Quote:
Originally Posted by Frequitude
This is not completely accurate, Locke. As is the often misused "Ticket prices have nothing to do with salaries and everything to do with supply and demand".
Salaries certainly have an effect on the supply side of supply & demand. They are an input cost and as the input cost of an item increases, the supply curve for that items shifts to the left, resulting in a new intersection point of the supply and demand curves.
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Well thats just not true, of course salaries affect ticket prices.
However you're also assuming perfect economic elasticity or demand, which also isnt true.
Ticket prices are generally stable and dont experience wild shifts, especially not in economies such as Calgary's, and further there are barriers to the consumption or disposition of season tickets. The owners of the Calgary Flames dont particularly care if you use your season's tickets for attendance or toilet paper so long as you've paid for them.
My point regarding it's irrelevance was twofold:
1. Hockey Ticket Prices in Canada do not go down, they simply increase marginally less, and its not reflective of the team's overall salary payroll.
2. The Calgary Flames broke even, more or less, with 82 sellouts and made profits on playoff games when they were a cap team so now, by having a significantly lower payroll but essentially similar attendance figures they are actually better off financially.
And, sort of a 2B, most people who make Entertainment decisions dont factor in the profitability of the company to whom they're handing over their entertainment dollars to in their decision to consume that product.