the three losing seasons that they just had to raise ’em for 2008. Way to win back those disgruntled fans!

    And the continued raising of the single game prices is just incompetence. They think if they raise the single game prices artificially high they’re gonna con people into keeping their season tickets. Their most loyal customers (the season ticket holders) are canceling and not willing to pay $38 a game so they think the casual fan is going to pay $60 a ticket? It didn’t work in the past and it isn’t going to work having the single game tickets be $25 more than the season ticket price. All it does is make sure that nobody buys any tickets at the box office when the team is losing. Are they so sure that this turnaround of ’07 is gonna continue that they’re willing to see ticket sales decline even more than they did before?

    This team will never win anything so long as Armstrong, Lincoln and Bavasi are around.

  6. bermanator on December 18th, 2007 11:22 am

    I don’t get why they would make tickets more expensive on the day of the game. Wouldn’t that discourage impulse purchases?

    I would think that the more rational approach would be to cut prices on gameday, since otherwise the seats go unsold and the revenue is zero.

  7. joser on December 18th, 2007 11:23 am

    Then again, I suppose the trendy fan who just wants to make an appearance might also overpay, thus increasing the number of “M’s fans.”

    Those fans were wearing Yankee gear a few years ago. They’re wearing Red Sox gear now. They’ll only be “M’s fans” if the M’s have been winning. And they’ll be no less obnoxious in their personal behavior.

  8. joser on December 18th, 2007 11:29 am

    I would think that the more rational approach would be to cut prices on gameday, since otherwise the seats go unsold and the revenue is zero.

    Yeah, exactly. They’re selling a perishable product. Just like you can get deals on hotel rooms late at night, since the room is going empty and their fixed costs don’t change (unless they’re really anal about their housekeeping accounting). They should be trying to get more butts in seats, particularly since it looks better on TV and those people might buy concessions. The people who truely are exposed to market forces understand this: I’ve gotten tickets from scalpers in the Bronx and elsewhere at below face value by not buying until the first inning has started, and the value of their inventory has started to evaporate.

    Of course, the M’s are also concerned about preserving the “value” they’re offering season ticket holders. How do they get any presales of that KC series if everyone knows the stadium is going to be half empty and prices are going to be dropping through the floor at game time?

  9. Carson on December 18th, 2007 11:31 am

    2 – Doubtful. The casual Mariner fans who already see a ballgame as too expensive, and assume their team will likely lose, will want to go even less.

    It is too bad the Mariners aren’t as good at finding ways to maximize their winning as they are at maximizing profit.

  10. smb on December 18th, 2007 11:44 am

    Maximizing revenue makes sense. To pair it with a steady decrease in product quality is dubious, though. You know what else happens in capitalism? Strikes. They are making a serious push to cause me to go on strike as an M’s fan, and the ironic thing is that the ticket prices really have nothing to do with it. I’d pay twice as much if I thought the team knew how to build a title contender.

  11. ducky on December 18th, 2007 11:52 am

    The synergy of the ticket prices and the potential Silva signing is absolutely priceless.

  12. gwangung on December 18th, 2007 11:53 am

    I don’t get why they would make tickets more expensive on the day of the game. Wouldn’t that discourage impulse purchases?

    Depends. Judging from my experience in ticket sales, impulse buying has shifted somewhat from day of event to web sales; having the ticket booth on your desktop/laptop has been conducive to more impulse buying from the web.

  13. Gomez on December 18th, 2007 12:01 pm

    And fans will complain. And they’ll pay for tickets anyway.

    That’s how it always goes.

    I respect the Mariners’ business model, and their working of the clear demand of their product, which hasn’t really dropped all that much despite the leaner years that preceded last season.

  14. Gomez on December 18th, 2007 12:05 pm

    8. Actually, many, many fans purchase their tickets on gameday, when they get to the stadium, and many of those fans make long trips into town to see the game, so the team has quite a bit of leverage to raise the gamday price. The one instance where you’ll see otherwise are high demand games that sell out, like the Yankees/Red Sox series or playoff games.

  15. Kunkoh on December 18th, 2007 12:10 pm

    Hmm, I wonder how they will define “Premium”. Probably when we play the Red Sox or NYY. Or will they decide “Premium” is any time Felix starts regardless of the team? Or maybe they will decide it’s when we play a team worse than us, so we have a good chance of winning?

    I guess if it’s option one, then the people that will end up paying the most will actually be Red Sox and NYY (bandwagon) fans, rather than M’s fans. That’s kind of ironic in a way.

