Yankee attendance is down. Even though attendance is usually low in early April, mostly due to weather, per-game attendance is at its lowest levels since the new Stadium opened. (Hat Tip RAB)
If the trend continues, a lot of people will probably start to offer explanations for why Yankee Stadium attendance is down. The weather is bad. The Yankees failed to acquire a big-name free agent or trade target this off season. The new stadium isn’t as cool as it used to be. The economy is bad. New Yorkers are suffering from Yankee fatigue. I’m sure that creative people will come up with other excuses as well. I’m sure that some of these have some truth to them, but I don’t think that even the sum total of all of them is significant. I’d like to offer one simple explanation: elasticity of demand and prices.
The Yankees have been steadily ratcheting up prices since the new stadium opened, even after a very steep rise in prices when they moved in. In the short run, not a lot changes. Yankee fans pay more for tickets and eat the costs elsewhere. But over the long run, habits and behavior adjusts. We may watch more games on television. Instead of paying $60 for a not-so-great seat to a Yankee game, I may pay $60 for a pretty good seat to a Devils game, or put some more money toward a $160 Orchestra seat to see Jersey Boys. Or I may just decide that Yankee games are not worth the cost and save the money.
I’d like to add one important substitution effect that is unique to baseball: with fixed ticket prices, I may elect to only go to higher-quality games. For $50 on the primary market, I can buy the same ticket to a cold, April Monday-night Twins game as I can to a nice, warm June Saturday game against the Texas Rangers. That means that we can actually see an increase in the prices and quantity of higher-quality games, while simultaneously seeing record-low attendance for lower quality games.
To help illustrate my point, I graphed home-game prices for April and May from Stubhub. I took the highest minimum price for a game in each series.
You can pretty much get a ticket to see the Yankees beat the Orioles or Twins on the weekend for free. Minimum prices are $1 and 2$. No one wants those tickets. Prices increase a little as the weather warms up, and really shoot up on the weekends. Season ticket holders who bought 81 tickets without intending to go to 81 games are probably taking pretty big losses. Speculation, be damned.
I’d wager that if you compared these prices to previous years, you would see a big drop in the undesirable weekday games, but a much smaller drop or even an increase in the more desirable games. So don’t expect to be able to pick up cheap tickets for Red Sox games this year, even if attendance remains depressed.
This may sound all doom and gloom, but I think its good news for us fans. First off, if you’re as broke as I am, you’ll be able to attend Yankee games for cheap. Those games might be against the Royals, but I’m fine with that. I pay $20 for tickets to see the Nationals get killed every once in awhile, so Yankees vs. Royals is a big step up from that. Second, the Yankees will probably adjust ticket prices downwards over time, since the marginal cost of adding another person into the stadium is actually negative (that is, the Yankees would still make money if they filled 5,000 empty seats by giving tickets away, mostly from concessions), resulting in lower ticket prices for the rest of us.
One more thought: this whole ticket pricing scheme makes no sense at all. This is a problem created by fixed ticket prices for a seat over the whole 81-game home schedule. Why should the face value of a Saturday game against the Red Sox be the same for the same ticket as a Wednesday game against the Royals? One of these days, some baseball team (Update – Looks like several teams do it already to some degree) is going to adjust prices per game. Average ticket prices (and therefore, season ticket prices) would remain the same, but certain games will get much cheaper, while games against the Red Sox and Mets will be enormously expensive. This is also a good thing – the Yankees will make more money, and more fans will be able to see more baseball games. I’d be willing to shell out $50 for non-season ticket seats close to the field when the Yankees host the Cleveland Indians, and I’m sure some investment banker will be willing to shell out $500 for that ticket against the Red Sox. People selling their tickets on StubHub, on the other hand, will lose out, but I’m fine with that.
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