Old Dominion University
ODU Digital Commons
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Developing a Pricing Strategy for the Los Angeles
Dodgers
Denise Linda Parris
Joris Drayer
Stephen L. Shapiro
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21
Case Study
256 Volume 21 • Number 4 • 2012 • Sport Marketing Quarterly
Sport Marketing Quarterly, 2012, 21, 256-264, © 2012 West Virginia University
Developing a Pricing Strategy for the
Los Angeles Dodgers
Denise Linda Parris, Joris Drayer, and Stephen L. Shapiro
Denise Linda Parris, PhD, is an assistant professor of marketing in the Barney Barnett School of Business and Free
Enterprise at Florida Southern College. Her research interests and consulting include pricing and marketing strategies, non-
profit management, leadership, and entrepreneurship.
Joris Drayer, PhD, is an assistant professor of sport and recreation management at Temple University. His research interests
include ticketing and pricing strategies in both primary and secondary ticket markets, as well as consumer behavior.
Stephen L. Shapiro, PhD, is an assistant professor of sport management at Old Dominion University. His research focuses
on financial management in college athletics, ticket pricing in college and professional sport, and consumer behavior.
Developing a Pricing Strategy for the Los
Angeles Dodgers
Blame it on the weather? Or the economy? Even if these
factors play a role in game day attendance, Larry knew
there was a much bigger story behind the empty seats at
Dodger Stadium. In 2011, the Los Angeles Dodgers
averaged 36,236 fans per game, dropping from 43,979
in 2010 and 46,440 in 2009, an overall loss of about
10,000 fans per game in just two years (Baseball-
Reference.com, 2012). In 2011, The Dodgers’ atten-
dance ranking fell from first to eleventh in Major
League Baseball (MLB), which amounted to a loss of
over 800,000 tickets sold per year, as well as the result-
ing revenue from concessions and parking. These num-
bers, in addition to being surpassed by the Los Angeles
Angels of Anaheim in attendance for the first time in
history, put Larry in quite a predicament. As Marketing
Director of the Los Angeles Dodgers, Larry wondered
how he could bring fans back to the ball park.
Despite the Dodgers’ long and storied history, ticket
demand had been negatively influenced by inconsistent
performance, mounting bad publicity surrounding
owner Frank McCourt’s divorce, the beating of a San
Francisco Giants fan on opening day at Dodger
Stadium, and the threat of suspension or termination
of the Dodgers by MLB commissioner Bud Selig if
McCourt did not agree to sell the team. After filing for
bankruptcy in June 2011, the McCourt Era (2004-
2012) ended in March 2012 when he sold the Dodgers
and Dodger Stadium to Guggenheim Baseball
Management for over $2 billion dollars, the highest
price ever paid for a sports entity. The value of the deal
was derived by the promise of a substantial uptick in
media revenue following the 2013 season, when the
organization’s current deal expires (Futterman, 2012).
The new ownership group strengthened this invest-
ment by acquiring several All-Star caliber players with
large contracts (Hanley Ramirez, Carl Crawford, Josh
Beckett, and Adrian Gonzalez). Given the increased
investment and new strategic trajectory for the organi-
zation, the team also needed to reassess ticket prices as
the product on and off the field was changing rapidly.
Leading into the sale, the Dodgers were offering ticket
prices not seen in 20 years with upper deck seats start-
ing at just $5 for season ticket holders. Most ticket
prices were reduced throughout the stadium for the
2012 season (“Prices drop,” 2012). Larry, who was part
of the new management team, did not want to get
boxed into the downward spiral of lowering ticket
prices and wanted to take a fresh look at the team’s
pricing strategy, particularly in light of the exciting
player acquisitions made by the new ownership group.
He understood pricing is one of the most important
elements of the marketing mix because it is the only
variable that directly determines revenue (Parris,
2011). Since price affects quantity demanded, he
thought developing a new pricing strategy would help
fill the 56,000 seats inside Dodger Stadium.
