Yankee Stadium and the Power of Sports Monopolies
April 29, 2009
Yankee Stadium and the Power of Sports Monopolies
ByOriginal Content
The opening of the new, $1.3 billion Yankee Stadium, with its $2,625 front-row seats and an average ticket price of $72, has sparked as much commentary and controversy as the team itself and its $400 million stable of off-season free agent acquisitions. Empty seats in some of the priciest sections have critics proclaiming that the Yankees miscalculated demand. The team, in turn, contends that it’s already sold 85 percent of its premium seats (average price, $510) for the year and that virtually all of the stadium’s ordinary, non-premium seats are gone at ticket prices that are on average 75 percent higher than last year.
Even though the Yanks have been forced for the time being to cut their top prices, time and demographics are on the side of the Yankees--and most other teams, too. Even the worst U.S. recession in more than a generation, even here in New York, the home of our sickly financial markets, isn’t likely to moderate the upward spiral of ticket prices. Why? Because for decades now major professional sports leagues, and especially Major League Baseball, have used certain cartel powers tolerated by government to restrict supply, even as we as a country have grown more populous and richer (the current recession notwithstanding). Pro sports aren’t retailing, where every economic uptick finds businesses elbowing each other for prime locations. Instead, the leagues have divided the country nicely, and short of some kind of major court decision or legislation in Washington that drastically reshapes the way leagues must do business (which would probably disconcert the very fans who abhor rising prices), the cost of attending games just about everywhere is likely to continue growing at a faster rate than most prices. The Yankees are merely leading the way.
To understand what I mean about sports and demographic trends, just take a look at the way the New York metropolitan
Yankee Stadium and the Power of Sports Monopolies
ByOriginal Content
The opening of the new, $1.3 billion Yankee Stadium, with its $2,625 front-row seats and an average ticket price of $72, has sparked as much commentary and controversy as the team itself and its $400 million stable of off-season free agent acquisitions. Empty seats in some of the priciest sections have critics proclaiming that the Yankees miscalculated demand. The team, in turn, contends that it’s already sold 85 percent of its premium seats (average price, $510) for the year and that virtually all of the stadium’s ordinary, non-premium seats are gone at ticket prices that are on average 75 percent higher than last year.
Even though the Yanks have been forced for the time being to cut their top prices, time and demographics are on the side of the Yankees--and most other teams, too. Even the worst U.S. recession in more than a generation, even here in New York, the home of our sickly financial markets, isn’t likely to moderate the upward spiral of ticket prices. Why? Because for decades now major professional sports leagues, and especially Major League Baseball, have used certain cartel powers tolerated by government to restrict supply, even as we as a country have grown more populous and richer (the current recession notwithstanding). Pro sports aren’t retailing, where every economic uptick finds businesses elbowing each other for prime locations. Instead, the leagues have divided the country nicely, and short of some kind of major court decision or legislation in Washington that drastically reshapes the way leagues must do business (which would probably disconcert the very fans who abhor rising prices), the cost of attending games just about everywhere is likely to continue growing at a faster rate than most prices. The Yankees are merely leading the way.
To understand what I mean about sports and demographic trends, just take a look at the way the New York metropolitan