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1 – 10 of 41Yang-Ming Chang, Joel M. Potter and Shane Sanders
A standard result of firm theory is that a monopoly maximizes profit somewhere along the elastic portion of its demand curve. However, empirical studies of sports ticket pricing…
Abstract
Purpose
A standard result of firm theory is that a monopoly maximizes profit somewhere along the elastic portion of its demand curve. However, empirical studies of sports ticket pricing routinely find that (home) teams price along the inelastic portion of demand. Despite compelling theoretical explanations of this finding, at least one important factor remains unconsidered. A profit-maximizing team considers not only direct marginal revenue and direct marginal cost when setting a ticket price but also deferred, strategic benefit (revenue) from present game success. The paper aims to discuss these issues.
Design/methodology/approach
Prior literature finds that a given win is valued in that it generates additional future revenue and likelihood of home victory rises, ceteris paribus, in crowd density. The authors construct a firm profit maximization problem in which a sports team considers both present and future revenue when pricing home games in the present period.
Findings
If the deferred benefit is sufficiently large, a forward-looking, profit-maximizing team prices along the inelastic portion of its static demand curve. Importantly, this same price falls along the elastic portion of the firm’s (empirically unobserved) dynamic demand curve.
Originality/value
This is the first model of sports ticket pricing to recognize the intertemporal nature of demand for a sports match.
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Yohan Lee, Alan Morse, Moonsup Hyun, Stephen L. Shapiro and Joris Drayer
Pricing studies have largely focused on sellers' pricing strategies and price determinants. To expand earlier work on sellers' pricing decisions, this study considers time as a…
Abstract
Purpose
Pricing studies have largely focused on sellers' pricing strategies and price determinants. To expand earlier work on sellers' pricing decisions, this study considers time as a major factor driving sellers' ticket prices in the secondary market. Specifically, because most secondary market transactions occur in the last moments before a game, this study considers how resellers adjust ticket prices within a few days prior to a game day including an actual game day.
Design/methodology/approach
To examine the impact of time on secondary market ticket prices for Major League Baseball (MLB), ticket prices were collected from StubHub (one of the largest secondary ticket markets) four times per game: from 3 days to 1 day prior to a game day and on the actual game day. Additionally, 10 control variables were obtained from previous research on price determinants (N = 19,155). A multiple regression model was created based on the extant literature regarding secondary market ticket prices.
Findings
Results indicate the number of days before a game negatively influenced ticket prices: resellers decreased ticket prices consistently during the last few days prior to a game's first inning. Specifically, secondary market ticket prices decreased relatively dramatically on an actual game day. Time had no significant effects on ticket prices 2 days prior to a game day. In addition to the role of time, league affiliation and the number of all-star players were identified as key price determinants in the secondary market. Moreover, changes in weather forecasts and the home team starting pitcher's ERA played significant roles in price changes.
Research limitations/implications
Despite containing a relatively high number of data observations compared with prior pricing studies, this study's findings were limited to certain teams. Additionally, as only MLB secondary market ticket pricing was considered, different outcomes and implications may apply in other major sport ticket markets (e.g. NBA, NFL, NHL and MLS) featuring distinct league structures, policies and demand.
Practical implications
This study offers practical guidance for sellers' pricing decisions. Most secondary ticket market sellers lowered their ticket prices relatively dramatically on an actual game day. Reducing ticket prices prior to a game day can lead to greater chances to avoid unsold tickets that compromise revenue management. This study's results also afford professional sport organizations and secondary ticket market consumers a clearer understanding of the factors resellers consider when setting ticket prices.
Originality/value
Although previous studies have uncovered essential elements influencing ticket prices and consumer demand in the secondary ticket market, little work has examined how time affects sellers' pricing decisions within a few days prior to a game day. Little is known about the elements that significantly influence sellers’ decisions to adjust (i.e. increase or decrease) ticket prices in the secondary market as well. This topic deserves ongoing attention, as new outcomes can supplement previous studies' findings due to changing market environments.