In 2009, the San Francisco Giants were the first MLB
team to adopt dynamic ticket pricing (DTP), which
adjusts prices in real time to match fluctuations in
consumer demand. Prices change daily based on fac-
tors such as team performance, individual player per-
formance, ticket prices in the secondary market, and
weather. DTP is quickly emerging as a prominent tick-
et pricing strategy with 17 of 30 MLB teams using
some form of demand-based pricing during the 2012
season (Dunne, 2012). A catalyst to this transition has
been the software pricing company Qcue that repre-
sents 15 MLB teams. Qcue started in 2007, offering
dynamic ticket pricing solutions by using a model to
recommend daily ticket price changes based on market
demand (Qcue, 2012). This shift in pricing strategy is
breaking long-held industry norms, and perhaps has
unintended consequences for fans and sports teams.
Given the recent drop in attendance, the last thing
Larry wanted was to adopt a pricing strategy that
would add to fans’ discontent. His marketing team
needed to carefully evaluate the potential implementa-
tion of DTP by asking themselves: What factors influ-
ence day-to-day price-setting, and what is the best way
to analyze and understand these factors? What are the
potential positive and negative effects of DTP for the
organization? And how can the Dodgers use their new
pricing strategy as a marketing tool? The Dodgers
needed clear answers to these questions in order to
determine if DTP was the right choice for the organi-
zation. Larry realized that despite the growing accept-
ance of DTP, his team faced a steep learning curve
regarding if and how to develop and implement this
new pricing strategy. So he broke his ticket marketing
team up into smaller groups and assigned them the
task of assessing the most appropriate pricing strategy
that would help the Dodgers maximize ticket revenue.
A New Beginning
The recent change in team ownership from Frank
McCourt to the Guggenheim Baseball Group brought
hope to Dodgers fans of a new era filled with more
successes on and off the field. The team was facing the
challenge of maximizing ticket revenue and finding an
advantage to compete against the ever-increasing num-
ber of sport entities in the Los Angeles market, includ-
ing the Angels (MLB); the Lakers and the Clippers
(NBA); the Kings and the Mighty Ducks (NHL); the
Galaxy and Chivas (MLS); notable college teams such
as the UCLA Bruins and the USC Trojans; and several
horse racing tracks and speedways. The new ownership
group understood that the team’s prestige and overall
fan support had declined over the last decade and
intended to bring the Dodgers, a team with worldwide
brand recognition, back to prominence. Overall the
organizational goals for the new ownership group
included the aggressive acquisition of players, greater
fan access to the action, renovations to Dodger
Stadium, and improvements in stadium concessions
(Beacham, 2012). A new pricing strategy based on
market demand might be in line with these goals as
new ownership is poised to develop an organization
that is leading the way through creative initiatives that
fit the current professional baseball environment.
Pricing Strategies
Although the mythical birthplace of baseball can be
debated, the birthplace of yield management, also
known as DTP, is the airline industry. Yield manage-
ment is the “process of allocating the right type of
capacity to the right kind of customer at the right price
as to maximize revenue or yield” (Kimes, 1989, p. 15).
Service providers who sell tickets are constrained by
the perishability and fixed capacity of their products.
Thus, marketers employ complex pricing techniques
such as early discounting, limited early sales, and over-
booking in order to profitably fill capacity (Desiraju &
Shugan, 1999; Kimes, 1989). Once the plane takes off
or the ball game starts, revenue from unused seats is
permanently lost. These constraints encourage service
providers to adopt a strategic focus on filling capacity
that is concerned with generating revenue from ticket
sales, as well as the revenue derived from parking, con-
cessions, merchandise, and any other services offered
(Reese & Mittelstaedt, 2001).
