Stanley Cup Supply and Demand Stories

Now two days removed from a deciding game 7 to determine this year's NHL champion, my fellow native Bostonians are still in a state of bliss over the Bruins winning Lord Stanley's Cup. Described by some as the toughest trophy in American (or Canadian) sports to win, the Cup is already making the rounds at local watering holes around the Commonwealth, cherished by its winners and their fans alike. More pertinent to this website are two interesting supply and demand stories stemming from the Bruins' best of seven series with the Vancouver Canucks as well as its aftermath.

First off it seems, as is the case with many major finals in the sporting world, that tight supply and high demand for the game seven in Vancouver drove prices to astronomical heights. Blawgconomics favorite Darren Rovell noted in a piece from Wednesday that prices rose to around $3,000 on the day of the game on StubHub; local Boston radio stations suggested that some deals were being made at over $10,000. The Vancouver Sun noted at least one ticket was posted on an auction site SeatGeek for nearly $20,000, though it is unclear if it actually sold or if someone was throwing in a line to see if they could get a bite. Even if the latter is true, it does indicate that at least one potential participant valued the experience of going to the game marginally over $19,801 in cold hard cash.

Rovell noted in his SportsBiz post that supply was constrained more than prices might have been were the game in Boston as the secondary market for tickets is far less robust in Canada than in the States at this time. In a slightly more anecdotal case, it appears that there aren't enough official 2011 Stanley Cup Champion hats on the shelves in Boston. From my father (a rabid Bruin fan on the search for his customary post-championship purchase), "The local shops are all out of hats. One of the clerks told me it might be up to two weeks before Reebok (the official producer) has enough made and shipped for me to get one."

What lessons to learn from these two stories? In the case of ticket prices, perhaps it is that secondary markets improving liquidity in commodity markets can help buyers; in the absence of secondary markets it is clear that a market for hot tickets tilts heavily in favor of sellers. And, in the case of both stories, never underestimate the purchasing power of a rabid fan base. Hundreds of Vancouver fans were willing to pay thousands of dollars for a chance to see their team lift the Cup for the first time in the 40 year history of the franchise. And clearly, many championship-starved Boston hockey fans are keen on having a memento to commemorate a historic moment in franchise history. Though demand for seats is set due to obvious constraints, official merchandisers might do well to consider this phenomenon when producing championship gear in the future.

No comments:

Post a Comment