Monday, December 24, 2007
Yankee Tickets
[T]he best Field Championship seats that last year cost $125, $135 or $150 per game (on a season plan) have risen to $250. So for some, that's a 100 percent increase.
The Main Championship Box went from $85 in 2007 to $120. That's 41 percent.
Even in a more modest section, Tier Reserved, the best seats rose from $17 to $25, up 47 percent.
Many other tickets went up less, such as the Loge Championship Box, from $120 to $130.
The most eye-popping numbers are in the Legends Suites closest to the field, which cost about $600 per person in 2007, including perks such as food and parking.
Based on options chosen, those seats could double or more in cost in 2008.
No one pretends "legends" seats are for the average fan, though. But there are non-corporate fans who now must pay $250 for the next-costliest level. They often join others to share costs and tickets.
For them, the latest increase is a shocker. Many with partial plans also were hit with big hikes.
"When does it stop?" asked a member of a ticket consortium who asked to remain anonymous.
When people stop paying.
Friday, December 21, 2007
Sports Technology
From the press release:
Technological change is a powerful force in the economy, and in sports as well. I don't know if the pace of change is quick enough to produce a quarterly journal indefinitely, but there is surely a backlog of topics worth covering for a while.The inaugural issue of Sports Technology highlights a number of topics that are not only cutting-edge but also pertinent to the sporting community- such as the science and technology behind the Tour golf balls, a review of tennis ball aerodynamics, a research article on new sophisticated performance analysis in alpine skiing, the design of high performance running shoes, the shock absorption properties of artificial turf surfaces; as well as an article on how sportsmen may leverage on video technology to improve their athletic performance.
Co-editor of Sports Technology, Professor Franz Konstantin Fuss of Singapore’s Nanyang Technological University, added, “Sports is a multi-billion dollar business with stakeholders of different backgrounds: an interdisciplinary journal targeted at the technology of sports equipment and related to the sporting goods market is long overdue.”
NFL Week 17 Showdown
In the 21st century television market sports networks are cash cows, generating large revenue streams from relatively inexpensive programming, especially when owned by a sports property. In order to earn really big revenues, a cable sports channel has to be part of the basic package offered to every subscriber. Many cable companies are reluctant to add channels to their basic package, because they have to pay the channel on a per subscriber basis and find it difficult to pass this additional cost on to the consumer.
The NFL started its own sports channel, the NFL Network, in 2003. In 2006, the NFL Network started showing regular season games on weeknights toward the end of the season. The NFL clearly wants its network to compete with the ESPN family and the myriad regional sports networks. In order to compete with these channels, the NFL Network needs to be part of basic cable, like ESPN, ESPN2, and the regional sports networks. Up until now, the big cable players, Time Warner Cable and Cablevision, have declined to make the NFL Network part of basic cable.
Week 17 has brought things to a boil, because the potentially historic season finale between the (most likely) undefeated New England Patriots, who only have to beat a terrible Miami Dolphins team to go 15-0, and the New York Football Giants. This game will be broadcast on the NFL Network, which is available to less than 40% of the US television viewing audience. This has led to all sorts of wailing and gnashing of teeth. Today's Connecticut Post reports that the entire Connecticut Congressional delegation sent a letter to NFL president Roger Goodell imploring him to put the game on over the air TV. Predictably, other members of Congress have smelled the opportunity to make political hay out of the situation, and rumblings about revoking the NFL's antitrust-exemption have been heard from the vicinity of DC.
I think that the NFL has gotten exactly what it wanted to out of this situation. The furor over the Pats-Giants game will probably force Time Warner Cable and Cablevision to do something about the NFL Network. Goodell has already said that the NFL would make the NFL Network and the game available to Time Warner Cable and Cablevision if they would submit to binding arbitration over the NFL Network impasse. But the antitrust threat may be more than the NFL wanted to bite off. As they say in the TV biz, stay tuned.
