What would be the ideal price?

Everywhere I turn on the net—blogs, message boards, etc—sports fans are decrying increases in ticket prices and slamming franchises and leagues and owners because "real fans" can no longer afford to attend sporting events in person. Meanwhile, our population has grown, modern transportation continues to make it possible for fans to travel greater distances to attend events, and television, radio and their internet counterparts have provided sports fans with new methods of following their favorite sports from around the globe (depending on your level of interest in sports and your views on intellectual property, myp2p may be your favorite site on the internet). So while the number of sports teams and leagues have grown, that pace has nowhere near matched the increase in demand for tickets generated by the aforementioned factors.

I have no doubt that many passionate and dedicated fans are being priced out of attending as many games as they would like to, but one question that I never see asked is how their lot would be different if tickets were price controlled (and for the record we're now operating under the assumption that only lower-to-middle class fans can be "real fans").

Starting with an extreme example, if tickets were free, they would have to be rationed by some means other than price. Perhaps everyone that wanted to attend sporting events for a particular team or league would put their name on a waiting list and once they received their ration of tickets they would move to the bottom of the queue. But here, "real fans" probably wouldn't get to attend as many games as they would if there were a charge for tickets, because casual fans, having to invest nothing more than their time, would consume more tickets. Invariably, a black market of ticket scalping would emerge and the "real fans" would go right back to paying for tickets, since "real fans" would undoubtedly value the tickets more than other people.

There seems to be a pervasive assumption that there would be no increased competition for cheaper tickets. I'm preaching to the choir here, but I challenge anyone who self-identifies as a "real fan" to name me the price at which they, personally, could afford to attend more matches and would also be able to secure tickets against the increased demand that would come hand in hand with those lower prices. It is no doubt out there, but it is going to be hard for the average fan to identify and will vary from fan to fan depending on their disposable income, travel costs, and a variety of other factors.

Going further, let's speculate about a situation similar to rent control in New York City. What about cheap season tickets that could be renewed, indefinitely, at their original purchase price, even if adjusted for inflation. The decriers seem to be operating under some sports variant of Kip's Law, in that they assume they'd be the lucky few with season tickets priced way below demand that would rarely, if ever, be relinquished. Heaven help you if you fall in love with a franchise after all the renewable season tickets have been rationed by a means other than market price.

A good portion of this backlash is directed at the number of seats sold to companies, instead of directly to individuals. Soccer fans often raise this complaint with regards to the difference in crowds between professional club and national team competitions. The spectacle of the World Cup draws in a greater number of casual fans, aided by the number of tickets given out by large companies, which leads to a less boisterous crowd. What I find humorous is, if operating under the viewpoint of "real fans", the act of tickets being given out by corporations to casual fans actually demonstrates the problem caused by removing market forces from the pricing of tickets—with less of a sacrifice required to win tickets in competition with other fans, be they casual or "real", the casual fans end up with a greater share of the available tickets. And none of this touches on if self-identified "real fans" have more of a right to tickets than the casual fan.

I remember the Society of American Baseball Research conference I attended in the summer of 2005. One panel included members of the Toronto Blue Jays front office and they were kind enough to field questions from obsessed baseball fans on why they are bastardizing the game (namely the J-Force dance troop that performs on top of dugouts in between innings, something that could get those well meaning dancers shot at Fenway, Busch, or Yankee Stadium). One Jays official said that, unfortunately for "real fans", the focus is at the margins. The hardcore baseball fans show up for Blue Jays games because the team plays in the best league on Earth and the quality of play is the highest around. The Jays official said this group of "real fans" probably account for around 15,000 seats a game. The remaining seats get filled by bandwagon jumpers when the team is doing well and casual fans drawn in by promotions and other entertainment like the abomination against God that is the J-Force.

All of this could be chalked up to the evil influence of money in sports, but like anything in life there are tradeoffs. Without money, teams and leagues wouldn't attract the caliber of athletes they do. They'd leave for other teams, leagues or sports, and eventually sports altogether. That horrible corrupting money is the reason we now enjoy levels of competition unrivaled in history.

I recently watched a DVD of the original BBC broadcast of the 1961 FA Cup game won by Tottenham Hotspur, a team that won "the Double" that season (where a club soccer team wins both its league title and highest tournament cup). Compare that to the DVDs I own of today's Tottenham Hotspur beating Arsenal 5-1 in the decisive leg of the Carling Cup semifinal, and their following 2-1 victory over Chelsea in the final at Wembley. Tottenham are a mid-table Premier League side this season, and today's Carling Cup is considered the lowest of five potential trophies available to Premiere League clubs. Nonetheless, the 2008 Spurs would completely and utterly obliterate their 1961 counterparts, who were the finest club England had to offer in that day. This massive improvement in play is a result of all the money that has followed all the interest the sport has attracted. The difference in the speed of play between the two championship matches I own on DVD, separated by less than 50 years, is staggering.