Professional sports teams are service providers faced
with the challenge of maximizing ticket revenue and
finding a competitive advantage to compete against an
ever-increasing number of entertainment options. For
example, sports fans can choose to purchase a ticket to
a baseball game, or to spend their money on partici-
pating in action sports, going to a movie, watching the
game at home, or attending another entertainment
event in their local area. In addition to competing
against other entertainment options, all professional
sports teams contend with the secondary ticket market
where tickets are resold at prices dictated by market
demand (Drayer & Shapiro, 2009). Secondary ticket
market revenue is generated by capitalizing on the
pricing inefficiency in the primary ticket market (Boyd
& Boyd, 1998; Qcue, 2012). In this market, prices are
free to respond to varying levels of consumer demand
while tickets in the primary market typically stay con-
stant throughout the year. According to King and
Fisher (2011), buyers are increasingly bypassing the
primary market in order to find discounted tickets on
secondary market websites such as StubHub. Indeed,
over the last few years, secondary market prices have
come down while the number of transactions has gone
up (Fisher, 2009). Not only does this negatively affect
the primary market revenue, but the availability of
tickets at prices well below face value may also affect
the team’s brand image and the perceived value of the
tickets in the eyes of consumers. Further, King and
Fisher (2011) stated that the availability of these dis-
counted tickets may also be negatively affecting the size
of the season ticket base.
Similar to the airline industry, demand for sport
event tickets fluctuates regularly as evidenced by dra-
matic price changes in the secondary market (Drayer &
Shapiro, 2009). The primary market’s first acknowl-
edgement of these fluctuations in demand was its use
of variable ticket pricing (VTP) where teams charged
different prices for the same seats primarily based on
Volume 21 • Number 4 • 2012 • Sport Marketing Quarterly 257
the time of year (Rascher, McEvoy, Nagel, & Brown,
2007). When using VTP, teams set ticket prices
months before opening day and are reluctant to
change prices midseason to reflect the weather, win-
ning or losing patterns, or responses to trades because
they fear alienating their season ticket holders that pay
upfront for their seats (Belson, 2009). For example, the
Dodgers currently use a form of VTP by pricing their
weekend games (Friday and Saturday) anywhere from
$2 to $15 higher (“Dodger tickets,” 2010).
In addition, prices per game differ only by pre-estab-
lished pricing categories such as seat location and
opponent. This creates two perceptions: 1) the cus-
tomer is in an advantaged position (person has premi-
um seats with a great view in close proximity to the
field of play), and 2) the customer is in a disadvan-
taged position (person has poor seats with a bad view).
Creating pricing categories (i.e., rate fences) gives
teams the ability to design specific marketing offers,
programs, and products targeted to small consumer
segments. Well-designed rate fences prevent the less
price sensitive fan, who is willing to pay more, from
taking advantage of a lower price that is targeted at a
more price-sensitive customer segment (Parris, 2011).
For instance, the Dodgers have 28 different pricing cat-
egories for seat location and perceived service quality
for season ticket holders; whereas the Giants have 11
(see Appendix A).
Additionally, until recently VTP was the only afford-
able option for teams. DTP was too expensive due to
the cost associated with continuously re-pricing tickets;
only recently has it become feasible with the techno-
logical advancements of digital markets and the expo-
nential growth of the Internet as a popular transaction
medium (DiMicco, Greenwald, & Maes, 2001; Howard
& Crompton, 2004). Historically, the primary ticket
market, which is operated by teams, has left demand-
based pricing to scalpers and the secondary market;
without taking into account that fans place a different
value on tickets based on a variety of factors such as
team success, opponent, and the day of the week
(DiMicco et al., 2001; Drayer & Shapiro, 2009). The
cost of mispricing results in over half of the tickets not
being sold, while 10% are resold in the secondary mar-
ket for two times the face value (Qcue, 2012). DTP
helps teams set better up-front prices and allows them
to adjust prices in real-time, based on advanced analyt-
ics and multiple measures of shifting demand, in order
to fill seats while maintaining profitability. In fact,
Shapiro and Drayer (in press) examined the San
Francisco Giants’ DTP prices and secondary market
prices and found that compared to traditional fixed
price tickets, DTP provides a ticket price that better
reflects fluctuations in demand that commonly dictate
the price in the secondary market.
