Player salaries really didn't start to take off until the TV contracts got big and the free new stadiums.

In Lords of the Realm it is explicitly stated that the huge new TV contract (in I think 1989) is what caused the salary boom that followed.

Sure, but there's a point where the targeting becomes insanely focused on only a microscopic percentage of the population.

I actually don't see any real indication that sports teams did market to wealthier demographics in the 70s and early 80s; if they did, it was miniscule compared to how much it's done today.

One of the main ways you do that is by setting aside expensive areas, pricier than other areas, so as to promote an air of "exclusivity." That's what the areas within the moats are about, that's what the "clubs" at six or seven areas of Citi Field and NYS are about, that's what the chairback and club seats at Michigan Stadium are about. To the demographic we're talking about, the act of spending the money necessary to obtain these faux-exclusive items is self-validating, and that's why the marketing works. That's its essence.

Compare this to the stadiums of the more egalitarian era. Tiger Stadium had four pricing tiers, as did many stadiums. The same four or five dollars that got you the box seat out low, near the foul pole got you the box seat ten rows behind home plate. No club seats, nothing "exclusive" that wasn't available to the guy who worked at the GM auto body plant if he was lucky enough to beat his social "better" to the ticket window, nothing to make the social climber feel as if he'd somehow "made it." Those inclined to conspicuously consume, to achieve through consumption, had literally no outlet for that urge.

Actually all I've ever claimed is that payrolls were one cause of increased ticket prices, more perceived than actual...

Actually ... doesn't this completely undermine what you've been saying? "More perceived than actual?" Haven't I been arguing that, although high salaries are perceived to lead to high ticket prices, this isn't actually the case?

"More perceived than actual." No kidding! I'm not sure whether I should congratulate you for seeing the light or turn on the Irony Siren.

Astrodome with its luxury boxes opened in 1965. The Red Sox installed suites in the early 80's and then some more in the late 80's. Yankee Stadium had luxury boxes added in 1974. All of the cookie cutter stadiums that popped up in the 70's had luxury boxes.

Astrodome with its luxury boxes opened in 1965. The Red Sox installed suites in the early 80's and then some more in the late 80's. Yankee Stadium had luxury boxes added in 1974. All of the cookie cutter stadiums that popped up in the 70's had luxury boxes.

Yes, a handful of stadiums had luxury boxes, way the #### up there where you couldn't see the game very well and no one could see you.(**) Most were bought or leased by corporations.

(**) It's kind of hard to conspicuously consume when no one can see you.

A handful?

Most were bought or leased by corporations.


You act like this supports your view. It does not. It is proof that your view is incorrect.

"One of the main ways you do that is by setting aside expensive areas, pricier than other areas, so as to promote an air of "exclusivity."

Yeah, teams are doing this. In the hypothetical world where player salaries are still kept low due to the reserve clause, there is no reason this could not still be the case. You'd have to imagine a world where the elitists actually cared what the help makes, instead of the world we live in where the elite can f**k the economy, get bailed out, keep their ridiculous bonuses, and then turn around and blame everything on public sector union employees. And get a sizable number of non-wealthy to go along with their ideas.

Now there is no way the reserve clause could have lasted. I agree with that, but pointing that out only means you don't know how to think about hypothetical questions.

Actually ... doesn't this completely undermine what you've been saying? "More perceived than actual?" Haven't I been arguing that, although high salaries are perceived to lead to high ticket prices, this isn't actually the case?

"More perceived than actual." No kidding! I'm not sure whether I should congratulate you for seeing the light or turn on the Irony Siren.

If you go back through every word Andy has posted in this thread, you'll see that you've missed somewhere one or two words that Andy will use to argue that you've misunderstood his position. His typical m.o. is to come back and extensively quote from the discussion, bolding one or two random words that you must be overlooking, since everyone who argues with Andy magically seems to be lacking in reading comprehension skills.

I also understand the need of those who want to promote class warfare to try to show the middle class lot has not improved over time, but LOL. look at the cars they drive, size of houses they live in, etc, since the 1969s, and it ain't debatable. It's extremely difficult for economists to adjust inflation estimates for technological progress, and certainly makes it easy for demagogues to manufacture earnings estimates to prove whatever they want.

I don't understand the need of those wanting to promote class warfare by claiming class warfare who then make easily debatable claims while claiming they're not debatable. Look at the quality of houses built since 1969, and the quality (the noise, the density, the commuting times, fer instance) of suburban life. Look at the hidden environmental cost of suburban life. Look at the number of people in the middle class who can only afford manufactured and mobile homes.

A-Rod's the outlier, but he's also a stand-in and a symbol for what many fans see as the cause of those ticket prices. Do rock fans make similar types of value judgments about their favorite musicians?

Actually, yeah. There are some gouging artists whose work I have no problem pirating.

I seriously doubt if even you and your lawyer's income---never mind someone making $30 K a year---would be wanting to give your money to that sort of an owner, no matter how good a product he put on the field.

Except people make these sorts of transactions all the time. Labor's constantly getting screwed in all facets of the economy and, newsflash: no one much cares.

That may be the mother of all non sequiturs. As if what happens to someone else (a worker you've never met and who may not be from a group you're overly fond of) is comparable to what I described (skyrocketing prices of tickets that you---not someone else---have to pay, with salaries remaining the same as they were [in adjusted dollars] at the end of the reserve clause era.

The grandmother of all non sequiturs, perhaps, given that labor (depending on your definition) makes up at least one hundred million people in the US alone. They care greatly. Your ability to claim "no one much cares" tells us all we need to know about how you view the world.

So, I'll bet some coin that Brian C. is Nieporent's sock puppet (notice how David cleverly makes a token appearance in the thread). I mean, how likely is it that there's more than one real, live human being who'd be willing to go toe to toe with Andy for several hundred posts? This is turning into the BBTF version of the Thrilla in Manilla.

Player salaries really didn't start to take off until the TV contracts got big and the free new stadiums.

McCoy, offhand, do you know when public financing of MLB stadiums became the norm?

They care greatly. Your ability to claim "no one much cares" tells us all we need to know about how you view the world.

Really? Maybe I'm misunderstanding you, but lamenting that "no one cares" that labor is "constantly getting screwed" makes me come across as unsympathetic to labor? Do I seem to you like someone who chooses words so carelessly that I'd use a loaded term like "screwed" if I liked the way our economy is functioning?

I mean, how likely is it that there's more than one real, live human being who'd be willing to go toe to toe with Andy for several hundred posts?


Do you really have Andy that high up on a pedestal?

McCoy, offhand, do you know when public financing of MLB stadiums became the norm?

50's? 60's?

You're still missing the point. Labor cares that labor's getting screwed. The people that are getting screwed care about getting screwed. Your dismissal of them as though they were some kind of generalized talking point makes your worldview clear. If that's not the case, then, yes, you're using words carelessly.

I mean, how likely is it that there's more than one real, live human being who'd be willing to go toe to toe with Andy for several hundred posts?


Do you really have Andy that high up on a pedestal?

I'm impressed by his endurance, and find his grasp of history fascinating, though I'm truly baffled by his willingness to endlessly engage a handful of posters here. I can think of literally hundreds and hundreds of things I'd rather do than, for instance, spend an evening, if not days (and the equivalent of months, probably), battling it out with someone such as Ray. I don't mean this at all unkindly: I simply cannot understand why someone would do that.

edit: in fairness to Brian, and while I haven't read everything he's posted, he at least seems to argue in good faith. That's the opposite of Ray's M.O., which is why twice a month threads he inhabits devolve into half a dozen posters laughing at him and calling him a troll.

Your dismissal of them as though they were some kind of generalized talking point makes your worldview clear


Aren't you generalizing as well?

Labor cares when they are getting screwed. They don't care when some other labor gets screwed. Individuals care about themselves and unions care about themselves. Individuals don't care about the kid flipping burgers at their local fast food shop and unions only care about other people if it is to their benefit. Though that of course applies to individuals as well.

Christ.

edit: in fairness to Brian, and while I haven't read everything he's posted, he at least seems to argue in good faith. That's the opposite of Ray's M.O.,

I'm reminded yet again of a couple weeks ago, when you argued that a 130 game season simultaneously showed Moises Alou's durability and ARod's lack thereof.

Interesting demographic extremes in the 2010 poll: Forty-five percent of African-Americans picked pro football as their favorite sport, the most of any group. Six percent of African-Americans picked baseball as their favorite sport; the least of any group. NASCAR is the favorite sport of essentially no African-Americans. I've unfortunately relegated myself to an area where my favorite sport has little appeal; a mere four percent of "Easterners" picked college football. They're missing a great party.

Setting aside the methodological problems noted by Brian C, your conclusion doesn't follow. The problem with the poll (and the many others like it that the media touts) is that it asks a stupid question. What does it mean for X to be one's favorite sport? Does it mean that one doesn't like the sports that aren't one's favorite sport? No. Indeed, it doesn't even mean the sport isn't the most popular. (If 50% of people like baseball 1st and basketball 2nd and hate football, while the other 50% of people say football 1st, basketball 2nd, and hate baseball, then basketball will rank last in a poll like this even though more people like it than any other sport.)

