Saturday, September 15, 2007

Price hike for Preds

Nashville was 23rd in the league last season in announced attendance, and likely even lower when only paid attendance is the measuring stick (they averaged 13,815 per game). In light of that, Preds management has an interesting strategy to better fill the building:
The Predators will raise single-game ticket prices by an average of about 25 percent for the coming season, vice president Steve Violetta said Tuesday.

In addition, the team will expand on the policy of variable pricing that it started in 2006-07, meaning single-game tickets will come in three different categories — regular games, premium games and premium-plus games.
Nearly half of Nashville's home games next season have been designated either premium or premium-plus, and you better believe those include games against the ever-popular Red Wings, who seem to have more than a few faithful fans in the Tennessee area.

Oh, right... and then there's this:
The team must average at least 14,000 fans in paid attendance to keep a lease between the city and the Preds intact. They averaged 13,815 last year.
The interesting business here is that plug-pulling owner Craig Leipold is still making the decisions regarding things like player movement and pricing, with the local group of business leaders hoping to buy the team only being "aware" of what's happening.

I'm afraid I don't have any inside information into what's happening with the sale, but The Globe's David Shoalts did mention that there were snags in a recent blog item on the NHL board of governors' annual fall meeting.
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8 Comments:

At 3:53 PM, September 15, 2007, Anonymous David Johnson said...

The new ownership probably doesn't care. If attendance drops significantly they probably already have a side deal with 'Boots' to sell it all to him (he's already set to buy a significant chunk if/when the sale goes through) so he can move it to Kansas City (which is where he really wants his team) and in the meantime the local ownership get some good local press for trying to save the team. The whole situation seems like a joke to me.

 
At 6:13 PM, September 15, 2007, Blogger Paul Nicholson said...

I've talked with several hockey bloggers in the Nashville area, including some who are peripherally associated with the Predators (ie: they have press passes or have jobs somewhere in the organization).

My conclusion from talking to them: This was about differentiating season tickets from single game. There is a strong feeling that the 14,000 seats will easily be met this year, given the very strong season ticket sales when compared to last year.

The next item on the to-do list: Get revenues up and make a profit.

Raising ticket prices does two things: 1) Makes more money per ticket (duh), but 2) it gives more reason for people to buy season tickets. Seasons tickets used to only give you a small discount over regular tickets (3-10% usually). My personal seats (up in the nosebleeds) only gave me a $1.75 discount per seat in past years. The reasoning, and i think it is somewhat sound, is that there were a lot of people that thought about buying the casual 13-game pack, but when confronted with so little savings over single-game tickets, it wasn't compelling. People would just say "Oh, we'll just go to games as we want to" and would only get around to going to maybe 3-6 games a year.

By giving those casual fans more incentive to buy a 13-game pack (or giving 13-game pack owners incentive to buy a 22-game pack, etc) they will get more commitment and more revenue.

I know all this sounds horribly foreign to you Canadians, but this isn't really that unusual a problem. The Preds prices are still WAAAAY below league average and this was more about correcting a lack of value for season ticket holders and getting more revenue from those games that are guaranteed to at or near sellouts (ie: weekends and Red Wings).

If the Leafs did this it would be weird, but i think it makes perfect sense if you took a look at where the Preds prices were prior to this point.

 
At 9:10 PM, September 15, 2007, Blogger JavaGeek said...

There's a few important things to note first:
1. Nashville's ticket prices last season were average compared to American teams
2. Capacity = 17,113 [#28/30]
3. announced attendance was 90% of capacity, which is close to average
4. For every dollar increase in price you'll lose about 150 fans.
5. Selling to capacity doesn't necessarily maximize revenue. [lose 150*ticket price, gain $1*attendance]

Nashville's focus on pricing based on demand is smart for a city with such a small arena as it allows them to try and squeeze the maximum amount of money out of those ever popular games (Detroit) that will sell out for sure.

Of course this doesn't touch the issues of the Predators agreement with the city...

 
At 10:37 PM, September 15, 2007, Anonymous ken said...

"Premium Plus"? Does that mean you get free crackers at the game?

 
At 3:54 AM, September 16, 2007, Anonymous beingbobbyorr said...

"The bottom line is that we're doing this [lockout] for the game and for the fans, ultimately, more than any other constituency. When we get our expenses under control, the pressure to continually raise ticket prices to try to make revenues meet the expenses will certainly correct itself."
-- NHL VP & chief legal counsel Bill Daly, 10 May 2005

 
At 10:24 AM, September 16, 2007, Anonymous Gerald said...

4. For every dollar increase in price you'll lose about 150 fans.

Where on earth did you ever get this notion?

In fact, Preds paid attendance went up the past two years despite hefty price increases.

 
At 10:41 AM, September 16, 2007, Anonymous Baroque said...

I can see the logic in Paul Nicholson's comment. If there is a substantial discount, even a perceived one from the wording, someone might be more likely to buy a multi-game package. They might also find themselves going to more games than they anticipated originally since they paid for the tickets already.

 
At 4:51 PM, September 17, 2007, Blogger John said...

So, the logic is by making single game tickets more expensive the season's ticket package is a better deal.

If the fans are committed then that may work. But what if the committed fans already have seasons tickets? Then won't the increase in single ticket prices make Football or Basketball tickets (or concert or movie, etc) look like a better deal?

I have little doubt there is a rabid base of fans, but I'm not sure raising ticket prices is going to lure on-the-fence fans to buy tickets to more games. And how do these higher ticket prices factor into how much the new owners want the city pay in order to top up ticket sales? Do these higher prices mean the city of Nashville may need to pay even more than they would have before this announcement?

 

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