Hat tip to my PhD student Brian Soebbing, who saw this coming weeks ago.
Friday, December 14, 2007
Sowell on MLB
On steroid (and related) use:
Maybe we are too sophisticated today to react that way to the news that many major league star players have been taking steroids or other performance-enhancing drugs. But maybe we have gotten too sophisticated for our own good.
Steroids are dangerous and sometimes fatal. Yet, if some players use them, others will feel the pressure to use them as well, in order to compete. Most important of all, many young people will imitate their sports heroes -- and pay the price. Those young people are far more important than asterisks.On punishment/deterrence:
There is still some lingering hope of sanity in the baseball writers' refusal to vote Mark McGwire into the Baseball Hall of Fame, despite his tremendous career achievements. Keeping known rule-breakers out of Cooperstown would be a lot more effective deterrent than putting asterisks alongside their records, to be disregarded by those who are "non-judgmental."
Readers familiar with Sowell know that he is no fan of big government or infringement on personal choice. He has endured a great deal of acrimony for his views on such matters --likely much more than most readers of this blog. Yet, he views MLB steroid users as reprehensible for their illegality, lack of ethics, and spillovers effects within and beyond baseball.
In contrast, many among the network of sports economists hold the critics of steroid use in disregard. My views fall close to Sowell's way of thinking, yet I'm aware that this puts me at odds with many colleagues whose views I respect. I thought that I would address (very briefly) what seem to me to be the main objections to the anti-steroid line.
Drugs should be decriminalized (it is a matter of personal choice, enforcement is ineffectual, ...), so MLB drug users should not be vilified or punished.
This seems to be the root of much of the defense of sports drug users. Yes, U.S. drug policy is a matter worthy of serious discussion. Yet, even agreeing to decriminalization does not imply that current laws should not be enforced. How do we triage laws that should be enforced and those that shouldn't? Who decides? I'm a proponent of free trade but think that we should enforce standing restrictions (as Adam Smith did).
MLB had no explicit rules against these substances, so MLB or Hall of Fame voters should take no action.
Some rules are explicit, some implicit. These players not only knew that they were breaking federal law, but they broke the law with the specific intent of gaining advantage over their peers.
Fans don't care about drug use.
I'm a fan. I care. Yes, when I thought that McGwire and Sosa achieved their feats straight up, I cheered. However, when realized the likely role that drugs played in their accomplishments, it sickened me to see them (and others like them) standing in the same company as Mays, Aaron, Gibson, Koufax, and other heroes of the past. I don't think that I'm alone in these views. Yes, I tire of the media's oversaturation of this and other non-playing topics, but I'm also interested in identifying cheaters and getting substances away from the game (as much as possible).
Substances don't enhance performance.
While there is not a lot of lab work on this subject and observational studies (casual and rigorous) are subject to omitted variable and causality issues, the idea that HGH or steroids don't enhance performance seems a reach, at best. Not only did run-of-the mill players start hitting 50 homers, but players from the mid 1990s somehow discovered the fountain of youth. Plus, it has predictive content -- see my not-so-veiled reference to Roger Clemens in a 2005 post.
Drug use by players is a personal choice with no external consequences.
Even if we avoid the broader, societal consequences regarding imitation by youth that Sowell mentions, there is a moral hazard problem that the internal politics of the MLB and MLBPA have failed to address very well. The 2005 post addresses this issue.
My comments will, no doubt, generate some strong opposing views. Let me say that I realize that issues of fairness, aggregated beyond the individual level, get messy very fast. That's true whether the discussion relates to laws or simply organizational rules. MLB drug use and what to do about it retrospectively is no exception. I don't pretend to have all the answers, but I do think that the views of someone like Thomas Sowell gives weight to the idea that this is not just a media-driven problem.
