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Long term arena building and revenue

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272768.37 in reply to 272768.32
Date: 8/22/2015 2:24:21 PM
Overall Posts Rated:
370370
You don't need to invent arguments that I did not say. I am saying that the conventional advice given to newbies, that they should build their arena as soon and as fast and as far as they can, ignores the opportunity cost of that (bad) advice. It is as simple as that. If they have better things to do with their money they should put it to work buying trainers and buying/training players. Empty seats not only do not yield any revenue, they represent money that could have been spent on something a whole lot better than empty seats. The opportunity cost of empty seats can be enormous.

Newbies, throw money into empty seats ONLY when you don't have something better to spend it on. Make your money work for you. Don't let it sit idle. (Even if your competition likes to see you throw it into empty seats).

BTW
I don't know where your empty seats theory cones from.
It isn't rocket surgery. Revenue from empty seats anywhere in the arena = zero.

Last edited by Mike Franks at 8/22/2015 2:28:11 PM

This Post:
00
272768.39 in reply to 272768.38
Date: 8/22/2015 2:34:04 PM
Overall Posts Rated:
370370
Steve, I give that a +1. Thank you.

This Post:
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272768.41 in reply to 272768.31
Date: 8/23/2015 1:54:40 PM
Overall Posts Rated:
596596
I know that. If you're selling twelve seats at $10 dollars or sell six seats at $20, which way are you making more money? Answer: neither, it nets you not a penny more and you're still suffering the effects of overbuilding your stadium, either by having empty seats or low ticket prices to try to fill the overbuilt stadium.


That makes sense if that were the case, but all other things being equal, seat pricing has an elasticity lower than -1, so when you lower ticket prices, by a certain percentage, the volume of tickets sold increases by a higher percentage.
Of course, once you hit rock bottom on ticket price, and have strong fan survey results, and STILL have empty seats, it is at that point that you are really only building seats for a future promotion (or playoffs, as they draw larger crowds than regular season).

From: Jason

This Post:
00
272768.43 in reply to 272768.42
Date: 8/23/2015 8:02:19 PM
Arizona Desert Storm
III.1
Overall Posts Rated:
11251125
To add on to what you are saying....On average it takes about 18 home games to make back what you spent building the seats....once you sell those seats 18ish times, it's pure profit every time they sell after that, and an empty seat is not costing you any money either.

This Post:
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272768.45 in reply to 272768.41
Date: 8/23/2015 11:12:27 PM
Overall Posts Rated:
370370
... all other things being equal, seat pricing has an elasticity lower than -1, so when you lower ticket prices, by a certain percentage, the volume of tickets sold increases by a higher percentage.
Of course, once you hit rock bottom on ticket price, and have strong fan survey results, and STILL have empty seats, it is at that point that you are really only building seats for a future promotion (or playoffs, as they draw larger crowds than regular season).

There, that's the type of constructive response I hoped to see. Too bad others can't follow your example, instead of just attack (even moderators, whom you would think would be more responsible than that).

Yes, I agree with your point. I think if you are experiencing empty seats you can mitigate the loss by lowering your ticket prices, thereby recouping part of the money you spent on those seats. Since you still have some empty seats (although fewer) and since you have lowered your prices, the recovery is only partial, but your situation isn't as bad.

No one has yet said that empty seats producing no revenue is a good idea. The first person who does will give us all a good laugh and lighten the tone of this thread.

This Post:
00
272768.47 in reply to 272768.43
Date: 8/23/2015 11:16:25 PM
Overall Posts Rated:
370370
To add on to what you are saying....On average it takes about 18 home games to make back what you spent building the seats....once you sell those seats 18ish times, it's pure profit every time they sell after that, and an empty seat is not costing you any money either.

Actually, empty seats never pay for themselves. Only after sufficient games with fannies in the seats do they pay for themselves ... and what number is sufficient depends of course on your ticket prices.

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