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March 2, 2006
Shrinking the stadium to increase sales
Stanford is making its football stadium smaller to try to sell more season tickets. The reason: If people think they will not be able to get a ticket for the big rivalry games, they will shell out the money for season tickets to make sure they do. (NY Times)
Consultants who advise sports teams say there is method to the Stanford plan. Reducing capacity can increase sales, said Marc Ganis, president of Sportscorp Ltd., a Chicago sports consulting firm.
"When people feel like they wouldn't be able to get a ticket to any game they want to go to, they tend to get season tickets," he said, adding that it improves attendance over all.
There are a number of economic concepts at work here. Elasticity, bundling (pricing season tickets vs. individual tickets), supply and demand under uncertainty. Explaining the economics behind this would make a nice little undergraduate research paper.
Roger Noll is quoted in the article, but not about the factors mentioned above. Rather, he is quoted on the lack of concern about the money spent.
But several faculty members said graduates who donate to athletics would not have given money to rebuild any other part of the university, and so there was no downside to spending so much on the stadium.
"These people, their connection to the university is much more through athletics than through the academic" side, said Roger G. Noll, an economics professor at the university, referring to the graduates whose donations were financing the stadium project. He said he had heard few complaints from colleagues about the project, while he had heard concerns about the school's business endeavors, including real estate and intellectual property holdings.
While under the right circumstances, the plan could work, it is not a sure thing...
At least one other school, Dartmouth College in Hanover, N.H., is weighing a similar plan to reduce stadium size. But for Dartmouth and Stanford, the example of Princeton, which reduced the size of its stadium to 27,800 from 45,000 in the 1990's, may offer a cautionary tale.
In the first seasons after the construction project in New Jersey, and after the price of a ticket was cut to $5, attendance soared, rising to more than 20,000 people a game from fewer than 10,000 a game in the old stadium, said Jerry Price, associate athletic director at the school.
By last season, attendance had fallen nearly to its old levels, he said.
"We had bad weather for a couple of games," he said.
Write your own conclusion.
Posted by William Polley at March 2, 2006 3:24 PM
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Comments
This is good news. Now the congestion on Palm Drive on football days will be less. We make weekend pilgramiges thru Stanford to get to the horses and have to be cognizant of game days.
It will be interesting to see what affect this will have on attendance. I think a winning team would be more important.
Posted by: dilbert dogbert at March 5, 2006 2:07 PM