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Connected: Major Leagues keep ticket fees down
Thursday, April 07, 2005

The last time I wrote about Major League Baseball's online ticketing strategy, I complained about a system that penalized fans who purchased inexpensive seats via the Web by saddling them with large convenience fees. Times have changed, and baseball has made great strides in its efforts to bring value to fans via the Internet.

MLB has updated its Web pricing strategy, and put in place a number of valuable fan-friendly technologies. It also has set itself up for a sophisticated fan experience -- both online and at the ballpark -- by developing technology and even buying a ticketing company.

The previous ticketing model charged a per-ticket fee when a fan bought via www.mlb.com for any of the 30 major league clubs. The fee was the same whether the ticket price was $9 or $160; and there was no cap on the fee. While the new model still has a per-ticket fee, the way it is implemented makes the fee much more palatable. The number of dollars per ticket has been dropped substantially; and a small order processing fee has been added to each order. According to Bob Bowman, president and chief executive officer of Major League Baseball Advanced Media, the league also has capped the total convenience fee on any online purchase.

The fees now vary depending on the price of the tickets; and the league has worked with the individual clubs to determine the fees that are most appropriate for the market. For instance, in Pittsburgh, there is a $2 convenience fee attached to online purchases of $9 Pirates tickets (down from $4, which is 44 percent of the ticket price); and a $3 convenience fee attached to $26 tickets. In Boston, if you can find seats to a Red Sox game, the convenience fee starts at $3.50. Each transaction in Pittsburgh also adds $3 to process the order; while the processing fee is $7 in Boston.

According to Tim Schuldt, the new vice president of marketing and sales for the Pirates, his message to his ticketing partner is: "I don't want you to raise fees. I want you to help me sell tickets."

In a small market such as Pittsburgh, that's a key decision criteria. When a fan goes to www.mlb.com, he'll have plenty of seats to choose from. For many games, he'll be able to choose from 10 or more price levels -- as low as $9 for a grandstand seat, to $160 for the exclusive Home Plate Club. Each additional fan in PNC Park, now the smallest ballpark in the majors, is an opportunity to sell food and souvenirs.

The Red Sox, by contrast, are virtually sold out at Fenway Park. During the off-season, the ball club added seating capacity, lifting Fenway above PNC Park in number of seats. Yet, buying seats online for the Red Sox yields few ticket choices. Even in the least popular games, an online buyer is likely to find only one type of seat (if he can even find two seats together). So the club needs to find ways to increase revenues without attracting more fans to Fenway.

According to sports and entertainment business consultant Tom Rooney, the convenience fee has traditionally provided extra profit beyond the ticket price that the sports franchise splits with the ticketing agency.

In Major League Baseball, any profit coming from convenience fees is subject to revenue sharing. Last year that amounted to 15.3 percent of ticket sales.

MLB recently purchased www.tickets.com and plans to use it to further enhance the ticket buying process and keep fees down. According to MLB's Bowman, its strategy is to "keep fees low, sell more tickets, innovate constantly."

First published on April 7, 2005 at 12:00 am
David Radin is a consultant whose daily nationally syndicated radio show can be heard locally on XM and Sirius. You can sign up for his tip letter, contact him and find an archive of his previous columns at www.MegabyteMinute.com.
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