Wednesday, December 12, 2007
Electronic Ticket (Re-)Sales
On Monday, sellers on StubHub were asking from $750 up to a rather comical $164,710 for tickets to the Ohio State-LSU game (the latter price is for a prime luxury-box seat). The season finale Giants-Patriots NFL game might be historic; on Monday, sellers on StubHub were offering tickets for $200 up to $26,000, depending on seat location or box quality. Once the NFL playoff pairings are known, scalper Web sites will come to life for those contests, too. The asking price is not always the selling price, of course. But bowl committees and NFL teams must be saying to themselves -- if these seats really are worth hundreds or even thousands of dollars on the free market, we should be the ones pocketing that scratch. How long will it be until professional teams cut out the middle person and simply auction off tickets for whatever the market will bear?Any day now, the NFL is expected to announce a deal to affiliate all its teams with one online reseller, probably Ticketmaster or StubHub, formally acknowledging reselling as legitimate and bringing the NFL an expected annual fee in the $20 million range. This might be just the first step in converting sports-ticket selling into StubHub World.If one thinks of tickets like shares of stock, it is unlikely that franchises will initially place 100% of each season's seats by an electronic auction mechanism. But what percentage will be "placed," and what percentage will be auctioned?
I think rich people in particular are willing to pay to sit in the same spot ("their" seats in some sense) near others that they recognize. The latter component may be modest, but it might also account for the some of the interest in prosecuting scalpers in the old days. Legal reselling increasingly puts that component at risk. This is a stretch, but one way of interpreting laws against scalping is that clubs didn't mind you selling tickets to your friends, just any old high bidder.
One can debate the purpose of anti-scalping laws, as the economic literature has done for some time without a clear resolution. But what is clear is that electronic exchange mechanisms are leading to the repeal of these laws. The rise and fall of scalping laws is an interesting question in political economy. Easterbrook's piece provides a few useful anecdotes in that regard.
Labels: ticket pricing, ticket scalping
Thursday, December 06, 2007
Threat Point - The Vikes
This week in Sports Economics I talked about the effect sports teams and sports stadiums have on their local economies (not much). That doesn't keep owners from trying to get public subsidies. The Star Tribune notes that Vikings owner Zigi Wilf seems to be publicly turning up the heat to get public funding for a new Vikes stadium.
"The Vikings and the NFL understand and respect the priorities and pressing issues facing the state, but at the same time, the stadium issue needs to be resolved in the near future," Wilf said. "Construction costs are rising significantly each year that we delay and there is an urgency to reach a solution."
Given the subprime mortgage crisis, might this not lower the rate of inflation of construction costs? But I digress.
The state's answer puts the project — a retractable roof stadium along with housing and business development on the Metrodome site — up against a tight deadline.
Sports economists agree: sports stadiums are not the boon of economic development that they are often portrayed to be and, thankfully, public money has not been as easy to come by in many instances. That's why some recent public financing packages include plans to have ballpark villages developed as a part of an agreement for public financing. Otherwise the secondary development is not likely to happen.
The development is unlikely to occur because the returns for the development do not justify private investment. Otherwise we'd see a lot more "spontaneous" economic development surrounding stadiums. In other words, the people who frequent stadiums don't really care all that much about shopping/bars/restaurants/condos etc. around ballparks. They want to go to the event, do what they do there (get their private benefits), get in their cars, and go home. So politicians are seemingly more resistant, thankfully, to giving subsidies just for stadiums by themselves. But package in some secondary development (which, if it draws any extra economic activity to the site, will probably draw it from elsewhere in the region) with the subsidy request and see if you can get the necessary votes.
But if private financing isn't forthcoming for the housing and business development, is it really that good of an investment for the government? In other words, what are the public goods associated with the ballpark villages?
Labels: economic development, NFL, stadium subsidies
Wednesday, December 05, 2007
MLB's Hall of Fame Shame
As executive director the players union, Marvin Miller single-handedly (in the sense of being a uniquely strategic and effective leader) won freedom of contract for major league baseball players by obliterating the odious "for life" interpretation of baseball's monopsonistic reserve clause. In doing so he erased much of the damage from one of the most bizarre and inexplicable Supreme Court Decisions in our country's history (The Federal League Case of 1922), breaking a logjam that subsequent courts and congresses could not breach.
