washingtonpost.com

Capitals Cut Prices for Season Tickets


By Tarik El-Bashir and Thomas Heath
Washington Post Staff Writers
Wednesday, April 21, 2004; Page D01


The Washington Capitals announced yesterday that they will reduce season ticket prices next season by an average of 11 percent, moving to bolster flagging attendance two weeks after finishing with their worst record in 26 years and out of the playoffs.

Washington's attendance last season averaged about 14,700 per game, down about 5 percent from 15,552 for the 2002-03 season, while attendance around the NHL remained flat. Meantime, the team had the 13th highest average ticket price in the 30-team league, at $43.85 per ticket, according to Team Marketing Report.

The Capitals are one of 15 teams that have announced a reduction in ticket prices for next season, according to Bernadette Mansur, the NHL group vice president of communications, a trend that underscores assertions by the league, many of its owners and sports analysts that the NHL's business model has gotten out of whack.

Team owners, faced with rising player salaries and relatively little television revenue, have raised ticket prices in recent years to meet costs. By lowering prices, at least half of the league's franchises appear to have acknowledged that attending games has become too expensive for many fans.

The league is already in a financial crisis, with two-thirds of its teams losing money. The Capitals say they will lose more than $30 million in the fiscal year ending June 30.

"The huge question is whether there is a pool of fans waiting to be activated if the price goes lower or if there is a fixed number of fans and the Capitals are just cannibalizing revenues," said James Chung, president of Reach Advisors, a Boston-based sports marketing strategy firm. Chung said lowering ticket prices is also occurring in other sports, except for the profitable NFL.

Six teams will raise ticket prices next season, and nine have not announced their plans, according to the NHL. Of the teams cutting prices, the Capitals will pass along some of the biggest savings. The New York Rangers are cutting prices by 10 percent for all seats, and the Florida Panthers are planning to reduce prices from 5 to 33 percent for all tickets.

The Capitals plan to notify season ticket holders of the lower prices in a letter being mailed out this week.

The Capitals' decision comes as the league enters an offseason filled with uncertainty. The collective bargaining agreement between the players and owners expires on Sept. 15, and an owners lockout next season appears likely unless the players agree to a salary cap. The union says the market should determine salaries and is opposed to any ceiling.

Between January and March, the Capitals traded many of their highest-priced players, including Jaromir Jagr, Robert Lang, Peter Bondra, Sergei Gonchar and Michael Nylander, to cut costs.

Shortly after acquiring Jagr in 2001, the Capitals raised ticket prices from 10 to 15 percent. Then, after posting a franchise record for attendance in the 2001-02 season, the team kept prices stable for a season before again raising ticket prices for this season by about 3 percent.

But with the team embarking on a rebuilding process by stocking its roster with younger, less highly paid players, slashing ticket prices appears to be in line with management's new philosophy. "We are in a sense passing the savings along to the fans," said Dick Patrick, the Capitals president and part owner. "If we are going to have a new era of controlling costs, the fans should be a part of that, too. With or without a [new collective bargaining agreement], what sense is it to raise ticket prices, spend more and more money, and not have that translate into success on the ice? It was time for us to take a step back."

Said Bob Sitnick, a Capitals season ticket holder from Northern Virginia: "That's treating the fans the way they should be treated considering it's going to take a number of years to get back to where we should be."

The Capitals' season ticket sales have seesawed, starting at less than 3,000 when Ted Leonsis bought the team in 1999 and increasing to around 12,000 during Jagr's first season in 2001-02. Since then, season ticket sales have declined to around 9,500, which includes full- and partial-season ticket plans.

"With the uncertainty over the coming season, we wanted to reward the fans that were most loyal to the franchise," said Kevin Morgan, the Capitals' vice president of sales. "We have reduced prices to where they were three years ago, before we acquired Jagr."

If owners and players fail to reach a new collective bargaining agreement in time for next season, and some or all of the season is canceled, Capitals season ticket holders can leave their money with the team and earn 3 percent annual interest, Morgan said. Fans can also have their money back. The Capitals will also provide non-financial incentives that have yet to be disclosed in order to convince people to keep their season ticket deposit with the team.

"Their new pricing is reflective of the product that they have been putting on the ice and the current demand for their tickets," said David Cope, director of business development for Bethesda-based Gilco Sports and Entertainment Marketing. "Our expectations aren't as great for this upcoming season as they were last season, and they are pricing their tickets accordingly."

Staff researcher Julie Tate contributed to this report.



© 2004 The Washington Post Company

I don't think the money will make a difference to most people.  But the gesture *had to* be made if Ted ever wanted us to get over being pissed off.  That's still going to take a while, but keeping ticket prices the same would have made it worse.

 

Sweetie

Shut up, Ted.

Oh it DOES make a difference! That's $450 a year for me, $10 a game. Still, I have a hard time seeing me re-up.

It does make a difference to me, too. I don;t have season tickets but I am assuming gate prices will be lower as well. I will go to more games if I can get a decent seat for $30. This past season those were $56.

But I also liked watching the team at the end of this season much better than the one they started with. Getting to watch them for less money is an added bonus.

Legion15