One of the hardest things to do working in sports is trying to figure out what the appropriate pricing should be for tickets. Those of us assigned this task are keenly aware of our different customer’s financial pictures. The challenge of course is to come up with figures that are low enough to meet our consumer’s needs, yet high enough to bring in the revenue our owner(s) demand.
For most organizations I have worked for, pricing out tickets is rarely weighted on team performance. Before we even begin talking about individual seating sections and ticket plans, there first has to be a larger conversation about costs and revenue projections.
Now I don’t know if this is how the Rangers (or MSG at large) go about their business, but I imagine it must be similar to the organizations I have worked for.
With that said, every September we present to our owner(s) what our overall projected revenue is for the following year. These revenue figures almost always have to be higher than the previous year because costs always go up.
In recent years, the cost of doing business in New York City has gotten pretty ridiculous. Healthcare premiums are through the roof, taxes are high, advertising costs are the highest in the country, and the cost of working with unions has gotten incredibly expensive.
The problem is none of this is communicated to customers because a) they generally don’t care and b) we can’t throw our partners under the bus. It’s just bad business.
Anyway, so once our owner gives us a figure that we have to reach, we can then start planning out how we are going to hit that number. For tickets specifically, we have to look at what the price increases are for other local entertainment properties (i.e. baseball, football, Broadway, etc.), as well as what the rest of the league is doing in their respective markets.
In previous seasons, the Rangers average ticket price didn’t crack the top 5 teams in the league (according to TMR’s fan cost index). This was probably a mistake since the NY market is one of the most expensive markets to do business in and the demand for tickets has always been very strong.
In my opinion, the second mistake was the decision to keep ticket prices flat during the Rangers playoff drought. It put the organization behind the eight ball and they’ve been trying to make up for it with larger than normal increases ever since. Top it all off with the cost of doing the renovations without tax payer dollars and voila, you have some serious costs to cover.
Now I know the recent price increases in some sections are pretty ridiculous, there’s no arguing that, but these things aren’t just done on a whim. Hopefully this post helps explain more about the overall process and where your money actually goes.