Wednesday, September 05, 2007

Edmonton Oil Kings - Ticket Prices illogical Greed or Smart Business?




The above mascot illustrates a family-friendly atmosphere sports organization.

Which may be.

What isn't family-friendly is the ticket prices.

The Oil Kings announced their single game ticket prices in recent weeks. $29 and $25, the highest in the CHL. Add in ticketmaster fees ($5-$6/ticket), Parking ($8), and the likely NHL-Priced concessions, and families are left wondering whether to just stick with the U of A Golden Bears ($10 adult tickets).

Yes, higher than Vancouver and Calgary, both solid comparables with established WHL franchises. Only the 100 level will be open to limit capacity/supply (~6750), improve a hockey atmosphere, avoid employee payroll in the 200 level, and most importantly prevent leakage from higher ticket prices to lower ticket prices.

Too much you say?

Oil Kings VP Nick Wilson disagrees. He claims that those prices are in line with the cost of other entertainment in Edmonton.

What are the comparables? Movie Theaters? Eskimos games? Rush? Gateway Bowling? U of A Golden Bears? A quote left up to the reader's interpretion - but finding a decent comparable is difficult.

The WHL has the potential to be a profitable venture for the EIG. Market size is one of the largest in the league, with small towns such as Swift Current (population: 16,000) competitors. Players also don't receive salary either, just a modest diem (~$200/week). Bus rides are more common than airfares, and these guys aren't staying in world class hotels like the NHL guys. At the same time, the EIG cannot afford price themselves out of the Edmonton Junior Hockey market leaving only 2,000 fans in a 17,000 Rexall Place.


The major questions arises among Edmontonians - are the current ticket prices too much to build up a fan base? Or are they reasonable enough to attract the targeted 5000-6750 needed in order to generate extremely high annual returns? Is the current pricing sustainable over the long run (i.e. Will the novelty wear off after the 1st year)?

You'd think the EIG researched their market well. The success of the Oil Kings founder Club (3 year season tickets) likely aided them in finding the price point. These guys aren't a charity. They didn't donate tickets to the Troops themselves (rather, the season ticket holders were asked), and they aren't interested in subsidizing lower income or single parent families either. This isn't about Edmonton or the community, no matter how many times Patrick LaForge leads us to believe so. The "Family" demographic talk is nonsense. The intent is to find the price point in order to fill the lower bowl with higher income families or commerce related workers that are willing to pay $8.00 for a Molson. If it keeps the ''Family'' demographic away from the games - so be it. Opening the 200's and 300's could definitely help out the "Family" demographic - but it comes at a major cost. The cost being leakage. The upper levels would require lower ticket prices, and this would remove the certainty of the higher ticket prices. This is the same reason Ken King, president of the Calgary Shames, indicated a short while back, an ideal capacity for an NHL rink is in the 16,000's. This is a business gentlemen. These are smart business guys folks, as much as it pains me to admit it. They already know how to fuck a city over and still come out as public heroes with the taxpayers of Edmonton subsidizing the Rexall lease.

Will the strategy work?

For those in the "Family" demographic that vocally raised objections - take your money to a better quality of hockey in the U of A - you were a never the targeted market. For those a little more wealthier, the eyebrows that were raised when the ticket prices were announced, will seamlessly fall back down without further objections. After all, aren't the Oil Kings ticket prices comparable to other entertainment options in Edmonton? With the Oilers tickets becoming more scarce every year, the EIG know they will be able to get away with charging the highest ticket prices in the CHL.

And they will.

EDIT: After blog entry release, the Edmonton Oil Kings introduced more family-friendly pricing. $10 single tickets, $17 ATB tickets, and $88/4 tickets + 4 Sodas/Hot Dogs packs.

3 comments:

ifnrule said...

Way too much money! I'm originaly from Moncton N.B. Our first crack at the CHL,tickets were high,fan base was low and expansion teams never doo too great in their firt few seasons. WE quickly became the joke of the league. Then,with smart new ownership,tckets were lowered to very affordable prices,in adition they were giving away about 2 to 3000 tickets/game. Most of the give aways were to local schools through various contests and local radio and tv stations.So in creating a good fan base with the kids,thus for alot of parents started bringing them to the games,we suddenly had 5 to 6000 people at every game,not bad for a town of 50 000.Rivalry games such as halifax would sell out every time(9000).By giving all these tickets away,you lose on the price of the tickets,but they made it back on concesions,as new ownership took control of them.In the long run,you'll make more money with low prices/many fans than high prices and low fans.Plus it sure feels better playing for full crowd rather than a empty rink.

PunjabiOil said...

update: Oilers release new promotional pricing. $17 tickets, $10 tickets, and $88 for a family of 4, including pop and hot dogs.

PunjabiOil said...

".By giving all these tickets away,you lose on the price of the tickets,but they made it back on concessions"

____

That's a good point. There are people that will spend a good $30-$50 on food/beer alone at games.