September.

It comes after August and before October every year this much we know, however September can mean many different things to many different people. To some it marks the end of a bitterly cold Winter and the beginning of Spring, to others an Earth, Wind and Fire classic hit but to me September means one thing and one thing only – the AFL Finals Series is here.

If you asked the AFL what September means to them, I have little doubt they would give you the same response, however internally the more honest response would be “Profit”. With the Finals on our door step and the various approaches and considerations when it comes to pricing in our minds, there is no better time to look at how the AFL craftily manipulates their pricing strategies to ensure maximum profitability.

The AFL recently announced a revision to their finals pricing structure, with the headline change a reduction in the price of an entry-level finals ticket to $35.00. Further reading into the article (link below) shows that “For the first time in three years, the price of other ticketing categories will rise slightly in weeks 1-3”

http://www.afl.com.au/news/2016-08-23/35-entry-price-for-finals-tickets

This notion is no more than a publicity stunt, with the median overall ticket prices rising, and the grossly overpriced Grand Final tickets getting more expensive again in 2016. I pose the question to the AFL, if they knew that the matches earlier in the finals had a chance of selling out, would they have decreased the price? Or like the Grand Final (an event that will inevitably sell out), would the prices be increased? Inevitably these questions are largely irrelevant, because the folks at home who see this news story get that warm fuzzy feeling and the perception of a bargain in mind, and have little regard for the supply and demand complexities mentioned above. Simply put, the AFL is dropping the price of tickets for games that will not sell out, that is, they have a supply level that is not being met, and decreasing prices to find an equilibrium that will allow them to sell more tickets to fill the seats that would otherwise be empty.

Hawks2015

Having cast a light on the practices of the AFL we can further analyze the marketing elements in place. Looking internally, the potential explanation behind the AFL’s change of strategy can be traced back to the quest to remove pricing as a barrier to entry for fans, to encourage more people to get the matches, creating a better atmosphere and experience for all. With this considered the cynic in me suggests their motivations are purely financial but you can be the judge of that. Externally, we know the cost of living is constantly on the rise and the expenses involved in families going to the football are continually rising in parallel, this initiative may be the difference to families and those with a lower disposable income allowing them to attend the game they love.

There are many other options the AFL could’ve explored, having already hinted at the prospect of engaging a US-Style dynamic pricing strategy in the near future. In practice, such a dramatic shift would likely polarize the fan base and inevitably do more harm than good. The other option could be to introduce an early-bird special much like the NRL, offering cheaper tickets to those who book ahead of time, however given the uncertainty of outcome and the lack of a secondary ticketing marketing this could prove equally risky. Given the year-on-year profits reported by the AFL, a unique opportunity to actually drop ticket prices across the board could have been explored, generating widespread positive publicity, and hopefully allowing their brand to be painted in a positive way.

With all considered the AFL would be remiss not to adjust their pricing periodically as changes in the economic climate as well as inflation generally play their part. The irony of the whole situation is that the AFL as a non-for-profit organisation has the luxury of being able to adjust its pricing strategies almost risk-free, without the careful considerations of a retailer in a competitive marketplace who might have to consider the various complexities such as supply costs, market demand, competitor pricing and company policies. Whilst the AFL no doubt should and likely does make these considerations, they have much greater scope for experimentation as evidenced by their unique hybrid Finals Pricing Structure.

In conclusion, the unique way in which the AFL has priced their finals ticketing provides an interesting insight into the considerations and approaches taken to pricing. Whilst the AFL has attempted to position themselves as doing a great service to the football public, a more profit motivated mentality is perhaps a more accurate description of their true objective. Regardless, there’s one thing I know for sure, If my team found their way into a Grand Final for the first time in 55 years, it wouldn’t matter what it cost, I’d be there.

 

 

Harrison Shannon-Brown

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September.

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