Caps Look To SF Giants For 'Dynamic Ticketing' Model

Dynamic ticketing, where the price of admission to sporting events fluctuates, is now gaining popularity among professional sports teams, including the Washington Capitals. The hockey will begin pricing tickets dynamically for the remainder of this season's single-game tickets, meaning buyers could pay more or less than the average ticket price depending on the demand for a particular game.

The Caps are  following the lead of baseball's San Francisco Giants. The Giants had a banner year in 2010, as they won their first World Series in 56 years. It was also the year the Giants became the first professional sports team to base ticket prices on demand in the "dynamic ticketing" model.

"It was exciting to watch the Giants during the course of the season and watch how the ticket prices reflected that excitement," says Stephen Shapiro, a professor of sports management at Old Dominion University who studies dynamic ticketing.

Lots of things can affect demand for ticket to a particular game. Weather. The fortunes of the team. The opposing team's performance. Particular popular players, especially if there are all-stars that are performing particularly well. 

"As we get into the dog days of August, a team might be completely out of the playoffs and that will lower the demand versus a team which is still in the playoff race and has a chance to make the playoffs," Shapiro explains. 

The Giants reported increased revenue of 7 percent through the use of dynamic ticket pricing during the 2010 season, and it's now taking hold in other professional sports.

On the surface, the Caps' recent announcement about dynamic ticketing sounds counter-intuitive: why would the management of a sports team want prices to sometimes go below the norm?

"The goal is to have a full stadium," Shapiro says. "By dynamically pricing the tickets and dropping the tickets in low demand situations, you're going to attract more fans. And getting them into the stadium is going to make the stadium look more full."

Once inside, those fans spend money. They may have to pay for parking, or they might buy a t-shirt. They're likely to purchase a hot dog, beer or some other kind of concession.

"It can be more valuable to drop a ticket price if they're going to spend more money once they're there," Shapiro says.