More than any person I can think of, Miller merits a place in the Hall of Fame. Why is he not there? Pettiness, it seems. Helyar provides the background to this year's tally, along with commentary from Miller himself.
Miller's leadership reformed the reserve clause system. This led to a significant transfer of income to players from owners, who were ultimately forced to pay market prices. The owners responded with a twenty year long, Sisyphus-like ordeal of lockouts and strong-arm tactics in an attempt to turn back the clock in the labor market. Miller and the players were unfairly tarred by the media's brush throughout this period. Yet the game did not suffer from free agency, as economics implies. Indeed, the commissioner himself now proclaims the financial state of the game to be better than ever.When I called Miller at his Upper West Side apartment in New York on Monday night, he wasn't seething about the Hall of Fame vote. He was listening to the soundtrack of "Guys and Dolls" and letting his wife, Terry, handle the seething. But he, too, had a sense of deja vu.
"They seem to be the same kind of small-minded, vicious people as the owners were when I came in," he told me, though, ever the cool, rational man, he wasn't taking it personally."I'm only mad at myself," he said. "After the first time on the ballot, I should have just withdrawn my name from consideration. My judgment of my chances was, 'Never.'"
But Terry Miller and others talked him out of it. That first time, he drew 44 percent of the votes. And, indeed, he climbed to 63 percent the next time around, just 10 votes shy of what he needed for the 75 percent that would get him in.
Kuhn [MLB's commissioner and Miller's foil in the 1970s] made it onto only 17 percent of the ballots in the last round of voting conducted under the old process earlier this year.
Then the Hall of Fame changed the format. Instead of allowing all Hall of Famers to vote for "veterans" nominees, it created three new panels. Nominees in the "executive/pioneer" category were no longer being considered by 81 voters, but by 12, and that group is comprised primarily of former MLB executives.Voila!Kuhn, a longtime Hall of Fame board member, got 10 votes. Miller got three.
Vladimir Putin couldn't have done it better; Cooperstown couldn't look worse.
If there were ever a time to make peace between MLB, former commissioner Kuhn, and Marvin Miller, the Hall of Fame vote is a fit and proper place to do it. But MLB's executives have indeed succeeded in turning back the clock, once again cloaking their legacy in shame.
Tuesday, December 04, 2007
Italy's Head Start Program
UEFA chief Michel Platini and his fellow would-be regulators blame the foreign players in the Premier League, for "denying" places to English players. Refuting this is a fairly simple proposition: England's national team was mediocre well before the foreign invasion, and they still are. The difference is that the foreign players in the EPL (a) make the game more skillful and enjoyable to watch, and (b) raise the skill level of the English players who train with them.
Gianluca Viali, who played and coached at the highest levels in England and Italy has a different perspective.
Kids in Italy train the way professionals do. I went through it myself, both at my first club, Pizzighettone, and then when I moved to Cremonese at 14. In retrospect I think this is hugely important. A boy's first experience of organised football affects his vision of the game. And, for a kid in Italy, this means treating football as a job, something to be taken seriously - enjoyed, of course, but in a professional way.The lesson is that focused training at an early age matters. Viali recognizes the positives and negatives in the two football cultures, and offers a nuanced comparative analysis in his piece. It may worth purchasing his book, Italian Job
The English boy's first experience of organised football is different, often in the context of a school team. In Italy, there is practically no football in schools but there are plenty of 'football schools'. For English kids football is an extension of school - the 'fun' part. Nobody is forcing the young Italian boys to join their local football clubs, but once there, they immediately adopt a 'professional' - some might say regimented and quasi-military - attitude to it.
, from which this excerpt is taken. One thing Viali doesn't do, unlike Platini, is employ half-baked pseudo-analysis in an effort to change the economic rules of the game.