Actually all I've ever claimed is that payrolls were one cause of increased ticket prices, more perceived than actual, and that 2011 ticket prices couldn't exist with 1975 payroll levels, for reasons I've spelled out many times by now and you've contested with equal persistence. The deus ex machina line simply referred to the thought that payrolls alone aren't the cause of ticket price increases.

That's a pretty amazing set of sentences. It manages to misuse the terms "perceived," "actual," "deus ex machina" and "cause," in self-contradictory ways. You don't really understand your own argument, do you?

#281 As Voros and others (in particular Roger Moore) pointed out at the time I did the study this is based on you can't be certain about the way the causation arrows flow. Further, payroll is backward looking. That is to say that it's more closely related to how well the team played last year (which is what Zimbalist used as the proxy for the perception of team quality in his study) than how well it will play in the upcoming season.

Voros and Roger didn't like my decision to include payroll. But it is worth noting that Dennis Shea was fine with the decision. And at the time he was an associate professor of Economics.

All I can say with confidence on the subject is that fire sales are uniformly revenue disasters while big money free agent signings are uniformly good for revenue independent of other measures that predict marginal revenue.

Your point is well taken. But regardless of how one looks at the team quality versus peception issue it becomes fairly clear that how good the team actually is matters less than you might think. Probably because the casual fan is critical to marginal revenue and the casual fan won't notice how good a team actually is until moderately late in the seaon. And for quite some time payroll has been about the only thing mentioned by so many of the talking heads when discussing a team's prospects for the season to come that I'm pretty confident that it's become a proxy for team quality to the public at large.

All I can say with confidence on the subject is that fire sales are uniformly revenue disasters while big money free agent signings are uniformly good for revenue independent of other measures that predict marginal revenue.

I'd be interested to see something like change in payroll from year N-1 to year N measured against change in revenue from N-1 to N. (I suppose you might have to convert the other variables to changes as well - did you make the playoffs 2 years ago and miss them last year, and so forth.)

#320 Sounds interesting. Go for it. The data you need for the study isn't hard to find. I'd suggest reading Zimbalist (Baseball and Billions) before starting (if you haven't already) His methods and explanations of those are a great place to start any serious look at revenue.

One thing that profoundly influences revenue that isn't covered by Zimbalist is a new stadium. A decade ago they were worth ~40 million a year in the early years (with the effect weakening every year until it just disappears.)

So, I'll bet some coin that Brian C. is Nieporent's sock puppet (notice how David cleverly makes a token appearance in the thread). I mean, how likely is it that there's more than one real, live human being who'd be willing to go toe to toe with Andy for several hundred posts? This is turning into the BBTF version of the Thrilla in Manilla.

Look, I've got plenty of fans here (smile) who seem to thrill in misrepresenting my position and then slaying the Great Straw Horse. But Brian's nobody's sock puppet, and if he's really Nieporent in disguise he sure has fooled me. I think he's wildly wrong on that one narrow hypothetical point we've been arguing about, but other than that he isn't saying anything that I'd take all that much issue with.

And I keep it up for the same reason that many others do: I like to see all my assumptions challenged on a routine basis by people I respect even when I sometimes don't act as if I do. It can be mildly annoying at times when Ray and Nieporent cherry pick what you've said and then duck like the proverbial girl when you confront them about it, but that goes with the territory, and anyway, it sure beats the hell out of being a on some left wing website where everyone wants to play Holier Than Thou. At least the libertarians here have a bit of personality, deranged as it sometimes may be. I might even leave them a poster or two in my will.

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Labor cares when they are getting screwed. They don't care when some other labor gets screwed.

Finally something I can agree with McCoy on, although I sure wish I didn't. If what he says hasn't so often been the case, the IWW wouldn't be nothing but an historical curiosity and you wouldn't have so many white workers voting Republican unless they thought abortion or Jesus was the # 1 issue confronting the country.

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offhand, do you know when public financing of MLB stadiums became the norm?

AFAIK the first publicly funded MLB stadium was Cleveland's Municipal Stadium, which opened in 1932. After that you had Milwaukee's County Stadium in 1953, Baltimore's Memorial Stadium in 1954, Kansas City's Municipal Stadium in 1955, and then in the 60's it really took off. After Yankee Stadium in 1923, I don't think that other than Dodger Stadium in 1962 there was a privately funded stadium until the 90's, and even Dodger Stadium was kind of a ringer, given the sweetheart deal that O'Malley got on that prime real estate. I doubt if there's been a genuinely and fully "private" stadium since the days of Jake Ruppert, although I could certainly be mistaken, and this is all just off the top of my head.

Actually all I've ever claimed is that payrolls were one cause of increased ticket prices, more perceived than actual, and that 2011 ticket prices couldn't exist with 1975 payroll levels, for reasons I've spelled out many times by now and you've contested with equal persistence. The deus ex machina line simply referred to the thought that payrolls alone aren't the cause of ticket price increases.

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That's a pretty amazing set of sentences. It manages to misuse the terms "perceived," "actual," "deus ex machina" and "cause," in self-contradictory ways. You don't really understand your own argument, do you?

Certainly a lot better than you evidently do. One can easily think that payrolls are one cause of increased ticket prices, while at the same time also thinking that their role as a determinant is exaggerated in the public perception. You're free to believe that 2011 ticket prices could co-exist with 1975 payrolls, but that's not my problem.

a handful of stadiums had luxury boxes, way the #### up there where you couldn't see the game very well

No kidding. I once won a luxury-box seat at the Vet by sending a boxtop in to a radio show or some such thing. Way up in left field, and you might as well have been lashed to a tower of the Walt Whitman Bridge in terms of distance from the field. Also, the "luxury" consisted of a swivel chair bolted to a chipboard/formica table.

Things have changed, for sure. The boxes at the Ballpark feature some degree of actual luxury. Those at Cowboys Stadium are insanely decadent, as you might imagine (I have only been in them on the tour, never for a game). It's fascinating how different Cowboys Stadium is from the Cotton Bowl (which is still in use, if barely). As several posters above noted, the old idea of a stadium was that everyone could see everyone else, and be exposed roughly to the same conditions (in Texas, lethal heat) as everyone else. I don't actually agree that the point of the newer luxury boxes is conspicuous consumption; most of them have a kind of ultra-recessed, one-way-glass feel more like the headquarters of a Bond villain than a box at the opera. One of the few things I like about George W Bush is that he'll sit next to the dugout with Mr Ryan and enjoy the game in the open air like any other fan. True field-box seats at baseball parks (like courtside seats at basketball games) still have both cachet and visibility associated with them.

Edits to reduce incomprehensibility

You're free to believe that 2011 ticket prices could co-exist with 1975 payrolls, but that's not my problem.

I don't believe they would co-exist. I think we differ on what is the cause and what is the effect. My position is that higher ticket prices cause payrolls to rise. When players are free agents it is easy to see this in action, teams make a lot of cash, the owner says the team can spend more to be competitive, and the GM obliges by spending this on players. Wisely in come cases, not so wisely in others.

If free agency were not there, players would hold out, or competing leagues would form. All of this happened historically when players felt they weren't getting their fair share.

So what causes ticket prices to rise? They rise because fans are willing to pay the extra amount. We see that baseball fans are come from the wealthier families in the country. It's no secret that the incomes - especially the after tax incomes - of this group have increased more than overall income. We have seen much more of an increase in disposable income for wealthy baseball fans than what you'd get if you look at the increase in GDP, or inflation.

You're free to believe that 2011 ticket prices could co-exist with 1975 payrolls

We've already shown that they actually do, in college football and college basketball and Major League Soccer. They're all structured with a single entity keeping player compensation low, but charge for tickets what the market will pay. Your argument basically consists of pretending that there is no relevance or comparison between those sports and baseball, as if somehow a shorter season or different sized ball invalidates the entire economies of the sports.

You're free to believe that 2011 ticket prices could co-exist with 1975 payrolls, but that's not my problem.

I don't believe they would co-exist. I think we differ on what is the cause and what is the effect. My position is that higher ticket prices cause payrolls to rise.

Why can't the two feed off each other?

There's never been any sort of mathematical relationship between payroll and ticket prices, and it's also obvious that signing a megastar can be, and is, looked upon as an investment as well as an expense. But when that investment is made, its cost has to be recuperated, and one of the ways that's done is in the form of higher ticket prices. The argument here seems to be that it's purely a correlation rather than a cause, but that seems like pretty much of a stretch when you've got a player whose signing jacks up your payroll by double digits.

Payrolls aren't the only convenient prop for raising ticket prices, and in the past 15 years the owners have had new stadiums as an even better one. But I fail to see the logic that dictates that while megasalaries can't possibly cause ticket prices to rise, a new stadium can't just as easily be reduced to a mere "correlation". By this logic, if owners could have jacked up ticket prices just as easily without having increased their payrolls by well over thirtyfold, then they could have also jacked them up while still playing in RFK, the Metrodome, and Cleveland's Municipal Stadium. And there's the second impossible thing you can choose to believe before tomorrow's breakfast.

Of course you can easily say that new stadiums help create demand, and that they're an "investment". True enough---but you can also say that about the signing of a new megastar free agent. I'm not sure what makes thirtyfold plus payroll increases exempt from being named as at least a co-respondent in the case of rising ticket prices, one among many, while an abstract concept called "demand" shoulders all the blame.

If free agency were not there, players would hold out, or competing leagues would form. All of this happened historically when players felt they weren't getting their fair share.

