Empty Seats: How Cricket Australia is changing its pricing strategy to renew interest in less profitable formats

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Cricket Australia have announced this week that they will be lowering ticket prices for the Test and One Day matches for the upcoming 2016/17 season.Ticket prices for a Test Match at most venues will now be $30 for an adult (was $45), $10 for a child (was $15) and $65 for a family (was $75). One day games will be similarly priced (Cricket.com)

Video Link explaining new ticket prices

This is after disappointing attendance figures over last summer’s Test and One Day fixtures where the average daily crowd for Test Matches was only 18,000 compared to the Big Bash League which was almost 30,000 per game. BBL tickets are said to be more affordable ($20 for an adult) compared to the cost of a Test Match (SBS News Website).Despite the success of the relatively new BBL franchise it appears that its success and marketability as a format has partially contributed to the decline of Test/One Day attendances.

The decision by Cricket Australia appears to be an attempt to increase interest in these ‘declining’ formats by increasing patron volume through a yield management strategy (Iacobucci 2014:120). While BBL attendances would utilise most if not a better proportion of their capacity, this strategy will look to increase crowd numbers thereby meaning less seating is left unused and maximum profit is gained. Considering paying to sit and attend the cricket is essentially a service, any unused seating for a day at the cricket is considered perishable and cannot be ‘saved’ for the next game(ibid). For example, the MCG can hold approximately 100,000 patrons. If only 30,000 seats are utilised then there is potentially 70,000 seats that are not being utilised for profit.

Within its pricing strategy it would have to factor in the fixed and variable costs of operating a sporting venue for an event like cricket(ibid:112). Fixed costs would include the cost of renting or leasing the venue for cricket plus electricity costs (although this could be variable too). Variable costs would include staff wages such as caterers, security staff, ticketing staff etc. (ibid) So while Cricket Australia may lose a small amount of their profit per ticket, they would be hoping to increase volume to at very least ‘break even’ or more ideally return profits against their operating costs.

Price segmentation is evident as children and adult tickets are priced differently despite being the same product (ibid: 119). Although this is a form of price discrimination it is done as kids rely on their parents to pay for them and who are encouraged to bring their children because of the cheaper prices. Also purchasing a ‘family ticket’ to the cricket works out to be cheaper as a form of quantity discount which is cheaper than buying individual tickets(ibid). As a family ticket is now $65 it is cheaper than buying the individual tickets alone which would equate to $80 (2X adults + 2X children).

The beauty of price bundling in the form of family tickets is that this encourages higher volumes of attendance where both parties are benefiting in some way. So although a slight loss is made per ticket this will be absorbed by increased attendance who will likely spend more money on food/drink, merchandise etc. Also the costs per patron to attending the sporting event ie. Driving, parking, public transport etc. will be compensated by the saving on the individual ticket.

With the price decreases it appears that Cricket Australia is also trying to make its pricing as competitive as possible against other sporting codes. The chart below shows that while slightly more expensive than the AFL it is cheaper to attend than other sports.

Sporting ticket prices comparison (Source abc.net.au)

Sport Event Cheapest adult prices Family of four
Cricket Any Test match $30 $65
Rugby Union Wallabies v England $79 $197
Rugby League Australia v NZ $35 $100
Football Socceroos v Greece $35 $70
AFL MCG club match $25 $50

It does remain to be seen if it will work though. Ticket prices were slashed for the Hobart Test in December, however only a small crowd showed up admittedly against a depleted West Indies side (Cricket.com; Paynter 2015). Read more here

The upcoming schedule indicates a busy summer with 41 days of international cricket to be played as well as the lucrative BBL tournament (Cricket.com). It is imperative that Cricket Australia continually reviews its marketing mix to ensure that it can draw the maximum amount of fans to all its formats.

 

November games need november prices – An article by Daniel Brettig discussing the oversaturation of cricket during the 2014-15 summer and the need for cheap tickets to encourage attendance during non-peak times.

 

References:

ABC News, 2016, ‘Cricket Australia slashes ticket prices for 2016-17 international matches’, retrieved 28 April 2016, <http://www.abc.net.au/news/2016-04-26/cricket-australia-slashes-ticket-prices-for-international-match/7357398&gt;

Cricket Australia, 2015, ‘Ticket prices slashed for Hobart test’, retrieved 28 April 2016 <http://www.cricket.com.au/news/hobart-test-blundstone-arena-australia-west-indies-tickets-first-test/2015-12-03

Cricket Australia, 2016, ‘Pricing’, retrieved 28 April 2016, <http://www.cricket.com.au/pricing&gt;

Cricket Australia, 2016, ‘Series’, retrieved 29 April 2016, <http://www.cricket.com.au/series&gt;

Home B, 2014, Mitchell Starc image, Daily Telegraph, retrieved 28 April 2016, <http://cdn.newsapi.com.au/image/v1/cfa1e8d4718994a03d861b1b87368097?width=650&gt;

Iacobucci D, 2014, MM4, Cengage Learning, Chapter 9, p.112, 119-20.

Paynter J, 2015, Sydney Morning Herald,’Cricket Australia to review ticket prices as Test crowds decline’, retrieved 28 April 2016 <http://www.smh.com.au/sport/cricket/cricket-australia-to-review-ticket-prices-as-test-crowds-decline-20151222-gltoh3.html&gt;

SBS News, 2016,’Test,ODI cricket ticket prices lowered’, retrieved 28 April 2016 <http://www.sbs.com.au/news/article/2016/04/26/test-odi-cricket-ticket-prices-lowered&gt;

 

Aston Northfield

900168086

 

 

 

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