I have written several posts criticizing the massive public subsidies for the new Yankee Stadium (see here, here, here, and here). Hundreds of millions of dollars in taxpayer funds were expended, more than on any other stadium project in American (and possibly world) history.
In exchange for all this public largesse, you might expect that New York taxpayers would at least get the opportunity to purchase tickets at reasonable prices. Not so much... The prices are so high that many seats are going unsold, creating public relations problems for the team. Even after the franchise cut prices in reaction to anemic sales, the new rates are still extremely high. For example,, seats near home plate still cost $1250 each after a 50% price cut. For New Yorkers looking for really high-end seats, it would be much cheaper to fly to see the Yankees play in Seattle [HT: Tyler Cowen]:
Ticket prices at the new Yankee Stadium are so high that if a New Yorker wants to watch a Mariners/Yankees game from the best seats, it would be a lot cheaper to fly to Seattle, stay in a nice hotel, eat fancy dinners, and see two games.
Option 1: Two tickets to Tuesday night, June 30, Mariners at Yanks, cost for just thetickets, $5,000.
Option 2: Two round-trip airline tickets to Seattle, Friday, Aug. 14, return Sunday the 16th, rental car for three days, two-night double occupancy stay in four-star hotel, two top tickets to both the Saturday and Sunday Yanks-Mariners games, two best-restaurant-in-town dinners for two. Total cost, $2,800. Plus-frequent flyer miles.
Normally, I wouldn't have any comment on the pricing policies of a private business. If a firm charges ridiculously high prices, they will be punished by the market and consumers will go elsewhere. People who don't like the price don't have to buy the product. In this case, however, the Yankees' insistence on extraordinarily high prices further cuts into the taxpayers' ability to get even a slight return on their investment. Government subsidization of sports stadiums almost always inflicts more economic harm on the public than it creates benefits. Charging exorbitant ticket prices adds insult to injury. Moreover, it's possible that the taxpayers will end up covering part of the Yankees' revenue shortfall, since the team has a consistent record of asking for (and getting) additional government subsidies each time the new stadium project ran into trouble.
Related Posts (on one page):
- Exorbitant Ticket Prices at the New Yankee Stadium:
- The New York Times on Public Funding for the New Yankee Stadium:
How else can they generate sufficient revenues to adequately compensate employees with the IQ of steamed broccoli and drug-induced giantism so that they can support their 12 kids in 11 different cities?
Please, have some empathy here.
http://www.netvibes.com/buyreplicarolex
True, but I don't think that's the point. Ilya's complaint, as I understand it, is that given subsidization the team should have some obligation to make tickets affordable, rather than simply trying to maximize revenue.
I say that as a Democrat and a Red Sox fan, of course
The city tried to get the Red Sox to move up from Ft. Meyers, but that city had a fatter wallet. Then the city tried for--and is still trying as best I can divine--for the Baltimore Orioles.
No big loss, as far as taxpayers are concerned, I guess. There is a loss with the Reds Single-A affiliate, though. The best seats for those games run $7.00, for a box seat behind home plate. Those Single-A games were a good deal all around.
The city calculated its direct and indirect earnings from having a pro team in the tens of millions, with a few hundred jobs attached. The earnings and jobs loss are not particularly welcome just now.
Slashed Ticket Prices Allow Lesser Nobility to Attend Yankees Games
They may look at the demand curve for high priced tickets and say "It is better to sell 90% of them at $1,250 each than 100% at $1,000 each".
Ilya, are you saying that a business shouldn't profit maximize just because they received a government subsidy? That once any company receives a government subsidy it must act in the public interest, not the shareholders? The public interest as defined by elites such as Ilya Somin?
Do you want them to sell the top tickets for $1,000? Are you concerned about people that can pay $1,000 for a ticket, but not $1,250? Do you want them to sell the top tickets for $50?
Of course I am outraged by the subsidies, but those are sunk costs to be ignored.
That's the way to fix problems in New York City government - more Democrats.
What I find fascinating is how these arguments are playing out in a lawsuit by Seattle against the former Seattle Supersonics. When they wanted an arena the tried and true "economic engine" argument was trotted out. Now that the team's move to Oklahoma has taken place, the team's defense relies in significant part on the studies by the very economists earlier villified by proponents that strongly suggest there is no such "economic engine" benefit.
Hmmm... A "economic engine" when a demand is made for an arena to be built, and a "non-economic engine" when a team decides to move.
Is it just me, or does there seem to be a gaping inconsistency?
Even at that price, the Yankees aren't publicizing it for fear of admitting a mistake.
It's not a surprise that so many Yankees/Red Socks fans fly down to B'more and stay for all three games.
"many of which may not be buying because of the negative PR potential"
Or, you know, lack of ready money, or perhaps a newfound soberness.
Some aspects of recessions are underrated.
and then, only for a grudge match against the Boston Red Sox.
I beg to differ. The government officials, at least in DFW, get a free box to use.
As I understand it, physicists have proven that the demand doesn't actually curve, it's an optical illusion.
Now, the Demand Spitter is another story altogether.
Given current economic conditions I would suggest you squirrel that $1250 away under the mattress and let the pin-stripers play to an empty house.
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