Although DTP is a growing trend in the sport indus-
try and has shown evidence of being a successful tool
in generating increased revenue and managing inven-
tory, it is still in its infancy. Team marketers are still
trying to figure out the factors influencing demand
(data collection), the tools needed to do so (data min-
ing and data analysis), the number of price categories
(rate fences), the timing of price changes (frequency),
fan perceptions of DTP, marketing implications (com-
munications and promotions), and the overall man-
agement and operation of DTP. Currently, teams can
completely outsource operations through companies
such as QCue or Digonex (Ticketmaster is also said to
be developing this technology) or they can pay for data
compilation and make pricing decisions on their own
(King, 2012). Given the fact that each team is unique,
it is vital that the Dodgers evaluate their specific situa-
tion to determine which factors that influence demand
are the most relevant to them. The following sections
provide an overview of the factors influencing con-
sumer demand in sport and fan perceptions of ticket
prices and pricing strategies.
Factors Influencing Demand in Sport
Determining the price to charge fans for season tickets,
group tickets, and game day tickets requires teams to
reflect on a number of factors such as organizational
costs, consumer expectations and perceptions, supply
and demand factors, competition, pricing objectives
and strategies, and external and internal factors. Earlier
studies examined variables that influence consumer
demand such as outcome uncertainty (Falter &
Perignon, 2000; Forrest & Simmons, 2002; Rascher,
1999) and labor strikes (Matheson, 2006). Boyd and
Boyd (1998) found that attendance changed based on
ticket prices, home team winning percentage (current
and previous season), population, average household
income, and the quantity and quality of other recre-
ational opportunities in the local area (see Borland and
MacDonald, 2003 for an extensive review of demand-
based studies). These studies examine sport demand in
a variety of contexts including different sport leagues
in various countries. However, there are several studies
that focus specifically on demand in professional base-
ball (Baade & Tiehen, 1990; Kahane & Shmanske,
1997; Marcum & Greenstein, 1985; McEvoy, Nagel,
DeSchriver, & Brown, 2005; Rivers & DeSchriver,
2002). These articles provide a useful starting point in
determining how to set prices in the primary market
by illuminating which factors have a positive or nega-
tive impact on attendance (see Table 1). Most notably,
these studies suggest that as the quality of the home
258 Volume 21 • Number 4 • 2012 • Sport Marketing Quarterly
team and the opponent goes up, so will attendance.
Further, other specific factors, such as day of the week
and stadium age, may also have a strong impact on
demand. Given that supply in the primary market is
fixed (by stadium capacity), any evidence of increased
consumer demand suggests that a price increase may
be appropriate.
While the aforementioned studies are helpful in
understanding what drives people to an event, there is
relatively little research that examines how these fac-
tors influence the amount consumers are willing to pay
for tickets. In terms of the primary market, Reese and
Mittelstaedt (2001) found that organizations price
their tickets based on team performance, revenue
needs of the organization, public relations, toleration
of the market regarding price increases, and average
league ticket prices. Rishe and Mondello (2003) pro-
vided empirical evidence of various price determi-
nants, including team performance, fan income level,
and playing in a new stadium. The authors acknowl-
edged that the process of price determination will vary
from team to team and league to league, thus making
it difficult to standardize the procedure. Rishe and
Mondello (2004) also investigated ticket price determi-
nants across the four major North American sports
leagues. Their findings across sports were consistent
with previous findings in which price was influenced
by team performance, a new stadium, previous price
increases, and fan income. The authors also found that
population size was positively correlated with ticket
prices in all leagues with the exception of the NFL
where sellouts are common regardless of market size.
Prices in the secondary market have fluctuated
according to demand for years. Drayer and Shapiro
(2009) conducted a study of price determination in the
secondary market. They found that for NFL playoff
games, the strongest predictors of final sale price on
eBay was the face value of the ticket, population in the
home city, and total number of secondary market
transactions for the game. However, the study was lim-
ited to tickets for NFL playoff games in a single season.
More recently, Drayer, Rascher, and McEvoy (2012)
found that prices for NFL regular season tickets sold
on a secondary market website differed based on the
point spread (games with smaller point spreads had
higher prices), percent of total seats sold, the home
team playing in a new stadium, and team performance
(both home and visiting teams). In regard to baseball,
Shapiro and Drayer (in press) found that time and seat
location influenced secondary market prices in an
environment where DTP was being used within the
primary market. Although there are some consistencies
in price determinants within the primary and second-
ary market, clearly there are also differences. The sec-
ondary market price determinants that are different
tend to focus on factors that fluctuate regularly. These
factors are not relevant in a primary market when fixed
pricing is being used. However, with the implementa-
tion of DTP factors affecting price in the primary mar-
ket could mirror those in the secondary market.
