It looks like even New York isn’t immune to the current economy. News came out yesterday that the Yankees have decided to cut the prices of their premium field-level seats (New York Times, 4/28/09). Front row tickets that had cost $2,500 each have been cut in half to $1,250, and tickets along the first and third base lines have been cut from $1,000 to $650. Anyone who had paid full price previously will be compensated with free tickets to future games, and additional complimentary tickets are being distributed to premium season and partial plan ticket holders.
In the days leading up to this decision, there had been some heated comments going back and forth between Don Garber, the Commissioner of MLS, and Randy Levine, the Yankees team president. Garber criticized the Yankees for having so many empty seats behind home plate, which did not look particularly good on television. Initially the team defended their pricing, but after reevaluating they admitted that some seats “might be overpriced.” Even with cutting these prices in half, the Yankees will still have far and away the most expensive ticket prices in baseball, and they’ll still be the league leader in ticket revenue.
I’d be curious to know what type of price sensitivity analysis the Yankees did before setting their new stadium prices. I’d have the same question for all New York teams that are opening new facilities and substantially raising their prices. A lot of teams still set their ticket prices by feel, which cannot be a very effective method. If the team’s did run some sensitivity analysis, when did they do it? The Yankees and the other New York teams announced their price increases quite a while ago, before we knew the extent of the current recession. If they do the same analysis today, their results would no doubt be quite different. Some type of advanced dynamic pricing models might help the teams handle this type of situation more efficiently.