There's little support for that in history---the Federal League went broke after 2 years and no other competing league in the 20th century ever got off the ground---but there's also little reason to believe that the last 36 years wouldn't have been that much different even if the Seitz had ruled for the owners.

So what causes ticket prices to rise? They rise because fans are willing to pay the extra amount. We see that baseball fans are come from the wealthier families in the country. It's no secret that the incomes - especially the after tax incomes - of this group have increased more than overall income. We have seen much more of an increase in disposable income for wealthy baseball fans than what you'd get if you look at the increase in GDP, or inflation.

That's certainly a huge part of what's been going on, but it's also because by flaunting their willingness to spend on payroll, teams have collectively branded themselves as a "premium" entertainment product. Whether baseball could have pulled this off while they were still paying their premium players 1975 salaries is something I guess we'll just never agree on.

You're free to believe that 2011 ticket prices could co-exist with 1975 payrolls

We've already shown that they actually do, in college football and college basketball and Major League Soccer. They're all structured with a single entity keeping player compensation low, but charge for tickets what the market will pay. Your argument basically consists of pretending that there is no relevance or comparison between those sports and baseball, as if somehow a shorter season or different sized ball invalidates the entire economies of the sports.

And your argument consists of pretending that telling the alumni that their tickets help support both their teams and their alma mater in general is no more resonant to college fans than a baseball owner telling his fans that his prices have had to go up by over thirtyfold in order to pay off his last six wives.

Payrolls aren't the only convenient prop for raising ticket prices, and in the past 15 years the owners have had new stadiums as an even better one. But I fail to see the logic that dictates that while megasalaries can't possibly cause ticket prices to rise, a new stadium can't just as easily be reduced to a mere "correlation". By this logic, if owners could have jacked up ticket prices just as easily without having increased their payrolls by well over thirtyfold, then they could have also jacked them up while still playing in RFK, the Metrodome, and Cleveland's Municipal Stadium.

No, no, no.

I have certainly been willing to agree that acquiring a new player boosts demand, which may in turn lead to higher ticket prices. My point is that the salary of the player does not lead to demand. Acquiring a good, well-known player will lead to the same increase in demand whether he was signed as an expensive free-agent or or acquired through a trade with the other team pitching in salary relief or brought up through the farm system and making league minimum. Thus, a high salary, if that is the case, is a correlating factor, because you can have the same result with a suitably talented and/or hyped low-salary player. The constant - and causal factor - is that people are willing to pay more to see this player.

And so, yes, of course, a new stadium leads to increased demand. But the cost of the ballpark would be basically a correlating factor (let's assume, for the sake of argument, that teams pay for their ballparks, of course). Pittsburgh, for instance, drew more fans in the first year of their ballpark, even with a smaller capacity, than Cincinnati did in the first year of theirs. But Pittsburgh's park actually cost less. Does that mean that cheaper ballparks drive demand? Of course not - it just so happened that way in this instance. Miller Park opened the same year as PNC, but the Brewers drew more with a more expensive park.

It's just not a causal factor; sometimes there's correlation and sometimes there isn't. Same for player salaries.

Why can't the two feed off each other?

Because there's no mechanism by which higher salaries would cause higher prices.

Payrolls aren't the only convenient prop for raising ticket prices, and in the past 15 years the owners have had new stadiums as an even better one. But I fail to see the logic that dictates that while megasalaries can't possibly cause ticket prices to rise, a new stadium can't just as easily be reduced to a mere "correlation". By this logic, if owners could have jacked up ticket prices just as easily without having increased their payrolls by well over thirtyfold, then they could have also jacked them up while still playing in RFK, the Metrodome, and Cleveland's Municipal Stadium.

That is not remotely "this logic." (Well, your dopey logic may be the same, but it's not remotely right in this case either. The new stadiums do not serve as a p.r. excuse for the owners to raise ticket prices. The new stadiums increase demand, because they're nicer and provide a better experience, at least for casual fans. The owners could not "also have jacked them up while still playing in RFK et al" because the demand wasn't there.) But there's no reason why increasing the amount one pays players (as distinct from increasing the quality of one's roster) would increase demand.

Of course you can easily say that new stadiums help create demand, and that they're an "investment". True enough---but you can also say that about the signing of a new megastar free agent. I'm not sure what makes thirtyfold plus payroll increases exempt from being named as at least a co-respondent in the case of rising ticket prices, one among many, while an abstract concept called "demand" shoulders all the blame.

Demand is not an "abstract concept." As for why supply & demand determine prices, I'm afraid I can't teach you economics in a BBTF comment. Buy an econ textbook.

Note: "signing a new megastar free agent" can increase demand (and thus lead to higher prices). But it's the acquisition of the player, not the payroll increase, that's doing the work. (Note that this can't explain leaguewide price changes, because signing free agents is a zero-sum game.) Signing A-Rod for $30M or $300M, it's all the same.

This is so painful to watch -- like a car crash unfolding very slowly.

Andy, your fundamental mistake here is that you apparently believe that the bullsh!t capitalists always say in order to justify higher prices -- "research and development" say the drug companies, "exploration" say the oil executives -- actually has something to do with their ability to raise prices, or our willingness to pay them. Instead of considering them transparent rationalizations for charging as much as the market will bear for their products. These statements are about maintaining a public image, and sometimes forestalling political problems -- but they have zero to do with pricing outcomes. One way you can tell is that by the time we're hearing this bullsh!t, the price increases are usually already in effect!

That you would be the one making this argument, against conservatives who take the opposing view, only makes the whole thing weirder......

I have certainly been willing to agree that acquiring a new player boosts demand, which may in turn lead to higher ticket prices. My point is that the salary of the player does not lead to demand.

That's a good point. Stephen Strasburg's arrival certainly led to increased ticket demand in Washington last year, and it had nothing to do with his salary. Regardless of salary levels or the rules on player movement, some teams will put premium talent on the field, and these teams will see more demand, sell more tickets, and be able to charge higher prices.

Why can't the two feed off each other?

They can't, when looking at baseball as a whole, because for every team that gains a free agent megastar (and increases their ticket demand) there is another team that loses a free agent megastar.

That you would be the one making this argument, against conservatives who take the opposing view, only makes the whole thing weirder......

I take it that Andy is a strident liberal? I remember Nieporent - I used to post here a lot, a long time ago, before the registration was put in place - but this Neck Wound guy that people call Andy is new to me.

At any rate, this isn't a remotely political argument. So if it's become a liberal vs. conservative proxy battle in the eyes of the forum, then shame on Andy for making the lib side look so stupid.

Because there's no mechanism by which higher salaries would cause higher prices.

Of course there is and it's been mentioned more than once on this thread. Owner wants to raise prices. Owner wants way to sell the increase. Owner tells fans, "I'm raising prices; among the reasons are ... my increased payroll." Fans say "Makes sense to me; I'm in." Presto. Higher attempted prices, higher actual prices.

The new stadiums do not serve as a p.r. excuse for the owners to raise ticket prices. The new stadiums increase demand, because they're nicer and provide a better experience, at least for casual fans.

They do both. The insistence that they must do one, and not the other, continues to puzzle.

Instead of considering them transparent rationalizations for charging as much as the market will bear for their products.

I'm not seeing anyone argue that fans who fall for the con aren't suckers.(**) Perhaps there's some talking past going on because of the nature of the word "cause." Some seem to be using it in a more metaphysical sense than others.

(**) Or conspicuous consumers, social climbers, etc.

I have certainly been willing to agree that acquiring a new player boosts demand, which may in turn lead to higher ticket prices. My point is that the salary of the player does not lead to demand. Acquiring a good, well-known player will lead to the same increase in demand whether he was signed as an expensive free-agent or or acquired through a trade with the other team pitching in salary relief or brought up through the farm system and making league minimum.

You have no way of knowing this. It's equally plausible that a team like the Nats, when they get around to (stupidly) signing a big-ticket free agent (Werth) to a huge contract, get extra points from their fans for the size of the contract itself: "The owners have finally opened the checkbook. Now we're really trying to compete."

Certainly the media and the radio babblefests talk that way; it's hard to believe it doesn't seep down to at least some section of the fanbase.(**) Moreover, the teams that have most notably built their rosters on a high-quality-at-low-price philosophy -- the A's and Rays -- have done very poorly at the gate.

(**) Though it's entirely unnecessary to the point, I also have no problem believing, in our celebrity-sodden culture that celebrates riches so feverishly, that a player with a higher paycheck is more appealing simply because of the size of that paycheck.

Of course there is and it's been mentioned more than once on this thread. Owner wants to raise prices. Owner wants way to sell the increase. Owner tells fans, "I'm raising prices; among the reasons are ... my increased payroll." Fans say "Makes sense to me; I'm in." Presto. Higher attempted prices, higher actual prices.

My ear hurts and I'm losing my hearing. I think this is because of evil spirits in my head. I take a pill, believing that it will drive out the evil spirits. The earache dissipates. Ergo, the pill was a mechanism for driving out evil spirits.

Don't even try telling me some mumbo-jumbo about how the pill is an "antibiotic" and I had an "ear infection." Nonsense. Save your one-size-fits-all medical crap for someone who isn't so delusional.

Don't even try telling me some mumbo-jumbo about how the pill is an "antibiotic" and I had an "ear infection."

OK, I won't.

