SMA 2012: Developing a pricing strategy for the Los Angeles Dodgers

1. SMA 2012: Developing a pricing strategy for the Los Angeles Dodgers Kathryn Belanger, Katie Gonzales, Megan Gregg, Adam Schwoebel

2. Dodger Stadium

3. What should the new pricing strategy be?

4. History • Established in 1883 • Originally in Brooklyn, NY – moved to LA in 1958 • 6 World Series Titles

5. Strengths Weaknesses • Dodger Stadium • Large metropolitan area • New ownership group • All-Star players • Past ownership issues • Filing for bankruptcy in summer 2011 • Drop in attendance/fan support

6. Opportunities Threats • New media contract after 2013 season • Crowded sport market • Secondary market

7. New Strategy • Dynamic Ticket Pricing (DTP) – Individual, Group, Promotion • Variable Ticket Pricing – Season Tickets

8. Benefits of DTP • Compete with secondary market • Drayer and Shapiro study 2010 • 17/30 of MLB teams use DTP

9. Attendance vs. Revenue Increase attendance per game Increased revenue

10. Drawbacks of DTP • Fan Reaction • Season Ticket Holders • Game to game fans • Cost of implementing

11. DTP in Use

12. San Francisco Giants • Implemented DTP in 2010 • Fan reaction • In-House system

13. San Francisco Giants • Factors used to determine pricing: • Opponent • Day of the Week • Promotional Giveaway • Starting Pitcher • Weather

15. Average Attendance

16. “We have seen two consecutive sold out seasons and about an 8% increase in revenue yearly since we rolled it out.” -Russ Stanley Managing Vice President, Ticket Sales and Services

17. Chicago Cubs • Season ticket holder reaction • Positive effect on revenue • Factors: • day of week • opponent • weather

18. Additional Example • Used DTP for one year • Excellent results • Fans rely on social media and the teams website for ticket prices and deals • Dynamic deal of the week

19. Dodgers and DTP

20. Pricing levels 2012 Pricing & Savings New Levels Currently 28 levels New 14 levels

21. Digonex • Headquarters • Indianapolis, IN • Current Clients • Anaheim Ducks • Minnesota Twins • Partners • MLB Advanced Media

22. Digonex’s pricing • Set-up fee- Based upon the time frame of launch for DTP • Other Charges • Price per ticket or unit • Revenue share on profits • Flat fee based on number of items sold and length of contract

23. Digonex’s software • SEATS (Sports and Entertainment Analytical Ticketing System) • Digonex trains employees • Integrated with chosen ticketing platform

24. DTP in action Purchases Reporting Consumer Dodgers SEATS • Fans purchase tickets • Purchase is recorded in ticketing system • Ticketing system tells Digonex what was purchased New Prices New Prices Consumer Dodgers SEATS • SEATS ingests data and Dodgers’ variables • Recommended prices sent to Dodgers • Accepted prices sent to ticketing system to display to buyers • SEATS compares current data, historical data, and expected sales • SEATS calculates optimal prices

25. Variables for Dodgers • Opponent • Rivalry • Team records • Same division • Day of week • Holiday • Secondary market prices • Team marketing initiatives • Bobble head night • Available inventory • Date of game

26. Variable exclusions for Dodgers • Weather- Last rain out April 17, 2000 • Probable pitcher • Other Los Angeles area teams playing

27. Communicating DTP

28. Internal • Email to whole organization • Outline what the change is • Why it was made • Ticket department seminar – explain new process • DTP group more intense training

29. Dodgers to Introduce Dynamic Ticket Pricing

30. Dodgers to Introduce Dynamic Ticket Pricing Starting in 2013 Los Angeles, CA October 24, 2012 –– Starting at the beginning of the 2013 season, the Dodgers will begin using dynamic ticket pricing. In dynamic ticket pricing, tickets fluctuate periodically based on certain characteristics of that particular game. This type of ticket system will encourage fans to buy tickets early in order to assure the best deal on their tickets. The Dodgers, in a quote from an upper level ticket executive stated, “We want to assure fans that this new ticketing system is being implemented with them in mind.” Every decision we make is made with fan satisfaction as the number one goal.” Dynamic ticket pricing will not affect the price of any season tickets as those prices will still be based on the formers system. With this move, the Dodgers become the seventeenth major league team to implement in some capacity the use of this system.

31. Dodgers to Introduce Dynamic Ticket Pricing Starting in 2013 Los Angeles, CA October 24, 2012 –– “Digonex Technologies, a industry leader in dynamic pricing services, and the Los Angeles Dodgers have partnered to bring fans ticket prices that accurately reflect consumer demand in real-time. “ Continue to Full Story >>

33. Value to Season Ticket Holders • Currently: play catch on field (certain dates), early entry to parking and stadium, exclusive right to watch batting practice

34. New Season Ticket Holder Gift • Buy one get one free hot dog • One free souvenir soda • One free parking voucher

35. Marketing DTP

37. Conclusion

38. Thank you! Questions?