Monday, February 19, 2007

Empty Boxes

There are stories that the famous diamond producer De Beers works (via cooperatioon and bullying) to keep the supply of their favorite gems short in order to keep prices up. They know that a luxury good is all about perception and if you can not get a diamond too easily then the consumer wants it all the more with the bonus of being willing to pay a premium. BMW did the same thing by limiting the number of Minis. You will be willing to pay more because they are rarer than a Honda Civic.

The Wall Street Journal is reporting that some sports teams are eliminating luxury boxes as the units are going unsold. The article focuses on baseball teams that are have problems filling selling the boxes for the season as companies are cutting back on expenses. This is not a Chicken Little message for college football as the markets are different in many key ways but it does point to old economic adage about the trees not growing to the sky. Baseball was among the first to enter this market and college football programs may find themselves with the same issues in the future.

The baseball season is 81 games and a late August game of two teams out of contention is rarely a hot ticket. Baseball was in the market early before there were other options for those sports dollars. There is something to be said for the laid back nature of America pastime for allowing the conversation to drift into business issues. In college football you have just 5 to 8 games and the end of the season often has the rivalry game that is a hot ticket regardless of the teams records. The market for the college fan in general and the luxury box fan in particularis more tied to the institution with pure passion that MLB lacks.

That said college football needs to avoid the hubris and arrogance of the pros. Easy to say but difficult to do the best strategy would be to have just a couple of people on the waiting list for that box. Not a long line where fans give up but just long enough that they pounce on an opening. So next time your team wants to add seats or luxury boxes to the stadium take a look at Rice University with a bigger stadium that is only 21% full.


Blogger the boss said...

In your link stating that Rice and Stanford are the only college stadiums to host Super Bowls, why isn't the Rose Bowl counted? I think you could even count San Diego State's Qualcomm Stadium.

6:20 PM  

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