Rest comfortably.

By Andy's logic, the Yankees should double the salaries of all their players... and then jack up ticket prices to the point where they magically make extra profit from the doubling of the player salaries.

By Andy's logic, the Yankees should double the salaries of all their players... and then jack up ticket prices to the point where they magically make extra profit from the doubling of the player salaries.

#### the Yankees - you've just saved baseball in Oakland! Beane's been playing the wrong kind of Moneyball!

The Nat fan base was excited they got Werth not because they spent 150 million on him but because he was viewed as the best positional player available. If they had used that 150 million to sign Jeff Francoeur or Juan Pierre the fanbase wouldn't have given two shvts. How much they cost is a nice talking point but what fans really care about is just how good the player is.

The Nat fan base was excited they got Werth not because they spent 150 million on him but because he was viewed as the best positional player available.

Can you publish the results of the poll you took so we can all see?

How much they cost is a nice talking point but what fans really care about is just how good the player is.

Tell it to the Rays and A's owners.

telling the alumni that their tickets help support both their teams and their alma mater in general

I'm with Andy here (though perhaps only here :) College sports are so bound up with branding, with appeals via pathos and sentiment and nostalgia, with their status as profit-directed units of non-profit institutions, that the comparison is just a bit weak. Yes, universities overcharge ticket holders and underpay athletes (though salary budgets for coaches and staff are sometimes enormous). But at the same time, universities court donors to help them build stadiums and run other elements of their athletic programs. Few pro sports entities charge for tickets and encourage fan clubs and booster organizations to just hand them over more money on top of that. College sports are closer to opera and other arts in that respect than to pro sports, where one trades on fan loyalty but where fans see the value as an entertainment expense, not a donation.

Edit: and, as mentioned somewhere upthread (forgive me for not recalling exactly who or where) a lot of tickets to college sports are cheap student seating; it's part of a kind of knothole strategy (cue other Andy threads :) that builds future fanbases. Some colleges also charge general fees to subsidize athletics, which is a grey area but is a "public funding" strategy of sorts. Such fees usually have to be approved in student-body elections, but turnout is as low there as in any other election.

This is getting to be more fun by the minute. Hope everyone else feels the same, and that David's not forgetting to take his cardiac pills and his Lipitor.

I have certainly been willing to agree that acquiring a new player boosts demand, which may in turn lead to higher ticket prices. My point is that the salary of the player does not lead to demand. Acquiring a good, well-known player will lead to the same increase in demand whether he was signed as an expensive free-agent or or acquired through a trade with the other team pitching in salary relief or brought up through the farm system and making league minimum. Thus, a high salary, if that is the case, is a correlating factor, because you can have the same result with a suitably talented and/or hyped low-salary player. The constant - and causal factor - is that people are willing to pay more to see this player.

---------------------------------------

Why can't the two feed off each other?

Because there's no mechanism by which higher salaries would cause higher prices.

No, other than the fact that (a) if the team didn't pay that salary, it wouldn't get that megastar; and (b) if he didn't get that megastar, he couldn't use that megastar's contract as an excuse to raise prices.

The common theme here is that it isn't the salary that causes the ticket price increases, it's the demand. But while it's obviously true that Red Sox Nation Fan # 1 didn't say "Gee, I can hardly wait to go out and see that Brinks truck with license plate #45 go pitch against the Evil Empire tonight", if the Red Sox hadn't unloaded their Brinks truck at the doorstep of that player wearing the #45 uniform, the demand for those tickets wouldn't be as high. The problem here is that you want to pretend that the middleman---the Brinks truck---doesn't exist, or is irrelevant to the whole enterprise. Which is either nonsense or just a case of semantics.

Of course you can easily say that new stadiums help create demand, and that they're an "investment". True enough---but you can also say that about the signing of a new megastar free agent. I'm not sure what makes thirtyfold plus payroll increases exempt from being named as at least a co-respondent in the case of rising ticket prices, one among many, while an abstract concept called "demand" shoulders all the blame.

Demand is not an "abstract concept." As for why supply & demand determine prices, I'm afraid I can't teach you economics in a BBTF comment. Buy an econ textbook.

It's an "abstract concept" that certainly does determine prices, but it's made up of many specific components. You apparently seem to think that it just springs up like Topsy, or that decisions to spend megabucks on a contract have no effect on another decision to raise ticket prices in order to recover and compound that investment.

And since I'm about the only one left here who seems to voicing even the slightest bit of demurral to your economics textbook orthodoxy, I have to wonder why you're spending so much time belaboring this point of relatively minor disagreement---which is really all it is underneath most of the rhetoric. By the tone of most of these responses you'd think I were arguing that payroll levels alone determined everything from ticket prices to the cost of parking.

------------------------------------

Andy, your fundamental mistake here is that you apparently believe that the bullsh!t capitalists always say in order to justify higher prices -- "research and development" say the drug companies, "exploration" say the oil executives -- actually has something to do with their ability to raise prices, or our willingness to pay them.

As you might have guessed from the political threads, I'm as hostile to predatory capitalists and price gougers as anyone, but somehow I'd say that the demand for lifesaving medicines and the gasoline to get people to work is a bit less elastic than the demand for a baseball ticket would be under that hypothetical scenario which everyone agrees could never exist. Unless they flat out can't afford them, few sane people are going to be refusing to buy their prescription drugs out of any sense that the drug companies are gouging, and boycotting gasoline is like shooting yourself in the foot.

Instead of considering them transparent rationalizations for charging as much as the market will bear for their products. These statements are about maintaining a public image, and sometimes forestalling political problems -- but they have zero to do with pricing outcomes.

Well, if megastar contracts aren't a factor in pricing your product, then why even bother to mention them? Why not just say "We just signed Albert Pujols, but never mind how much we're paying him---that's strictly our business and none of yours"? According to what I've been reading here, this sort of statement would be met with complete indifference.

That you would be the one making this argument, against conservatives who take the opposing view, only makes the whole thing weirder......

I don't see this as being in the slightest way "political". Other than my two favorite libertarian wingnuts and C-bird, I've got only the vaguest idea of the general political stance of the people who've been most conspicuously posting on this thread.

Can you publish the results of the poll you took so we can all see?

With all due respect to McCoy, I'd actually settle for evidence that Nats fans were all that excited to begin with. They're currently sitting 15th of 16th in the NL in attendance.

"The Washington Nationals yesterday announced season ticket prices for the 2011 season at Nationals Park. According to the club, in an effort to continue to offer affordable entertainment, the team will lower or maintain the same price structure from 2010 for all regular season tickets while decreasing the cost of tickets in the premium seating areas." Source

Try again, SBB.

Why can't the two feed off each other?

Because there's no mechanism by which higher salaries would cause higher prices.

No, other than the fact that (a) if the team didn't pay that salary, it wouldn't get that megastar; and (b) if he didn't get that megastar, he couldn't use that megastar's contract as an excuse to raise prices.

Nice try Andy, but no. The scenario we're discussing is one in which Marvin Miller became a Starbucks barista instead of a labor organizer and so baseball salaries were stuck at 1975 levels (adjusted for inflation). In that scenario, the team would get that megastar without paying that salary.

Try again, SBB.

OK.

Can you publish the results of the poll you took so we can all see?

This is ostrich head in the sand ridiculous.

Tell it to the Rays and A's owners.

When the A's were good their attendance increased. When the Rays got good attendance went up by over 30%.

Few pro sports entities charge for tickets and encourage fan clubs and booster organizations to just hand them over more money on top of that.

How is that any different than the Brewers getting the counties and state to pay for the construction of their stadium?

Also for the Nationals:

Per game attendance:
2011 22,375
2010 22,569
2009 22,435

I'm going to make a prediction: When Bryce Harper is MLB-ready and gets the call he will do more to increase attendance and ticket demand at the MLB minimum salary than Jason Werth and his mega-millions have done.

Same with Strasburg. But then again when the attendance does go up people will just attribute it to the payroll that Werth's giant contract just sitting their like a giant boulder will inflate.

It will be, "see, they increased payroll and attendance went up. Told ya."

You apparently seem to think that it just springs up like Topsy,

Actually I would argue that you are the one who thinks this. Apparently you believe that:

a) increased salaries lead to increased ticket prices,
b) except when they don't, because
c) you can't just put some one-size-fits-all explanation together, because
d) every situation is unique, and therefore
e) the whole concept of demand is just too "abstract" to isolate.

How this is an argument for anything other than total randomness is beyond me: sometimes market forces respond to this mysterious force we call "demand," sometimes they don't, and it's just mindless "orthodoxy" to pretend we know what we're talking about.

You apparently seem to think that it just springs up like Topsy, or that decisions to spend megabucks on a contract have no effect on another decision to raise ticket prices in order to recover and compound that investment.

Sometimes you wonder if people truly understand sunk costs.*




*That being said-future costs are not sunk costs but by implying that you would raise ticket prices because of increased costs to produce a product smacks heavily of not understanding sunk costs.

When Bryce Harper is MLB-ready and gets the call he will do more to increase attendance and ticket demand at the MLB minimum salary than Jason Werth and his mega-millions have done.

Yup. But looks like we may have to wait a little longer. Bryce in Harrisburg: .171/.237/.171.

