So what's this 7-year-old company doing with the NBA?
They are actually building software to help teams better understand the business of ticket selling. The software will enable teams to look at the entire arena of seats and perform cost analysis on each chair. Furthermore, it will figure out how the ticket was bought and the frequency it was filled throughout the season. The software is expected to eventually include a predictive tool, which will enable teams to understand how seats will sell and at what price, given a certain set of factors, including team record and specific promotions.
"We found out that teams were spending a tremendous amount of time trying to figure out how many seats would be available for their small ticket packages where they group a bunch of games together," said Matthew Marolda, the CEO and founder of the privately held company. "With our software, you can look at everything you want with the touch of a button."
For years, NBA executives arguably have been more interested in research compared to their compatriots in the other major sports. They have an online library, where team marketers freely exchange their philosophies and practices with one other.
"We spend a lot of time helping teams drive revenue," said Scott O'Neil, the league's senior vice president of marketing and team business operations. "We're also looking for an advantage and this relationship allows us to get more strategic and analytical as the ticket business continues to grow."
Marolda has big dreams of growth in the relationship. He says his software will be able to predict how tickets will sell based on local area economic trends, the popularity of the visiting team, and most importantly to some, the performance of the players. Executives might one day be able to evaluate the merits of a possible trade or decide how much to pay a player based on the predicted effect it will have on ticket sales.
Although basketball teams, unlike baseball teams, have for the most part steered away from variable pricing due to a large amount of season-ticket holders, Marolda says the software one day could allow for teams to ensure that they fill their houses for every game by pricing tickets based on time-sensitive supply and demand. As it gets closer to the game, tickets prices could drop.
"There would be a lot of psychological hurdles to jump over when considering whether sports fans would ever accept airline-type pricing," Marolda said. "But at least, if it ever gets to that point, teams will be able to do it with our software."
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