Sports

Dynamic ticket pricing use takes off, and teams hope it'll lure fans back into sports stadiums

Jacob Young, special to CNBC.com
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Key Points
  • Adjusting sports ticket prices according to supply, demand and other factors is becoming more popular as a tool to fill stadiums.
  • "Dynamic pricing" makes tickets act "just like a stock," according to one market observer.
Cooper Kupp #18 and Sammy Watkins #2 of the Los Angeles Rams celebrates after Kupp scored a touchdown against the Oakland Raiders during the first quarter of their preseason NFL football game at Oakland-Alameda County Coliseum on August 19, 2017 in Oakland, California.
Thearon W. Henderson | Getty Images

Many sports fanatics seem content to watch their favorite teams in a bar or in the comfort of their own homes.

It's easy to understand why, as pro sports ticket prices often run in the hundreds or even thousands of dollars, depending on the game and location. According to Statista.com, the average ticket price for a National Football League game during the 2015-2016 season was $92.98 — well above other sports and almost triple the average Major League Baseball ticket at $31.

To combat this, franchises and secondary market sites are ramping up their use of dynamic ticket pricing, currently in use by at least a quarter of NFL teams, as well as in other sports. It means prices are modified in real time to account for the current market, a team's opponent, weather conditions, and other factors determined by supply and demand.

"It is a supply-demand-driven commodity, just like a stock," said Jesse Lawrence, founder of TicketIQ, an event ticket search aggregator. "The price should reflect the fair market value."

'Worthy of consumer dollars and attention'

The move to get more spectators into stadiums comes at a challenging time for professional football. Although negative attention from on-field protests has taken a toll on television ratings, NFL stadium attendance is actually up slightly this season when compared with last, according to data from Pro Football Reference, which crunches the numbers on fan attendance at stadiums.

This strategy seems to be making headway in attracting devoted fans away from the big screen and back to the stadium. "At the end of the day, there is more competition, demands for consumers' attention," Lawrence said. "That's always going to be challenging."

Waning TV ratings raise the stakes for teams, who "have to make sure the product is worthy of consumer dollars and attention," Lawrence added. "It raises the bar in terms of the quality of experience consumers expect."

Icon Sportswire | Getty Images

Ultimately, dynamic pricing allows teams to use potentially cheaper ticket prices to encourage buying and create loyalty. Beyond the professional level, variable pricing seems to be a trend with big-time NCAA football programs as well, with some programs betting that lower prices will help fill the bleachers.

Ohio State University has one of the nation's most storied and popular college football programs, which a Wall Street Journal analysis recently valued at $1.5 billion. Recently, Ohio State's Board of Trustees announced a plan to return some of that value to ticket buyers, cutting next season's ticket prices by more than $50.

"Ticket pricing is evaluated and potentially changed each year, with the primary driving factor being the overall athletic department budgetary needs," Brett Scarbrough, associate athletic director and head of ticketing, told CNBC in an email. "Pricing each individual opponent separately creates this season-to-season fluctuation."

Ohio State introduced premier-game pricing in 2013, and has built on that by offering different prices per opponent and percentage discounts for season-ticket holders. Next season reserved seats will cost $195 when the Buckeyes host rival Michigan, but only $67 against Tulane.

Like some other universities, Ohio State relies on verified resale sites to assist with ticket distribution, such as Ohio State Ticket Exchange. "We see this as a benefit to our season- and single-game ticket buyers to have flexibility in managing their ticket investment," he said.