Boston Globe business columnist Steve Bailey pens a very insightful column (“Patriots stand tall”) about the contrarian ticket strategy of the New England Patriots franchise and its owners, the Kraft family. Excerpts: This week, giant Ticketmaster won the hotly contested bidding to become the Official Ticket Scalper of the National Football League. The deal will mean maybe $20 million for the league and the teams, but the Patriots have made clear they don't want any part of it (as have a handful of other clubs)…
The Kraft family, who have turned the Patriots into a model franchise, are not stupid businessmen. They know that it was not that long ago, before they arrived on the scene in 1994, that there could be 35,000 people in the stands and 300 arrests in the Animal House culture that was the sorry old Foxboro Stadium. The drinking and hooliganism was so bad that the network pulled the plug on Monday Night Football there. It was a bad customer experience, on and off the field….
The Krafts have largely fixed that. Better security has helped. So has the new Gillette Stadium. But knowing who is sitting where, and holding them accountable, has made a difference, too. It can still be raw in some sections of Gillette Stadium on a Sunday night, but the experience is night and day from the bad old days.
I like the free market, too, but pro sports are not a true free market. There are more than 50,000 people on the waiting list for Patriots season tickets, but the Krafts aren't about to expand the stadium and the NFL is not about to put a second franchise here because of demand…
As this blogger is fond of saying, “There is no free lunch. There is no free love. There is no free market.” That doesn’t mean that allowing market forces to operate is not the single most critical factor for an economy. It simply means that the truly ”free market” is an economist’s abstraction realized only to various degrees in actual markets. Bailey’s column shows that the Krafts (and Bailey) appreciate this distinction. They are building a franchise, and ticket distribution is an element of that strategy, not just a means of maximizing revenue.
2 comments:
What if Harvard started charging the market rate for its education? It would fill with Saudi and Beijing princelings but the experience would become worthless. Foxboro can hold itself as the Harvard of the NFL. The anonymity afforded by sitting in a stadium of people lets some idiots think that they can get away with murder. With the ability to give the owner of the seats the death penalty, deterrence is assured (kind of like the actual death penalty)
Exactly, flymorgue. They realize the value customers place on possessing scarce season tickets and use the incumbent's privileges as one way to improve the overall customer experience.
As the Guinness ads say, "Brilliant!"
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