All Commentary
Wednesday, February 1, 2012

The Boston Red Sox and Bad Baseball Economics

No way to make cheap tickets more available.

The Boston Red Sox are following our politicians’ lead, enacting paternalistic market restrictions that defy basic economic principles. The team announced a new Digital Ticket Initiative, which will require upper-bleacher patrons to swipe at the gate the credit card they used to purchase the tickets, effectively killing the secondary ticket market for those seats. The stated goal of this measure is to “gradually eliminate those purchasing these specific tickets solely for the purpose of resale, and instead get these tickets into the hands of fans and families all over New England.”

Unlike the government, of course, the Red Sox organization is private and has every right to enact this measure. But, that doesn’t mean we should ignore the bad economics in action, especially since it contradicts the exact goal the organization is apparently pursuing.  By restricting the market for these seats in an attempt to make them cheaper, the Red Sox are only going to make them more expensive for most fans and increase the power of incumbent season ticket holders.

If you’re a Red Sox fan without season tickets, you had two choices: Buy a ticket the day of release (January 28) or purchase a ticket on StubHub. Both options got worse this year thanks to the new policy. Since buying the day of release was the only way to purchase $12 upper-bleacher seats, more people presumably lined up on January 28, so the odds of getting a cheap ticket were reduced.

Let’s say the tickets were sold out, and you go to StubHub to buy a ticket. The prices on StubHub will be higher, since the supply of tickets that can be resold has also been reduced. In one act the Red Sox have made it harder to buy the cheapest tickets and made the tickets available for resale more expensive. Neither of these measures helps the average fan.

Likewise, season ticket holders will now have more control over ticket distribution. In Fenway Park only a small portion of tickets are released for individual game sales. Under the model the Red Sox are promoting, these season-ticket holders will act as gatekeepers for ticket distribution. They are more likely to allocate them to close relatives or friends than individual-game ticket holders are. This will create a small group of elites with lots of tickets and make it harder for those tickets to be distributed more evenly.

In effect the Red Sox are promoting a form of a sports-ticket aristocracy. They’re nominating an elite class that gets to distribute a scarce resource by their own whims and desires in the name of public welfare. Sound vaguely familiar?

Occupy Fenway Park.