Tickets.com Client Spotlight: San Francisco Giants

Baseball Tickets Too Much? Check Back Tomorrow

The New York Times
By KEN BELSON

Setting ticket prices to sports events requires that one hope for the best but prepare for the worst. Teams want prices high enough to cash in if they play well, but need them to be low enough to draw fans if they falter.

But because teams set their prices months before opening day and resist changing them later, they have trouble reacting to the unexpected, like the weather, winning and losing teams or, this year, the ferocity of an economic downturn.

The San Francisco Giants are experimenting with a possible solution — software that weighs ticket sales data, weather forecasts, upcoming pitching matchups and other variables to help decide whether the team should raise or lower prices right up until game day.

The Giants are the first major league team to test the software, which some industry analysts say could transform the way teams adjust to the ebb and flow of the season, not unlike how airlines, hotels and rental car companies — which also use dynamic pricing — adjust to changes in the travel industry.

Many teams have various ticket prices for the same seats, altering the dollar amount based on the opponent, the day of the week and the time of the year, but those variations are set before the season and not altered. The Giants, by being more fluid, are taking the concept a step further.

The system has the potential to change how fans shop for tickets and to win back the bargain hunters and die-hard fans willing to pay top dollar at resellers like StubHub.

“Consumers are already paying a multitude of prices on the secondary market,” said Dan Migala, the director of the graduate program in sports administration at Northwestern University. “Gone are the days of teams having just three or four ticket prices.”

Teams have looked at tinkering with prices at midseason for some time, but they have been reluctant to do so for fear of alienating season-ticket holders, who pay upfront for their seats and may be offended if fans sitting nearby paid far less for their tickets.

Still, discounts were hardly an issue in San Francisco. In the first eight years after they moved into what is now AT&T Park in 2000, the Giants regularly drew capacity crowds. If anything, they often wished they could raise prices.

“All those years when Barry Bonds was here hitting those home runs, what were we thinking?” Russ Stanley, the Giants’ vice president for ticket services, said as he ruminated on what might have been had the Giants altered prices from week to week as Bonds’s various home run pursuits intensified. “The world is ready for this.”

With Bonds gone and the Giants finishing last season in fourth place in the five-team National League West, attendance fell 11 percent, to below three million for the first time since 1999. Ticket sales so far this year are up 1.7 percent, but at one April game, attendance fell below 30,000 for the first time in the park’s history.

The Giants are not alone in trying to adjust to the recession. The Toronto Blue Jays have hosted “Messin’ with Recession” nights, when fans get tickets for as little as $5, hot dogs for $1 and discounted merchandise. The San Diego Padres are selling two-for-one tickets to some games. The Los Angeles Dodgers gave away “Mannywood” T-shirts to fans who bought seats in left field.

Like many teams, the Giants have tiers of ticket prices. The highest-priced “premium” games include opening day and the games against Oakland and the Los Angeles Dodgers during the summer. The next tier includes “feature” games against the Dodgers in April and weekend games during the summer. The lowest price level includes all other games.

The Giants’ dynamic pricing experiment affects 2,000 of the 41,000 seats at the stadium. The team chose four sections in the upper deck in left field with 1,200 seats and three sections in the left-field bleachers that typically are among the last to sell. No season tickets were sold there.

Because the seats often went empty, the team felt that cutting prices to as low as $5 could entice more fans to sit there. They in turn might buy hot dogs, beers and other concessions. Fans at AT&T Park spend on average $22 a game on food and merchandise.

Conversely, the team charges more for the seats — which are regularly $10 in the upper deck and $17 in the bleachers — when demand is high, like last weekend, when the Mets were in San Francisco.

For the game against the Mets on Thursday, a blustery night, the Giants shaved $1 off their upper-deck seats and $2 off their bleacher seats. But for the Friday night game, when the Giants’ ace, Tim Lincecum, was on the mound, the upper-deck seats went for $19 and the bleacher seats jumped to $27, including a $2 increase on the day of the game.

On Saturday, with Johan Santana paired against Randy Johnson, the Giants raised the price of bleacher seats to $33, including a $2 increase on game day; seats in the upper deck were again $19. On Sunday, bleacher seats went for $23 and sold out in a few days because Lincecum bobblehead dolls were given away.

Through the first 17 home games, sales of dynamically priced tickets rose 20 percent, compared with sales in those sections during the same period last year. That works out to about 500 extra tickets a game.

But it is unclear whether cheaper tickets alone helped boost sales, or whether the team’s improved performance and the mix of competitors, including the rival Dodgers, were responsible. The Giants also hosted a Filipino heritage night that drew a big crowd.

The team is also tinkering with the algorithm that it uses to determine the best time to lower or raise prices. Opposing pitchers and hitters are assigned values on a five-point scale. But if the highly regarded Cole Hamels of the Phillies does not pitch in San Francisco, the Giants may not raise prices when the team is in town.

A single group sale of 100 tickets may misrepresent fan interest. The Cubs draw well even when they are doing poorly. Each day, the calculation changes as starting pitchers are announced, team records change and tickets are sold, prompting the team to recalibrate prices.

Thus far, much of this is lost on the fans. Karla Marroquin, who lives in Petaluma, north of San Francisco, did not know the four upper-deck seats she bought last month had prices that were adjusted.

She originally wanted to attend the game on April 28, but when she saw the same seats the next night were a few dollars cheaper, she chose those.

“The pricing makes it worthwhile when you look at the overall cost of the game, the parking, the tolls, the food,” Marroquin said. “We used to go to the A’s games because of the cheaper prices, but now with the variable pricing, I might go to the Giants more often.”

Megan Romero, who lives in San Francisco, said she was also unaware of the new pricing system.

She bought her bleacher seats because they were the cheapest available. Now that she knows that other seats may be discounted, she said she would start hunting for bargains.

“It’s not the way I shop for things,” Romero said. “But if the ticket is all of a sudden $6 on a Wednesday night, I might decide to go.”