Smith 1

Stephanie Smith Ms. Hoffmann English 1102 31 March 2014 Come and Get Um. Beer, Hotdog, Cotton Candy Bum. Bum bum bum. Bum Bum bum, buuum! The cadence of Rocky Balboas Eye of the Tiger echos through the stadium as 50,000 fans rise to their feet. Fans are chanting, kids are screaming, and beer is flying. The game is on the line and the home team is getting ready to pull an upset. Sweat beads start to form on your forehead as your eyes are glued to the field. Every move a player makes is analyzed and every second that ticks off the clock is a step toward victory. This is the ultimate fan experience. As a sports fanatic I enjoy going to the stadium or arena to watch my team play. The electricity in the air and the atmosphere of being with fellow diehard fans cannot be replicated. Over the years ticket prices and overall cost of attending a game has grown substantially, which in turn, restricts my ability to see my team play in person. I am writing this paper from the perspective of a diehard fan who has ESPN at my fingertips, I get in game updates sent directly to my phone, and I am subscribed to the weekly ESPN blog. I am writing from a perspective in which the cost of ticket prices and attending a professional game has severely limited my ability to watch a game in person. My perspective has not previously been represented, therefore I am stepping out the norm to explore and bring to light the ways ticketing has evolved so that fans like myself might have an opportunity to watch their favorite team play without losing an arm and a leg. The driving force behind my paper revolves around this question: What is the relationship between ticket prices and attendance to professional

Smith 2

sporting events and how has that affected the game? Throughout my paper I will be focusing on three professional sports teams in the Charlotte area: The Atlanta Braves, Charlotte Bobcats, and Carolina Panthers. If you have been to a professional baseball, football, or basketball game you probably know the routine. First you must purchase your ticket. You wait in excitement until the game day comes then you rush to the stadium, and finally you are in your seat to watch the game. This was how I previously thought about going to a game. Now through exploration and research I have formulated a different outlook. I am interested in this particular topic because I hate the fact that I cannot go to watch my Panthers, Braves, and Bobcats play. I started from step one, the ticket price. In my situation tickets are very expensive eliminating me from attending the game. I began wondering how and why tickets were priced so high and why do ticket prices continually change? Professional sports are made possible not only by the players but by the fans as well. In order for teams to make money they need fans to attend their games. The most logical way to get fans to the stadium is through ticketing. Tickets are priced through a process known as variable ticket pricing or VTP. VTP sets the price of a ticket well before the season begins and actually factors in the time, opponent, season, day of the week, and start time (Drayer, Shapiro, and Seoki 185). All professional sports teams use some type of VTP. It can be tweaked to fit the specific market and it is solely the responsibility of the organization. However, as modern technology has evolved teams started noticing that with prices of games set before the season it does not give them the opportunity to cash in on the premium games that would seemingly have more demand. Teams are losing money because they cannot change their ticket prices to accommodate certain variables (Drayer and Shapiro 532). As of 2009 a process called dynamic

Smith 3

ticket pricing (DTP) emerged and was first implemented by the San Francisco Giants, a Major League Baseball team (Drayer and Shapiro 536). DTP stems from the concept of revenue management and is used by the hotel and airline industries. DTP is different for VTP is such a way that the prices fluctuate daily instead of being set before the season. The variables that DTP takes into consideration is, Weather, player performance, team performance, opponent, and other situational factors (Drayer and Shapiro 533). Both VTP and DTP are based on demand; however, the flexibility to change prices and the factors took into consideration are completely different. The San Francisco Giants dynamically priced a small portion of their outfield seats in 2009. At the end of the 2009 season the team compared the dynamically priced seats to the rest of the stadium which were not dynamically priced. The analysis showed that the Giants created approximately $500,000 in extra revenue from the dynamically priced seats (Drayer and Shapiro 533). As the old saying goes money talks and the proof is in the pudding. In 2010 the Giants made the decision to dynamically price the entire stadium resulting in an overall increase of 7% in revenue. After the success the Giants experienced, DTP has slowly started to permeate its way throughout the MLB and into the NFL and NBA. Major League Baseball is the front runner in DTP implementation. In order to further understand DTP I put the microscope on the nearest MLB team in our area, the Atlanta Braves. In 2012 the Braves decided to test the waters with DTP and decided to implement the new systematic approach to a section of about 8,000 seats (Kings). Baseball is one of the longest sport seasons. It lasts from April to late October and each team has 81 home games. The Braves DTP policy is set through a series of pricing floors. Because season ticket holders get their tickets cheaper per game, they did not want the dynamically priced tickets to fall below the

