Friday, June 26, 2009

Holders of Season Tickets Are Having Second Thoughts -

Is it the economy or the product? Either way the teams (and likely MLB in general) have some work to do!

Teaching point: all too often students ask why should the company care if the stock price in teh secondary market goes up or down. The standard answer includes a mention of what happens when they want to sell more shares in a SEO. This is quite similar. Here the article focuses on the secondary market for baseball tickets, but also shows that this secondary market impacts the primary market as well (as evidence by the teams cutting prices etc).

From the NY Times:

Holders of Season Tickets Are Having Second Thoughts -

"The weak resale market has Goldman and a growing number of Mets and Yankees season-ticket holders considering whether to drop their seats next year, or to switch to a plan with fewer games or cheaper seats. The risk of getting stuck with expensive tickets that are hard to resell, they said, is just too high in a weak economy."

and later

"If I can’t move these tickets, I can’t afford to be stuck with them or take a loss,” said Mr. Coleman, who said he was getting 40 percent less this year for tickets to weekday games that he resold. “The proof is the secondary market. If you don’t have people willing to buy tickets at these prices, I hope the message gets across to the Yankees and Mets.”"

Anecdotally, I went to Citi Field for the first time this past Sunday and will definitely agree there were MANY empty seats and purchased the tickets for about 25% under face value in a "Secondary market" transaction and even then wonder if I got my money's worth. Yes the park was nice, but the game itself was not very good. It rained, the game was much too long of game (a MoneyBall result? Must every player try and work a full count?) and they lost.

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