San Antonio Express-News (Sunday)
Astros’ World Series win hikes demand for tickets
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In 2018, fans such as Bryce are noticing it more because the World Series win sent demand and prices up.
His wages, he noted, did not go up. Last year, the welding inspector from La Porte and his family attended 15 games before June. This year, it’s just one.
“Supply and demand is part of our economy, but at the same time, c’mon man,” he said. “You can watch the games on TV, but you want to be here, too.
When the Astros adopted dynamic pricing, they were in their thirdstraight season of more than 100 losses, and they would finish in last place in their first year in the American League West Division. The season average ticket price at Minute Maid Park was just $66 on the secondary market, according to TicketIQ. Dynamic pricing meant tickets might go from cheap to a little less cheap, if the pitching matchup was good, or if it was a holiday weekend, or the team had a popular giveaway promotion.
The average ticket price for the 2018 season is now $87. Only six teams are more expensive. If the Astros stay on their first place trajectory or head into a pennant race in the fall, that average could rise. Then again, if they lose big names like Justin Verlander and Jose Altuve to injuries, it could fall.
MLB has cast dynamic pricing — and its partnership with the secondary marketplace StubHub — as a boon for fans, making it easier for them to find deals and to avoid fraud by purchasing verified tickets. But it is unquestionably a boon to MLB and its franchises, which can reap a cut of the profits that were previously inaccessible.
Even while teams recapture revenue that had been on the secondary market, the move toward dynamic pricing doesn’t necessarily hurt resellers who don’t have deals with leagues or clubs, especially in baseball where there is so much supply, said Jesse Lawrence, founder of TicketIQ, an aggregator that offers tickets through verified sellers.
“If teams are pricing up, that benefits anyone who owns the ticket,” Lawrence said. “On the flip side, (when prices fall), it can hurt the secondary market.”
Baseball fans are used to such fluctuations when shopping for airline tickets or a ride home. Toll roads, zoos, theme parks, tequila bars and renaissance festival masquerade balls have adopted the model. It’s even been tested — and rejected — by Coca-Cola.
But Major League Baseball has more to lose than Uber did when it transformed transportation with dynamic pricing, argues economist and pricing consultant Rafi Mohammed. Uber continues to infuriate users with fare surges, such as those recently affecting a military homecoming in Hawaii and stranded train passengers in Australia. But Uber was a startup. Baseball has a historic brand to protect.
“I would be worried about (where) is the tipping point where fans start to feel gouged,” Mohammed said.
Teams can guard against that by communicating that higher prices for some games are offset by lower prices for others, he said.
Alicia Price gets that. She attends dozens of games a year.
“Compared to last year, of course it’s going to go up, depending on who’s coming in,” she said. “But I understand that. I’m used to it.”
But teams can abuse that understanding, too, Mohammed said. “You don’t want to say this has become an elitist game and you can only go to Tuesday afternoon games with an off team,” he said.
The Astros have $7 seats on a Monday night in June against the lowly Tampa Bay Rays.
As of May 23, to get in for a premium opponent such as the Boston Red Sox, fans will pay a minimum of $20 for a Thursday night matchup.
The minimum for a
July weekend homestand with the division rival Texas Rangers is $25.
The Seattle Mariners, who are in second place behind the Astros in the American League West, are commanding a minimum of $20 for a Friday night in August. But there are still $8 seats for the Thursday night in that series.
Bryce said surges for weekend games mean his family has been priced out of Saturdays at the ballpark.
“Their end game is to make money. I get that,” Bryce said. “I don’t think they care about fair … It’s a business for them.”
The team declined to comment for this story and did not make its pricing software vendor, Austin-based Qcue, avail- able. Reid Ryan, president for business operations, previously told the Chronicle that as the Astros field greater talent, they have to find ways to pay them.
“We have a fiscal responsibility to our fans to field the best team and a fiscal responsibility to the business to price appropriately,” Ryan said. “So there will be seven to 10 games a year that will be most expensive. But we have all kinds of value pricing as well.”
Most teams with dynamic pricing set rules so that, no matter what the algorithm says, prices generally won’t rise above or fall below certain cutoffs, said Greg Loewen, CEO of Digonex, a dynamic pricing software provider. That protects season ticket holders from losing value if prices fall, teams argue, because those ticket holders will never see prices for their seats fall below face value on the secondary market. It keeps some seats available at reasonable prices even in high-demand situations, while allowing teams to recoup some revenue that otherwise would fall to third-party vendors or scalpers.
The Astros had $21 outfield seats for a Saturday matchup against Cleveland, in first place in the AL Central. That’s around the low end for a weekend game in 2018, but still removed from 2013, when the team offered some $5 seats, even for a home opener against their in-state rival Texas Rangers.
And fans are locking in floor prices by purchasing more season tickets. The Astros sold about 6,000 new season ticket packages for 2018, and now more than half the 41,000 seats are sold on a season basis, Ryan said.
The Houston Texans use dynamic pricing for individual game tickets, but the effect on fans is relatively negligible because the Texans sell 67,000 season tickets, spokeswoman Amy Palcic said. That leaves, at most, a few thousand individual game tickets. The Rockets have used dynamic pricing since 2010.
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