Giants' 'Dynamic' Pricing System Is Downright Evil

By Joe Eskenazi Wed., Feb. 10 2010 at 12:01 AM

Categories: Business, Sports

The Giants may not be able to afford Barry Zito, but Giants fans on a budget can now only afford to go to his games

Let me say it up front and outright: The San Francisco Giants' long-planned move to charge more for more desirable games makes good business sense. Including factors such as the day's starting pitcher, the weather, and the team's place in the pennant race all adds up -- at least on a calculator.

I expect the team will make scads of extra money, though not enough to write off the Barry Zito fiasco. But I sincerely hope that this is a dismal failure, and those responsible for it are disgraced into finding non-baseball avenues of squeezing every last dollar out of rubes. Maybe they could go work for the Department of Parking and Traffic.

The oft-quoted model for the new, likely soon-to-be-ubiquitous baseball pricing system is airline ticket purchasing. It's almost certain readers have experienced first-hand the joys of last week's $300 tickets this week being priced at $410. It's a strong incentive to buy early before myriad contrived supply-and-demand factors are tossed into the algorithm and you end up paying through the nose. As noted before, inducing people to spend quickly and pinging those who do not is a sound business practice -- if not an endearing one.

On the other hand, it just seems downright wrong that you should be made to pay more for a baseball game because it's a "great day for baseball." It seems exploitative that you should be made to cough up extra dollars when Tim Lincecum is on the mound; will we be given a deep discount when Zito is pitching or Pablo Sandoval takes a day off? Further following the airline model, will we be charged extra for using the restroom? Do clean seats cost more? Do I have to pay extra to stay out of the all-felon, all-drunk, all-jerks talking loudly about work on their iPhone section?

I can understand why the same seats that cost $5 vs. Pittsburgh will run you five times that when Boston comes to town (or more, if it's a really nice day and Lincecum ends up taking on Josh Beckett). But the notion of "premium game pricing" sends fans an unmistakable message. It means "premium" teams visit AT&T Park, but the home squad is not one of them.

Finally, the notion of "dynamic" pricing feels so wrong because it completely upsets the "Hey! Let's go out to a game!"-notion that makes baseball unique. Among professional sports, only baseball is still priced at a level that makes spontaneity possible. No, you can't ditch the car in Little Hollywood, buy a sandwich at Piccolo Pete's, walk a mile, and score bleacher tickets for $3.75 anymore. That rose-hued nostalgia is fading fast. But toting a sandwich into AT&T Park and buying view reserve or bleacher tickets really is affordable for the everyman.

Hey, it still might be -- so long as the weather's lousy, the pitching matchup stinks, and the team's hopelessly out of the race. Go Giants!

Tags:

baseball, Dynamic Pricing, Giants

Write Comment

Email to Friend

Print Article

Related Content

More About:

