The Mets hosted a conference call with Dave Howard, Executive Vice President of Business Operations, for the blogs regarding their announcement about ticket pricing for 2012.
The main focus of the call was the new system of dynamic ticket pricing, in which the Mets will adjust single-game ticket prices as the season progresses. Matthew Artus and I were on the call and each got to ask a question, and James Kannengieser and I transcribed the whole thing. Do not mess with the Amazin' Avenue:
Dave Howard: The announcement today is a fairly significant one in terms of what we have done to take a look at the ballpark, section by section, and take a look at all the market data from this past year, doing very detailed statistical analysis of that data to try to come up with optimal pricing for all of the areas, in particular the largest area of the ballpark that is available to season ticket holders.
The result is that we have reduced prices at the majority of the ballpark and in some cases pretty substantial reductions. I believe that of the inventory available for season ticket holders, which is give or take about 40,000, I think 80% of those seats have been adjusted downward. So 20% are essentially flat. In all cases season ticket holders will pay no increase. Technically there are decreases for all of them but some of the decreases are so insignificant that they’ll essentially be flat. 80% of inventory will see a decrease of approximately 5% or more.
We looked at the market data. We think the two most significant factors continue to be the economy and the challenge for people in terms of disposable income, and team performance. On the team performance side, we saw some good things this year. We got off to a rough start and we finished rough. But in between the team did play well. The emergence of the young players has given a lot of hope moving forward, and we’re excited about the job Terry Collins did in his first year as manager. We’re also very, very bullish on Sandy Alderson and his crew in terms of trying to get this team back into contending status and the flexibility they’ll be recapturing on the payroll side I think will be very good news for Mets fans as we move forward.
Matt Cerrone, MetsBlog: What struck me most interesting was the dynamic pricing. I’m wondering if you’ve seen any feedback around the league from regular fans who may be a little intimidated that when the team is doing well, they may not be able to afford an average ticket price. If as the team does well that price increases. Obviously it benefits if the team is doing poorly and you drop prices. But if the team is doing well and the prices go up, I think some fans might feel like they’re going to get boxed out a little bit and I’m wondering if you’ve seen any feedback from that and if you agree or disagree.
DH: We certainly have discussed with teams that have been doing the dynamic pricing. We’re actually partnering with Qcue, the same company that has partnered with the Giants, Diamondbacks and Cardinals and a few other teams that have adopted the dynamic pricing system for single games. I don’t think that would, or should, be a concern. The reality is over a six month regular season, there’s going to be more than enough inventory, more than enough games, where pricing will be reasonable and affordable.
As it is, because we’ve researched the ballpark and reduced a large majority of the pricing, there are a lot of tickets where the prices will start off being a reasonable number. The likelihood that most of those seats will go up in a dynamic environment I think is unlikely. The factors that might push tickets in an upward direction are those usual factors which are already built in to the initial offering price. When they go on sale for single games in March, the pricing for each seat and each game will already be in that typical variable price format, although we’re not using the different categories, because the categories are irrelevant when we go dynamic. Pricing will be in a typical peak vs. off peak formulation, and then the market will dictate where we go from there. There may be adjustments moving forward. But the likelihood of the adjustments going down is probably equal to possibility of adjustments going up.
I think the upward adjustments are going to be because of a really good team or really good pitching matchup or the team catching fire and being in playoff contention, things of that nature. That should be balanced with some of the off-peak type of games, where pricing should be reasonable and in many cases might actually drop. There should be plenty of access and affordability for families.
Greg Prince, Faith and Fear in Flushing: I'm wondering what you folks learned this year when you ran certain promotions, like kids get in free, the student rush tickets, the BJ's Clubhouse stuff. I thought all those were great ideas because you’re better off with more people, even not at top pricing, getting in and spending money in your ballpark. It’s obviously better for the fans that can get in. I wonder if there was any learning from that that went into any of these decisions.
