Season Ticket Pricing - An Opportunity or a Pipe-dream?

[HibsMax]

I was thinking about how Hibs can get more bums on seats, other than by playing silky football, and the obvious starting point (for me) is with season ticket prices. I'm not going to try and talk about walk-up fans because they're a flighty bunch and therefore difficult to budget for. So everything that I am suggesting here is *purely* based on Season Ticket sales, and a little of my own black magic thrown in for good measure.

Obviously some assumptions have to be made but I tried to keep them to a minimum. Assumptions:
1. 19 home games a year,
2. Hibs will make a 2 pound profit per fan per game in concession sales. I don't know if that is a fair number or not but as long as I am consistent it doesn't really matter tooooo much. I figured some people won't buy anything whereas others (Hibernian TV commentators for example) will spend several hundred on pies alone. The basic thought process here is that a bum in a seat is a potential sale....and I am not even including programs or increased shop sales which could also follow.
3. an empty seat is a wasted seat (hence the success of websites like priceline.com, expedia.com, etc.)
4. Season Ticket Price = 405 pounds (I know there are different pricing categories and if I was going to be rigorous I would find out how many STs at each price there are available but I'm just trying to make a point, not do ALL the work for Hibs ).

OK, so the numbers....

I'm considering 2 different prices:
Full Price = 405 pounds
12.5% off = 354.38

Note : I considered 25% off as well but that much of a discount seemed too aggressive and would require a substantial boost to sales, so I removed it as an option.

8,000 Season Tickets @ 405 pounds
Sales = 3,240,000
Concessions = 304,000
Total = 3,544,000

9,000 Season Tickets @ 354.38
Sales = 3,189,375
Concessions = 342,000
Total = 3,531,375 (minus 12,625 pounds compared to full price)

10,000 Season Tickets @ 354.38
Sales = 3,543,750
Concessions = 380,000
Total = 3,923,750 (plus 379,750 pounds compared to full price)

But where is the balancing point?
8000 @ 405 = 3,544,000 (incl. projected concession sales)
9032 @ 354.38 = 3,543,931

So if Hibs were to reduce the season ticket price by 12.5%, they would need to sell 1033 more season tickets before they start to see a difference in overall income. If they sold 10,000 tickets then the income would be up by about 380,000. When I say "sell more" I am talking about making sales to fans who would not be coming to Easter Road anyway (including walk-ups). That's an important distinction to make. If Hibs reduced the price of season tickets and no new fans bought one, the club would absolutely lose money. No doubt.

Of course the question is, would season ticket sales actually increase with this price cut? Another question would be how to compensate the 4k-5k fans who have reportedly already dropped 405 pounds?

Note : a similar change in walk-up prices might have a similar effect but the reason for ignoring walk-up patrons is because Hibs don't see that money until game day, if at all e.g., because someone decided not to go to the game.

Make of all that what you will. If nothing else it demonstrates how sales and prices are correlated and if one goes down, how much the other has to go up to keep the balance.

[NYHibby]

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Of course the question is, would season ticket sales actually increase with this price cut?

Easy answer, no. Football tickets are inelastic. Your 12.5% price cut requires a 12.9% increase in sales. Won't happen.

[HibsMax]

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Easy answer, no. Football tickets are inelastic. Your 12.5% price cut requires a 12.9% increase in sales. Won't happen.

While not disagreeing with you, I don't know how you can say this is an easy no. You say that football prices are inelastic. What do you mean by that and how do you know? Are you saying that a drop in price does not result in an increase in sales? If that is what you're saying I would like to see the supporting data. I'm genuinely curious because this touches upon what I do, although I am faaaaaaaar from a mad scientist (and pricing IS a science).

Let's say that Hibs increase season ticket prices to 10,000 pounds across the board. I would assert sales would plummet to 0. Now lets say that Hibs decreased their prices to 1 pound. I have no doubt that they would sell out. I have no data to backup either of these assertions but I think that what I am saying is not too much of a stretch. (edit : The point I am making is that as price comes down and sales go up, there will be a point where the balance is just right. All I did was say that the price falls between 1 and 10,000 pounds.) I think it makes financial sense for Hibs to sell their tickets at the lowest price they can afford to fill as many seats as possible without losing money. As I said before, and this doesn't need data to back it up, empty seats are lost revenue. I'm only talking about tangibles, there's also the atmosphere generated by a larger crowd.

[NYHibby]

Sorry. Given your post, I assumed that you had a working knowledge of economic concept of elasticity.

Ticket sale would increase but not enough. Simplifying things, football tickets are normally priced in the inelastic portion of the demand curve. This means that a one percent decrease in price will lead to a less than a one percent increase in sales.

