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Maple Leafs offer ridiculous reason for season-ticket price hike
Like every other creator and owner of a ticketed entertainment venture, the Toronto Maple Leafs are tired of brokers making money off of their product.
There have been many ways teams have tried to go to war with ticket brokers. The Leafs, for example, have used personal seat licenses in the past and are going to transition into some kind of 12-month die-hard fan subscription model, which we’ll get to later.
(Please note that a poll five years ago showed only seven percent of respondents were concerned that the secondary market was inflating NHL ticket prices, compared to 56-percent for baseball.)
But the main point of attack on ticket brokers from the Leafs is, apparently, raising season-ticket prices across the board in the hopes of … breaking them or something?
When the company’s analytics team tackled the secondary ticket market, it found that many single-game Leafs tickets sold via brokers and scalpers for nearly twice their face value. The markup represents a fat profit for resellers, and a hefty incentive to stay in business.
Please note that the Leafs needed “an analytics team” to discover that single-game tickets were selling at double-face by brokers and on secondary ticket sites. Apparently “guy with laptop at your local coffee shop” was busy.
Next season, season-ticket prices will rise by between $7 and $16 per ticket per game, but MLSE chief commercial officer David Hopkinson says the increase won’t affect the final price on the secondary market, where brokers resell the season seats they purchase.
Look, we’re no economics majors, but unless ticket brokers are setting some arbitrary price that’s not linked to the face value of the ticket or, more importantly, demand – which will rise significantly now the Leafs are worth a damn again – this claim seems … specious.
Let’s say I have an NES Classic at Christmas 2016. It’s $150. I’m selling it for $170, based on demand. Nintendo’s like, ‘hey, guess what, it’s now $170, because reasons.’ And so I … keep it at “new face value” because they met my inflated price, or I inflate it more?
Obviously, it inflate it like a monster truck tire. It’s the hottest toy at Christmas. You either want it or not, price be damned.
Instead, he says, raising the retail price with shrink resellers’ profit margins.
Which, again, seems a little wishful thinking, essentially betting that the brokers aren’t going to find ways to make up the money spent on higher-priced face tickets and other bells and whistles.
What the Leafs ACTUALLY mean is that they know brokers will continue to gobble up tickets, so they’re gouging them while the fans take the same hit. Before some of them, you know, resell the tickets themselves …
Hopkinson says fewer brokers in business means more tickets for fans.
Fans who will buy these tickets, and then immediately put them on secondary ticket sites for popular games in order to fund all of their other ticket purchases, thus making them overpriced and thus pricing “fans” out of the building, but it’s OK because it’s not “brokers” doing it.
“If we don’t price the tickets appropriately versus what the market is going to pay for them, guess what happens,” Hopkinson says. “The tickets don’t get cheaper. Just other guys make the money . . . and that doesn’t help your hockey team. That doesn’t help us get better.”
So what did the analysts learn about the Leafs tickets on the secondary market?
While the Leafs acknowledge that most single-game seats are bought and sold on the secondary market, they note that the biggest markups occur on the least expensive seats. Where upper-bowl seats average $80 per game as part of season packages, they average $108 as single-game seats and $141 on the secondary market. Lower-bowl seats, meanwhile, average $195 under a season-ticket package, $234 at the box office and $250 resale.
“There is a significant arbitrage here that we’ve got to try and close,” Hopkinson said. “Someone’s going to end up with the money, and we’d rather it’s not a guy in a parka.”
Whoa, that’s some serious shade thrown at La Parka.
Now, other people have taken a look at how to make tickets more affordable for the plebeians, when the brokers and the rich have control of the ticket market.
And when the questions are about economic policy, the answers are usually found with Alexander Hamilton.
From the Financial Times:
Hamilton, the US hip-hop phenomenon widely praised for drawing new people to musical theatre, is smashing a different kind of record: theatregoers in the prime orchestra seats are paying $849 a ticket, the highest charged for a Broadway show.
Lead producer Jeffrey Seller has likened the move to “taking from the rich to give to the poor” because they allow wealthy theatregoers a legitimate way to pay above the odds for seats, making them less likely to turn to scalpers. The profits from the premium seats can then be used partly to keep other tickets affordable.
Now, as the first holders of $849 tickets head to the theatre, the price rise appears to have paid off. The resale of Hamilton tickets has dropped nearly 50 per cent after the price change, as measured by an Financial Times analysis of secondary ticket volumes on the resale site StubHub. Secondary ticket sellers posted an average of 53 listings for each Hamilton performance after the price rise, compared with 99 listings before.
So one way to attack the brokers’ profit margin is to really, really raise prices on your most expensive seats, which in turn can help keep your lower-priced seats at a reasonable number.
Rather than, you know, raising ticket prices across the board.
Back to the NHL: When they say “someone’s going to end up with the money,” we ask again: Is it the Leafs? Is it the fans that buy these tickets and then resell them for a profit?
And if it’s the latter, are the Leafs saying it’s more virtuous that their fans get to resell the tickets for 43-percent markup than the brokers, despite the end result being that there are fewer face-value tickets available and other fans have to pay 43-percent more for the ones that are available?
There’s a concept called “framing effect” in behavioral economics, in which people are presented with different rationales for the same results, in the hopes that one resonates.
So maybe the Toronto Maple Leafs are raising ticket prices to hurt brokers, or maybe they’re doing it to clamp down on the inflation of upper-level seats so “real fans” can buy them, or maybe they’re just trying to keep you award from The Parka Man, a mythical beast that roams the streets around the ACC.
All scenarios lead to one conclusion: Your ticket prices are going up, Leafs fans.
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Greg Wyshynski is a writer for Yahoo Sports. Contact him at puckdaddyblog@yahoo.com or find him on Twitter. His book, TAKE YOUR EYE OFF THE PUCK, is available on Amazon and wherever books are sold.
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