The New York Yankees announced today that they were reducing prices on a select group of premium seats, while offering refunds and comps to those who spent thousands of dollars on seats per game at the new stadium.
Given the price of some of the seats -- as much as $2,500 for the front row that runs from dugout to dugout -- the amount of this deep discount is historical. So how did the Yankees find themselves here?
1. Wrong Digits. The Yankees simply came out of the box with a bad number. Some of these seats wouldn't have sold if the stadium were ready last year. Having a new stadium with new amenities still might not justify a tripling in ticket price.
2. Different World. When the Yankees announced their luxury pricing tier, it was simply a different time. On March 21, 2008, the Dow Jones was at 12,361. Today, the Dow closed at 8,016.
3. Look Who's Not Talking. Financial institutions who typically purchased these seats can no longer do so. Some of these targeted firms, like Bear and Lehman, don't even exist anymore.
4. Scared To Sit. Business owners and executives who could afford the tickets are now cognizant of the message it sends to be an owner of these seats. Others who might have recently cut payroll or let people go don't want to be seen at these games.
5. The Formula. The final decision had nothing to do with any public relations nightmare. The Yankees don't care. Losses on the field affect the perception of their brand more. It had more to do with the simple financial equation. Six games through the regular season, Yankees executives had to make the math work. In order to do that, they had to come up with a formula that would push volume. So they figured out what they had to do by both discounting and including free-add ons to make this deal make more business sense.
6. Eat Crow. Lastly, it took a piece of humble pie. For whatever the Yankees might mean to their fans, they are still subject to the economy and market forces. For Thursday night's game, you can buy a ticket behind home plate for $400 on StubHub right now. With those prices, it's hard to keep face at six times that.
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