Desperation move or something more? Florida Panthers covering seats, adding "Airline Pricing"

We're still waiting on the official announcement, but The Miami Herald's George Richards reported yesterday that the Florida Panthers will be lowering the arena capacity by covering just over 2000 seats for the Panthers' games this year. In addition, they will be instituting a new variable pricing scheme for single game tickets that is based on the model used by airlines, where prices change dynamically in response to demand. These could be seen as desperation moves by a team that is losing money, has an empty building most nights and has proven itself adept at irritating fans. However, I think that this is not our usual Panthers announcement.

 

Immediate fan reaction to the seat coverings has been mixed, no doubt related to the news that the tarps covering the seats will have advertising on them. The Panthers' building has a lot of advertising and is a sore point for many fans who attend a lot of games. Anything involving advertising generally elicits quick complaints. But there is also the worry that it will look bad. Without having seen them yet, I think they will not be any more intrusive than the advertising banners already hung in the upper bowl and will look a lot better than the enormous sections of empty seats that normally make up the upper bowl on game nights. As a season ticket holder last season, I saw three to ten upper bowl sections with fewer than ten people at almost every game. Exceptions were some weekend games and the big draw teams.

The reasons management has given for the reduction in capacity are to introduce scarcity into the ticket market, create a better fan experience by reducing the number of empty seats and bringing the cheapest seats closer to the ice and also reduce the number of promotional tickets given away by the team.

These are legitimate reasons. In fact, American Airlines Arena has already done this for at least some events. I have seen concerts where the section behind the stage has been curtained off because it hasn't sold to capacity. When they sell enough tickets, it's opened up and people are seated behind the stage. While one can tell that part of the venue has been covered, it's a lot less noticeable than empty seats.

Based on the seating charts now up on the Panthers web site, it appears that everything past row 10 in the upper bowl will be covered. The only seating chart available is for season tickets, so this could be slightly inaccurate. What the team has announced is that seating in the top of the corners and the goal zone will be covered without getting into specifics other than to say that the seating offered will be symmetrical. So, the idea that they will cap all sections at the same row seems likely. I don't think anyone is going to miss these seats. Season ticket holders will be moved into the new lower sections which offer a better view at the same price. I do believe that this will create a better atmosphere in the upper bowl on game day.

The promotional tickets have been another sore point with fans. Many season ticket holders complain about the large number of ticket giveaways every season. The management decided that they would respond to these complaints by instead giving season ticket holders extra tickets to most games to give away. As reported here late last season, this approach was not very well received. Reducing the number of seats is a more sensible approach to the problem than flooding the area with cheap or free tickets.

The idea of increasing scarcity brings with it another new plan: variable pricing. Single game tickets will be priced in different tiers: Bronze, Silver, Gold and Platinum. Each section of the arena will have different pricing for each tier. Games wll start out at one level and increase according to demand. So, for example, weeknight games against Atlanta will probably be Bronze, the cheapest level and will likely stay at that level as the team is not a big draw. Games against the New York Rangers will probably start at Silver or Gold and quickly move up as seats sell.

This will do three things for the team. One is increasing revenue from fans of the visiting teams for those games that are big draws. Another is encouraging early ticket sales, which will help drive sales of popular games. And it will also be more flexible. Sure, the annual holiday week games against the Maple Leafs, Rangers and Canadiens are guaranteed draws and can start in the premium levels. But the variable pricing will capture more revenue on games that are unexpectedly popular. Unless the price increases keep people home. But it's a chance worth taking and if it doesn't work as well as expected, the team can change the algorithm that determines when the pricing changes.

This scheme appears to be a mix between what the Sabres instituted after the lockout and what the Stars did last year in their upper bowl. For the last several years, the Sabres have had four price levels and picked the level for each game based on anticipated demand. Games against unpopular opponents on weeknights were set at the lowest level and games against teams like the Leafs, Sabres, Red Wings and Flyers are set at the higher levels, as are all weekend games. The Stars have four price levels for their upper bowl seats and as seats sell, the prices increase to the higher tiers.

The Panthers tried a couple seasons ago to charge a $25 surcharge to certain games, which didn't really work out that well. I was surprised at the time that they hadn't already instituted tiered pricing and weren't then. I think this is something that the organization has sorely needed. Given team performance the associated ticket sales, they need to make as much money as possible on the few big draws they have each season. In addition, if they have a sellout and there is still demand, the upper bowl seats can be uncovered and tickets in those areas sold.

In conclusion, the people hit hardest will be the fans of the visiting team and those who get the biggest benefit will be season ticket holders. I don't believe any section season ticket prices have increased and some seat prices have dropped due to the closing off of the back rows, which are also the seats with the worst view. The slightly more intimate upper bowl will help provide a better atmosphere than the old swaths of empty seats. This franchise has given fans a lot to complain about over the years, but I don't think these changes are among them. I think these moves will ultimately provide the team with a much needed revenue stream and enhance the fan experience. Management is starting to make good on their promises and like the new Den of Honor and the hiring of Dale Tallon as GM, this team may finally be on its way out of its status as a standing league joke.