Dec 2, 2009, 10:30 AM EDT
John Henry, regretting that the Red Sox are raising ticket prices again:
“I am concerned with how expensive it is for four people to attend a game these days . . . Unfortunately virtually all contracts in baseball go up each year for on-field and off-field members of the organization.”
As Baseball Prospectus’ Joe Sheehan so eloquently put it nearly eight years ago “The price of tickets is not set to recoup costs, but to maximize revenue.” Indeed, this is how the price of just about every item in the stream of commerce is set (the price of razor blades and printer ink is apparently set by the Russian mob, however). Supply and demand you know.
If you don’t believe it, ask yourself why it costs so much to go to a Notre Dame or Ohio State game. They don’t have any salary expenses to recoup. Or the NFL, NHL and NBA, where salary caps have kept overall costs basically constant and certainly predictable, yet ticket prices have spiraled in ways wholly unrelated to expenses.
A smart organization sets ticket prices at the absolutely highest level they can be set without negatively impacting demand. The Red Sox sold out their games at last year’s prices. They will likely sell out their games at 2010’s prices. Those prices will continue to be raised until the exact moment people decide they are not worth the price and cease to buy Red Sox tickets. John Henry’s suggestions to the contrary are exercises in public relations.
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