February 25, 2010

Last week the Chicago Cubs unveiled their future methodology behind the selling of baseball tickets.

The Cubs idea? A pre-sale…with an added price.

…the Cubs will launch a special First Chance Presale for individual game tickets. The sale, which runs through Thursday at noon, will allow fans early access before all tickets go on sale Friday.

The Cubs are charging a 20% fee per ticket for the advance sale. You could knock that down to 15% by using MasterCard, the sponsor of the pre-sale. There is a six-ticket limit per person, and the Cubs say they have “a limited number” of tickets available for the presale.

Interesting idea, no?  The Cubs have increased the power and value of the Master Card sponsorship with the 5% discount while simultaneously increasing the money going into their own coffers.  And for those people thinking that maybe the demand for pre-sale Chicago Cubs tickets would exist? You’d seemingly be mistaken.

“We’ve heard from fans that there’s a willingness to pay a premium for early access to games that are especially popular, like opening day,” said Wally Hayward, the Cubs’ chief marketing officer. “It’s like paying extra for a ‘Fast Pass’ at Disneyworld or Six Flags. If you’re going to Disney for three days, you don’t want to spend all your time standing in line. This is the same idea. You’re paying extra for a convenience so you can get those must-have tickets.” (via ChicagoBusiness)

Looks like it should be a great move for the Cubs as far as the increase in revenue.  But what about the fans?  The likelihood that secondary ticket markets will purchase large portions of pre-sale tickets is relatively high.  That means that some of those Cubs fans that would have previously had to pay “X” in order to get a ticket to a game are now going to pay “X” plus at least 20%, so that the secondary ticket market company that bought the ticket can still make a profit.  Apparently, this isn’t really an issue for Cubs management…yet.

“Everyone is experimenting with different models and ticket options,” Mr. Hayward said. “This is something we felt we should try to address the tremendous demand for tickets.”

A different model indeed.  The Cubs model may really prove its worthiness a few years down the road.  Just like with any other market, if you can show scarcity of a product, you can usually raise prices.  That being said, if the Cubs already have an adequate demand for a pre-sale, and if secondary ticket companies snatch up pre-sale tickets, leaving fewer tickets for the average fan, and that happens for a few years such that fans know the tickets are scarce and that they need to move quickly to purchase…

How far behind is a ticket price increase to balance out the market?

Lets check back in in a few years…


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