DH: Those promotions, generally speaking, were well received. The BJ's Clubhouse did very well throughout the year. The promotion we did toward the end where each adult ticket could bring three children in for free definitely stimulated sales and definitely got more people into the building, which was the goal. Especially when the parents are bringing kids, that’s a big plus. Because they’re going to hopefully draw an affinity and connection with the team and become fans going forward. The good news is that there was response. The worst thing you can do is start these promotions and not get any response, because that’s a worst case situation where there’s apathy. The good news is there wasn’t apathy, there was response, and all that was taken into consideration for 2012.
Howard Megdal, LoHud Mets Blog: I wanted to talk a little about the timing and deadlines put into place today. I know you’re bringing back the Amazin’ Mets Perks, which is something that had a December 15th sign-up deadline for last year, whereas it has a November 7th deadline this year, which is well before the fans have any chance to see the team’s offseason moves. Compare to last year, December 15th actually takes place after the Winter Meetings. I was just wondering if you could talk a little about how that decision was made.
DH: We discussed creating more of a payment plan with our season ticket holders, which is probably the first step in that transaction. You see it a lot more in basketball or hockey where the renewal invoices will go out sometimes during the regular season, towards the tail end of the regular season, but in many cases immediately after.
The renewal process will allow for fans to pay out over a long period of time, which is not something we have done historically. You see us moving in that direction this year, by having the two different payment plan options, including the six-payment plan option. To do that, we need to start the process a little bit earlier. We probably would have gone out even earlier this year, except for the fact that we are transitioning to the new ticketing system. We’re going to tickets.com and that conversion is underway as we speak.
We originally were planning to start issuing invoices during the regular season, but that was cut off because of the ticketing system conversions. It takes a lot of time and we wanted to make sure the new system was up and running by the time we start taking payments. That was the reason for the timing.
Steve Keane, Ed Kranepool Society: This is the 3rd year in a row that the organization has revamped its ticket program and it seems like the organization has a problem reading its fan base. Watching these postseason games, especially games at Citizens Bank Ballpark, Comerica and Arlington, you see the seats behind home plate are regular stadium seats, whereas at Citi Field they have these big expensive luxury seats. Has there ever been any thought of taking those seats out by the Champions Club, and putting in seats where fans will actually sit in those seats during games.
DH: The Champions Club is behind home plate but not immediately behind home plate on the field level. It’s actually technically off of the field level concourse. They sit above the Sterling Seats. With regards to the Champions Club in particular, we are actually changing that club and making it an all-inclusive club. While the prices are essentially remaining constant, there is going to be complimentary food and non-alcoholic beverages served.
I think in regards to the Delta Club, which is the club that’s on camera from the center field view during games, those are upholstered theater-style seats. They are very comfortable. They are a premium seat. They are basically sold out. Again, you may not see people sitting in those seats all the time. They may be in the club, they may be in the back, they may not be there. Those seats are sold, so we don’t have any plans at this point to change those. What happens is that the team starts to win more, it gets more exciting; people will be in those seats on an increased basis.
Kerel Cooper, On the Black: I was wondering if you could give us some insight into the selection of tickets.com as the technology provider. I know you mentioned earlier that you’re switching providers so I just wanted to get a little more info in terms of the decision-making process there.
DH: Our agreement with [garbled] was up for renewal, and we went out and took bids from the three ticketing service providers approved by MLB Advanced Media. So that was [garbled] and tickets.com and Ticketmaster. We obviously did a competitive bid process, and we assessed the deal on both the financial and technological side of things. Tickets.com is owned by MLB Advanced Media. They have really done a very good job of the new iteration, which is called Pro Venue. It is closely tailored for MLB teams.
It is now the third season that that system will be in place. It has largely performed well, they’ve worked out the bugs. We felt this was a good time to migrate to Pro Venue. There are advantages to being partners with tickets.com because of the co-ownership relationship with MLB Advanced Media. They gave us a great overall competitive bid, but the technological advances were also very attractive. It was because of tickets.com and their partnership with QCue that we were able to go into the dynamic pricing mode for next year. It was obviously a number of factors, but those were the principle considerations.