Fan Perceptions
Fan reaction is one of the biggest considerations for
teams adopting DTP, as the practice has not been
accepted by consumers in all industries (Cox, 2001;
DiMicco et al., 2001). The Dodgers are certainly con-
cerned with fan reaction to price changes during this
change in ownership. Customers are frequently faced
with price fluctuations for the same products.
Charging customers different prices for airline tickets,
hotel rooms, sports and entertainment tickets, and
retail products is a common practice by most compa-
nies. Price differentiation in the airline industry has
been used for years, however, when Amazon sold the
Volume 21 • Number 4 • 2012 • Sport Marketing Quarterly 259
Table 1
Summary of Demand Studies on MLB
Authors Year Significant Effect on Attendance
Baade & Tiehen 1990 Star Players (+), number of professional teams in local market (-),
team performance (+)
Kahane & Shmanske 1997 Roster turnover (+), new stadium (+), indoor stadium (-), ticket
price (-)
Marcum & Greenstein 1985 Day of the week (+ for weekend), opponent (+ for better
opponent), promotions (+)
McEvoy, Nagel, DeSchriver, 2005 Stadium age (+ for very old or very young stadia), current and &
& Brown previous year team performance (+)
Rivers & DeSchriver 2002 Team payroll (+ if evenly dispersed among players), playoff
success (+), new stadium (+), income (-), playing surface (- for
turf fields)
same movies and DVDs at different prices to different
customers there was a public outcry calling the pricing
strategy unjust (Cox, 2001). Coca-Cola’s use of smart
vending machines, that charged higher prices for hot-
ter temperature items, and Victoria Secret offering
higher discounts to men, are examples of discriminato-
ry pricing that varied prices across time periods, con-
sumers, and circumstances, resulting in dramatic
consumer resistance (Haws & Bearden, 2006). These
examples illustrate that the price offered to consumers
and the rationale for price changes may be perceived as
unfair (Xia, Monroe, & Cox, 2004).
Consumers want price consistency and if fluctuations
in price, particularly price hikes, are viewed as unfair,
they may choose not to purchase (Kahneman, Knetsch,
& Thaler, 1986). However, Wirtz and Kimes (2007)
claimed that the perception of unfairness declines over
time as consumers become more familiar with regular
price changes based on market factors. For instance,
Kimes (1994) showed that perceptions of real-time
pricing were more favorable for the airline industry,
which had used revenue management heavily com-
pared to the hotel industry where the practice was in its
infancy. Kimes (2003) replicated this study a decade
later and found positive perceptions of real-time pric-
ing in both industries providing evidence that time and
familiarity reduced feelings of unfair pricing practices.
Another concern of the new management was how
fans might perceive the Dodgers changing prices so
often with the adoption of DTP. Parris and Drayer
(2010) conducted an exploratory study by posting a
survey on online message boards to investigate fans’
perceptions of price changes. The results indicated fans
responded differently to the reason for the price
change. Fans were asked to rate the fairness of price
change factors that included weather, team and indi-
vidual performance, the opponent, seat location, pro-
motions and giveaways, and day and time of the game.
Seat location, day, and time of the game are pre-deter-
mined; therefore, prices variations can be set in
advance based on these factors. Other factors such as
team performance, individual player performance,
starting pitcher, weather, and expected attendance can-
not be pre-determined, certainly not before the season
starts. In the Parris and Drayer (2010) study, seat loca-
tion was clearly perceived as the most fair price setting
factor, while day and time of the game were also per-
ceived as fair by respondents. However, the vast major-
ity of price setting factors were seen as unfair. Fans
were also asked to rate how familiar they were with the
practice of DTP and how fair they considered this pric-
ing strategy to be for the ticket buyer. The results indi-
cated that fans who were more familiar with DTP
perceived the strategy as more fair, which is consistent
with Kimes’ (2003) work in the hotel and airline
industries. This may suggest that as DTP becomes
more common in a sport setting, the perceptions of
unfairness could decrease.