Smith 4

threshold. This eliminates the possibility of have two fans sitting side-by-side, one a season ticket holder who paid $35 for his ticket and the other fan who paid $15 for their tickets. As you can see the organization would lose their back bone of support from their season ticket holders if they could purchase tickets individually at a cheaper price. Throughout the process of delving deeper into ticket prices for the Atlanta Braves I wanted to create a formula to depict the optimal time to purchase tickets. I found that cheaper tickets are usually found at the beginning of the year after Opening Day weekend. DTP takes into consideration player performance and since baseball has a rotation of five to six pitchers the prices can vary from when the top pitcher is scheduled to pitch to when the inconsistent rookie takes the mound. Prices also fluctuate depending on the weather season. For example the spring and fall months when kids are in school are considered ticketing off-season. Not to mention at this point in the year the weather tends to be cooler resulting in a less comfortable atmosphere for the fans. I also discovered that the cheapest tickets are available during the weekday. So for all those baseball fanatics like myself who want to watch their team play, the best time to go is during the week against a poor team when a weaker pitcher is pitching. I believe this is when fans can turn dynamic pricing in their favor so that they have an opportunity to watch the game in person instead of from home. This is when fan attendance comes into play. Organizations have realized that in order to keep fans coming back to the stadium they have to offer customized promotions to entice the fans who are on the boarder of staying at home or coming to the ball park (Crompton and Howard). The Atlanta Braves feature a theme park combo package which allows fans to attend an Atlanta Braves game while also receiving admission to either Six-Flags, Stone Mountain, Georgia Aquarium, or the Coca-Cola Factory. They also have a package that allows fans to

Smith 5

choose six games with added amenities and discounts. The idea behind all inclusive deals is to get fans to not just come to the park once but to come back multiple times. Last year alone the Atlanta Braves jumped three spots from 16th to 13th out of 30 teams in average attendance level ( ). Obviously the more appealing the ticket price the more willing people will be to purchase tickets resulting in increased attendance. Because baseball has some many variables, dynamic pricing flows directly into the scheme of the season. Tickets are a perishable inventory (Drayer and Shapiro 533). Once the game is underway a ticket has no monetary worth only sentimental value. In the National Football League each team has approximately eight home games. Eight home games is a far cry from the 81 home games that the MLB plays. With only a handful of Sundays to make a profit tickets are significantly higher. According to Yahoo Sports, last year the average cost of one NFL ticket was $78.38. Wow! That is a chunk of change. Do not forget after you purchase your ticket you will then have to pay for parking. Once you get in the stadium the aroma of fresh popped popcorn fills your nose and you reluctantly make your way to the concession stand where you buy a beer, a bag of popcorn, and maybe even a hotdog. Before you even get to your seat you have spent over $100 just to watch a game. The NFL certainly has the highest ticket prices compared to the NBA and MLB. Because of these high prices I believe the NFL has eliminated a large portion of their fan base. The segment of their fan base that has been eliminated includes me and millions of other people who are diehard fans. According to the Wall Street Journal the NFL has seen an attendance drop of 4.5% since 2007 (Kennedy). If teams are not selling out then why not decrease ticket prices so that more people can come to the game. Once people are in the gates they will not be able to resist the temptation to purchase food from the concessions

Smith 6

and go to the team story. The profits made from these services can help make up for lower ticket prices. The Carolina Panthers announced in February, They were raising their ticket prices from $2 to $21 depending on seat location. (Person) The lowest ticket price would be $41 which is probably the nose bleed section where you need a microscope to see players on the field (Person). Because the Panthers have already announced their prices before the season, I know they use variable ticket pricing. This is bad news for fans like myself who hope to cash in on dramatic price fluctuations which is featured in DTP. The cheapest ticket will be around $41 dollars depending on the opponent, time of year, and seat location. The Lions and Patriots are the only two NFL teams to make the switch from VTP to DTP this season and as 2014 rolls around only time will tell if the risky move will pay dividends (Lawerence). Instead of going to the game, why not sit in the comfort of your own home? The NFL has recognized the fact that high ticket cost eradicate millions of fans. In response over the past decade the NFL has increased their efforts to make every game available through services like DirecTv and NFL Network. Stations such as Fox, NBC, and CBS have also chimed in on the surge of view audience by adding Hall of Fame players to analyze and commentate the game (Schottey). The evolution in television, camera, media, and audio technology has changed the sports industry especially in football. Never before have fans been able to sit on their couch to watch a football game in crystal clear high definition, count the hairs on Cam Newtons head, listen to Cam call the play, and see instant replay in a matter of seconds. This added dimension to football has changed the fan experience. All the added features television broadcast have to offer has formed a new dynamic that is more cost efficient for friends and families. Staying at home may lack the thrilling fan atmosphere but at least I get to sit in a comfy chair and watch the

