Price of success: Cubs raise season ticket prices by average of 10 percent
With success comes higher demand, and with a greater demand comes a chance to make a lot of money. Hence, one of the main reasons why the Chicago Cubs have decided to raise ticket prices heading into the 2016 season.
On Friday, the Cubs announced the average price for season tickets will increase by about 10 percent, and up to nearly 14 percent across the board in 2016. This will mark the team’s highest ticket price increase since 2010, which not surprisingly follows their most successful season since 2008.
[New York mayor Bill de Blasio honors World Series bet, sings ‘Kansas City’]
It’s the way of the world within the business of baseball. Teams can’t add and subtract seats at will depending on the outlook of their product. They can only gauge interest and project where the demand will be when tickets for the 2016 go on sale. In the Cubs case, it’s easy to see where the demand is now and where it will go as they approach a wide open window of contention.
“We’ve clearly seen an increase in demand, so that helped factor into an increase in our prices,” Cubs vice president of sales and partnerships Colin Faulkner said Friday. “Our goal is to remain competitive for the long term and provide value to our fans for a competitive baseball team, but also (value) in their tickets.”
The Cubs had the third-highest average ticket price in the majors in 2015 while finishing sixth in attendance at 2.959 million fans. Even if the tickets weren’t the most affordable to, fans were obviously willing to pay before, and should be willing to pay next season after getting a taste of postseason baseball again in 2015.
Bruce Levine of CBS Chicago has more on what the increased prices coupled with even modest attendance gains could mean from a business perspective.
What this means is the franchise should reel in an extra $20 million based on three million tickets sold next season. The average ticket price will jump to around $51 for 2016, up from $47 in 2015. You then add in the per-capita rate, which is $20 a ticket sold for food, beverage and merchandise.
The $71 per fan showing up to Wrigley doesn’t allow for the no-show factor. With no-shows, you don’t get the per-capita bonus. No-shows diminished significantly in 2015 due to the exciting 97-win team that the Cubs fielded.
No-shows should decrease even further in 2016. Even if fans with tickets can’t make it, they’ll understand the tickets have too much value to go unused. As we saw during the postseason, the secondary market was a big moneymaker too.
[Check out Big League Stew on Tumblr for even more baseball awesomeness.]
From a business standpoint, the Cubs decision makes sense. It obviously won’t appeal to fans who will be priced out of the ballpark, or perhaps limited to one or two outings per season, but some might be more forgiving if they know the extra money is going into building the team. That, Levine says, has not been confirmed at this point, but it should be safely assumed.
The Cubs haven’t said what they plan on using their increased revenues for. The baseball department is expected to be able to add at least $15 million to $20 million in payroll for the 40-man roster in 2016.
Owner Tom Ricketts and his family said when they bought the team in 2009 that every dollar that comes into the franchise will go into building a champion on and off the field. So far, Ricketts has taken the necessary steps toward that. He created a new complex in the Dominican Republic to sign and train players, and the Cubs also made a deal for a state-of-the-art spring training complex in Mesa, Ariz., that cost $77 million.
This didn’t seem possible five or six years ago, but the Cubs not only have a plan, they have a long-term plan that figures to the Cubs brand into a booming busines. One that could even own its own network by 2020.
Business is good on the north side. Great even, and it’s only going to get better.
More MLB coverage from Yahoo Sports:
– – – – – – –
Mark Townsend is a writer for Big League Stew on Yahoo Sports. Have a tip? Email him at [email protected] or follow him on Twitter! Follow @Townie813
