O/T - Juan Soto - 15 years/$765M with the Mets

[Balticfox]

Originally Posted by John1941

Not really. In 2006 Neil deMause of Baseball Prospectus wrote an article called "Do High Salaries Lead to High Ticket Prices?" He found that the data showed that higher salaries do not lead to higher ticket prices: "in the first dozen years of free agency, as salaries more than tripled, ticket prices actually went down in inflation-adjusted dollars." Increased ticket prices after that point were due more to changes in stadiums than salaries.

deMause explained that tickets are priced for maximize revenue - if raise them above the optimal price, fewer people will buy tickets, and overall revenue will be reduced. "The price point you select for your tickets, then, shouldn't change [after signing some big-$ free agent]: If you're already charging the price that will bring in the most money, then raising ticket prices in response to increased player costs would be foolish. Conversely, if you think you can get away with charging more for tickets, you'd be foolish not to do so, regardless of what you're paying your players."

Of course, ticket prices can rise after big-$ free agents are signed- but that's because of increased demand, not because "those contracts must be paid for!"

The BP article only focuses on ticket prices, but the same reasoning is applicable to souvenirs, concessions, etc.

Whether real world ticket pricing is as straight-forward as all that is debatable, but those are the economic fundamentals at least.

Two things:

1. I wonder if deMause's research would still hold up now eighteen years later?

2. Moreover the perception that higher salaries lead to higher prices for fans is still there. This leaves a bad taste in the mouths of many fans. It's "Why should I support those multi-millionaires at the ball park out of my meager earnings? I'll leave that to somebody else." I'm that way. As ticket prices for big league sports have exploded, my attendance has dropped precipitously. I'm much more inclined now to attend junior and other minor league games instead.