Implementing DTP: Peer Feedback
The Dodgers have been seriously considering the
implementation of DTP moving forward. Since two of
the Dodgers’ biggest rivals, the San Diego Padres and
San Francisco Giants, had adopted DTP in recent
years, each organization was contacted in hopes of
learning more about their decision to implement this
pricing strategy and gain further information about
how such a system would work.
First, John Abbamondi, Vice President of Strategy
and Business Analysis for the San Diego Padres, helped
them understand the three different ways sport teams
price tickets:
• Every game is priced the same—price differ-
ences are based only on seat location and qual-
ity of service;
• VTP—prices vary based on seat location and
service quality, in addition to assigning differ-
ent prices for games based on the team’s ‘best
guess’ of expected demand approximately nine
months before the season using three or more
pricing levels (i.e., A Games, B Games, or C
Games, with A Games representing the highest
demand, such as opening day). These price
settings do not change once tickets go on sale;
• DTP—like VTP, but with the added ability for
ticket prices to change in real time by allowing
prices to adjust based on changing demand
(i.e., instead of having a fixed face value, ticket
prices vary based on whether fans are purchas-
ing or not purchasing tickets).
Although the Padres used to price each game the
same, after adopting DTP they changed prices “section
by section, game by game” (J. Abbamondi, personal
communication, June 19, 2012). By using DTP for indi-
vidual tickets teams have the ability to change prices for
any section depending on market indications. Another
consideration when a team adopts DTP is addressing
how to create rate fences (i.e., seating sections) that tar-
get fans’ price points. As John of the Padres described,
“If I look at a game and I have two neighboring sec-
tions, which are priced five dollars apart, and the
cheaper section is sold out, whereas the more expensive
section is not very well sold, the market is telling me to
lower the price on the more expensive section” (J.
Abbamondi, personal communication, June 19, 2012).
Thus, DTP can serve as a tool for filling capacity.
In addition, John of the Padres explained how the
adoption of DTP is not a zero-sum game; a situation in
260 Volume 21 • Number 4 • 2012 • Sport Marketing Quarterly
which the Dodgers’ gain (or loss) will be exactly bal-
anced by the losses (or gains) of fans. DTP can be
implemented differently or not adopted across all cus-
tomer segments. For instance, season tickets can still
be variably priced; group tickets (e.g., companies,
churches, schools or Cub Scouts) can be priced based
on weekend or week day games, and individual and
game day tickets can be priced using DTP. Pricing
strategies should address the needs of each customer
segment and take into consideration special pricing
promotions.
The customer segment the Dodgers marketing teams
are typically most concerned about regarding the adop-
tion of DTP is season ticket holders. As a senior execu-
tive in the NBA shared, “Our season-ticket holders are
paying an inordinate amount of money. I don’t really
want to piss them off by lowering prices” (Muret, 2010,
p. 2). This concern is valid considering that the per-
ceived fairness of a comparable other paying less is
stronger than when the comparable other pays more
(Martins, 1995). Hence, before Russ Stanley, Managing
Vice President of Ticket Sales and Services for the San
Francisco Giants, adopted DTP, he conducted research
on season ticket holders’ perceptions of pricing strate-
gies. “Those surveyed came back and said, Do what you
want on single game pricing. I do not care. But just do
not undercut me or make me look stupid that I bought
a season ticket” (R. Stanley, personal communication,
June 13, 2012). Even though the Dodgers season tickets
sold for the 2012 season at prices equivalent to prices
20 years ago, the marketing team was concerned prices
may drop even lower with a DTP strategy, resulting in
season ticket holders paying higher prices than individ-
ual game day tickets. However, John of the Padres
explained how this is a “misnomer,” and how a DTP
strategy for individual and game day tickets can
demonstrate a value to season tickets holders. First,
both the Padres and the Giants have an internal policy
that they will not price games below the season ticket
holder price. Thus, season ticket holders will always
know they paid the lowest price of anyone in the ball-
park for their seat. It’s also important to remember sea-
son tickets holders purchase tickets for a considerable
discount. For instance, for a field box VIP seat for a
Padres game at Petco Park, one of the best at the stadi-
um, a season ticket holder will pay $46 a game for the
whole season while the average single game ticket sells
for $80. The average discount represents a 30% to 40%
margin for brokers and scalpers who purchase season
tickets with the intention of reselling. According to
Russ of the Giants, his team’s adoption of DTP has not
had a noticeable effect on the secondary ticket market,
“Our StubHub numbers on the secondary market have
gone up 15% consistently the last couple of years,
which leads me to believe we’re still not pricing our sea-
son tickets properly” (R. Stanley, personal communica-
tion, June 13, 2012). Second, John of the Padres
emphasized how DTP “allows you to demonstrate to
the season ticket holder that they saved money even
more than they had in the past” (J. Abbamondi, per-
sonal communication, June 19, 2012). This added value
is made obvious when ticket prices for some games
increase because of significant demand. As a result, sea-
son ticket holders can see they save hundreds of dollars
(in some cases) on a seat compared to the individual
ticket price. As a result, DTP can benefit season ticket
holders.
