What It Really Costs...Lakers Ticket: Sec. 111, Seat 18

A-Back-of-the-Envelop-Calculation
A-Back-of-the-Envelop-Calculation
A prime seat at a Christmas Day game between the Los Angeles Lakers and the Miami Heat would cost $900 at the box office and about $2,582 on the secondary market. Where is all that money going? 
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The Ticket
The Ticket
The ticket has a face value of $255 because that's what a season ticket holder pays. It would cost $900 at the box office. In 2008 the Lakers adopted a tiered pricing system, charging different amounts for different games, depending on the opponent. According to data from the ticket search engine SeatGeek, the asking price on the secondary market for a comparable ticket ranges from $1,473 to $6,000, with an average of $2,582. The Lakers, like other National Basketball Assn. teams, routinely underprice tickets, because owners have to worry about long-term fan loyalty. "Teams that are good today, by and large, are going to be bad down the road," says Rex Fisher, vice-president for business development at Digonex Technologies, which specializes in event pricing. "Maintaining a dedicated fan base is paramount."
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The Salaries
The Salaries

NBA teams are notoriously secretive about their numbers. A person who has seen the books of many teams (and asked to remain anonymous to be able to continue looking at the teams' books) estimates that, on average, teams spend 62 cents of every dollar in revenue on players, such as Pau Gasol. The Lakers have large salaries, but because revenue is so high the team likely apportions about 43 percent of revenue to payroll. Of the $900 ticket price, some $387 goes to Gasol and his teammates, and about $101 of that goes to Kobe Bryant. The Lakers would not comment on our estimates.

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The Coach
The Coach

The operational costs for an NBA team, not counting player pay, account for an average of 23 percent of spending--$207 of this ticket. This includes coaches' salaries, scouting, and the cost of running the arenas. The Lakers share the Staples Center, which opened in 1999, with the NBA's Clippers and the National Hockey League's Kings. Coach Phil Jackson made $12.5 million last year, plus a $2 million bonus for winning the championship, making him the highest-paid coach in any sport. (In July, he agreed to come back for another year at an undisclosed pay cut.)

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The Other Teams
The Other Teams

It costs more to see the Miami Heat than any other NBA team this season, with an average ticket price of $222 on the secondary market for away games, according to SeatGeek. Last season the average away Heat ticket fetched $69--thanks to the arrival of LeBron James, Miami jumped 10 spots on the list of the most in-demand teams. In the NBA, fans and their money follow star players. According to Barry Kahn, CEO of the ticket-pricing consultancy Qcue, the visiting team accounts for roughly two-thirds of the variability in demand for a seat. Qcue's NBA clients--the Atlanta Hawks, Houston Rockets, and Utah Jazz--adjust prices throughout the season, a practice known as dynamic pricing.

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The Fans
The Fans
A Saturday game on Christmas between two marquee teams is a perfect storm of demand factors, and NBA schedulers plan it this way. A game's timing--whether it falls on a weekend or weekday, at the beginning or end of the season--accounts for a third of the variability in demand, according to Kahn. SeatGeek's data suggest that fans are influenced by the ebb and flow in the supply of games. "When a team is on the first game of a home stand, ticket prices tend to rise leading up to that game. There's a lot of pent-up demand," says SeatGeek founder Russ D'Souza. "You see the opposite effect with teams at the tail end of their home stand. There's a saturation point."
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The Seats
The Seats

Section 111 is in the lower bowl of the Staples Center and in the top tier of Lakers ticket prices, which range from $10 for a nosebleed seat in a throwaway game to this $900 superticket. Location accounts for two-thirds of ticket value, according to Kahn, and the quality of the event the remaining one-third: "What that means is that courtside seats for a meaningless game are worth more than upper-level tickets to a playoff game." The ticket, of course, is just the beginning. No matter who's in town, the average price of a beer at the Staples Center is $7.75.

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