As often happens with naive populist grumbling, the faults of the market are derided while at the same time the benefits are taken completely for granted. The fact that, despite all this complaining, the Premiership (as an example) is growing in popularity the world over speaks to the fact that the quality of competition is the absolute bottom line when it comes to our enjoyment of sports. Far and wide, there will be cries of outrage as the top leagues pull top players out of their native countries as these players go in search of more money and greater competition, but I for one welcome it. With modern media, attending a match live, while often an amazing experience, isn't the primary method of following sports. Sites like myp2p are the future. The real problem going forward will be time zone differences. How can we make it so fans from the Americas, Europe, Asia, Africa and all parts in between can watch the same games live? In any case, I do not count myself among the ranks of the doomsayers. I think the future looks bright.

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Sites like myp2p are the

Sites like myp2p are the future.

Alternatively, the leagues could wise up and see the benefits of distributing via the internet themselves. CBS livecast all of the NCAA tournament this year, and I don't see any reason in principle that the same couldn't be done for other sports. I'm not sure why this doesn't even seem to be talked about as a possibility. Ads would still be run, so the teams would still get paid, so what's the holdup?

While as a rule I hesitate to say a business is being run poorly (since they have billions at stake and I nothing), the attitude of the sports leagues, especially the NFL, towards newer media is shocking to me. America is a mobile society, but the assumption seems to be that everyone who happens to live in Chicago now wants to see nothing but Bears games. With college sports the assumption is even stranger. I care little about Big 10 sports but would love to see my alma mater (in the ACC) play. Hell, I'd pay money (not a lot, but some) for the broadcast. You'd think Comcast would be interested in getting even more from me, but apparently they think I'll watch Illinois-Wisconsin instead. I won't.

The Premier League, if anything, seems to be even worse in getting new media. They patrol youtube and virtually instantaneously remove highlights. How on earth does it cut into their profits if I want to see a goal in a game I missed? I just don't understand it.

Premier League...

Is crazy expensive. To get all the games here in the states you'd have to sign up for both Fox Soccer Chennal and Setanta Sports through your cable/satellite provider. And their official online packages really suck. 40 pounds at the Spurs website gets you live streaming audio of the games and video highlights later (plus some really weak interviews the club's PR department does with their own players).

Over at MLB.com $130 a season gets you streaming video of every baseball game (2,430 in the regular season) barring some weird blackout restrictions, but they've upgraded their streaming video quality to 1,200 K now. And they have a kick ass mosaic program that lets you watch six games at once. Whatever video feed you click on takes over the audio. With MLB's online package and myp2p I now watch almost all of my television on my laptop. The one area MLB is crushing the other American sports in is their online content through their subsidiary MLBAM (MLB Advanced Media). I'd like to see some other leagues follow suit.

I know Setanta Sports has a streaming package for the Premiership, but depending on what team you follow, you're not always going to be able to watch them as Setanta and Fox Soccer split the games. And that's just here in the States. Not sure exactly what the breakdown is across the pond but I know it involves Sky Sports.

Out of curiosity . . .

Are MLB games streamed on myp2p? The way you wrote, it sounds like you go on and pay for the MLB package and then get the rest over myp2p. That would seem to support the belief that if prices are lower, people would pay for the legal (and probably higher quality video too, though I don't know) alternative, even if they aren't necessarily supportive of copyright.

Like I said, I don't like to assume I know more about a business than the people in the business, but I've long thought that prices for on-demand sports had long passed the "Laffer curve peak", so to speak. And sometimes it's like what you described for the Premier League, not only sky-high prices but crappy services and chaotic organization as well.

myp2p post links to

myp2p post links to different streams on a variety of different peer-to-peer streaming programs. Many MLB games show up on myp2p, but not all, and one of the better streaming peer-to-peer hosts, Sopcast, will ban any member caught streaming MLB games (presumably MLB's lawyers have gotten to Sopcast).

Profit in Sports

Somewhat tangential point: basic models of economics suggest that one of the results of competitive markets is to push profits in a market lower and lower until no more profit can be made by entrants. When sports franchises raise their ticket prices, and it becomes more costly to participate as a "live" consumer, it makes room for new entrants / leagues / teams / sports because there is more profit to be had by underserved consumers (i.e. people who would pay for the consumption of the sports at lower prices).

This could be an unintended positive result for all of us of raising ticket prices.

As An Update

The Independent Twins program I work as an editor for publishes a monthly program with an insert for every home series. This past weekend series against Detriot was the last we were selling our first issue of the year. As a promotion this past Sunday, we handed out our program for free and went through 1,800 copies much faster than we thought we would. We miscalculated how quickly the programs would get handed out, and felt terrible when some of our loyal customers couldn't get copies even when they were looking to pay and sought us out.