How To Fill A Stadium

I was watching the Toronto Raptors on TV and noticed the swash of empty seats. The arena was half full. Why? The Raptors suck. That’s why. But after further thought, I concluded that this wasn’t the case. The reason why there were empty seats was because two reasons: (1) people weren’t buying tickets, and (2) people with tickets weren’t showing up to games.

Why People Aren’t Buying Tickets
I’ve been curious as to why price of individual games remains constant. Surely people would pay more to see the Lakers than the Grizzlies. People aren’t buying Raptors tickets because the value of the ticket doesn’t match the price. The Raptors are currently sucking, making is less engaging for fans to go to the games. The value of the product is decreasing, so shouldn’t the price match? At $15 a pop, I would rather go see “Yes Man” than suffer through seeing the Raptors tank from the nosebleeds. Decrease the price until the Raptors give me better value for my money than Jim Carrey. Give people good value and they’ll buy your product.

Why People Are Wasting Their Tickets
People are busy. Things come up at the last minute. A snow storm comes in. It all makes sense. Normally, if you can’t get to a game, you’ll try to sell your tickets or give them to someone else. But then you get lazy. You only call one friend who can’t go to the game and then you give up. Basically, there’s effort required to get rid of your tickets. And that cost of the effort is greater than the value that selling the tickets would bring. And people don’t decide not to go to the game until the last minute, when it’s too late to resell the tickets.

The Solution
The Raptors set up an official online auction site to resell tickets. If you are season ticket holder who can’t make a game, they make it easy for you to log-in and sell your tickets. The Raptors take a processing fee for each transaction (like eBay). If you’re a winner, all you do is take a winning bid code to a ticket window at the arena and pick up your tickets. Voila.

The team could also leverage the auction system to release tickets for their empty seats on game day. It allows them to price the seats low and allow the fans to decide the value of the tickets. If you really want to go to the game, you simply bid more. This way the Raptors would be to sell out the ACC every time. An empty seat is a sunk cost, so they could sell for as little as $1 and the team would gain revenue.

Conclusion
For every professional sports team, each empty seat represents an enormous opportunity cost. Especially when there are a limited amount of seats and a limited amount of games in a season. Why not maximize revenues by making it easy for people to access these seats at prices that fit the value?

- Christian