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J. Cairns, N. Jennett and P.J. Sloane
Since the appearance of Simon Rottenberg's seminal paper on the baseball players' labour market in the Journal of Political Economy (1956), the literature on the economics of…
Abstract
Since the appearance of Simon Rottenberg's seminal paper on the baseball players' labour market in the Journal of Political Economy (1956), the literature on the economics of professional team sports has increased rapidly, fuelled by major changes in the restrictive rules which had pervaded these sports, themselves a consequence of battles in the courts and the collective bargaining arena. These changes have not been limited to North America, to which most of the literature relates, but also apply to Western Europe and Australia in particular. This monograph surveys this literature covering those various parts of the world in order to draw out both theoretical and empirical aspects. However, to argue that the existence of what is now an extensive literature “justifies” such a survey on professional team sports clearly begs a number of questions. Justification can be found in at least two major aspects.
Chen-Yueh Chen, Yi-Hsiu Lin and Yen-Kuang Lin
The Chinese Professional Baseball League (CPBL) experienced a rapid decline in attendance after the mid 1990s. In this study, market demand analysis is used to discover the causes…
Abstract
The Chinese Professional Baseball League (CPBL) experienced a rapid decline in attendance after the mid 1990s. In this study, market demand analysis is used to discover the causes of variation in CPBL attendance from 1990 to 2008. The ordinary least squares (OLS) is employed for model estimation. From this model, empirical evidence reveals that a homogenous sport substitute, Taiwan Major League (TML), the Major League Baseball (MLB) effect and game-fixing scandals in CPBL negatively influence CPBL attendance. Additionally, real income is found to negatively affect CPBL attendance, making CPBL games an inferior product. The proposed model accounts for approximately 91% of variation in CPBL attendance between 1990 and 2008.
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Barrie Dale, Jos van Iwaarden, Ton van der Wiele and Roger Williams
To measure service quality perceptions among spectators of a sports event.
Abstract
Purpose
To measure service quality perceptions among spectators of a sports event.
Design/methodology/approach
This paper reports the main findings of a 290 respondent questionnaire survey carried out “live” among home spectators at a sports fixture. This methodology of distributing and collecting questionnaires to and from home spectators is novel and can be used by other researchers. Also reported in the paper are follow‐up discussions at a shopping precinct with lapsed fans.
Findings
The paper identifies the main factors that influence attendance and the initiatives to attract new or lapsed supporters. Amongst the main findings is that those spectators who make regular contributions to the club through a range of schemes and are members of its independent supporters Association rate club and players public profiles higher and perceive season tickets and ground entrance prices better value than non‐members, and are also more likely to visit the club shop to purchase merchandise.
Originality/value
This paper reports a project carried out by a supporters forum of a Rugby League Club into the means of increasing attendance at home games. There are sparse details in the literature of similar projects of its type and scale being undertaken in sports arenas. Therefore, the methodology adopted, the questionnaire details and the findings can be useful in other sports environments.
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Albert A. Barreda, Sandra Zubieta, Han Chen, Marina Cassilha and Yoshimasa Kageyama
This study aims to examine the impact of a mega-sporting event “2014 FIFA World Cup” on hotel pricing strategies and performance.
Abstract
Purpose
This study aims to examine the impact of a mega-sporting event “2014 FIFA World Cup” on hotel pricing strategies and performance.
Design/methodology/approach
The present project examines the host regions’ response to the 2014 FIFA World Cup which was established by the variance in the main hotel key performance indexes: occupancy, average daily rate, revenue per available room (RevPAR) and supply. Using data gathered from STR, this research distinctly shows how the Brazilian host regions reacted to the World Cup.
Findings
Results suggest that the key performance indicators of Brazil’s lodging sector reacted differently to the World Cup. Although all hosting cities experienced significant RevPAR growth because of the increase in hotel room rates during the event, the supply and occupancy performed differed from each city.
Research limitations/implications
Research is limited to the case of hotel performance at the country level for mega-events. The study focused on the reaction of revenue managers in the Latin America context. Other contexts may generate different results.
Practical implications
The study helps revenue managers to examine how the FIFA World Cup travel demand affected pricing strategies and revenue management practices in the Brazilian hotel sector in areas undergoing seasonal growths in overnight tourism. This study serves to inform hoteliers and practitioners about revenue management pricing strategies to improve hotel performance during mega-sporting events.
Social implications
This study reveals that the benefits brought by a mega-event are not always translated into strong hotel revenue performance. This study highlights an important but understudied research area of revenue management pricing strategies and the effect of mega-sporting events in the hotel sector. This study contributes to the literature as one of the few investigations to benefit hotel pricing strategies and overall revenue performance.