Actually I would argue that you are the one who thinks this. Apparently you believe that:

a) increased salaries lead to increased ticket prices,
b) except when they don't, because
c) you can't just put some one-size-fits-all explanation together, because
d) every situation is unique, and therefore
e) the whole concept of demand is just too "abstract" to isolate.

How this is an argument for anything other than total randomness is beyond me: sometimes market forces respond to this mysterious force we call "demand," sometimes they don't, and it's just mindless "orthodoxy" to pretend we know what we're talking about.

You've just summed up the entire Andy oeuvre beautifully in one post. (The only thing you left out were the sneers at people who don't think that every situation is unique.)

Bryce in Harrisburg: .171/.237/.171.

# of PA?

39.

You've just summed up the entire Andy oeuvre beautifully in one post. (The only thing you left out were the sneers at people who don't think that every situation is unique.)

I don't know how many times I've had to point out to Andy that he's not arguing from any core principle. Unless one counts pure whimsy.

The new stadiums do not serve as a p.r. excuse for the owners to raise ticket prices. The new stadiums increase demand, because they're nicer and provide a better experience, at least for casual fans.

They do both. The insistence that they must do one, and not the other, continues to puzzle.

Personally I'm becoming less and less puzzled, and more and more convinced that the concept of multiple and gradated causes is something that some people just resist, although in the case of the libertarians with their reductionist mentality, it's not exactly a shock.

-------------------------------

Why can't the two feed off each other?

Because there's no mechanism by which higher salaries would cause higher prices.

No, other than the fact that (a) if the team didn't pay that salary, it wouldn't get that megastar; and (b) if he didn't get that megastar, he couldn't use that megastar's contract as an excuse to raise prices.

Nice try Andy, but no. The scenario we're discussing is one in which Marvin Miller became a Starbucks barista instead of a labor organizer and so baseball salaries were stuck at 1975 levels (adjusted for inflation). In that scenario, the team would get that megastar without paying that salary.

Well, I'm glad that we're at least (and at last) clear on the terms of that part of the argument. I think you're nuts to think that the owners could get 2011 prices with a 1975 payroll, and you think I'm nuts for not thinking so. And every rational lurker thinks we're both nuts for carrying on this conversation for the last 2 or 3 days.

But you're also nuts to think that the sort of hyped up excuses for ticket price rises could exist on the same level without free agency, because you don't get nearly the buzz level when all of the superstars are stuck on the same team for year after year. The most exciting collection of underpaid stars in recent history did nothing to jack up the Oakland A's prices, but the introduction of Catfish, Reggie, and Goose---with their new contracts spelled out in great detail in every media outlet to appropriate oooohs, ahhhhs, and curses---helped to kick off the sort of price-hike justifying buzz that helped enabled Steinbrenner to raise his top ticket prices by 65% in four short years.

And it's hardly irrelevant to note that without that free agency and the buzz it created for "new" incoming stars, ticket prices had been stagnant in real dollar terms for the better part of the 20th century, in the face of both rising population, greater affluence, and a superior product on the field---all of which should theoretically have increased demand and raised ticket prices, at least according to our resident genius economists.** But I'll let you genius economists look at those ticket prices and try to explain why that didn't happen.***

**I'd set that sentence in boldface type if I weren't afraid of Ray's scornful wrath.

***And if you don't believe that those ticket prices weren't stagnant relative to the CPI for the better part of the first three quarters of the 20th century, from the bleachers to the box seats, let's put up some money and make ourselves a nice cash bet. Or you can just note that the 1913 dollar was worth $5.43 in 1975, and do the research yourself.

-------------------------------

You apparently seem to think that it just springs up like Topsy,

Actually I would argue that you are the one who thinks this. Apparently you believe that:

a) increased salaries lead to increased ticket prices,
b) except when they don't, because
c) you can't just put some one-size-fits-all explanation together, because
d) every situation is unique, and therefore
e) the whole concept of demand is just too "abstract" to isolate.

How this is an argument for anything other than total randomness is beyond me: sometimes market forces respond to this mysterious force we call "demand," sometimes they don't, and it's just mindless "orthodoxy" to pretend we know what we're talking about.

What's mindless is thinking that all pricing decisions are identically reached simply because you say so, and that you can arbitrarily (and automatically) exclude one large cost factor from such decisions.

You've just summed up the entire Andy oeuvre beautifully in one post. (The only thing you left out were the sneers at people who don't think that every situation is unique.)

I don't know how many times I've had to point out to Andy that he's not arguing from any core principle. Unless one counts pure whimsy.

I love it. If I ever stopped hearing this from you two I'd be calling for the Pod People Police.

How is that any different than the Brewers getting the counties and state to pay for the construction of their stadium?

In public stadium funding, you usually hear the prominent argument that the stadium will bring a lot of jobs to the area and revitalize a city district. It's not unlike tax breaks for many other different businesses. And it's not a volunteer arrangement. College sports teams OTOH have lots of individuals who simply write them checks for the love of it. I do agree that mandatory student fees are similar to tax-supported stadia; there are similarities and dissimilarities, but college sports are absolutely sold for the love of alma mater.

David writes:

You've just summed up the entire Andy oeuvre beautifully in one post. (The only thing you left out were the sneers at people who don't think that every situation is unique.)

Andy writes:

What's mindless is thinking that all pricing decisions are identically reached simply because you say so, and that you can arbitrarily (and automatically) exclude one large cost factor from such decisions.

Nieporent ftw.

And it's hardly irrelevant to note that without that free agency and the buzz it created for "new" incoming stars, ticket prices had been stagnant in real dollar terms for the better part of the 20th century, in the face of both rising population, greater affluence, and a superior product on the field---all of which should theoretically have increased demand and raised ticket prices, at least according to our resident genius economists.

Do you see anyone arguing against free agency as something that drives demand? I don't.

Here's a perfect illustration - as if we need more! - of your misguided thinking on the matter. You see

1.) free agency 2.) higher salaries 3.) higher ticket prices

and assume causation solely on the basis of correlation. That's it. That's where your thinking starts and stops. That is literally the only evidence you've been able to offer during this whole debate - that there must be cause and effect because, gee whiz, these things have been happening at the same time. And then when I or someone demonstrates the lack of causation, you simply repeat that we'd have to be crazy not to notice the correlation!

It's madness, really.

And it's hardly irrelevant to note that without that free agency and the buzz it created for "new" incoming stars, ticket prices had been stagnant in real dollar terms for the better part of the 20th century, in the face of both rising population, greater affluence, and a superior product on the field---all of which should theoretically have increased demand and raised ticket prices, at least according to our resident genius economists.

Do you see anyone arguing against free agency as something that drives demand? I don't.

No, but what I've seen is the argument that even without free agency and its resulting payroll explosion, owners would still be charging the same ticket prices as they do now, all because of this magical independent entity known as "demand".

And yet from 1901 to 1974, the U.S. populated tripled, the GDP per capita quadrupled, the product on the field got better with each successive generation, and attendance per game quintupled.

Wouldn't all that have led to an explosion in "demand"?

But strangely enough, throughout this period, ticket prices for all sections of the ballpark, in real dollar terms, had scarcely budged, and in some cases had actually declined.** This in spite of the fact that the owners had complete control over player salaries during that entire period, a scenario which you repeatedly say wouldn't affect ticket prices if it were replicated today.

Sorry, Brian, but the only madness I'm seeing here is your refusal to confront facts that don't fit into your predetermined formula.

**And again, don't embarrass yourself by trying to deny this. There are ticket stubs floating all over google images and ebay that prove it beyond the shadow of a doubt, and if those don't convince you, there are countless sports memorabilia auction catalogs, all fully illustrated. I'm sorry if the late Friedrich Hayek forgot to include this information in those economic textbooks that you seem to be relying on, but then as Mr. Hayek would have been the first to say, no one individual can know everything.

And yet from 1901 to 1974, the U.S. populated tripled, the GDP per capita quadrupled, the product on the field got better with each successive generation, and attendance per game quintupled.

Wouldn't all that have led to an explosion in "demand"?

And here, instead of arguing that payroll is just a small factor that figures into demand - just one of many factors, more perceived than actual, in fact - you're implicitly arguing that increased payroll is the only possible explanation for increased ticket prices. After all, we had all those other factors in play before too, and nothing happened!

Here's a (serious) question. We both understand that MLB is in a golden age, attendance-wise. Do you believe that this is bound to continue?

What I mean is, whatever the reasons for the current attendance boom, do you think that the sport has stumbled across some formula that has created a permanent new level of interest in attending games?

And yet from 1901 to 1974, the U.S. populated tripled, the GDP per capita quadrupled, the product on the field got better with each successive generation, and attendance per game quintupled.

Wouldn't all that have led to an explosion in "demand"?

And here, instead of arguing that payroll is just a small factor that figures into demand - just one of many factors, more perceived than actual, in fact - you're implicitly arguing that increased payroll is the only possible explanation for increased ticket prices. After all, we had all those other factors in play before too, and nothing happened!

Except that I've never argued, and would never argue, that any one factor goes into ticket pricing, either before or after 1975. What I am saying is that if owners could set prices without any regard for payroll, and only with regard to "demand", then we would have seen steady real dollar price rises throughout history**, instead of seeing it only once their monopoly power over salaries was eliminated and payrolls went rocketing skyward.

