San Francisco Giants and Dynamic Pricing

Posted by Jeff Lubbers on Friday, July 10, 2009 at 11:15 pm

For the 2009 season the San Francisco Giants have implemented what the team refers to as “dynamic pricing.” Using special software the team has the ability to change the prices for seats in up to seven different sections for every home game whenever they choose, including the day of games. Although in the past a number of teams have implemented sliding scales of ticket prices based primarily on opponents and day of the week, the Giants’ system appears to be the most agile. A number of factors can be taken into account when deciding on the ticket price, including weather, starting pitcher, postseason implications, and promotions, among others.

From a fan’s perspective this of course can be good or bad. If you’re simply interested in going to a game and don’t care if it’s a Tuesday night game with a journeyman starting pitcher you’ll pay less than you would have before. On the other hand, had this system been implemented two years prior one can be sure that fans who waited until the last minute to buy tickets for a chance to see Barry Bonds hit career home run #756 would have been paying a whole lot more. In fact, Bonds’ pursuit of Hank Aaron (and more specifically the markup of ticket prices on the secondary market) is what convinced the team to explore dynamic pricing.

Additionally the changing prices also give fans an idea of how well or how poorly the team is doing when it comes to ticket sales. Though ticket prices alone does not allow for a comprehensive look at ticket sales some trends can still be discerned fairly easily.

While Randy Johnson’s pursuit of 300 wins did not exactly captivate the city of San Francisco like Bonds’ pursuit of 756 home runs did two seasons prior, it was still a significant milestone that would have drawn a significant number of hometown fans, had he gone for win #300 in San Francisco. Unfortunately, however, for Giants’ fans Johnson attained career win #300 on June 4 in front of an embarrassingly small crowd. Hoping to see the effect that Johnson’s pursuit of 300 wins would have on ticket prices I tracked the prices of Giants’ home games from May 11 to June 21. While there were no truly significant fluctuations in prices due to Randy Johnson there were still some interesting trends to be found.

First, it’s worth noting that not all tickets to Giants games are sold using the new dynamic pricing structure. The majority in fact are not, as there are only 7 seating sections with changing prices: sections 333 to 336 in the left field/third base upper deck and sections 140 to 142 in left field. The team may or may not include more seats within this system in future seasons.

Second, these seats are certainly not the best in the stadium. From many of the seats in the upper deck sections large portions of the outfield can not be seen and the seats in the lower deck are about as far away from home plate as any in the stadium.

Finally, the dynamic pricing structure is not the only varying aspects of the Giants’ ticket pricing plans. Fans pay the most for what the team calls “premium” games which consists of Opening Day and series against Oakland and Los Angeles. Fans pay a little bit less for “feature” games which are mostly weekend games in the summer and series against Los Angeles during the week in the spring. All other games fall under the “regular” category when pays will pay still a little bit less.

After the tickets went on sale in early March, many prices dropped by a few dollars by mid to late March. This is not particularly surprising – many fans certainly have the date tickets go on sale circled on their calendar and want to ensure that they are able to buy seats for their desired games. By the time they have been for sale for a couple of weeks sales have certainly dropped off and the team has an interest in boosting sales by lowering prices by a couple of dollars.

As a general rule if someone were to buy tickets the day of a game as opposed to the day before they could expect to pay about $2-$3 more per seat, “penalizing” those who waited until the last minute. (However, this increase is still less than the amount one would pay in transaction fees by purchasing online in advance as opposed to not paying the fees by buying tickets at the stadium on game day.)

Certainly there were some games in which the changes in ticket prices in the weeks leading up to the game were virtually insignificant. For the May 11-12 (Monday – Tuesday) games against the Washington Nationals tickets that were sold using dynamic pricing remained between $5 and $7 apiece for two months. It’s almost as if the team was begging fans to come to an early week spring game against an opponent with zero drawing power.

On the other hand the Giants know they will draw healthy crowds to the marquee games, including a Saturday interleague game against the Athletics on June 13. Personally paying as much as $45 for a subpar seat seems like a lot for virtually any regular season game though the team felt that was the market rate three weeks before the game. The empty spaces below meant the team was not selling seats in those sections using dynamic pricing at that time:

While fans didn’t witness #300 for Johnson they did witness #299 and paid accordingly. Soon after Johnson attained win #298 on May 11 the team jacked up ticket prices for the game that was expected to be three starts away for Johnson on May 27 against the Braves. If Johnson would have won one of his next two starts (vs. NYM and at SEA) May 27 could have been Johnson’s first shot at #300. However, since Johnson received a loss and a ND in those two games May 27 was his third shot at #299. The following table is a snapshot of dynamic ticket prices for May 27:

Other pricing changes seem downright trivial. Was it really necessary for the team to raise and lower prices in increments as small as $.25 in the days and weeks leading up to the Monday, June 15 game against the Angels?

Overall, however, the team seems to be viewing the pricing as a success, claiming a 20% increase in tickets sold in those 7 sections compared to a year ago. Through 43 home games in 2009 the team has an average attendance of 34,329 compared to 35,137 in 2008, a drop of a little over 2%.

In a sense the team is simply taking a slice of revenue away from the secondary ticket market (both legal and illegal). Online ticket sites and ticket resellers on the streets outside games would be both selling tickets at higher prices to the premium games and also trying to unload unwanted tickets to games against the Pirates and Nationals as the Giants are now doing.

If the team’s claims are to be believed then overall dynamic pricing seems to be a positive development for both the team, who is seeing increased attendance, and fans, who now have cheaper options from which to choose. The days in which all but season ticket holders pay the same for all 81 home games are coming to a close as the Giants are in the forefront of letting the market decide the going rate for seats.