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Ticket Pricing Idea?

Discussion in 'Lounge' started by pennphinfan, Mar 27, 2013.

  1. pennphinfan

    pennphinfan Stelin Canez Arcade Scorz

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    Okay, I have no idea why after a 12 hour work shift and post work gym workout I am thinking about this, but I've been scheming up a new stadium pricing plan to increase attendance at Sun Life. I am by no means an economist, so some (or most) of my thinking may be wrong, but hear me out. It's nothing too drastic I swear.

    The current situation:
    Sun Life Stadium Capacity = 75,540 for NFL games
    Average Attendance last year = 57,379 (76% capacity)

    Average Non-Premium Ticket Price = $71.14
    Average Premium Ticket Price = $200
    # of Non-Premium Tickets sold = ~52,379
    # of Premium tickets sold = ~5,000
    Total ticket revenue = (71.14)(52,379) + (200)(5,000) = $4,726,242

    Take into account that due to the rule of needing 85% of tickets sold to relieve blackout, which Ross ALWAYS pays at 34 cents/dollar:
    34 cents X 7,000 extra tickets needed (9%) X average non-premium price = (.34)(7,000)(71.14)= $168,980 to lift blackout

    This leaves total revenue at $4,726,242 - $168,980 = $4,557,262


    The Idea
    Fundamentally, the idea is to slash $20 straight up from every ticket price.
    This obviously will appeal more to the cheaper tickets, as it's a much higher cost% drop to tickets. These are also the people we should be targeting to fill the seats. Those who are well off and can buy premium won't much care about $20, nor will it affect loss amount too much. Here's the breakdown:

    Personally, and this is with no research, I'm assuming this drastic drop in price could add upwards of 10,000 new visitors to Sun Life, raising our attendance rate to 89%.
    Of the 10K, lets assume that's 9000 new non-premium, and 1,000 new premium tickets sold. Let's look at the new ticket revenue

    New Average Non-Premium Ticket: $51.14
    New Average Premium Ticket: $180
    New Average Non-Premium Attendance: 61,379
    New Average Premium Attendance: 6,000
    New Ticket Revenue = (51.14)(61,379) + (180)(6,000) = $4,218,922

    We now no longer have to buy out tickets to relieve a blackout. This saves $.

    But still, we are looking at 4,557,262 - 4,218,922 = $338,340 net loss in revenue

    Here's how to Make the Money Back

    Here's the crazy idea. Require those who attend and who wish to purchase alcohol to purchase a $5 wrist band or "booze pass" for the option to buy alcohol inside the stadium. The pass itself does not get you any alcohol, only the ability to buy it. I seriously doubt that many people wishing to drink inside the stadium will no longer drink because of this fee, especially because of the $20 cut in cost (I mean, hey, you're already saving money!)
    - This also will increase family attendance, because in their minds, they're getting a discount on ticket price for NOT drinking, which they likely wouldn't be doing anyway.
    - Assume 40% of people in attendance purchase said pass. (67,000) x (40%) x ($5) = $134,000

    We're now at a net loss of revenue of $338,340 - $134,000 = $204,000

    BUT WAIT
    You now have 10,000 new people at sun life stadium! you know what that means! PARKING!. Assume about 3,000 cars for the 10,000 people x $25/car = $75,000

    We're now down to a net loss of ~$125,000 dollars.

    And here's where I stop guessing numbers, because it'd be even more crazy. But tell me this:
    -Would 10,000 new people buying food, alcohol, merchandise, etc, really not make up for that ~$125,000 and THEN some? that's only $12.50 per person, which I'd say is well below what an average person spends on food/drinks at a game
    -Would having your attendance at nearly 90% not just serve to further increase team morale/popularity? This could indirectly cause the team to play better, which will in turn further push up attendance.
    -Mr. Ross was going to pay $168,000 ANYWAY to the NFL to lift the blackout, so even if all those new butts didn't buy a single food item, beverage, or tshirt/jersey/etc, you're STILL SAVING 40 grand per game and getting 10,000 more people in the stands!!


    All in all, this isn't that crazy of a thought right? Why can't our team be the first to buck the trend of high ticket prices? Obviously, they'd need to do some market research to truly find out if dropping ticket prices by $20 would really increase by 10,000. That's surely the biggest assumption to my plan here. And if I'm wrong, well, then you can always fiddle with maybe dropping $30 but making the booze pass 10 or making parking 30? The public is still saving money on average and honestly some of the cost to make it back is hidden in places they won't see as well (like parking).

    I'm done with my thoughts. Maybe this belongs in the rant section of the fins forum, but this time of year I figure any thinking material to get a discussion going is worth it.

    Here are the pages I used as source material:
    http://en.wikipedia.org/wiki/Sun_Life_Stadium (for stadium capacity)
    http://blogs.trb.com/sports/custom/business/blog/2012/09/miami_dolphins_tickets_stadium.html (for average ticket prices)
    http://espn.go.com/nfl/attendance (for attendance rates)

    Things I assumed/couldn't find exact numbers on:
    Attendance Breakdown Premium vs. Non Premium (if the 5,000 premium seats is off please let me know)
    10K person increase in attendance due to cut in ticket prices
    40% of people drinking alcohol at the game
    3,000 cars needed for 10,000 new people (3.33 people per car)
    The fact that Ross has to pay the 34 cents on a dollar on the average non-premium price ticket-- not sure if this is correct.
    That people would actually read this entire thread

    Thanks for reading! Please share your thoughts.
     
  2. McLovin

    McLovin Resident Pats fan.

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    the really need to put M*A*S*H back on the air for your own sake.
     

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