When the Capitals raised season-ticket prices again for the 2011-12 season, I calculated the percentage increase for each price point. The range of increases was from 4 to 21 percent. But many of the biggest increases, percentage-wise, came in the upper level: 10 percent up for the Mezzanine Center, 17 percent for the Mezzanine Attack End, 21 percent for the Mezzanine Attack Corner, 13 percent For the Mezzanine Defend Corner.
Ditto the year before, when Mezzanine prices increased by 21 percent (center), 32 percent (end) and 33 percent (corner), with the latter two being the biggest percentage increases in the building.
The team explained this by pointing to the total price; since the upper-level tickets are cheaper to begin with, it doesn’t take much to make the percentage increase look massive. But apparently there’s also another reason: the people in the 400-level can afford it.
A recent SportsBusiness Journal story on how sports teams are using research and analytics to improve their businesses, in fact, led with this discovery by the Caps.
Upper-deck seating at most arenas, including the Capitals’ home, Verizon Center, has long been more of a value-oriented product, a place to put fans who just want to be in the building, weren’t concerned about status, or didn’t necessarily have entertaining needs for business clients.
But [senior VP Jim] Van Stone, looking at detailed demographic and income information on his fan base, found that a large amount of Capitals ticket buyers in the upper seating bowl held six-figure incomes. Furthermore, they were also among some of the team’s most ardent fans, as shown by a variety of additional measures such as merchandise and secondary market ticket purchases, team website visits, survey participation and other indices.
With fan interest in the Capitals also peaking, thanks to the continued ascendancy of star forward Alex Ovechkin and a series of high-seed playoff appearances, Van Stone and Monumental used that data to devise a new price structure in which upper-deck seats that previously sold for $14 each on a full-season basis nearly doubled to $27 each. Higher-priced inventory in the upper deck received similarly large increases.
Consumer and public relations pushback from the price hikes were minimal and ticket renewal rates stayed in excess of 90 percent. But much more critically, the upper-deck bumps have created more than $1 million in incremental, annual ticket revenue for the team.
Van Stone also told the publication that he hopes to use “dynamic pricing models” for both the Wizards and the Caps starting this fall. SBJ also reported that Monumental Sports will use similar analytics to help price “less-in-demand Washington Wizards and Mystics tickets,” in the magazine’s words. So you’d best hope your fellow 400-level Wizards season ticket-holders are poor like you.
(Note: A previous version of this item suggested that the “less-in-demand” phrase came from Van Stone, rather than the writer. Also, the Caps remain in the bottom half of the NHL in season-ticket pricing, according to the team.
(Via my sorta-co-worker and friend Neil Greenberg.)