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NBA markets change

Sun., March 28, 2010

Teams lower prices to bring in fans

MINNEAPOLIS – Glen Taylor isn’t blind.

Sitting courtside at Target Center, the Minnesota Timberwolves’ owner sees the scores of empty seats that surround him.

The Timberwolves, like many NBA teams, are losing more than just games these days. In the middle of a rebuilding project that team officials acknowledge will take at least three years, fans in the sports-saturated Twin Cities are choosing to spend their entertainment dollars elsewhere while the young Wolves learn on the job.

So Taylor challenged his marketing team to come up with a plan that would make them want to stick with the team through the hard times.

They responded with a drastic proposal: Fans who buy or renew season tickets in March can purchase seats in the lower bowl at discounts of up to 50 percent off this season’s price, with some as low as $10 per game.

“I told them to be creative. So they come back to me with something like this,” Taylor said with a chuckle.

Teams across the league are finding that they have to offer more in these difficult economic times to entice fans to spend money at their arenas.

According to a survey conducted by Team Marketing Report, an Illinois-based sports research firm, the average price for a ticket to an NBA game this season fell for the first time in eight years. In addition to the 2.8 percent drop, more teams are offering incentives such as meet-and-greets with players, free parking or separate concession lines for season-ticket holders.

So, after years of the average fan grumbling about being priced out of professional sporting events, are we seeing a market correction in some cities?

“Absolutely,” said Andrew Zimbalist, a sports economist and the Robert A. Woods professor of economics at Smith College. “Well over half the teams in the big sport leagues are engaging in discounting of one kind or another. The Timberwolves are probably on the far end of the discounting, both because of the size and the explicit nature.”

Timberwolves president Chris Wright calls it “a body play.” While the team may have difficulty making money with ticket prices at that level in the short term, Wright says the team views itself as a “growth stock” in the commodities market.

“If you’re in the commodity business and you have more inventory than you have demand, your price is low,” Wright said. “The idea is then to flip that on its backside and make sure there is more demand for the inventory that you have. We’re not there.”

Neither are the Sacramento Kings, who will cut nearly every season ticket in the lower bowl next year by 6 percent. The Kings are also offering season-ticket holders 20 games of free parking and their own line at the concession stands.

“The main thing we’re doing is listening,” said Mitch Germann, the Kings’ vice president of business communications. “We’ve always been listening, but I think we’ve listened more carefully than ever before.”

Detroit is another team that is cutting prices. It’s just a matter of determining how much.

“We are going to make some adjustments with our ticket prices, reducing most if not all of them, because we have to be responsive to the economic situation we’re all in,” CEO Alan Ostfield said.

Some teams, such as the Los Angeles Lakers and Cleveland Cavaliers, haven’t had to reduce their prices.


 

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