Friday, September 10, 2010

Cubs Might Drop Ticket Prices! (in 2021)

I apologize to anyone who is sick of the attendance and ticket price debate already, but this will be the last post on this subject for awhile (probably).

I got into it with Yellon over on his site yesterday about whether Cubs fans would abandon the team at the rates he seems to think is possible.  Now, I have stated numerous times that the absolute floor for announced Cubs attendance is the number of season tickets that are sold during the season.  Whether the fans who bought those seats show up or not, the announced attendance can not be lower than the total number of season tickets.

I asked the Cubs what that number is and they said they do not make that information public. I also asked the Astros about their season ticket base and got a similar answer and I bet most teams (if not all) would not disclose that sort of information.  Nevertheless, without a number provided by the team, we have to guess and Al has guessed 27,000 or so season ticket sales per year and that sounds reasonable to me, so we'll go with his number.

Al also took a poll of his readers which was kind of a jumbled mess, but there is some information in there which we can use to come up with some base assumptions.

First off, of the 60 season ticket holders to respond, 24% said they would be declining to renew in 2011.  That is an awfully big percentage considering last year only 2% declined to renew for 2010.  But what the hell, let's say that number is representative of the entire season ticket holding group.  That means 6,480 tickets will go back into the pool for the people on the waitlist.

According to one of Al's readers, the waitlist stands at about 115,000 people. Now for the sake of simplicity, I am going to assume that each person who declines and each person who accepts will drop or buy only 1 ticket when given the chance.  Of course, this is not true and the actual number would probably be about 2, but I want to keep things simple.

Al also asked if people currently on the waitlist if they would accept or decline if the Cubs called them this offseason with a chance to purchase. Of the 139 that responded, 82 said they would purchase if given the opportunity.  That is a 59% acceptance rate.  Pretty low, but again probably within reason of what we could expect from the entire group.

So now we have to figure that only 59% of that 115,000 are actual customers waiting to buy tickets, so lets adjust that number accordingly to 67,850.

So 6,480 people will theoretically drop their tickets, but the total tickets sold will stand at 27,000 leaving 61,370 on the waitlist in 2011.  We'll call that the Buffer Zone.

So what happens in 2012 and beyond?  Well, lets assume that Cubs fans' anger grows by 10% every year as measured by a 10% increase in season ticket drops as well as a 10% decline in waitlist acceptance.  Basically, I am fixing the formula to assume that more and more people give up their tickets, while fewer and fewer are willing to take them.

Using those assumptions, another 7,128 people will tell the Cubs to screw off after 2011.  That means that by the end of next year, 13,608 people will have dumped season tickets.  That is over half of the estimated 27,000 base.  Anybody think that will actually happen?  I didn't think so, but we will say that it does.

Also, the acceptance rate will fall to 53% so only 57,624 people will be available to take those tickets.  But since that is still about eight times more than the Cubs need to sell out again, they will.  So the total season ticket base will stand at 27,000 again and the Buffer Zone will be down to 48,455.

In fact, if you extrapolate out the assumptions (as shown in the chart below), the Cubs still won't run out of people on their waitlist by 2020.  It means they will average 27,000 fans every year without selling one single-game ticket.  They can average almost 30,000 per year just by selling out Opening Day and games against the Cardinals and White Sox and then nothing else.  That is a hell of a Buffer Zone.

So, realistically, the only variable the Ricketts have to contend with is the single-game tickets.  Season tickets, even when we assume increasing levels of anger, will sell out throughout the decade without any problems at all.

So again, you have to ask yourself, why would the Ricketts go with dynamic pricing, or lowering ticket prices for everyone?  They could introduce dynamic pricing, but the base rate where season ticket holders would have to lock in would be where the price levels are now or possibly even higher.  Why?  Because there is no reason not to.

They could lower some prices for the 500 level corners.  They might bring down the prices for the seats in the back rows of the Terrace Reserved seating.  Those are generally where most of the single-game tickets are.  But the Ricketts do want to win.  They are fans, that much is clear.  They aren't just interested in making money, so it isn't like they will purposely field a crappy team.  Whether they have the ability to win is irrelevant, they are going about business in an attempt to win the World Series.

So we have to assume that the team isn't going to suck as badly every year going forward as it has this year, but for the sake of my model, I am assuming that and the Buffer Zone still doesn't disappear for ten years.

This is why Al is just plain wrong.  The Ricketts don't have to do anything to win the fans over, much less purposefully reduce their guaranteed revenue stream to continue getting healthy crowds out to Wrigley.  But 2021 is just around the corner for those who are patient.


cubbiejulie said...

I was told there'd be no math.

Aisle 424 said...

Sorry. I also discovered a flaw in my own logic and formulas.

Originally, I subtracted the number of people who dropped each year from the waitlist total. But to fill those openings, the Cubs would have to also make calls to the people who would decline but would also be moved to the back of the line or taken off of the list.

If they all wanted to stay on the list, it doesn't change the math, but since I want to try to eliminate as many people off the list as I can as quickly as possible, I want to say they would all not want to be on the list any longer.

At that rate the Buffer Zone would disappear by 2018. Sorry. That clearly chages everything.

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