Another issue with adopting DTP has been losing
control of setting ticket prices to an algorithm. Russ of
the Giants helped ease these concerns by explaining
that the Dodgers would still be in control. To date,
DTP, as used by teams in the MLB, is not automatic
and is changed manually. DTP software companies like
Qcue present a recommendation based on hundreds of
data points that are hitting the algorithm, then, as Russ
of the Giants describes, “What we’re doing is really just
looking at it and giving it a human touch” (R. Stanley,
personal communication, June 13, 2012). Teams can
accept the suggested price change for each section of
the ballpark, reject it and retain current prices, or
adjust prices differently than the recommendation
based on other factors the management team deems
relevant, such as a sudden change in pitching rotation.
The Giants have a management team of four that
meets twice a week and for game night one person will
determine if prices will go up or down. Barry Kahn,
CEO and founder of Qcue, and Russ, highlighted the
fact that there is a learning curve for the team, and it
takes time to get the algorithm 100% accurate. As one
of Qcue’s first MLB teams (the Giants signed up three
years ago) Russ indicated, “more and more we’re hit-
ting ‘accept all’ for a particular game, which means
that he’s [Barry at Qcue] getting the algorithm closer
to setting prices that reflect shifting demand, and it
might be two years from now our prices will update
automatically” (R. Stanley, personal communication,
June 13, 2012). Ultimately, the Dodgers would still
have control over the pricing; however, they would still
have a steep learning curve for how best to adopt a
new pricing strategy.
Teams exploring DTP also agonize over fans’ reac-
tions to prices swinging wildly between games. For
instance, some fans reacted negatively when premium
terrace seats for the Dallas Stars hockey team were
offered at $36 and two days later the same seats cost
$60 (Reisinger, 2009). The Giants, like many MLB
teams, initially explored if DTP was a ‘good fit’ for
their team by adopting it across a section of seats
Volume 21 • Number 4 • 2012 • Sport Marketing Quarterly 261
instead of throughout the entire ballpark. This allowed
them to assess consumer response to the price changes
and continue to gather information that might be rele-
vant to the pricing algorithm. Further, for the Giants,
Russ clarified that price changes are not dramatic
swings, and sometimes are as small as 25 cents or 50
cents with the most significant changes averaging only
two to five dollars. Adoption of DTP has shown that
these relatively small price changes would alter fans’
purchasing behavior. For example, several years ago
Giants’ tickets priced at $33 were not selling; however,
they could see those same tickets were selling at $31 on
StubHub. Hence, the two dollar difference was too
high, surpassing fans’ willingness to purchase tickets.
Moreover, Russ of the Giants warned that one of the
ways a team can lose money with DTP is by not
addressing the cost of managing and counting money,
which suggests teams should not change prices after a
certain time on game day, and develop a policy to
round prices up or down depending on ticket sales. It
is important to note that the degree of price change is
different for each team and depends on previous prices
and the number of price changes.