The common thread throughout the game's history is this: Regardless of the terms of the standard player contract, owners take many factors into consideration in determining price. Demand is one of them, payroll is another. Just as you couldn't have had 1974 prices with 2011 payrolls, you couldn't have 2011 prices with 1974 payrolls. I suppose I'll never convince you that there may be more to this relationship than a mere "correlation", but I think that the radical upswing in ticket prices after 74 years of complete stagnation strongly suggests otherwise.

**with a downward dip in the 30's and a radical upswing in the 25 years of prosperity after WWII

Here's a (serious) question. We both understand that MLB is in a golden age, attendance-wise. Do you believe that this is bound to continue?

What I mean is, whatever the reasons for the current attendance boom, do you think that the sport has stumbled across some formula that has created a permanent new level of interest in attending games?

I think that baseball has stumbled across a fairly permanent way of maximizing its revenue during times of upper income prosperity as long as it keeps the cooperation of Congress and the IRS concerning business tax writeoffs. Take either of those factors away, and it's back to the drawing board. Take both of those factors away, and you're likely to see rollbacks both in revenue and payroll. Even multi-millionaire owners have to find a way to cut expenses during bad times, and that can't be solely accomplished by firing the ticket sellers and the luxury box wine salesmen.

But if baseball wanted to create new levels of interest in attending games immediately, without regard for total revenue, that wouldn't be very hard. All it would have to do would be to expend one tenth as much imagination to filling the stadium as it does to maximizing revenue. I'd be glad to act as a consultant.

Not likely to happen: First because it would make little economic sense, unless the upswing in concessions could make up for the loss in ticket revenue; second because some parks are already filled to near capacity; and third because of the lure of the comfort of home viewing and the virtual giveaway prices assigned to Extra Innings and the mlb.com season package. You'd have to reduce ballpark prices by an enormous factor (50% or more IMO) to lure most of those armchair fans to the ballpark. The current pricing and overall marketing models of today weren't created overnight, and they couldn't be reversed all that easily.

BTW a "grandstand" ticket for the 1932 World Series in Yankee Stadium, in the worst year of the Depression, went for $5.50, or $19.79 in 1974 dollars. A second deck ticket for the 1974 World Series in Oakland, a roughly comparable view, was $10.00, a drop of nearly 50%.

I think that baseball has stumbled across a fairly permanent way of maximizing its revenue during times of upper income prosperity as long as it keeps the cooperation of Congress and the IRS concerning business tax writeoffs. Take either of those factors away, and it's back to the drawing board. Take both of those factors away, and you're likely to see rollbacks both in revenue and payroll. Even multi-millionaire owners have to find a way to cut expenses during bad times, and that can't be solely accomplished by firing the ticket sellers and the luxury box wine salesmen.

But if baseball wanted to create new levels of interest in attending games immediately, without regard for total revenue, that wouldn't be very hard. All it would have to do would be to expend one tenth as much imagination to filling the stadium as it does to maximizing revenue. I'd be glad to act as a consultant.

Not likely to happen: First because it would make little economic sense, unless the upswing in concessions could make up for the loss in ticket revenue; second because some parks are already filled to near capacity; and third because of the lure of the comfort of home viewing and the virtual giveaway prices assigned to Extra Innings and the mlb.com season package. You'd have to reduce ballpark prices by an enormous factor (50% or more IMO) to lure most of those armchair fans to the ballpark. The current pricing and overall marketing models of today weren't created overnight, and they couldn't be reversed all that easily.

These last three paragraphs are fascinating. That's all I'm going to say. Someone else can field this if they so please.

These last three paragraphs are fascinating. That's all I'm going to say.

Condescension is fine, Brian, and I've leveled more than my share of it over the years, but surely there's got to be more to your repertory than that. Surely your fascination with me can't be all that's kept you posting here for the last few days.

For example, what's your answer to your own question? Surely you must have given it some thought. So far you've done little to contribute to this entire discussion other than critique what I've written. Nothing wrong with that as far as it goes, but it'd be nice to see you go beyond that once in a while.

And what's your explanation for 74 years' worth of ticket price stagnation, after repeatedly saying that even with the retention of 1974 payrolls we'd still have 2011 prices? You certainly didn't see that sort of consumer price stagnation in other forms of entertainment, or in the overall CPI during that same time frame.

What made baseball so different, and why do you think that the same forces that held prices down for 74 years might not have had at least some effect after that, if salaries hadn't risen over thirtyfold? The truth is that your one size fits all explanation of "demand" simply doesn't hold water once you're out of your modern day comfort zone, but I think that you've clung to that explanation mostly because you might not have been aware of baseball's static ticket prices prior to 1975, and you're perfectly capable of readjusting your thoughts in light of new evidence.

BTW a "grandstand" ticket for the 1932 World Series in Yankee Stadium, in the worst year of the Depression, went for $5.50, or $19.79 in 1974 dollars. A second deck ticket for the 1974 World Series in Oakland, a roughly comparable view, was $10.00, a drop of nearly 50%.

Of course. As the decades passed, players' wages deviated further and further from their market wages, and accordingly owners were able to lower real prices and still make a satisfactory profit.(**) No surprise, exactly what you'd predict. When the owners had to start paying their players market wages, they had to raise ticket prices, in both real and nominal terms, to generate the money to do it.

Though inexplicably resisted, the concept isn't complicated.

(**) And, as noted above, they had ready new markets and expansion fees to fall back on where the model didn't fully work.

When the owners had to start paying their players market wages, they had to raise ticket prices, in both real and nominal terms, to generate the money to do it.

Except owners got the money first and then paid the players. Also the owners were always paying the players their "market wages".

It is absurd to think that the players had a "true" wage and that with the creation of FA the owners had to pay that price. If the owners could truly only afford to pay a player 50k then he would get 50k. What we saw instead is that an owner could afford to pay a player much more than that. People seem to forget that ticket prices didn't really take off until about 15 years after free agency. They didn't sign Goose Gossage or Bobby Grich and then jack up prices.

Of course. As the decades passed, players' wages deviated further and further from their market wages, and accordingly owners were able to lower real prices and still make a satisfactory profit

Or you know that pesky thing called supply and demand. Or Bowie Kuhn was an idiot.

BTW a "grandstand" ticket for the 1932 World Series in Yankee Stadium, in the worst year of the Depression, went for $5.50, or $19.79 in 1974 dollars. A second deck ticket for the 1974 World Series in Oakland, a roughly comparable view, was $10.00, a drop of nearly 50%.

The key words that stand out here are "Oakland" and "New York".

I'm also curious, when bring world series tickets into the discussion, whether the face value of the ticket is actually what people paid for them.

For example, what's your answer to your own question?

Of course I think things could change. Baseball's not entitled to continue an historically high level of attendance any more than it was entitled to dominate the NFL in the national consciousness like it used to.

And what's your explanation for 74 years' worth of ticket price stagnation, after repeatedly saying that even with the retention of 1974 payrolls we'd still have 2011 prices? You certainly didn't see that sort of consumer price stagnation in other forms of entertainment, or in the overall CPI during that same time frame.

Well, here's some interesting data. What these figures show is that player salaries increased 73% during the decade before the reserve clause was abolished. In that time, the average ticket price was declining, and actually continued to do so until 1983.

But wait, that's not all! Even though salaries had continued to increase rapidly (excluding the collusion years), ticket prices actually reached their lowest post-1964 level in 1988, when salaries were more than 7x what they were in 1964. Let me spell this out for you, just in case you're not following:

Ticket prices were 31% lower in 1988 than they were in 1964 in real terms, even though salaries were 7x higher.

Turns out I've been giving you far, far too much credit. I've been accusing you of confusing correlation and causation - turns out the correlation isn't even remotely there to begin with. You're just flat ####### wrong in every way it's possible to be wrong.

And honestly, I feel dumb for taking your basic facts for granted for so long. Although with your basic facts being so wrong, it makes your actual logic to explain those facts all the more howlingly, laughably wrong.

When the owners had to start paying their players market wages, they had to raise ticket prices, in both real and nominal terms, to generate the money to do it.

Not so much; see above.

The key words that stand out here are "Oakland" and "New York".

The prices are set long before anyone knows who is going to be in the World Series.

I believe in the 1977 WS a comparable ticket went for 15 dollars.

Looking at attendance in the 1970's WS it looks as though the tickets were underpriced.

re 372.

Thanks for that. I've been trying to get that point across now multiple times. I'll wait to see how SBB and Andy hand wave it away like they have when I have said it.

You're right McCoy, should have hat-tipped you in my comment. You were definitely ahead of the curve on this one.

The key words that stand out here are "Oakland" and "New York".

To me the words that stand out are "And yet from 1901 to 1974....attendance per game quintupled." This is the context in which you have to think about ticket prices. Before WWII, the Cardinals were drawing about 5,000 fans per game to a stadium that seated about 35,000. Thank about that. So the starting point in Andy's story is that owners had millions of unsold seat-games available to them every year. And the marginal cost of filling a seat is zero (maybe negative). So of course that keeps massive downward pressure on ticket prices. It makes sense that the way revenues grew was expanding attendance first, without price increases (or perhaps even price decreases, pre Brian C), especially when you also consider sales of food and merchandise (which empty seats rarely purchase).