Simple Economics. I agree. The seats go to those who value them the most and are therefore willing to pay the most money for the game. Absolutely fair. If people disagree they don't have to go to the game. If enough people disagree, the prices will begin to come down because demand falls. But, as long as there is demand, I think great move by the Giants.
If you think every game is equal, then you have no reason to complain, all you have to do is go to a "cheap game" earlier in the year where Dynamic pricing has tickets for $4.25. The dynamic pricing allows the team to charge less for low demand games and makes up the money on "hot games" If not for dynamic pricing, the Monday game in April against the Pirates would have to be $20 for the bleacher seat because if they charged less, then they would have to charge less for games against the Dodgers and Red Sox.
DOnt know for you guys, but i think Joe made a few valid points..
Joe, you sound like a bitter old man. Were you upset about the internet age forcing you to blog instead of the "good ol days" when there was high demand for print media?? Get with the times, buddy... it's business, and its this scheme that will allow our Giants to overpay for some mediocre players for years to come =)
SF GIANTS SUCK N R STUDID IDIOTS, ANYWAYS U LOOK @ UM...A NO-CLASS BUNCH OF DEADBEATS!!!
NO-WAY JOSE! SF GIANTS MGT SUCK...CAUSE THEY R NOT LA (teams) NY, STL, BOSOX, ETC,,, BUT THATS WHY THEY HAVE "REVENUE SHARING" CAN U SEE ALL SPORTS/ENTERAINMENT DOING THIS W/ OR W/O A FAN BASE/LOYALTY??? I SAY ANY/ALL BASEBALL/SF FANS SHOULD "PICKET N BOYCOTT" ALL TEAMS/GAMES THAT TRY 2 PULL THIS SHIT ON THE FANS THAT "BROUGHT THEM TEAMS/PLAYERS $$$ 2 THE PARTY!!! W/O THE FANS SUPPORT $$$ U GOT SHIT!!!! IDIOT(S)BUD SELIG/OWNERS, PLAYERS/UNION "WAKE-UP N SMELL THE ROSES OR DIE"..CAUSE UR'KILLING THE GAME/SPORT!!!
it's an auction system, right? Not so different than what happens to us when we go to book a flight to NY or LA - demand fluctuates, and the guy next to you probably paid a different fare than you did. Whatever.
Also, business do increase prices for materials when they are in need: umbrellas are less expensive when it's summer and restraunts charge more at dinner than lunch.
Joe, you are living in a simpler time before reseller markets. You keep the prices at the same level and the resellers will buy up as many tickets to the premium games and enjoy the profit from reselling them. By providing a price closer to the market value (which is still under market in most cases) the resellers will have the same capital with higher costs associated with doing business. This in turn will provide more chances for single game buyers to enjoy a game as the resllers haven't bought up all the supply. The less desirable games are lower priced, giving the chance for the family looking for the experience a chance to have that as well. Walk up patrons to less than desirable games could see reductions as game time approaches as a ticket not sold is lost revenue for everyone. It gives everyone something.
One possible advantage of this system is that it might deter scalpers somewhat. (In fact, the Giants are probably trying to recover some of the consumer surplus currently going to the scalpers.) For low demand games, scalpers will find it harder to compete with official tickets; for higher demand games, the Giants' higher ticket prices will cut into scalpers' profits (as well as making extra money off fans who buy tickets early). Obviously this isn't the whole picture, but increases in ticket prices aren't necessarily coming completely out of the fans' pockets.
Bowie: I disagree with your claim that "every business does this." The department store or Walgreens doesn't charge more for umbrellas when it's raining. Restaurants don't charge hungry people additional fees or put a premium on tables far from the drafty door. At some point, price strategies such as these slip into what could be perceived as profiteering. Please note that my article repeatedly affirmed that this was likely a solid business decision. But if people feel leaned upon by these practices, that could wipe out whatever gains there are on the ledger. We'll see. People put up with exploitative airline ticket-selling practices because they want to go places, not because they desire the joys of air travel. But you buy baseball tickets because you want to go to a ballgame; it's not a mere conveyance to another goal. People feeling rolled will cease going to games before put-upon travelers stop traveling. The solution you and others seem to be offering is "shut up and take your medicine." But your notion of people who feel preyed upon staying away from ballgames isn't so far-fetched. I've rooted for this team since 1985 and will continue to do so. But I will not submit to a re-enactment of pricing a wedding caterer when standing in line at the ticket booth. I will listen to Jon Miller on the radio and get on with my life. Best, JE
Team loyalty and fan support are the reasons why there is an excess in demand. If you're disgusted by the special prices on premium tickets and whatnot, then stop going to the games and stop watching on television. Stop proving to the owners that you're willing to pay a crapload of money to go to those premium games you're complaining about. It really is that simple.
Vance: every business does this. every business seeks to cultivate brand loyalty while maximizing profit. baseball clubs are no different.
The Giants suck anyways... Even with DeRosa and and that other guy from Detroit, they still suck. Mostly for the ridiculous beer prices at ATM Park. They are pricing working class folk out of a past-time. Go Dodgers!
Sometimes successfully "running a business" requires more than "simple economics." How can an athletic franchise in good faith invoke the concept of team loyalty and fan support, while at the same time placing its profit margin above all else? VC
The Giants are unfortunately for you running a business. When there is excess in demand, they can afford to charge more for the game. It is simple economics.