Lastly, Barry at Qcue was contacted in order to gath-
er information regarding important factors the
Dodgers needed to consider before adopting a DTP
pricing strategy. First, Barry emphasized the need for
each team to clearly define their business goals and
objectives. What is the team trying to do? Are the
Dodgers trying to drive more revenue? Or is filling
capacity to enhance consumers’ experience more criti-
cal for revitalizing the fan base? Barry explained that
defining these goals will help with startup (i.e., set up)
by ensuring the team has thoroughly discussed DTP,
received buy-in from owners and upper management,
and developed an understanding for the abilities of the
organization to implement a new model. Most impor-
tantly, these goals and objectives force the organization
to evaluate where they are and where they want to go.
Second, Barry of Qcue highlighted that one of the
biggest and most unexpected challenges to DTP was
individual teams’ lack of data, unreliability of their
data, and the inability to mine the data. Therefore,
teams have a steep learning curve in data collection
and mining. Next, Barry reminded the Dodgers that
DTP is not “just about changing prices;” it requires
integrating multiple software applications (i.e., sys-
tems) to provide a single point of reference (i.e., a
dashboard), in addition to updating communications
with stakeholders via the team website and other
sources (B. Kahn, personal communication, June 18,
2012). After speaking with John of the Padres, Russ of
the Giants, and Barry of Qcue, the Dodgers’ ticket
marketing team had a deeper understanding of DTP,
but still realized they had a lot to learn and a very diffi-
cult decision ahead of them.
Conclusion
Leading up to the pricing strategy meeting, Larry kept
reminding his marketing team that adoption of DTP,
as with any new business strategy, requires the com-
mitment of management, intensive employee training,
and effective communications that re-educate the con-
sumer. A DTP strategy would change existing norms.
Larry wanted each marketing team to consider the
wide variety of information that had been collected
and determine what the most appropriate pricing
strategy was for the new Los Angeles Dodgers.
Specifically, he wanted them to focus on two key deci-
sions. The first was to determine whether or not to
make the leap into DTP as several competitors had
done recently. Second, he needed his marketing team
to carefully develop the pricing structure for all tickets
(season tickets, group tickets, and single game tickets),
regardless of whether or not DTP would be adopted.
He reiterated that a detailed explanation and justifica-
tion of their solution would be necessary for this new
ownership group that is clearly very interested in the
organization’s marketing strategy moving forward.
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Editor’s Note: Teaching Notes for this case study can be
found at www.fitinfotech.com
Volume 21 • Number 4 • 2012 • Sport Marketing Quarterly 263
Appendix A – Dodgers 2012 Ticket Prices
264 Volume 21 • Number 4 • 2012 • Sport Marketing Quarterly
2012 TICKET PRICING (per seat)
Level Season Price Group Price Advance Price*
Field Box VIP $80 $115
Field Box MVP $70 $115
Infield Box $50 $50 $80
Preferred Field VIP $30 $34 $55
Preferred Field Box $16 $26 $40
Loge VIP - Front Row $69 $95
Loge Box VIP $55 $80
Loge Box MVP $45 $45 $65
Infield Loge Box - Front Row $45 $65
Infield Loge Box $34 $35 $55
Preferred Loge Box - Front Row $28 $38
Preferred Loge Box Value - Front Row $14 $38
Preferred Loge Box $15 $20 $28
Preferred Loge Box Value $10 $28
Loge WC $10 $20
Club $44 $64
Infield Reserve - Front Row $20 $38
Infield Reserve $15 $18 $28
Infield Reserve Value $10 $28
Lower Reserve $8 $11 $20
Reserve WC $8 $20
Reserve $6 $9 $16
LF Pavilion VIP $11 $17 $20
LF Pavilion $9 $14 $17
All-You-Can-Eat Pavilion VIP $26 $28 $34
All-You-Can-Eat Pavilion $24 $26 $30
Top Deck - Front Row $8 $16
Top Deck $5 $8 $10
*Denotes Sunday through Thursday pricing. Ticket prices for weekend games are priced approximately $2 -
$15 higher for each section.
