Twitter was up in arms this week after Forbes claimed that the Toronto Raptors have the highest ticket prices in the NBA for the first round of the 2014 playoffs. This resulted in backlash towards MLSE for turning the Raptors’ success into an opportunity to milk their suffering fan base. Same old song and dance.
However, many readers seem to have overlooked a small but important detail: “The average ticket price on the secondary market for first-round Raptors tickets is the highest in the league at $370.62, according to Forbes.com.”
The secondary market represents the real supply and demand for tickets at a particular point in time, not the face value. Based on face value, word on the street is that the increase is in the 80-100% range over regular season prices. That’s a far cry from the 242% Forbes is reporting. The 242% increase is based on secondary market prices (StubHub, etc.).
The real story here is that demand for Raptors’ playoff tickets is sky high and MLSE is leaving a lot of money on the table.
|Secondary Average||Cheapest Secondary Price||Cheapest Face Value||Secondary % Increase|
|Raptors||$370.62||$170 USD (~$189 CDN)||$95||~99%|
|Highest Secondary Price*||Highest Face Value*||Secondary % Increase|
|$1,071 USD (~$1,176 CDN)||$450||~110%|
* Excluding courtside seats
As you can see above, the secondary % increase ranges from 99-110% depending on seat location over the face value that MLSE is charging. Ultimately, MLSE is losing out on money to resellers thanks to the high demand for their own product in the market. Teams try to minimize this discrepancy (that’s why most teams now do some sort of dynamic pricing), but it comes down to a guessing game. Prices for Raptors’ playoff tickets in the secondary market are an example of that.
On the other side of the coin, ticket prices for Miami Heat playoff games are down over regular season prices in the secondary market. This really means that demand for Heat first round playoff tickets is low. That’s why the Forbes report is so misleading. You’re lead to believe that MLSE is gouging Raptors’ fans and Heat owners are giving their fans a break at the gate this playoffs. But that’s not the case because it’s the secondary market that the report is based on.
Perspective is everything.