Complaints and confusion over the nearly 9 million tickets for the 2012 Olympic Games in London have been rampant, according to reports.
The complaints have focused on pricing—with the advertised top value of more than $5,000 for a prime event seat—while the confusion has centered on how and where to buy them.
Sports ticketing has always been under pricing and availability pressures—and subject to the wrath of fans.
But a new way of doing business, especially in the U.S., is being tried by sports' leagues with the aim of fair market value and fan access: dynamic pricing.
"It's a new way to bring in fans and sell tickets to games that wouldn't ordinarily sell," says Mark Conrad, associate professor at Fordham University's school of business. "You can fill in seats at a reduced price and maybe get those fans to come back and pay more at another game."
The theory behind dynamic pricing—letting demand set the ticket price—is hardly new. Airlines and hotels have been using it as far back as the 1980s. It's even hit Broadway and other cultural events.
But during the last two years, sports teams and more leagues have embraced dynamic pricing including Major League Baseball, the National Basketball Association, the National Hockey League as well as some colleges and universities.
Here's how it works. A team like baseball's San Diego Padres, which began using dynamic pricing this year, sets a ticket price on each baseball game played at home before the season begins. The current average price for a Padre ticket is around $16, while premium tickets go for $38. Both are among the lowest figures in MLB.
However, as the season progresses, a scheduled game with a another team may lose interest among fans. That could be because the visiting team is not playing well or has lost a star player to injury. Los Angeles Dodger outfielder Matt Kemp—considered one of the best players in the league—was on the disabled list twice before the All-Star break and missed 31 games.
So a game with the Dodgers—and without Kemp—may need a ticket sales boost. To do that, the Padres would lower ticket prices for some seats right up until game time.
Conversely, a game on the schedule that didn't have much importance is suddenly popular because the rival team may be playing well, or has a rookie player, whose drawing fan interest—such as Bryce Harper of the Washington Nationals. So ticket prices may spike.
It's this pricing flexibility—and the chance to make money— that's intriguing for teams, says Jarrod Dillion, vice president of ticket sales and services for the Padres.