  16. ThePopeofChilitown on December 18th, 2007 12:14 pm

    12- Agreed. Particularly for a more discriminating fan, internet sales is preferable to standing in a line hoping to score decent seats. Checking for the best available seats online before you leave your house is pretty appealing.

    I live in Tampa, so most of what I have witnessed is from the lines to get in to the horrible dome. But most of the people I’ve witnessed buying day-of tickets tend to be bargain shoppers. They seem to be there for the promotional night, and are buying the cheaper upperdeck and outfield seats. If those tickets where to balloon in price that day, I think they’d have far fewer attendees.

  17. Mat on December 18th, 2007 12:35 pm

    Raising the day-of ticket prices might keep me from a game or two I might otherwise have seen. I could be an exception, though. I wonder if the Mariners think that raising the day-of price will increase advance sales, so that in the event of a collapse like last season, more people will be locked into tickets after the team tanks.

    I still don’t understand why the view reserved outfield seats are the same price as the view reserved infield seats, but it’s certainly their prerogative if they want to keep pricing the tickets that way.

  18. franklloyd on December 18th, 2007 12:42 pm

    Every day of this increasingly pitiful offseason, I feel increasingly vindicated at having given up my 40-game package in Sec 129.

  19. Paul B on December 18th, 2007 1:11 pm

    I think Dave’s title for this section should have been “For profit business adopts new model, scalpers rejoice”.

    Or, maybe, “Profitable business on downward trend shoots self in foot, becomes candidate for the CNN annual 100 stupidest decisions in business list for 2008”.

  20. Squooshed on December 18th, 2007 1:40 pm

    Personally, I find the juxtaposition of being at the cutting edge of sports business / economics combined with near prehistoric techniques at player evaluation and roster construction to be downright humorous. If the M’s were as innovative in baseball decisions as they are in business decisions, we might actually be on to something.

  21. Nintendo Marios on December 18th, 2007 1:41 pm

    20 – Precisely my thought as well.

  22. JMHawkins on December 18th, 2007 2:38 pm

    This is beyond moronic. Charging “premiums” for the popular items is bad business – it makes people think they are getting ripped off. Instead, give “discounts” for the less popular items, then people think they’re getting a deal.

    If they really felt like increasing ticket prices was important, and wanted to use differential pricing, they should have just raised prices across the board, then announced certain “bargain” games.

    Just more proof that those who say the M’s don’t win because they focus too much on the business side and not the baseball side are wrong. The M’s don’t win because they make bad choices.

  23. I won the meat jackpot!!!!1 on December 18th, 2007 4:02 pm

    Speaking as a long-time Sox fan (damn you, Schiraldi)…

    Screw it, I’m not paying.

    I think “premium” games should be when Bloomquist is starting.

  24. Carson on December 18th, 2007 4:38 pm

    23 – Yes, you’ll pay. And if you don’t, plenty of other Sox fans will.

    If you grew up adoring a team in their home city, and now are 3,000 miles away and only get 3 chances a year to see them, you’ll pay.

    Its one of those things that pisses people off at the time it happens, but they forget about it later. If somehow the M’s put together another winning season, they’ll get away with it and laugh all the way to the bank.

  25. scott19 on December 19th, 2007 12:18 am

    23: 1) Sorry to say…but if the Mets hadn’t been so coked-up that year, they probably would’ve beaten the Sox sooner. 🙁

    2) I absolutely DO NOT BLAME YOU!!! This “premium” pricing tier is actually quite common these days in professional sports…doesn’t mean I necessarily agree with it, though.

    3) 🙂

    BTW, LOOOVE the FO’s rationale on this…we’re “spending more on payroll”? C’mon guys, we all know the REAL reason — and another miserable year of HoRam crapping his pants every fifth day does NOT rationalize a $13 jack-per-seat hike for certain games. 🙁

  26. joser on December 19th, 2007 12:53 am

    I can’t be bothered figuring this out, but how much added money are the likely to earn with this deal? 40K seats * $15 extra * what, 20 “premium” games? = Carlos Silva, I guess.

  27. kentroyals5 on December 19th, 2007 12:55 am

    I’m going to be VERY careful about paying ‘premium’ prices or increased prices for games that the 3 shitty-ass pitchers get on the mound.

    Not. Worth. It.

    If ‘premium’ was 4 dollars more for Felix kicking some ass, I might be more willing to open my wallet.

  28. tangotiger on December 19th, 2007 3:51 pm

    Re: the discount/premium. It’s just like Happy Hour or Early Bird specials. Then again, in Manhattan, selling something with a “Premium” has a certain cache. Who knows what the correct process should be.

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