Michael Donato, Optimistic Mets Fan: I have a question about the dynamic pricing. You mention that it won’t be lower than what the full-season ticket holders are paying. In the same breathe, you mentioned that the full-season ticket holders will be able to purchase the cheap twelve-dollar Promenade Reserved seats. I’m wondering, what exactly does that mean? Is there ever going to be a discount that’s significantly below what you can buy now? For instance, you could go on StubHub last September and you got tickets for two or three dollars. Will there ever be a situation where tickets will be that low, for say a rainy Thursday game, or is it basically what they are now, and you’re better off going on StubHub?
DH: Let me clarify. The commitment to our season ticket holders is that we will never price a single game in their section below what they’re paying. There may be sections that have no season ticket holders who may have more flexibility, where the dynamic pricing can go down. What we’re saying is we won’t undercut the season ticket holder in their section below what their price is, how it’s assigned for each game. As I said, there are certain sections of the building, where we don’t have, mostly in the outfield, where we might be able to add a little more flexibility in terms of pricing and large discounts.
Matthew Artus: I wanted to follow up a little more on the dynamic pricing. You mentioned that there would be a ticket floor. I was wondering if there would be a ceiling. And also if all tickets in the building are subjected to the dynamic pricing, or are the premium seats excluded?
DH: All seats would be included, to the extent that there is inventory available on a single-game basis. And with regards to a ceiling, no, there won’t be a ceiling. The market will decide what the price is on the upside.
Joe DeCaro, Metsmerized Online: My question is, last offseason you rolled out Amazin’ Mets Perks as an incentive to increase ticket sales only to see attendance drop a reported 8% from 2010. I’m of the belief that the longer a team stays in contention, the more the fans will continue go to the park, support the team and buy tickets. I would imagine that these new reduced ticket prices, the Amazin’ Perks programs, and all the free tickets that were given away this season cost the organization a very significant amount of money. In the grand scheme of things, might it have been better to simply invest an additional five-to-ten million in improving the roster so that we could’ve kept the season more relevant through September? Wouldn’t it have been more beneficial, and maybe profitable, to spend just a few more million at the front end in exchange for tens of millions more at the back end, even with the high payroll?
DH: Obviously, you can’t predict what’s going to happen before the season begins. Things played out as they did, Injuries played a significant role as well. If you looked how well Ike Davis and Daniel Murphy were performing, in particular, before their season-ending injuries. That’s something you can’t predict.
With regard to what we have done from a promotional standpoint, the Amazin’ Mets Perks program was intended to bring added value and benefits to our season ticket holders because they are so critical to the success of our business. We wanted to treat them sort of like we treat our major corporate sponsors, in a very special way, give them exclusive access, exclusive benefits. There was some cost there. I wouldn’t say the cost is extraordinary. The primary benefit of that program is, number one, to provide incentive to renew season tickets. That was effective, because we renewed last year at over 85%, which was a very good renewal given the performance of the team. From that standpoint, that was successful.
Obviously our payroll was high last year, at about $145 million. The value wasn’t there – we did have two players who were released in spring training in Oliver Perez and Luis Castillo, we had Johan on the disabled list all year, so we didn’t get the full benefit of that high payroll. Again, I don’t think anyone can criticize our ownership for not supporting a high payroll. Perhaps you can criticize us for not spending the money wisely.
That’s where I’m very optimistic that Sandy Alderson and his team will be doing that much more effectively as we move forward. I think we have to balance everything and it’s very important for us to treat our fans, season ticket holders, and sponsors in a first-class way on the business side, and obviously baseball operations is charged with elevating the value of the team and getting appropriate value out of the money that we are spending on players.
Scott Mandel, Sports Reporters: Sandy has already gone on record as saying that payroll was going to be significantly lower this coming season. The concern I was thinking about is that fans would look at this sort of ticketing program as a potential acceptance on the Mets' part that they’re going to be getting less revenue from ticket sales in general, and of course a lower payroll, and therefore free agents like Jose Reyes may not be in the picture, as far as the budget is concerned. Can you comment on it?
