What Happens When You Cut Ticket Prices by $2

[RonCo]

As noted in the past episode of this series, over the past five seasons we had 25 cases of teams raising prices by $2 or more. On the flipside, only nine teams have <em>dropped</em> prices by $2 or more—or technically, $1.94 or more, since I made the line down that far just because I wanted to. Regardless, that’s a pretty small sample size, so you’ll have to take that into account as you look at the results. Still, there are some interesting bits.

I took the same approach here, splitting teams by:

• Teams under .500 with fan interest less than 75
• Teams under .500 with fan interest more than 75
• Teams over .500 with fan interest less than 75
• Teams over .500 with fan interest more than 75

I then looked at what happened, and made some quality assessments—which you are, of course, free to disagree with.

One thing to note here is that these nine teams already had moderately high prices, with $15.73 (Hawaii, 2038) as the lowest starting point. This makes some sense in that teams with low ticket prices are less likely to make big changes—and peer pressure has been on the opposite direction. What this means is that we have no data on what happens with lower starting points.

Regardless, here’s the result on what we’ve got:

Let’s look at the four quadrants:

Bad teams with low fan interest: Hawaii has fit in this category twice, and both times had results that were effectively draws. Vancouver dropped prices almost $3 from a starting point of $24, and made a bunch of money. Despite losing more games, Vancouver bumped fan interest and wound up with a bigger budget. <em>This makes me wonder if Hawaii’s break-even result came because they didn’t cut prices enough</em>—especially in 2038 when they started to win.

Bad teams with good fan interest: Bot Louisville and Wichita cut prices a ton (more than $3.50), and wound up making bucket-loads of money. Louisville lost fan interest, but that comes mostly because they traded off most of their star players. The bottom line is that they won 15 more games, and even got a small budget bump. I’m calling this a draw, but you could argue that their drop was a pretty solid decision. The only real bad situation here was Twin Cities, who eventually ran a fire sale and lost major fan interest, cash, and budget. So if TWC had known what was coming you could again argue that they could have done better by cutting prices more.

Good teams (both low and high fan interest): cutting prices substantially resulted in more cash each time, and either solid fan interest bumps or budget bumps two out of three cases.
# # # Ultimately, I think you need to remember this is small sample size. One also has to recall that these teams are all starting from $16 prices and up. These constraints limit the lessons we can get from these results. Please be clear here that to me this data does not say one should definitely reduce their prices. In fact, I'd guess there would be some weirdness go on if everyone did. My view is that the 2037 push to increase prices had some good reasons and the process did improve our overall efficiency.

That said, in these cases it seems clear that most teams that got to that place of moderately high prices, and then dropped tickets by $2+ wound up pumping cash into their coffers and also often saw fan interest and budget increases. The cases where this didn’t happen are either situations where the team had other odd things happening (Louisville/Twin Cities), or Hawaii, who either did fine, or could perhaps have taken a big chance like Louisville/Wichita. [Note--you can argue with me on that last statement, all good there]