Essay on The Orlando Magic

796 Words Mar 2nd, 2016 4 Pages
The Orlando Magic is a professional basketball team that sells tickets to their games. As with any business, the Orlando magic forecast their ticket sales in order see the demand for their games. The team also “translates” that forecasted demand into ticket prices in order to maximize their revenue for each game. Before, the magic used to set the ticket prices the same for every game no matter what the day of the week, or the season, or the team they were playing. The magic decided that they were not reaching their revenue potential, so the team took their strategies up a notch in order to better manage their revenue. Their director of business strategy, Anthony Perez, helped implement a better yield/revenue management system, so the team would increase their revenue. Originally they had no set model in order to help set ticket prices, but the magic implemented a forecasting model which uses regression analysis in order to help determine demand for games and therefore change ticket prices accordingly. The dynamic pricing model that was implemented had several variables that it uses to help forecast demand and set ticket prices – opponent strength, day of the week, time of the year. Fans would rather see stronger/valuable opponents such as the Lakers and go to a game on a Saturday during the spring time, so naturally these games will have more demand. Using this model, the Orlando Magic prices the seats before the season even starts, and then constantly updates prices based…

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