Cricket pricing

Here is an article about how the ICC’s efforts to make as much money as possible and paranoia about ambush marketing has culturally destroyed the World Cup. Written by a chap called Mohan, a Trinidadian who volunteered for the World Cup. Excellent piece.

One thing, however, I don’t understand. Game in and game out I see empty stands. And am told by commentators that it is because the tickets are too highly priced. Question is haven’t the organizers heard of Revenue Management? Don’t they realize that most of the costs (facilities at the ground, organization, etc.) are fixed, and that the marginal cost of an additional spectator is minimal? (In fact, zero until the ground is full) And that they have only something to gain by lowering gate prices?

It is likely that the cricket audience in west indies is highly elastic, meaning if the ticket prices are reduced, the corresponding increase in volumes will more than make up for the reduced margins – a clear case for reduction of ticket prices.

On a related note, Mohan talks about the exorbitant prices for food and water inside the stadium, and how hence no one is able to buy them (also, food and water from outside are not allowed). Don’t these guys (the vendors) understand that the money they paid for hte concession is a fixed cost? And that lowering the prices for food and water will fetch much more in revenues?

Coming back to pricing of tickets, the ICC might justify the high prices saying that an event such as the World Cup will have so much demand and so forth. However, what prevents the organizers from offering spot discounts? Say three days before the match, only half the tickets are sold. Slash the prices and publicize it. And keep reducing prices further till you sell them all (maybe even throwing the gates open during the game)

Cricket needs its audience. It needs the mexican waves and the shouts and the hoots and the drums. It needs all the noise, and the passion and the cheers. If only ICC realized that and priced appropriately!??

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