2013-14 Schedule

[Bluzrover]

Not being able to sell out a local arena is not only a bummer, but also hurts recruiting. I'm hopeful this year will be different but I do understand the economics. I haven't lived in Wichita for nearly 30 years but my family is still there and I know the city has lost a lot of its economic engine.

[wufan]

Not being able to sell out a local arena is not only a bummer, but also hurts recruiting.

Nah.

[Rlh04d]

3.) Wichita State fans rarely have to pony up big money for a single game ticket that run $50, 70, 100+. It's just not in the budget and worth it to them to have to pay that price for a 2-3 hour game.
5.) Wichita doesn't have professional sports teams. So the sporting events that Wichita has like Thunder, Wingnuts are $20 a ticket at most. Paying 2, 3, 6 times that would just be foul in their mind.

Common sense dictates that ticket prices should probably be whatever results in a sell out. Of course it gets a little more complicated than that, but then the more people that are there, the more you're selling in concessions and other items.

If the game isn't sold out and they're selling ticket prices for that much, I think that's poor business. If it's getting close to game day and it isn't sold out, start dropping prices.

[1979Shocker]

If the game isn't sold out and they're selling ticket prices for that much, I think that's poor business. If it's getting close to game day and it isn't sold out, start dropping prices.

If you do that, people will wait for prices to drop. Prices should already be set to where they guarantee a sellout, whatever that might be.

[ShockerFever]

If you do that, people will wait for prices to drop. Prices should already be set to where they guarantee a sellout, whatever that might be.

Exactly.

It was quite embarrassing how WSU fans waited for the ridiculously desperate groupons last year and the year prior, before sales finally started to reach respectable levels.

I would hope after a Final Four run and a Top 25 opponent will kill the need for these Creighton-like promotions/discounts. Prices were pretty high for the last two years. Hopefully, they'll be a tad lower, but the opponent this year will definitely be worth the price.

[Rlh04d]

If you do that, people will wait for prices to drop. Prices should already be set to where they guarantee a sellout, whatever that might be.

True, but that's a difficult price to determine going in. With a decent price, any last minute tickets available should be in the nose-bleeds.

[proshox]

Common sense dictates that ticket prices should probably be whatever results in a sell out. Of course it gets a little more complicated than that, but then the more people that are there, the more you're selling in concessions and other items.

If the game isn't sold out and they're selling ticket prices for that much, I think that's poor business. If it's getting close to game day and it isn't sold out, start dropping prices.

I disagree. They are trying to generate revenue.

Assuming inelastic demand, i.e. price does not impact total sales, the promoter is better off with a higher price.

If demand does change with price, but the price has to move significantly to increase demand the promoter may well be better off with a higher price per ticket and less tickets sold. I pasted an example of this below....

Tickets Sold	Ave Ticket Price	Total Revenue
5,000	$80	$400,000
6,000	$70	$420,000
7,000	$60	$420,000
8,000	$50	$400,000
10,000	$40	$400,000
12,000	$20	$240,000
16,000	$10	$160,000

[jdshock]

I disagree. They are trying to generate revenue.

Assuming inelastic demand, i.e. price does not impact total sales, the promoter is better off with a higher price.

If demand does change with price, but the price has to move significantly to increase demand the promoter may well be better off with a higher price per ticket and less tickets sold. I pasted an example of this below....

Tickets Sold	Ave Ticket Price	Total Revenue
5,000	$80	$400,000
6,000	$70	$420,000
7,000	$60	$420,000
8,000	$50	$400,000
10,000	$40	$400,000
12,000	$20	$240,000
16,000	$10	$160,000

That's certainly an interesting point. What sucks for the arena/promoter is that the game has had last minute deals in previous years. Even if the first year they were able to take advantage of the 5000 ticket buyers willing to pay a higher price and then another 10000 paying a lower price (which as a side note, is obviously their best option. They get the $400,000 plus another 100,000... at least in your example), they have changed the demand now. A chunk of the people willing to pay the higher price are no longer willing to because they believe if they wait it out they will get a better deal.

[SpanglerFan316]

I disagree. They are trying to generate revenue.

Assuming inelastic demand, i.e. price does not impact total sales, the promoter is better off with a higher price.

If demand does change with price, but the price has to move significantly to increase demand the promoter may well be better off with a higher price per ticket and less tickets sold. I pasted an example of this below....