DH: The ticket pricing that we announced today, that is really here for the season ticket holders, is big news for season ticket holders. We think our overall pricing will be good news for Mets fans. The goal here, if you price your tickets in an optimal way, you’ll maximize tickets sales, and therefore you’ll maximize the gate revenue, which is an important component of a successful baseball team, no question about that. We actually see this as putting us in the best position to succeed.
The other big plus is that if the team does perform well, and we are in contention, not only will we have the typical lift from revenue that happens when they buy more tickets and when they start buying prorated season tickets during the regular season in order to get postseason benefits, but that will also be supported by dynamic pricing, so we’ll see a natural increase in overall pricing because demand will be increasing.
This system and the ticket prices we’ve outlined is totally compatible with signing Jose Reyes, if that’s what Sandy and his guys feel is best, and also being competitive. Because as we succeed, the revenue will support the team and potentially support a pennant-push acquisition of a high-priced player before the trade deadline. I don’t think fans should be worried that we’re pricing lower, and therefore we won’t support the team. We will have the revenue, particularly if the team performs as we think it will.
Chris McShane: There have been ticket fees associated with buying tickets on mets.com. What will ticket fees look like for fans now that the Mets are using tickets.com?
DH: It will be a similar setup. We’ll obviously look at the fees with tickets.com and MLB Advanced Media. Ultimately MLB Advanced Media approves the fees, but we’ll make sure the fees are reasonable relative to the price of the tickets. That’s an important consideration for us, to make sure that there is some consistency there, that the fees won’t become too much of the overall percentage of purchasing tickets online. We’ll look it very closely. That’s an important issue for us, and that’s an important issue for MLB Advanced Media, as well.
Ed Marcus, Real Dirty Mets Blog: I noticed in the press release that there will be certain sections that will have season tickets for less than $1,000. Is that going to be relegated to the upper deck areas of the stadium?
DH: Yes, those sections are in the Promenade sections in left field. I think it’s 532 to 536, so they’re sections basically below the out-of-town scoreboard.
Marc Hofstatter, Mets Today: In the conversations we’ve had thus far, we’re talking about season ticket holders. As you mentioned, single tickets don’t go on sale until March. You also mentioned there won’t be a ceiling in terms of dynamic pricing. In terms of a family of four going to the game, what sort of incentives would the Mets bring to a family of a four that perhaps only goes to a certain number of games each year? What will they be expecting down the road in terms of additional price break opportunities?
DH: That’s a very, very important part of our fan base, is families. We have historically always made tickets available in packs and other benefits that will be very affordable to families. We had several programs this past year, we had the Pepsi four pack, where you got food, drink, as well as a two-liter of Pepsi, for a family of four. That was a $99 dollar for four people for a hamburger, a hot dog, and a Pepsi product, and you’d also get a two-liter Pepsi.
We obviously had the BJ’s Clubhouse and some of the other programs that were geared towards families. It’s very important to us. It’s important to the core, to the Mets brand. They should know that it will be affordable, accessible seats for them to come out to the ballpark and enjoy themselves as a family in a very cost-effective way.
Shannon Shark, Mets Police: Is there anything you can tell us yet about the partial plans?
DH: I can tell you that we’re hearing what our fans and customers are saying. I think you’ve seen that in the news we announced today, and then probably the one element of we’ve announced today is club access. We’ve been hearing since we opened Citi Field that season ticket holders felt strongly that, regardless of where they’re sitting, they should have access to the clubs, and we’ve granted that going into 2012.
I think we’ve made several modifications to the plans in response to what we’ve been hearing from plan customers. Last season, in particular with regard to increases of flexibility, being more pure in terms of what fans want, in terms of Saturdays, Fridays, and weekend plans and things of that nature without adding some of those games. We had changed some of that flexibility. We’ll continue to be looking to do that and more. We’ll have specific announcements about plans in a couple of weeks, probably early November.
We are listening, we’re hearing what our fans are saying, and we’re trying to be responsive as we can.