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To: John H K
Are you saying that the owners could pay salaries such as ARod's if the price tickets weren't so high? It's a cycle that has to be broken.
28 posted on 12/06/2001 2:52:17 PM PST by nikola
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To: nikola
Ticket prices are set to give the owners maximum revenue. They are NOT set to cover owner expenses.

For example, a team could charge an average of $1000 a ticket. They'd likely have only 100 fans at the game for a given night, and only collect $100,000 dollars.

If they charged $1 a ticket, the stadium would be full, but they'd only collect $45,000 that night.

Somewhere in-between the above two, there's a ticket price point where they maximize revenue in terms of (ticket price) x (number of fans) = (revenue.) THIS IS THE ONLY CONSIDERATION IN SETTING TICKET PRICES. Ticket prices are based ENTIRELY on what people are willing to pay.

As are concession prices. Concessions are complete monopolies. The price of a hot dog is set at the point where they make the most money; the price of a baseball stadium hot dog is NOT set based on the cost of meat and buns. There are enough people willing to buy a $5 hot dog that those high prices maximize revenue. They could sell more hot dogs at a lower price, but make less money, or charge even higher prices for hot dogs and sell fewer, and make less money.

Owners do NOT say "well, we are paying X dollars in salaries, we need to charge X amount per ticket to pay for those salaries."

Though when a team raises ticket prices, they like to put out press releases where they claim it's necessary because they re-signed Joe Blow to a huge new contract...this is simply a blatant, out and out lie to fool gullible and naive sportwriters and fans who don't have the slightest idea of baseball economics.

If some federal law was passed limiting the maximum baseball player salary to $100,000 dollars a year next year...the owners wouldn't cut ticket prices at all. Why should they? If an owner has 90% of tickets sold at a given price in a year, then he has 1/10th the player salary expenses the next year, what possible motivation does he have to lower ticket prices? Absolutely none. All that would happen is the Owners would pocket the money "saved" by lower player salaries.

31 posted on 12/06/2001 3:27:28 PM PST by John H K
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