Monday, August 16, 2010

The Decline of Stephen Strasburg Mania

I recently wrote about the absurdly high ticket demand for Stephen Strasburg starts, but it seems like the hysteria has ended.

After an incredible beginning to his career, Strasburg has regressed to the mean a bit, being pulled from one start minutes before the game, spending a stint on the disabled list, and getting shelled against the Florida Marlins. While Strasburg's first few starts were sold out, his appearance Sunday drew a paltry 21,695 fans to Nationals Park.

I like to track prices on StubHub, a secondary ticket market, because it says so much about anticipated demand by the scalpers looking to turn a profit and actual demand by the fans as game time draws near. A few hours before Sunday's game, there were hundreds of tickets under $5 still available (many for only a few cents), as the resellers tried desperately to recoup any small percentage of what they paid for the tickets.

It's hard to imagine the market to see Stephen Strasburg will ever return to its early form, even if he continues to be an incredible pitcher. Ever wonder why many venues don't raise ticket prices, even when they know an event will easily sell out? One reason is insurance: for whatever reason (recession, bad weather, etc.), the venue could have made a mistake and ended up with a half-empty house.

But this mistake would be perpetually punished: it's not much fun to see a sporting event or concert surrounded by a sea of empty seats, which serve as a reminder that other people no longer think that this event is much fun. It's difficult to convince yourself that attendance is down because of the economy and not because the team sucks or baseball is boring. Today's attendance can very much be a factor of yesterday's attendance, which has such a large influence on how people perceive an event.

(A nod goes to Russ Roberts, who discussed many of these ideas in his class a few years ago.)