Tickets Sold	Ave Ticket Price	Total Revenue
5,000	$80	$400,000
6,000	$70	$420,000
7,000	$60	$420,000
8,000	$50	$400,000
10,000	$40	$400,000
12,000	$20	$240,000
16,000	$10	$160,000

Companies can spend millions of dollas in market research to determine (an approximation to) the demand function/curve http://smallbusiness.chron.com/diffe...rve-24674.html which is never linear (although a linear model might be a good approximation in some regions). If you already know the demand function, all questions are answered and problems solved. :D

[shockmonster]

That's certainly an interesting point. What sucks for the arena/promoter is that the game has had last minute deals in previous years. Even if the first year they were able to take advantage of the 5000 ticket buyers willing to pay a higher price and then another 10000 paying a lower price (which as a side note, is obviously they high prices toir best option. They get the $400,000 plus another 100,000... at least in your example), they have changed the demand now. A chunk of the people willing to pay the higher price are no longer willing to because they believe if they wait it out they will get a better deal.

To solve that problem the promoter just needs to create $10.00, 15.00, and $20.00 sections on the top deck. Then $30.00 and up sections on the bottom bowl. Our prices have been higher than K-State and too high for this product that Shocker fans have all year and fair weather basketball fans won't pay that much for.

[EB 22]

That's certainly an interesting point. What sucks for the arena/promoter is that the game has had last minute deals in previous years. Even if the first year they were able to take advantage of the 5000 ticket buyers willing to pay a higher price and then another 10000 paying a lower price (which as a side note, is obviously their best option. They get the $400,000 plus another 100,000... at least in your example), they have changed the demand now. A chunk of the people willing to pay the higher price are no longer willing to because they believe if they wait it out they will get a better deal.

This has been pretty common with many Intrust Bank Arena events not just basketball. Dave Mathews Band and Bon Jovi come to mind. It's almost a necessity to be done for arenas/promoters to get rid of whatever tickets they have on hand at the last second.

[Rlh04d]

I disagree. They are trying to generate revenue.

Assuming inelastic demand, i.e. price does not impact total sales, the promoter is better off with a higher price.

If demand does change with price, but the price has to move significantly to increase demand the promoter may well be better off with a higher price per ticket and less tickets sold. I pasted an example of this below....

Tickets Sold	Ave Ticket Price	Total Revenue
5,000	$80	$400,000
6,000	$70	$420,000
7,000	$60	$420,000
8,000	$50	$400,000
10,000	$40	$400,000
12,000	$20	$240,000
16,000	$10	$160,000

Did basketball tickets become similar to gas while I was asleep? Why would you ever assume inelastic demand?

Clearly price does effect demand. As for your example, I was being simplistic, but you're making assumptions based on nothing for those numbers. And not taking into account other sources of revenue, like concessions and merchandise, that will inevitably increase with more tickets sold. Or seat location, etc.

Obviously there is a point tickets shouldn't go under to keep revenue up. But that point is likely not $80.

As for your actual table ... you're assuming identical price structure. Let's take the other assumption. You identified how many extra people are willing to buy tickets at a given price -- 5000 people will buy at $80, an extra 1000 with a $10 price drop, and so on. Again, being simplistic and assuming a significant number of people don't hold out for lower prices to sit in worse seats, you could have:

Tickets Sold	Ticket Price	Total Revenue
5000	$80	$400,000
1000	$70	$70,000
1000	$60	$60,000
1000	$50	$50,000
2000	$40	$80,000
2000	$20	$40,000
4000	$10	$40,000
16000		$740,000

I've now almost doubled your total revenue without assuming anything other than what you put in that table. You base that pricing structure on seat quality, put the first 5000 in the best seats, the worst 4000 in the nosebleeds. You could even change that price structure dramatically, running from $60 to $5, and still make more revenue than what you're showing. Which, again, doesn't get into the benefits of having a full house on concession sales, merchandise sales, parking, and the un-quantifiable benefit of having a full stadium benefiting the home team competitively and creating a better television environment which makes it more likely the television broadcasters will want future games.

[EB 22]

I just don't see 4000 total people paying even $10 for nosebleeds if the game is on TV. The nosebleeds for basketball towards the back row are just horrible seats.

People would almost be better off staying at home or going to a bar where the concessions and view are so much better and cheaper.

[Kung Wu]

I just don't see 4000 total people paying even $10 for nosebleeds if the game is on TV. The nosebleeds for basketball towards the back row are just horrible seats.

People would almost be better off staying at home or going to a bar where the concessions and view are so much better and cheaper.

I have no argument with this.

But if WSU were playing Duke, do you still think that we wouldn't fill those 4,000 seats for $10 each?

[GoShockers89]

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