Athletes and Their Agents Don't Set Ticket Prices
CD regular reader Jim Moore writes in an email:
"I don't know if you're interested in reader-provided links, but there's an excellent little economics tutorial in the WSJ today (Wednesday) by Allen Barra, "Sports Salaries Show What We Really Value," page A11."
Here's at least part of that economic lesson:
The athletes and their agents don't determine the price of tickets, souvenirs and food. Not even the owners determine them. In general, you are the ones who set the prices for T-shirts and baseball hats.
It may take a while but eventually, if baseball management has overpriced its commodities, consumers -- that's you, the fans -- will show them their error and the prices will come down. If you are willing to pay their prices that means they set the right prices after all.
MP: It's similar to the economic reality that oil companies do NOT set oil prices or gas prices, it's market forces that ultimately determine market prices.
By the way, I am always interested in reader-provided links, ideas for posts, articles, suggestions, news items, blog items, etc., etc. Many CD posts have been based on reader-provided material, so please feel free to send along interesting items at any time to mjperry@umich.edu.
4 Comments:
Mark,
Below is a link to a New York Post story about how the New York Yankees were guided by market forced to lower ticket prices.
http://www.nypost.com/php/pfriendly/print.php?url=http%3A%2F%2Fwww.nypost.com%2Fseven%2F04282009%2Fsports%2Fyankees%2Fyankees_lower_ticket_prices_166648.htm
Sorry, here it is:
http://www.nypost.com/php/pfriendly/print.php?url=http%3A%2F%2Fwww.nypost.com%2Fseven%2F04282009%2Fsports%2Fyankees%2Fyankees_lower_ticket_prices_166648.htm
Cop-out.
Of course, they do. Otherwise they would be able to push them down even more.
This was a great op-ed in many ways. It did leave out that the major leagues limit each city to one team, so there are a string of regional monopolies coast-to-coast, usually subsidized by cities.
Also, in a free market, why are baseball announcers routinely banal, even insipid? Only Vin Scully is good.
I think the answer is that in each city, the local team is a monopoly, and only one radio station is allowed to broadcast the games. Thus, as a Dodgers fan, I have to listen to the mediocre Rick Monday broadcasting, and I have no choice.
I would give up my libertarian ways, if
1. A national school of baseball broadcasting was created.
2. Well-endowed, with huge stipends to grant to promising announcers, it trains 100 people a year to broadcast baseball. on the Vin Scully model. Each student gets $200k a year to train.
After a few years, there should be lots of good broadcasters out there. It is obvious, the free market has totally failed us on this score, with dire results.
Go ahead, I cave, you can have national health insurance, rural subsidies and the Dep't of Ag., the Pentagon, the FDIC, the home mortgage interest tax deduction, public universities, keep it all, if I can just get my baseball announcers academy.
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