August 01, 2008
The Florida Panthers haven't exactly given fans a reason to bum-rush the box office this summer; heck, one rogue agent in the marketing department was reduced to trashing Olli Jokinen in a mass e-mailing just to pacify angry customers.
So there may have been some sticker shock when the Panthers announced they were adding an extra $25 per single-game ticket for five of their first 16 home games: The Detroit Red Wings (Nov. 14), New Jersey Devils (Nov. 26), New York Rangers (Nov. 28), Tampa Bay Lightning (Dec. 26) and Montreal Canadiens (Dec. 29). More premium games will be announced later in the season, but opening night is an exception.
"Most of those games, with the exception of Detroit, fall within the holidays," team president Michael Yormark told the Miami Herald. "We know Detroit is a key game for this market. It's going to drive the casual fan into our building ... opening night needs to be a sellout, and the premium pricing is geared to games where we have a lot of snowbirds in the market."
Bilking the "casual fan" is a bit like passing around the collection plate an extra time during Easter mass -- these extra bodies aren't the die-hards, so why not squeeze'em for all their worth while they're in the building? It's one of the hallmarks of "variable pricing," which has slowly crept into the NHL's fan culture over the last decade.
But most of the time, variable pricing centers around a rather easy sell: The notion that fans from opposing teams are going to have to ante up to invade the arena. The St. Louis Blues are going to charge either a $20 or $10 premium over their single-game price for weekend contests against the Chicago Blackhawks and the Detroit Red Wings.
The Buffalo Sabres have targeted invaders from the nord -- Toronto Maple Leafs and Montreal Canadiens fans -- for four games this season that are labeled as "platinum" events; which means fans purchasing single seats will pay between $78 and $233 per ticket.
I recently spoke with Don Hinchey, VP of communications for the sports marketing firm The Bonham Group, about the variable pricing trend in the NHL; a trend that could be pricing some fans out of rivalry games. Do you mind paying more money for more compelling opponents?
As Hinchey confirmed, some teams have been experimenting with variable pricing as early as 2002. The Vancouver Canucks bumped up the price for the Maple Leafs and three other teams; the Ottawa Senators also increased prices for Toronto's visits; and the Pittsburgh Penguins added $5 per ticket for select games.
Obviously, what was a small increase in face value -- 20 percent was the ceiling six years ago -- has become complete price-gouging for NHL teams. This has left fans like Brad Lee from St. Louis Game Time seething:
When they announced higher prices for this season, they didn't say anything about charging $10 OR $20 more for select games. And how stupid is making the premium that different based upon the seat location? And by adding to the cost for some seats for some games, how much is the average ticket increase for the premium games?
Twenty-five dollars from the Panthers, $20 from the Blues ... this is variable pricing on steroids. But Hinchey said there are two main engines driving these ticket increases -- and first up are resale ticket brokers like StubHub.
"I saw Mark Cuban mention something about it a while back. I don't know if he explicitly labeled it 'variable pricing' but the idea was the same: Try to recapture, for the teams themselves, some of those revenues that are going to the secondary ticket sellers," he said. "In many cases, secondary ticket sellers are buying up the inventory for those games."
That inventory comes from single-ticket sales and from season ticket holders who dump their duckets onto the open market. Those season-ticket holders will now be able to command an even higher price for the resale of their tickets thanks to variable pricing ... which brings us to the second (and perhaps primary) reason for these massive surcharge for premium games: Those die-hards and suits who proudly own season tickets.
"The main thing teams want is to maximize revenues [for premium games]," said Hinchey. "But they can also make their season ticket packages more attractive by saying, 'Buy the whole deal and then you won't have to pay the premium for all these marquee games.'"
The Blues, Panthers and Sabres all waive variable pricing charges for fans who purchase season tickets or select multi-game packages. As Buffalo managing partner Larry Quinn told the Buffalo News: "If you want the luxury of going to a game like that without making a commitment to us on season tickets, OK. But it's like anything. You're charged for it."
Hinchey said it can be a risk for teams to raise prices out of range for non-season ticket holders. "The danger is that you could be pricing out future, long-term fans by establishing a premium value for these marquee games," he said. "But, having said that, those fans might get shut out anyway."
In my book "Glow Pucks & 10-Cent Beer," the variable price trend is No. 70 on the list of the 101 worst ideas in sports history. I find it nauseating for two reasons:
1. Teams rarely adopt the kind of "across the board" variable pricing system like the Sabres have, where some games are on a "value" level. A $22 ticket for a Monday night game against the Nashville Predators sells for $78 for a game against the Leafs. So if the Panthers want fans to spend $55 for what is a $30 ticket for a game against Detroit, then that same ticket should be $5 for Nashville on a Tuesday night, right? But it ain't.
2. The desperate push into season-ticket and multi-game plans. As if those harassing phone calls from aggressive salesmen weren't enough. Ticket plans are a hell of a commitment, especially for a family; the notion that a $35 season ticket in Buffalo becomes a $155 single-game ticket for a game against the Leafs means a whole bunch of young fans are never getting that arena experience. And as a kid who grew up watching the Devils and Rangers butt heads, that's a shame.
But what's the sense of railing against fairness and fan-friendliness when we're talking economics. As Quinn said: "Every business in the world prices their product based on demand. I don't know why hockey should be different."
Or as Tom Luongo from FanHouse wrote about Buffalo, in an even more unflinching manner:
To me, these ticket prices are inevitable, from the rising price inflation in food, energy and medical costs, a rising labor market and rapid monetary growth rates, those franchises that are dependent on ticket sales to generate revenue are going to have to raise prices to stay even. I see the rise in the salary cap in recent years as less of an expansion of the NHL's reach and more a reflection of the Fed's loose monetary policy (for those that forgot, this stuff is my 'other hobby'), the rise in Loonie being one aspect of it. It will be very interesting to see how long this rise in revenues (but not in real, inflation-adjusted terms) can be sustained in the face of a coming US depression brought on by a systemic failure of the banking system.
For a team that reportedly spent over 75% of its revenues last season on 'player costs' in a CBA designed to have that number be between 54 and 56%, do you see any other choice for them?
As I said during the lockout: The only cost certainty in the NHL is the certainty that it will cost us more to watch it.
One last perspective on this: Guillaume Turcotte is a Puck Daddy reader who sent an e-mail to Yormark and the Panthers about their variable pricing. Here's a clip; I'm sure he's not alone in feeling this way:
Furthermore, let me tell you about a franchise that tried to implement a Premium Game concept. When I lived in FLA in the late 90's, the Tampa Bay Lightning were not a very team. Consequently, they would advertise their game based on the opponent, such as "Come and see the stars of the Detroit Red Wings as they come into town." As you well know, the franchise did not fare well at the time. It was only when they got talented and started winning games in an exciting and passionate fashion that they were able to get people interested. In other words, FIX YOUR PRODUCT instead of trying to ride the coattails of the dignified franchises in the league.
In all honesty, I would like it if when I visit South Florida and attend a hockey game, it is to see the Panthers instead of another team trying with good odds to beat a characterless franchise. This move implies that the hockey brand of the Panthers is inferior and that tickets should be priced higher when a better product is available. If that is the type of team you want to run, please sell the franchise to an owner who will move it to a city that will treat a hockey team with dignity and maybe build a winner. I remember the passionate play of your '96 team and I can't help but feel that you guys let their honors down.