So your 12.5% discount would result in an increase in sales smaller than 12.5%. For your example to benefit Hibs, you need a 12.9% increase. What I am saying is that the club cannot increase revenue from season tickets by decreasing prices.

Here is a list of articles:
http://ideas.repec.org/cgi-bin/htsea...ticket+pricing

[HibsMax]

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Sorry. Given your post, I assumed that you had a working knowledge of economic concept of elasticity.

Ticket sale would increase but not enough. Simplifying things, football tickets are normally priced in the inelastic portion of the demand curve. This means that a one percent decrease in price will lead to a less than a one percent increase in sales.

So your 12.5% discount would result in an increase in sales smaller than 12.5%. For your example to benefit Hibs, you need a 12.9% increase. What I am saying is that the club cannot increase revenue from season tickets by decreasing prices.

Here is a list of articles:
http://ideas.repec.org/cgi-bin/htsea...ticket+pricing

I do understand these concepts (Price Elasticity) in the retail world albeit fashion / grocery items and not ticket prices. I just wanted to know what YOU meant by it, see if we are in the same page.

Without looking at the data, which I do not have, I cannot tell what the elasticity actually is. You said, "a one percent decrease in price will lead to a less than a one percent increase in sales." because, "football tickets are normally priced in the inelastic portion of the demand curve". If that is true then I totally understand why reducing the prices will not work.

The question is, do Hibs have the pricing correct? Is it at the exact point to maximise revenue? On one hand I could say they are bound to have it right but I'm not so trusting. :)

I'll check out that link you sent.

[Franck is God]

I personally plan on suggesting a pricing policy based on the number of season tickets sold.

for example the base ticket price is £400 and the price is reduced by £1 for every 100 tickets sold past 10,000. The more of us that sign up will make it cheaper for everyone.

[HibsMax]

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I personally plan on suggesting a pricing policy based on the number of season tickets sold.

for example the base ticket price is £400 and the price is reduced by £1 for every 100 tickets sold past 10,000. The more of us that sign up will make it cheaper for everyone.

That was actually where I was going to go with this (eventually). There was a website around a few years ago, it might still exist, where items where put up for sale. The more people that bought the item, the cheaper it was. When I was thinking about that very thing this morning, I was also going over the logistics. Assuming that people buy their season tickets at different times, and therefore different prices, somehow or other the club would need to figure out how to compensate the people who bought earlier at the higher price. That could get messy (pity it can't get Messi).

At this point I'm more thinking about how to fill the stadium as opposed to generating more revenue from ticket sales (while being careful not to LOSE money in the process).

One way to put bums in seats, once the season is underway, is to reduce entry fees for certain games. That might be a good way to get more walk-up punters but it's also a great way to piss off season ticket holders unless there is a way to compensate them too.

There are all sorts of ideas that the club could look into, and very possibly have already. Reward your loyal fans by either locking their rate in or even offering them a discount based upon continuous years of being a season ticket holder, upto a limit (kinda like your insurance no claims discount - assuming that still exists. LOL).

Maybe some incentive for the first 1000 fans to sign up? Then a slightly different incentive, of lesser value, for the next 1000 and so on.

I hope there is someone at Hibs who is pulling out all the stops to fill the stadium in a cost-effective fashion. I know from reading .net that fans are getting restless. People want news before they renew.

How about some other incentives Hibs?!

[son of haggart]

[QUOTE=HibsMax;2825516]That was actually where I was going to go with this (eventually). There was a website around a few years ago, it might still exist, where items where put up for sale. The more people that bought the item, the cheaper it was. When I was thinking about that very thing this morning, I was also going over the logistics. Assuming that people buy their season tickets at different times, and therefore different prices, somehow or other the club would need to figure out how to compensate the people who bought earlier at the higher price. That could get messy (pity it can't get Messi).

QUOTE]



One answer to that would be to provide a voucher for club shop at £1 back for every 1000 seasons sold or anything up to £5 per thousand.

[HibsMax]

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One answer to that would be to provide a voucher for club shop at £1 back for every 1000 seasons sold or anything up to £5 per thousand.

Yup. One thought I had was that the season ticket is actually a loyalty card that can store points on it. These points can be used in the shop for purchases, tickets, etc. Then compensation would be easy i.e., just add 1000 points onto Mr. Tickle's card....done! This card would be almost like an identity card and would / could be used to store information about the holder......information that the holder has first agreed to share.

[LancashireHibby]

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Yup. One thought I had was that the season ticket is actually a loyalty card that can store points on it. These points can be used in the shop for purchases, tickets, etc. Then compensation would be easy i.e., just add 1000 points onto Mr. Tickle's card....done! This card would be almost like an identity card and would / could be used to store information about the holder......information that the holder has first agreed to share.

