Here we get more into the question-and-answer part of the meeting, in which the execs talk about why the price increases had to happen now, and if they’re prepared for the inevitable backlash from the fans…
Question: Why do the price increase this year, after a terrible season, and not wait until things have improved a bit?
(McGowan:) “The assumption is that never is pricing really going to be taken well. So we wanted to do this in a way where we found that fine line. It’s all about, `What do we think is fair?’ and then we need to be prepared to deal with what season-ticket holders say. We wanted to go into this process and kind of have the (price) analysis drive where we’re going. We went into it open-minded, to where we would have potentially frozen, or maybe in some areas we would have lowered. The process drove our strategy, and that’s why we decided to do what we did, on the 5.66 percent increase.”
(Robitaille:) “The other thing is, from a business standpoint we knew (prices) needed to go up. You can go up a huge bump next year or do it slowly but surely. Knowing that, we want to be as fair as possible, and that’s why we went through this whole process, of making sure that everyone has the opportunity to either stay at the same price or, if they want to stay where they are, (prices) might go up a little bit. But at the end of the day, to make our business better, (prices) need to go up, for everything that’s going to happen for us in the next two or three years.”
Question: When, inevitably, you get a call from a season-ticket holder saying, “Why are you raising my prices when you finished last?”
what do you tell them? How do you make them see this long-term vision?
(McGowan:) “I think you can do a lot of things. I think a lot of our season-ticket holders know that our pricing is a lot more affordable than a lot of other organizations. They go to a lot of games, and they come back and they tell us that. `Wow, I can’t believe how much tickets are in Dallas. We’re lucky in L.A.’ So we’re dealing with some people that are definitely informed here. But, as we talked about a little earlier, we want to have an option for those people. `Yeah, it’s more (to sit) here, but have you considered moving here? It’s the same as you paid last year.’ So as long as we’re giving our sales people, and our people handling the season-ticket holders, those type of options…we may lose the argument, and someone may not come back to us because of the pricing.
“We obviously don’t want that to happen, but we know that’s the potential. We can go statistics with people all day long, because the statistics don’t lie. But do people really care that our prices have only gone up an average of one percent over the last 10 years? We have lots of supporting statistics that our organization will know when they get into these conversations, that will be used, but I don’t know if people want to get into that, because it never really wins the, `Well, you were 29th last year (argument).’ But we do want to have options for people. So we’ll probably handle it with some statistics and options to pay the same amount of money and go from there.”
(Robitaille:) “We’ve been below inflation for the last 10 years. That’s just the reality of it.”
(McGowan:) “We’re also $12 under the NHL average.”
(Altieri:) “The bottom line is, their prices are going up and they’re going to be upset. They’re going to communicate with us and we’ve got to give them all the information that we can, that’s going to help them make an informed decision on whether they want to renew, first and foremost, and then in what manner they can renew that can renew.”
(McGowan:) “We handle the pricing the best we can and spend a lot of time with our customers working through this process. Then the question also is, `Are you getting value in other ways?’ Probably not, as it relates to the team’s performance, but what we’ve heard is that there’s an optimism, from our fan base, about what’s around the corner. Then we want to really focus on that added-value stuff, access and events. That’s going to be our approach.”
(Robitaille:) “We’re working real hard on services. We want to make sure we’re servicing our fans well. We’re hiring people just to do that.”
(McGowan:) “Our sales staff used to be comprised of a manager and about eight or 10 people who just sold season tickets, sold mini-plans and managed our season-ticket base. We’ve just launched a service-retention department. So we’re going to have a manager over four or five people, with the sole job to just service the heck out of our season-ticket base and provide events and experiences for these people. We’ve kind of split sales and services. It’s all under the same roof and run by the same person. We’re taking the approach of dedicating a 100 percent dedicated, service-oriented resource for our season-ticket base. We’re going to do new programs and new access-based things.”