At some point in the 1980s, some franchises reached attendance numbers that made it possible to start increasing prices significantly, because seats became scarce. The value of seats close to the field becomes more apparent when attendance is 30,000 rather than 5,000, and a more affluent upper-middle-class starts paying for this privilege. But until a certain density was reached, increasing demand wasn't going to show up as higher ticket prices, it took the form of increased attendance.

Ticket prices were 31% lower in 1988 than they were in 1964 in real terms, even though salaries were 7x higher.

Annnnnd, that's the ballgame right there folks.

The prices are set long before anyone knows who is going to be in the World Series.

The league sets the prices, not the team? I thought world series prices would be set by each team, in the event that they play in the world series. So before they know if their team will make it that far, Oakland and New York could have different potential ticket prices. I could be wrong though.

Thinking through the logistics though, it seems like a very difficult task for a central body to set ticket prices for various quality of seats, without knowing which stadium to set them for.

You can do a google search for world series tickets and you'll find that a bunch of teams will have WS tickets and all at the same price for every year. For instance I had 2001 Phillies WS tickets. You can find 1983 White Sox WS tickets as well. So on and so on.

I'll wait to see how SBB and Andy hand wave it away like they have when I have said it.

There was a cost shock with the onset of free agency, owners were worried about what they could get for tickets, and underpriced tickets -- even in relation to costs -- for several years after free agency. That's been noted at least three times in this space in this thread and if there's one theme I've been consistent on -- because it's true -- it's that the price of a baseball ticket was undervalued both in the reserve clause era and into the free agency era. It took time for the cost shock to be internalized and the owners to overcome all the factors that were arrayed to counteract pure and immediate price gouging.

As to the particular point, as Brian C's chart shows, TV revenues rose 3-4 times in real terms between 1964 and 1988, which relieved some of the pressure on ticket prices and helps explain why a ticket was so undervalued in that era. Between 1984 and 1988 TV revenues doubled in real terms, and ticket prices decreased in real terms.

Turns out I've been giving you far, far too much credit. I've been accusing you of confusing correlation and causation - turns out the correlation isn't even remotely there to begin with.

You have it backwards. No one was suggesting that correlation meant causation, because no one saw the correlation you must have seen to have kept harping on it so long -- because it isn't there. Which is to say, this canard is another note in the same chord as "Prices are set by supply and demand ... can't you see that??!!?!". Yes, we can see that.

Wow. This is going to keep going on.

So payroll raises ticket prices but it only does so 15 years after the fact. Ok.

BTW a "grandstand" ticket for the 1932 World Series in Yankee Stadium, in the worst year of the Depression, went for $5.50, or $19.79 in 1974 dollars. A second deck ticket for the 1974 World Series in Oakland, a roughly comparable view, was $10.00, a drop of nearly 50%.

The key words that stand out here are "Oakland" and "New York".

I'm also curious, when bring world series tickets into the discussion, whether the face value of the ticket is actually what people paid for them.

To take the second question first, World Series ticket scalping was an extremely minor factor until fairly recently, mostly because it was a hundred times harder to do when the time frame only allowed for on-site scalping and a few ticket agencies, some of which were barred by state or local law from raising prices by more than a nominal fee.

By 1974 World Series prices were set by the league, but even in the reserve clause era, there wasn't all that much difference among cities. In 1933 the same "grandstand" ticket in Washington was exactly the same price as it was the year before in New York, and a Griffith Stadium box seat for that same Series was $6.60.

Rather than make this on overly long post, I'll respond to the other comments separately.

it's that the price of a baseball ticket was undervalued both in the reserve clause era and into the free agency era.

How can prices have been "undervalued" while 60-80% of seats went unsold? Is your theory that more fans would have come if only ticket prices were higher? ("I'm not going to the Dodgers game today. Can you believe they only want $7 for a ticket? They must suck....")

SBB #1:

But when the local bar posts a sign saying, "Sorry we raised our prices on Bud, they raised their prices on us," and you as a customer say, "OK, that makes sense, I'll pay the extra," it's the height of tetchy lawyerliness to say, "The cost increase didn't cause the price increase, that's just an excuse."

SBB #2:

Any time an owner says, "One of the reasons I raised ticket prices was because my payroll's higher," that assertion is factually true, and a fan says "You know what, he did raise payroll, makes sense to me, I'll pay the extra cost," it's plainly obvious that the increased payroll "caused" that buyer to pay a higher price for tickets.

SBB #3:

Owner wants to raise prices. Owner wants way to sell the increase. Owner tells fans, "I'm raising prices; among the reasons are ... my increased payroll." Fans say "Makes sense to me; I'm in." Presto. Higher attempted prices, higher actual prices.

SBB #4:

When the owners had to start paying their players market wages, they had to raise ticket prices, in both real and nominal terms, to generate the money to do it.

SBB #5:

No one was suggesting that correlation meant causation...

No further comment needed.

How can prices have been "undervalued" while 60-80% of seats went unsold?

My theory is that the public is stupid.(***)

Tickets are undervalued in the same way franchises were sold for far less than their intrinsic value in that era. As to tickets specifically, I consider this era the "normal" era of business within baseball; in other words, with immaterial exceptions, everyone is out to make the most money possible, players make market wages, owners charge market prices, there's no hypocrisy, no appeals to anything but money and what the market will bear. Having sat in really good seats for really good baseball from 1980 to 1988, and knowing what I paid, and knowing what the cost is of essentially the same product (**) today in the "normal" era, there's no other reasonable conclusion than that the 1980-88 ticket prices were highly undervalued. Whatever "improvements" the product offers today don't come close to justifying the real price increase. Naturally, I'm thankful for that, but I see it clearly for what it was.

(**) And, in some cases worse. A second deck seat six rows up on the infield at Tiger Stadium was a far better seat than a second deck seat six rows up at Comerica Park.

(***) There's a relatively famous SI story from the spring of 1979 about the "decline" of the NBA and one of the complaints from the public -- in addition to the hints that the league was too black, and the players didn't "care" or "hustle" enough -- was that ticket prices were too high. A seat at the half court line halfway up and less cost a whopping $9.00. This was for a team with Julius Erving, Bobby Jones, Mo Cheeks, and Doug Collins, a highly-entertaining and highly-competitive team that had been competitive since the ABA merger and would continue to be competitive for another 8 years.

That seat is now $119. To see Andre Iguodala -- God bless him -- Jrue Holliday, a washed-up Elton Brand and filler, and an organization that hasn't done jack squat in 10 years. With that as backdrop, there's no reasonable conclusion about the public denominating the $9.00 seat too expensive other than it was batshit insane.

No further comment needed.

You're hyperventilating again.

Ticket prices were 31% lower in 1988 than they were in 1964 in real terms, even though salaries were 7x higher.

Wow. This is going to keep going on.

So payroll raises ticket prices but it only does so 15 years after the fact. Ok.

The first question to raise about that chart of ticket prices is an obvious one: How was the "average" price calculated?

---By averaging the price of all ticket levels offered in all parks?

---By adjusting those prices by taking into consideration the number of tickets offered at each price level?

---Or by making a further necessary adjustment, and averaging the price of all tickets actually sold?

Unless the author had access to data that's virtually impossible to come by, he certainly couldn't have used the third method, which would have resulted in the truest figure. And even to use the second method he'd have to do a fair amount of digging.

But the first method will almost certainly skew the results. Here's why.

First, in the reserve clause era season tickets accounts for but a tiny fraction of the sales compared to today. Walk-ups nearly always formed the great bulk of the crowd. You can easily determine this by noting the almost nonexistent attendance for weekday day games before the advent of night baseball, and by the relatively tiny attendance of weekday games compared to night games after that, when night games were still restricted to only a dozen or two dozen a year in many cities. Look at the lowest attendance for any given team in any given year, and that'll give you the absolute maximum of season ticket holders, and even there you have to cut that by quite a bit to account for the walkups.

So if the box seat price was $3.00, the reserved seat price was $2.00, the general admission price was $1.50 (75 cents for children---that's what I paid for seats in Griffith Stadium and in DC Stadium that would now be either $65 or $150 in today's Nationals Park), and the bleachers were 75 cents, the "average" price would be $1.81, but the actual price offered for every seat in the park would have been much lower (since box and reserved seats made up a relatively small portion of the stadium), and the actual price paid would have been lower still (since walk-up customers gravitated to the general admission and bleacher seats).

But by 1988, in many parks you had the exact opposite bias if you averaged nominal prices, since the "cheap seats" sections had shrunk and the more expensive sections had expanded. If you simply averaged the prices offered in 1988, you'd be overcounting the cheap seats and undercounting the expensive ones---not because the walkup crowd didn't still flock to the cheap seats, but because there were relatively few of them available compared to past generations of ballparks.

Of course if the chart had given us total ticket revenue per year, he then could have given us the true "average ticket price" by simply dividing that figure by the total paid attendance.

But the author didn't do that---or at least there's no indication that he did. So color me skeptical about those "average" ticket prices until I see more about the author's methodology.

More in the next post.

So color me skeptical about those "average" ticket prices until I see more about the author's methodology.

Be skeptical all you want - I find it easy to believe that these numbers aren't exactly right. And I agree that more on his methodology would be helpful.

But on the other hand, I'm extremely skeptical that he's wrong by a full order of magnitude, which is basically the size of the error that you'd need for your position to start to make sense. Plus, whatever his data, he'd have to incorrectly figure that prices were decreasing when they were actually increasing, which also seems unlikely.

