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Knock revenue out of the park

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in Leaders & Managers

If you were a Major League Baseball (MLB) team with lagging revenues, what would you do? Build a bigger stadium with more revenue-producing seats?

In the business of baseball, bigger isn’t always better.

To ramp up revenue, MLB teams have taken a counterintuitive path. The 20 new stadiums opened (or almost open) since 1992 have more than 200,000 fewer seats. Yet the average ticket price is up 87% in a decade.

The result? Scarcity boosts ticket prices and keeps the seats filled.

By tapping into its loyal hometown following—and taking a different path from the National Football League (which draws two-thirds of its revenue from TV)—MLB has hit a home run.

—Adapted from “The Revenue Model: Why Baseball Is Booming,” David Jacobson, BNET.

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