Illustrations of Price Discrimination in Baseball

Abstract

This article explores the ticket pricing behavior of the clubs to illustrate the theory of price discrimination. An example presented shows how useful it is to be flexible in recognizing that while a box seat to a game is not an identical product to an upper reserved seat at the same game, the two tickets sufficiently share the core product that the price discrimination framework is useful for analyzing pricing, even if the products are clearly not identical on every dimension of quality. It is stated that every single Major League Baseball ticket is sold under some form of price discrimination. As teams grow increasingly sophisticated in their pricing strategies, price discrimination is becoming more precise, more widespread, and more profitable, while at the same time providing more opportunities for more fans to find tickets at a price they are willing to pay.

Explaining Game-to-Game Ticket Sales for Major League Baseball Games Over Time

“…Regardless of what the motives may be, however, the means by which teams are selling tickets indicates that distributing ticket sales more equally across games is a likely profit-maximizing objective. In particular, three recent developments are prevalent in ticket sales: variable ticket pricing, mini-season ticket packages, and online ticket retailers (see Rascher & Schwarz, 2012). Variable ticket pricing is a means of nonlinear pricing by which teams charge different prices for the same seat to different games depending on the opponent, month, or day of the week.…”

The Future of Amateurism after Antitrust Scrutiny: Why a Win for the Plaintiffs in the NCAA Student-Athlete Name & Likeness Licensing Litigation Will Not Lead to the Demise of College Sports

“…177 For example, the college booster clubs are some of "the biggest supporters of college sports," and yet they "are also the ones who are often caught professionalizing the sport by paying their alma mater's athletes under the table." 178 In addition, the NCAA has not hesitated to give fans the impression that student-athletes are professionals by scheduling important games during class days and displaying their images throughout campuses and the Internet as part of their own marketing efforts. Finally, if it were true that fan interest in college athletics would decline if student-athletes were compensated, there would be no need for the NCAA to impose an association-wide rule to prevent member colleges from reaching other arrangements with their student-athletes.…”