A system that can be put in place very easily already on people's season ticket cards.

[Ants]

Why dont Hibs approach Motherwell and ask for some assistance in doing deals for the fans...

Their deal is:- 1 Adult and 2 kids from £300.

This is from a team that has finished above us in the league, they have more reasoning to charge more than us!!!

Hibs need to wake up and adjust to the 21st century.

[HibsMax]

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Why dont Hibs approach Motherwell and ask for some assistance in doing deals for the fans...

Their deal is:- 1 Adult and 2 kids from £300.

This is from a team that has finished above us in the league, they have more reasoning to charge more than us!!!

Hibs need to wake up and adjust to the 21st century.

They can always just send me an e-mail, I'm happy to help them (run the club into the ground) with all "my" amazing ideas. LOL.


The whole "Season Ticket" idea is really just meant as a launching pad, a suggestion to get the collective creative juices flowing. There is no point in building a new stand (I don't just mean the East, I mean all of it) it it's going to be peppered with gaps.

Think of Easter Road as a plane. Airlines do what they can to fill every single seat because it makes more sense to fly full than empty. I would argue that the same could be said about a football stadium but there are other pluses as well e.g., the affect on the team when they run out to a packed stadium (assuming they're not being booed ).

EDIT: please! don't anyone try and fly Easter Road without proper training and clearance from Clarence. Roger?

[Hibs On Tour]

Think to a certain degree football is somewhat different from most other areas in this respect. With regards goods for example, there is generally a finite demand overall and only some of those potential purchasers will be massively swayed by price discounts, clearly more in line with the level of discount however. Football clubs however operate with a different 'clientele' in that - in most cases - the [sometimes long-suffering ] fan will pay whatever the club put in front of him up to the point that they can't actually afford it. That's what being a supporter entails.

I've also seen lots of studies that show that its almost unheard of for a business to lose any substantial sales or revenue by increasing their prices by 1%, which can generate a LOT of additional revenue for little or no discernable drop in sales. Better not show those to P-Rod then!

Think there are lots of ways to potentially increase revenue for the club and also to hopefully increase attendances. Truth is however that the only surefire way to increase attendances is to put a better team on the park...

[southern hibby]

Not a financial wizz, but would it be worth offering season ticket holders a half price season tickets after say 4 years loyal service. This would mean that every 5th year they could get their seat for half price.

Again we could do what I suggested a while back and offer 1000 - 2000 kids seats for £1, to cat B games. If we started with kids who were 12 - 13 and got them coming to the home games rather than doing something else on a Sat they might just get hooked on Hibs and start buying season tickets when they turn 16.

Again if they went to college or UNI we could still offer them the season ticket cheap and hope that when they start working they buy a full price one.

Also to add to this we could even offer 1000 - 2000 seats to unemployed people with the hope that they too would keep on coming back when they start working again.

Again we would have X amount of new fans that might spend on pies, strips or some other type of merchandise.

Now I'm not sure this would work as I have already stated that I'm no financial wizz. BUT if HIBS did it for say X amount of years and then re-assessed it and worked out if it was benificial then surely it would be worth a go.

If anyone from the Board does read this can I please say that not every kid / adult in Edinburgh who loves HIBS come from a family privilaged enough to afford the gate prices but one day their situation may change for the better and that better may help change HIBS fortunes.

LETS BE HONEST WE DO HAVE THE SPARE SEATS AND EVERY 1 PERSON THROUGH THE GATE IS AN ASSET TO OUR CLUB LONG TERM.

[HibsMax]

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Not a financial wizz, but would it be worth offering season ticket holders a half price season tickets after say 4 years loyal service. This would mean that every 5th year they could get their seat for half price.

While I like the idea it might be a little too much of a burden for Hibs to shoulder all at once. Imagine after the first 4 years, there might be something like 7,000 fans renewing all at once for half price. Half price might be a little too steep but as I said, I like the idea. Something similar could be "Refer a friend, get x% off your season ticket next year", but that would have to have a cap otherwise Hibs would be giving you a season ticket AND a wad of cash (if you refer lots of people).

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Again we could do what I suggested a while back and offer 1000 - 2000 kids seats for £1, to cat B games. If we started with kids who were 12 - 13 and got them coming to the home games rather than doing something else on a Sat they might just get hooked on Hibs and start buying season tickets when they turn 16.

Another good idea. Hibs must know which games are most poorly attended......make those games *FREE* for kids under 5 or something. Just brainstorming here.

An empty seat costs nothing / little to fill and can possibly even earn money through concession sales.

Maybe if I can get Fife's opinion I can get this thread to over 200 posts......