Monday, December 03, 2007

Back to the Classroom

Yes, ticket prices are going up for the Cubs in 2008. What do you expect when a team qualifies for the playoffs and, more importantly, is 98% sold out? See, demand for tickets exceeded supply. Basic economics tells us that when demand exceeds supply. prices will rise to the point where demand equals supply.

Some are bitching that 16% increase in one-year is a lot to swallow. Not really when there was no price increase in 2007. Again, because seats were empty in September 2006, more was affected than Andy MacPhail's job. Demand for tickets was below supply. Sure, the tickets were sold before the season started, but that the tickets went unused told John McDonough that a ticket price increase would not be easily passed on to the paying customers.

But what's really sad is supposedly educated writers falling for the company line:

When the Cubs spent $300 million on free agents last winter but didn't raise prices for season ticket-holders, most figured a significant increase would follow in 2008.

The Cubs announced a big one Friday: Prices will rise 12 to 23 percent on most tickets next season, with infield club box seats for prime games going from $65 to $80.

Dear Paul:

Ticket prices and payroll have NOTHING TO DO WITH EACH OTHER. Remember last year? Ticket prices were announced on Tuesday, November 14, 2006. Aramis Ramirez was signed a few days before, Mark DeRosa on the 15th, and Alfonso Soriano was two days after that.

Doesn't it make sense that Jim Hendry knew what his budget for salaries was going to be before ticket prices were announced? If so, then why were ticket prices held flat instead of raised right then?

Because demand was lower than supply.

Maybe next time an econ lesson is given, Paul will sit in the front row where he can see.

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