O’s ticket price hike is wrong message to the fan base

January 19, 2010 | Drew Forrester

In case you missed it, and based on the clandestine manner in which they released the information you probably did, the Orioles are raising their “day of game” ticket prices for 2010.

This all came out last Friday, conveniently launched the day before the Ravens played the biggest game of the last three years or so.  It doesn’t take a genius to figure out the reasoning behind that decision:  bury the story on a Friday while the city is involved in a purple inferno and hope it causes the least amount of furor.

The story about raising game-day ticket prices was originally hand-delivered to the Baltimore Business Journal because they’re not a sports publication and the content would be more about economics and less about the manner in which the message was delivered and the decision to raise the prices in the first place.

From there, The Sun picked up the story on Friday and basically re-wrote an Orioles press release.  It must be good to have the daily newspaper in your back pocket.

Four days have since gone by and no one in town is crowing about the ticket price increase.  Let’s admit one thing:  The O’s decision to sneak this announcement out to the masses last Friday worked to a tee.  No one in town seems to care.

But the football season in Baltimore has ended and we now turn our attention to the baseball team in town.

And the first order of business – for me, anyway – is to dissect the ticket price increase, comb through the truth and figure out the real reason for doing something that appears to be bad business.

I will say from the start that the concept of getting your customer to pay for a product in advance is a good idea.  And the way you half-force a customer to pay in advance is by giving them a price break for doing so.

The BEST sales formula in America that follows the guideline of “buy early, save money” is the airline ticket industry.  If you buy an airline ticket right now for a flight in July, you’ll pay much less than if you buy the ticket in June.  That’s the best method.  It rewards the customer who pre-plans and forks over their money in advance.

The model for sports franchises that loosely follows that of the airline industry is season ticket sales.  The Ravens are a perfect example of how beneficial season ticket sales are to a franchise.  They sell roughly 68,000 season tickets per-year, hold back another 3,000 or so for general sale in the summer, and sell every seat to every game.

But having the seats pre-sold, particularly for an outdoor event where weather can dictate someone’s decision to attend (or not), is imperative for both revenue-generating and revenue maximizing.

Think of how many people in Baltimore would have gone to the Bears game on December 13 had they not already owned tickets.  With two feet of snow on the ground, would anyone have “walked up” to the stadium that Sunday morning to buy tickets?  Of course not.  But because 70,000 people in Baltimore already owned tickets to the game nearly everyone gave it their best effort to make it to the stadium by 4:15pm.

So it makes sense for the Orioles to want people to buy season tickets – or mini-plans – in advance.  It accomplishes a couple of things for them.  It gets them winter revenue at a time when they’re not bringing in any real cash.  It also gets potential discretionary income committed by the customer and that’s always important when you’re involved in a seasonal expenditure.  In other words, if you buy $500 worth of baseball tickets in January, you’re likely to not be a candidate for the just-announced company cruise that goes on sale the third week of April.  “Gee, I’d love to go on that cruise with you guys, but I just don’t have the money.  I already pre-paid for my baseball tickets and that’s my summer fun money.”

Lastly, and this, unfortunately, is VERY critical when it comes to the Orioles.  By pre-purchasing your tickets in the winter or early spring, you’re also obligating yourself to attend the games in July or August when the team is already out of the playoff race and the games are nothing more than statistical data for the players on the field.  If you DON’T buy those tickets in the winter, you’re more apt to say – in August –  “Why would I go down there tonight on a 95 degree night and watch them lose to the Rangers again and fall 18 games below .500?”

So let me again stress this point: Getting people to buy their tickets in advance is a good thing.

Now, though, we move on to other side of the coin and talk about the reasons why the Orioles were wrong for raising their game-day ticket prices.

Here’s the official series of quotes from O’s Director of Communications, Greg Bader.

“In our mind, it (raising the walk-up price) accomplishes a couple of things. It rewards fans who buy in advance and make a commitment ahead of time to come to the park, and it has them make the commitment to come to the park,” Bader said.

Fair enough.  I pointed all of that out above.  When you’re an organization whose attendance has dropped roughly 40% over the last five years, you need to go out of your way to get people to attend the games.

The other element of their decision centered around overall pricing.  The average ticket at Camden Yards costs “about $22 or $23. Last year, the Major League Baseball average was $26 to $27,” Bader said. “So we will be under the Major League Baseball average again.”

All of that logic seems reasonable to me until you really start to review where the Orioles have been and where they’re going.

That’s when it starts to get a little fuzzy.

For starters, here’s how you know the game-day ticket price increase is wrong.  For sure.  Ready?

Orioles Hangout is outraged.

That’s when you know the Orioles are wrong on something.  On the very rare occasion that someone over at the OH takes exception with the club, they’re almost always banned by the web-site and removed from circulation.  I should know…they banned me for “self promoting” an Orioles minor league player appearance on my show.  But in this case, because nearly EVERYONE on the Hangout thinks their new game-day ticket decision is insane, you’re getting the real version of what the “true” fans of the team think.  And the powers-that-be at OH can’t ban everyone who contributed to the 12-page thread pissing on the team for their new ticket price policy or they wouldn’t have anyone left to read the site.

That’s how you know, for sure, that what the Orioles did last Friday was wrong.  Even the apologists at The Hangout are down on them.