Originality/value
This study is one of the few studies about exploring the reaction of revenue managers during the execution of a mega-sporting event. The value of the present study lies in the fact that the authors extend previous studies examining the impact of the most important sporting event in the hotel industry at the country-level perspective. This study serves to inform hoteliers and practitioners about revenue management pricing strategies to improve hotel performance during mega-sporting events.
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Moonsup Hyun and Brian P. Soebbing
Scholars note there are limited studies analyzing ticket price determinants. Using the common seat approach, the authors sought to advance this line of research by analyzing…
Abstract
Purpose
Scholars note there are limited studies analyzing ticket price determinants. Using the common seat approach, the authors sought to advance this line of research by analyzing determinants of National Basketball Association (NBA) ticket prices in the secondary ticket market. The authors’ research seeks to ask two questions. The first is how ticket prices in the secondary market are associated with common determinants of consumer demand. The second question is what impact the COVID-19 pandemic has on ticket prices in the secondary market.
Design/methodology/approach
Ticket prices of NBA regular season games in the 2021–2022 season were collected a week before the game day from Ticketmaster.com. A regression model was estimated with a group of independent variables: income, population, consumer preference, quality of viewing, quality of contest and pandemic (the number of COVID-19 cases).
Findings
Results indicate income, population, consumer preferences (e.g. team quality and star players) and quality of viewing (e.g. arena age and weekend) impact prices. Further, the number of COVID-19 cases did reduce the ticket price.
Originality/value
The present study illuminates the theoretical significance of analyzing ticket prices as a proxy of demand in professional sport, while providing practical implications regarding the potential opportunity to increase revenue.
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Adrien Bouchet, Michael Troilo and Brian R. Walkup
The purpose of this paper is to examine the extent to which dynamic pricing is utilized in North American professional sports. While industries such as airlines and travel…
Abstract
Purpose
The purpose of this paper is to examine the extent to which dynamic pricing is utilized in North American professional sports. While industries such as airlines and travel services have employed dynamic pricing for decades, professional sports is only now starting to adopt it.
Design/methodology/approach
The authors survey and interview high ranking executives and managers in North American sports organizations. A total of 72 managers and executives from the four major North American professional sports leagues as well as other sport properties were surveyed. Descriptive statistics and a basic regression provide insight into perceptions v. actual practice among sports organizations.
Findings
While most sports organizations perceive high usage of dynamic pricing within their organization, current procedures lag. Nearly 70 percent of respondents believe that their organizations frequently or always apply business analytics to dynamic pricing, but only 30 percent update their prices daily. Fully 50 percent of organizations do not automate decision-making processes, which is a hallmark of dynamic pricing. The perception of constant use of analytics in dynamic pricing intensifies as job title increases.
Originality/value
As one of the initial surveys looking at the usage of dynamic pricing in North American professional sports, this study provides a glimpse into both the perception and the reality. It suggests that there is still ample room for improvement.
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Nicholas Watanabe and Brian Soebbing
The purpose of this paper is to examine the impact of team performance, price dispersion – having multiple ticket prices for a single event, and market characteristics on fan…
Abstract
Purpose
The purpose of this paper is to examine the impact of team performance, price dispersion – having multiple ticket prices for a single event, and market characteristics on fan attendance. By considering the context of the Chinese Super League (CSL), this study considers multiple strategies for enhancing the demand for sport in relation to factors on- and off-the-field of play.
Design/methodology/approach
This study uses economic demand theory to examine consumer interest in sporting events in relation to pricing. Through employing econometric modeling, regression analysis is used to estimate results from match-level data encompassing multiple seasons.
Findings
The findings estimated from the linear regressions indicate that using multi-tiered pricing for sporting events does not significantly enhance demand in this context. Furthermore, it is found that consumers are responsive to matches against rival teams and strong opponents.
Research limitations/implications
The results run counter to prior literature on price dispersion, indicating that attendance demand may not always be influenced by the number of price points.
Practical implications
The findings help to develop an understanding of how team performance and pricing are important parts of meeting organizational goals in sport. From this, strategies can be formed to help stakeholders and managers in improving organizational performance.
Originality/value
This research is one of the first to consider the CSL, where both single and multiple price points exist for sporting events. Thus, it helps to build both theoretical and empirical knowledge in regards to the importance of pricing systems.
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