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VBS: Lesson 1
TICKET PRICING
Sports Marketing
Learning Target(s)
• I will be able to determine and set the price
level for my VBS tickets.
• I will be able to analyze demand to help set
accurate/profitable ticket, vending and
merchandising prices for my VBS franchise.
KEY TERMS
• PRICE
• REVENUE
• DEMAND
• YIELD MANAGEMENT PRICING
• Dynamic Pricing
• Marginal Cost
• Ticket Brokers
• Ticket Agencies
What is the main “product” of a
sports franchise?
The seats or tickets they
offer for purchase.
PRICE
- the amount of money you charge customers
for one unit (product) of what you are
offering.
VBS – your price for your tickets should reflect
what your fans are willing and able to pay.
REVENUE
- money collected in sales.
Revenue
(# of unit sales) x (price of each unit)
VBS a number of revenue sources (streams);
• Tickets
• Concessions
• Licensing
• Sponsorships
Real Life - TV / Radio Broadcast
DEMAND
- the amount of goods/services that customers
want and are able to buy.
VBS – your ticket prices should be determined
by the demand of the event and your
potential customers (fan base) income levels.
Why is pricing so tricky?
• # of seats are fixed
Example:
Stadium: capacity = 50,000
Tickets for sale must = 50,000
Marginal Cost – cost of producing one additional good
or making one more commodity available.
• there is no marginal cost to selling additional seats
Where are “seats” fixed?
What happens if pricing is set too HIGH?
• Don’t sell as much
• Limits your target market
• Limits your other revenue streams
•Stadium Parking
•Stadium Vendors
•Stadium Merchandise
Simply said, “You Lose Money”.
What happens if pricing is set too LOW?
You will lose money – why?
• Supply and Demand is not balanced.
Seats should be priced based on “VALUE”.
• Value = what fans think its worth and what
they feel they benefit from it.
Yield Management Pricing (YMP):
• Concept of setting different prices for seats of different value
Example higher price for seats with better views
lower price for “Top Six” rows
• YMP is used whenever quantity of a product is fixed.
Example Stadiums (PBS – 65,535) & (Hines Field – 64,450)
Arenas (Rupp Arena – 23,000) & (MSG – 19,500
Other examples where YMP is used:
• Sporting events
• Plays
• Concerts
• Hotels
• Airlines
How do fans purchase their tickets:
Team Box Office – safest most affordable means of
buying a tickets.
Ticket Brokers – individuals or companies who
purchase tickets and then sell them for a profit.
Artificial demand which drives the price up.
Ticket Agencies – Companies stadium owners use to
manage their ticket sales.
VBS – Lesson 2
Assignment
Ticket Pricing