Let me now get back to the reason why I think it’s wrong.

More than anything, it’s wrong because the Orioles haven’t done anything over the last five years to justify charging people MORE money to attend their baseball games.

They haven’t.  Period.

Their cost of business might be going up on an annual basis, but that’s NOT because their expenses are going up.  They’ve reduced their player payroll by nearly $25 million per-year (it was $93 million in 2007 and $67 million a year ago) since Andy MacPhail took over.  They’re MAKING more money now than they’ve EVER made.

And that’s their right to make money.  It’s every company’s right to generate a profit.

But if they’re raising ticket prices to generate additional revenue because in the last few years they’ve fallen short of their cash goals, that’s THEIR fault.  It’s not the fault of the fans, their sponsors or the community at large.

The Orioles haven’t done anything in the last five years to warrant ANY kind of ticket increase.  That’s a fact.  And what the other teams charge for their tickets and what the average price of those seats are…that has NOTHING at all to do with the state of the Orioles franchise.  None.  Nada. Zilch.  Any attempt by the team to try and connect what everyone else in baseball is doing with their tickets is nothing more than a smoke screen to protect the truth.

And the truth is the Orioles should first do something of substance to warrant a ticket increase and then follow suit and charge more money.

Charging more money – for any kind of ticket – and not being transparent enough to talk about it with the fan base and the media is one of the reasons why 40% of the people who used to attend games no longer go.

Speaking of money…just how much will the Orioles possibly generate in 2010 based on the new ticket price hike?  That’s pretty easy to figure out. My bird-in-a-tree tells me the team’s average daily walk-up sales last year was just under 3,100 tickets per-game.  About 50% of those (roughly) 240,000 tickets were sold for Friday night and Sunday afternoon home games.  If we use the figure of 240,000 walk-up tickets last year and just duplicate it for 2010, we find that the club will generate approximately $480,000 in additional revenue this coming season (240,000 x $2.00 per-seat).

So let me get this straight.  A baseball franchise that has reduced its payroll by $50 million (in total) over the last 2 years or so needs $480,000 that badly?

Really?  $480,000?

I could see if they were raising tickets in an attempt to generate, say $4.8 million.  That’s a lot of money.

But sticking your fan base with a ticket price increase to grab another half-million dollars?

It doesn’t make sense.  None at all.

The sad by-product of the whole scam is that no one in town cares.  The media certainly doesn’t give a damn.  About 70% of the daily media folk in town are essentially half-employed by the team either via the web, TV or radio.  So you know those people aren’t going to raise a stink about the ticket price increase, even if they believe it’s wrong.

And with that, maybe it’s time to acknowledge that the Orioles are actually WINNING, not LOSING this public battle of perception.

Other than the station “with one listener” (WNST), no one in town holds them accountable.  Ever.

So when they pull a stunt like Friday’s top-secret ticket price hike, it goes by largely unnoticed by everyone in town.

Raising ticket prices when you’ve done nothing to warrant doing so and then sending out the message through the city’s business paper on a Friday is all I needed to see to know that nothing has changed at The Warehouse.

I’m still dealing with the same bush league treatment from all of the suits in charge.

I still can’t get a return call, a return text or a return e-mail.

Over the last five days, I’ve tried to reach someone in their PR department to discuss the spring training media credential situation, as I would – again – like to head down to Florida and spend some of WNST’s money by covering the team in Sarasota.  Oddly enough, no one over there responds to my e-mail inquiries, but I sure as hell got the “Luke Scott signs his contract” e-mail press release earlier today — from the same folks who have been dodging me for the last week.

But that’s MY battle to fight with those charlatans.

Now, though, the fans have yet another reason to fight the team and it shouldn’t be that way.

The Orioles should be fighting for ways to get the fans to come back to the ballpark.

Raising ticket prices – no matter how “insignificant” the hike might be – when you’ve done nothing to warrant the increase is not helping you bring people back.

What they SHOULD have done – or, at least, COULD have done – would have been to sign Mark Teixeira last winter and give him that unthinkable $25 million contract and then institute an across-the-board ticket price hike in 2010 to help offset the bulging salary costs of the organization.  I think most fans would be OK with handing over an extra $5 bill to see someone like Teixeira play once they saw for certain the club was going to make a legitimate effort to improve.

We haven’t even touched the subject of the MASN TV deal yet and how that $30 million check written to the Orioles, by themselves, should more than make up for the $480,000 they’re trying to raise in 2010 by once again asking the fans to pay for their downturn.

And none of the media in town will talk about the big white elephant in the room except us, here, at WNST.  “What happened to improving the team by spending money on free agents, with that cash derived strictly from the team’s regional television network”?

Buy a few big name players and then raise the prices if you want.  It would be expected and understood.

You haven’t had a winning season in 12 years and raising the ticket prices is somehow acceptable because “we need to stay in line with the other clubs in major league baseball”?

Here’s a concept:  Try staying in line with the Red Sox, Yankees, Angels and Phillies in the standings.  That would be a welcome change.

All the marketing lingo and buzzwords about average ticket price can’t change the fact that the fans shouldn’t be responsible for the depths of the Orioles revenue fall.

Even the Orioles Hangout folks know that.

When they stop apologizing for the team and take them to task, you know it’s all seriously gone wrong.