Last week in this space, I touched on the importance of Full Season Equivalents. As I mentioned, the second part of tallying a team's FSE count is mini-plans. No more than 20 years ago, teams offered only full season tickets and individual tickets. Now, mini-plans have become an integral part of the business. With the rapid change in ticketing technology and demand for smaller packages, each Major League Baseball team offers anywhere from 10-to-25 different mini-plan packages.
Mini-plans produce a higher yield for MLB teams than season tickets, because they are normally discounted 10-to-20 percent, whereas season tickets are 25-to-40 percent off. A mini-plan allows fans to purchase tickets for as few as four games and as many as 40. The challenge for the front office is to allocate and sell each seat via mini-plan as if it sold the seat for a full season. Each mini-plan holder shares a seat with others to add up to 80 games. So whether it’s four mini-plan holders buying 20 games apiece or eight buying 10 games, it still adds up to one FSE.
In MLB, the primary economic driver is ticket sales, with the goal -- like it’s retail counterparts -- of a 100-percent sell-thru (the Yankees, Red Sox and Twins, for example, each have sell-thrus of more than 100 percent in their stadiums). Put yourself in the shoes of an MLB ticketing or sales vice president. You have up to 45,000 tickets to sell, and 33-to-50% of them are usually sold for the full season. Each MLB team features 81 home games, and half of a team's home games are played during school months of April, May, and September. Additionally, most schedules feature half of the home games during weekdays. How does one best leverage opening day, weekends and key match-ups to maximize its sell-thru rate in each price category throughout the stadium? It’s imperative that front offices allocate and package tickets properly in mini-plans to best leverage their key matchups to maximize their sell-thru.
Mini-plans have been on the rise as season-ticket sales have been drastically reduced. As the economy continues to flounder, the $5,000 or so that businesses and people spend on seats isn't expendable anymore. The market collapse has hit the middle and lower classes the most, especially those in an unemployment crisis or getting pounded by ARM loans. Large purchases, like vacations and sports tickets, are the first things cut out for any family.
Now let's say that you don't fall into that category and have the money to buy season tickets. Can you commit yourself to 81 nights of baseball? Would you purchase a product at a given rate that is readily available at a lower price via mini-plan? Probably not. For those who do commit to a full season, many go in on the ticket package with partners, which can lead to conflicts over playoff tickets and other big games.
Secondary brokers have also played a big role in the changing ticketing landscape, but they have done more for the fans than they have for sports teams. If you, the fan, need a ticket to a sold-out event or don't want to pay any PSL or licensing fees on your seats, secondary brokers can do that for you. The devalued cost of sports tickets on the secondary market is astounding and could be an even bigger problem down the line for major sports leagues like the NBA, NHL and MLB due to the number of the games every season. The more mini-plans teams are able to sell over the course of a season, the less teams have to worry about losing out on the secondary market.
Given our new economy, it’ll be interesting to see if a team can ultimately sustain a business model that has more FSE’s allocated to mini-plans than full seasons in the future. The team would produce higher revenues but push back their cash flows later into the season. With more customers buying less seats it would create a need in the ticket servicing department. Like many companies, MLB teams are now faced with the question: How do we sell more to less customers? Mini-plans help solve the problem for MLB teams and its millions of customers.
Coming next week: How teams can allocate and leverage their games to get the maximum out of an 81-game season.
David Simmons is a graduate of the University of Central Florida who worked in the front office of the Los Angeles Dodgers over 4 seasons. He has a decade of ticketing experience and currently resides in Baltimore. You can follow David on Twitter @davidesimmons
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