I'm sorry, but you're going to have to do much better than vague insinuations against his methodology.

Of course if the chart had given us total ticket revenue per year, he then could have given us the true "average ticket price" by simply dividing that figure by the total paid attendance.

Sorry to quibble, Andy, but no he couldn't. That would be average price of a ticket sold. The only thing that makes sense for this "argument" is the average ticket price as offered by the owner. Why? Because of the uncommon features of the market for baseball tickets, unless an owner asks for a price, he won't get it -- and the only price he will get is a price he offers. There isn't a mechanism for unanticipated demand to go into the owners' pocket -- it goes in to the pocket of scalpers (or at least it did until the StubHub era).

This is in plain contradistinction to the markets for other products. You put a new fizzy water on the market at $1.50, you're swamped with demand, you raise your price the next day to $2.25 (or whatever) and the market clears. You put a painting up for auction, you start the bidding at $50,000 and people like it more than you thought, you might get $750,000. Etc.

My theory is that the public is stupid

Now I understand your mistake. You are someone who greatly values baseball. You would have been willing to pay, say, $30 for tickets back in the 1980s. So it seems to you that prices then were "too low." And they were too low for you. But owners can't extract a maximum bid from every fan, there has to be fixed pricing, so there are always some consumers who get this kind of "bargain" on a product. What's changed is that there are now many, many more people in America who value baseball as much as you do (in terms of what they will pay to watch a game). So now the market price is much closer to what YOU would be willing to pay, and it feels to you like this is the "correct" price.

But that all has precisely zero to do with whether tickets were underpriced. Which they obviously weren't, since so many were empty....

Well, at least it was a different kind of hand waving than before.

Wow. This is going to keep going on.

So payroll raises ticket prices but it only does so 15 years after the fact. Ok.

But as I'm sure a grizzled old scout like you remembers, in the early years of free agency the megabucks contracts were offered only by a relatively small number of teams, with the Yankees first and foremost among them. Between the time that the Yankees signed Catfish Hunter to the time that they finished their first season with Goose Gossage, with Don Gullett and Mr. October in between---5 years, not 15---they'd raised their box seat prices by 75%, doubled their upper box prices, raised their general admission price by 92%, and raised the bleacher prices 15% while shrinking the number of bleacher seats by 69%. Inflation ate away nearly half of those increases during that period, but that was still a hell of a boost.

The other big spender in the early days of free agency was the Angels, who between 1976 and 1982 picked up four outright FA's (Rudi, Grich, Baylor and Reggie) and one quasi-FA who'd forced a trade from Minnesota and had his salary quadrupled. In that period, the Angels "only" raised their prices by 50% to 67%, with another double digit jump in 1983. Again, inflation ate up about half of the increase, but that's still a far bigger real price jump than had ever been realized from 1964 to 1976, when the top price went up only 50 cents.

And once more, the point isn't to say that payroll was the sole "cause" of these price hikes---the first thing I wrote in this entire thread was that that view was simplistic---but those "average" prices are often a lot less than meets the eye.

It's tough to argue that the demand -- more specifically, the willingness of people at large to hit the owner's bid -- wasn't lower then than now. That doesn't, however, mean prices weren't too low for the best seats. It doesn't follow logically, and the best seats were practically always full.(**)

That aside, my argument is more in terms of "intrinsic value." Franchises sold for far less than their intrinsic value and tickets -- at least really good tickets -- did as well. It's not as though the owners of 2011 are offering some new technology or some product that technology has made much cheaper to produce; they're offering a license to watch a major league baseball game. Just as their 1985 counterparts were. Either the 1985 price or the 2011 price is off; they make no sense together. It's pretty clear that the 1985 price is low.

(**) Few if any 80s teams didn't draw enough to fill all their box seats, particularly the very best box seats. It's unnecessary to the point but interesting to note that a commonly observed phenomenon today -- the best seats half empty, their counterparts a few decks up chock-full -- was very rare then.

Of course if the chart had given us total ticket revenue per year, he then could have given us the true "average ticket price" by simply dividing that figure by the total paid attendance.

Sorry to quibble, Andy, but no he couldn't. That would be average price of a ticket sold. The only thing that makes sense for this "argument" is the average ticket price as offered by the owner. Why? Because of the uncommon features of the market for baseball tickets, unless an owner asks for a price, he won't get it -- and the only price he will get is a price he offers. There isn't a mechanism for unanticipated demand to go into the owners' pocket -- it goes in to the pocket of scalpers (or at least it did until the StubHub era).

Fair enough, SBB, but two points in semi-rebuttal.

First, while what you're saying is true, if prices truly reflected pure demand they would have changed upward or downward each year, in reaction to the tickets actually sold. Which they didn't. As you can see by those ticket prices over the 1900-74 period, that was seldom if ever the case. You can say that the prices were either "stupidly high" or "stupidly low" compared to that demand, or sometimes just right, but in all cases they pretty much just stayed the same regardless of the actual demand.

And what you're suggesting is that the "average price" should have been calculated by my second method, "by adjusting those prices by taking into consideration the number of tickets offered at each price level." If only a relatively small number of box seats were being offered, but a large number of general admission and bleacher seats, the "average" of those three prices would be skewered by any other method. And in the more recent years, with virtually no general admission seats and a smaller number of bleacher seats, the "average" price offered would seem much lower than it really was. In both cases the outcome would have been biased towards the "prices didn't rise" conclusion.

And BTW SBB, you handle them for awhile. Dinner and a Sabathia-Shields duel beat even the rare thrill of arguing with Brian and McCoy.

But as I'm sure a grizzled old scout like you remembers, in the early years of free agency the megabucks contracts were offered only by a relatively small number of teams, with the Yankees first and foremost among them. Between the time that the Yankees signed Catfish Hunter to the time that they finished their first season with Goose Gossage, with Don Gullett and Mr. October in between---5 years, not 15---they'd raised their box seat prices by 75%, doubled their upper box prices, raised their general admission price by 92%, and raised the bleacher prices 15% while shrinking the number of bleacher seats by 69%. Inflation ate away nearly half of those increases during that period, but that was still a hell of a boost.


In 1974 and 1975 they were in Shea so I don't know why exactly you are comparing Shea to newly renovated Yankee Stadium of 1978.

From 1973 to 1975 the Yanks attendance (regardless of where they played) stayed consistent at just shy of 1.3 million a year. They reopen Yankee Stadium in 1976 and from that season to 1978 when Gossage joins the team they go to the WS each time and draw 2 to 2.3 million fans a year.

Now I have my doubts about your numbers but even taking them at face value don't you think supply and demand explains a ton of the price increase? Unfortunately we don't have team payrolls from that time frame on BRef and Doug's old site only goes back to 1977.

In 1973, the year before the renovations, the avg Yankee ticket was $2.53. While at Shea it jumped to 2.71 and then 3.53. 1976 was at 4.53 and then 1977 it was at 5.00. From there it went 5.45, 5.81, and 6.17 in 1980.
Payroll from 1977 to 1980 was:
$3,474,325
$4,722,000
$4,980,900
$6,073,425

From 1977 to 1980 the average price of a ticket rose by 23%. Payroll rose by 75%.

AS they say cost had nothing to do with the rise in ticket prices for the Yankees.

I'm really tired of this.

Andy, I've pretty much proved that you're utterly full of ####. If you want to argue that the methodology in the article I linked to is wrong, that's your right, but at least do so competently. It's very easy to get the author's email address; get in touch with him and see if you can find out what his definition of "average ticket price" is. Then you can constuct an argument against it if you find that his numbers are radically wrong (not slightly wrong, mind you, because his numbers would have to be radically wrong in order for what you're saying to make sense, even aside from your misunderstanding of basic economics).

But don't waste your time trying to tell us that you have a leg to stand on because the numbers might be wrong. That's beneath even you, I hope, and I'm simply not going to respond to stupid crap like "those 'average' prices are often a lot less than meets the eye" or pointless mumbo-jumbo about adjusting for number of seats when all you're actually saying is that pricier seats should be arbitrarily weighted more. As if average prices wouldn't already account for the number of seats sold at different price levels - that would be the whole point of computing an average!

So ... please. I've found real evidence to back up my position. It's time for you to do the same, and drop the theoreticals, insinuations, and anecdotal claims.

Put up or shut up time, bro.

I hate my phone.

1972 to 1975 deal for 72 million and the 1976 to 1979 deal was for 92.8.

Put up or shut up time, bro brah.

FIFY.

1972 to 1975 deal for 72 million and the 1976 to 1979 deal was for 92.8.

The earlier deal was with 24 teams an so that comes out to 3 million per team over 4 years. The newer contract has 26 teams through most of it. For simplicity's sake if we just take 92.8 and divide by 26 we get about 3.6 million per team over 4 years. The "big" TV deal that would allow the teams to offset the cost of their payroll only rose by about 19%. Obviously local deals factor into this as well.

The average price of a ticket in 1980 was 21% higher than it was in 1977. As we can see the Yankees and all of their spending for all of those big players didn't raise their prices all that much higher relative to everyone else. During this time frame salaries rose by 90%. As you can see the Yanks didn't even raise their payroll up as much as everyone else.

So during this timeframe teams raised their ticket price by 21% but saw their payroll rise by 90% and had a TV deal that increased their national TV revenue by 19%.