Smith 7

brilliant plays in slow mo. What if the Charlotte Bobcats are playing while the Panthers are on? No problem. Flip the channel so you get the best of both worlds. Speaking of the Bobcats I want to take you through the last phase of my examination of ticketing for the Charlotte area professional sports. Lets be honest. In the past the Bobcats have been below a sub-par team. In 2012 they only won seven games. That is horrendous. Although the team barely won all was not lost. From a ticketing and sales perspective the 2012 season was when the creativity and brain racking was put into play. The Cats had to find a way to get fans to the games even if they knew their team was going to lose (Lombardo). The Bobcats took a deeper look into their fan base. They tried to figure out what appeals to the fans, what promotions spark an interest, and what prices are fans willing to pay? At the end of the worst season in team history the Cats were only expected to have about 50% of their season ticket holders renew their contracts, keep in mind the league average is in the low 80s. The Bobcats needed to add another 30% to their season ticket sales to be in line with the rest of the NBA. The only way to make up the difference was to take an aggressive approach going into the summer sales season. At the end of the 2012 summer sales push, the Bobcats hit the 70% season ticket renewal rate. The key component behind their success was the BOGO (buy one get one) promotion that allowed fans to buy a season ticket for this year and receive a free season ticket the upcoming year. How did the Bobcats gain so much ground? The intent was to move tickets and the promotions garnered interest, said Flavil Hampsten, senior vice president of ticket sales and database marketing for the Bobcats (Lombardo). Creating mini season ticket packages that feature games against defending world champions Miami Heat and other popular teams such as the Oklahoma City Thunder, and LA Lakers, the Bobcats were able to spark an interest that allowed fans of these other teams to still come to the arena even if they were not

Smith 8

rooting for the Bobcats. Because the Bobcats used flexible mini season ticket packages like what is used in the MLB they were able to stimulate a demand for going to their games (Crompton and Howard). This demand ignited sales ultimately making the Bobcats a forerunner for other teams to start similar packages within their own organization. The Cats started looking at the NBA fan experience from a small market perspective (Lombardo). They realized that in order to make their product desirable they need to showcase amenities that lasted longer than the NBA season. They created the Cats 365 club which gives season ticket holders access to a plethora of team events and outings throughout the entire year. From a fans perspective this is great news. Tickets are being sold at prices that are reasonable for the demographic and economic area of Charlotte. Going into the 2014 season the Bobcats will be rebranding their name to the Charlotte Hornets. The atmosphere in the Charlotte area and the southeast is buzzing. Fans are excited and want to go watch the soon to be Hornets play. This new buzz is part of the garnered interest Flavil Hampsten was talking about. Tickets to the game are at a reasonable price even though they are dynamically priced. I believe next year the Hornets will see a tremendous jump in attendance just because of the rebranding and the fact that this year the Bobcats have an opportunity to make the playoffs for the first time in team history. Bum. Bum bum bum. Bum Bum bum, Bum bum buuum! The cadence of Rocky Balboas Eye of the Tiger echoes through my surround sound as we are on the edge of our couch side seats. My mom is screaming, Go go go! Like he can actually hear her. My dad was asleep snoring in his Lazy Boy, and I am jumping up and down running around acting like the diehard fan I am. Yes, we may not be able to afford tickets to watch our favorite team play, but that will not stop us. Through my exploration I have dug deep into the roots of the relationship between ticket prices and attendance for the Charlotte area professional sports teams. I found out how

Smith 9

and why tickets were priced so dramatically different. I also discovered the best times to purchase tickets. I have learned that the ultimate fan experience is not necessarily created at the stadium or arena. The ultimate fan experience can be recreated from the comfort of your own home.