Question

Considering that most leagues use dynamic ticket pricing, should there be a floor and ceiling for the prices to allow for revenue and attendance maximization, while making it more fair for the consumer?

Answer 1

There is always a need for reconsideration of the pricing strategies pertaining to the tickets because it is a known fact that only a single name would correspond to a stadium and that the inventories for those sponsorships are also limited. Therefore, in order to maximize the earnings in terms of revenue, it is essential that appropriate pricing strategies are in place. Owing to the legalization of the online markets as well to sell the tickets, there has been eventually an emergence of a secondary market. This is subjected to high level of price fluctuations due to market mechanism and on the other side, the brokers are capitalizing upon the presence of market inefficiencies in the primary market. When the consumer demand, in this regard, is known to the Leagues, they use the ticket pricing that is dynamic in nature. This ensures that there is maximization of attendance besides availing various other sources of ancillary revenues, for the games, depending whether those games are low in demand or high.

Dynamic ticket pricing may be profitable for the Leagues but may call for price discrimination and anti-favoritism as well. In this regard, there should be a floor and ceiling for the prices to allow for revenue and attendance maximization, while making it fairer for the consumer, to take care of such negative impacts of the pricing strategy. Flooring and ceiling for the prices provides a cushion for the consumers from being exploited and shall discourage the Leagues from monopolizing the ticket prices.