Calculators ready?
Ticketing revenues stem from complex calculations. This case enables the more quantitatively inclined students to test their hands at pricing simulations.
“I do not usually emphasize the quantitative aspects of the case,” explains professor Marco Bertini. “Yet there is room for spreadsheet simulations if so wished.”
Combinatorics (the mathematics of combinations and permutations) would suggest thousands of different revenue possibilities for the London Olympics. After all, there are 26 sports events. Plus opening and closing ceremonies. Plus other activities. Combine that with at last three major price tiers: preliminary qualifying events, intermediate events, and finals. Then consider that different sports carry different price tags: swimming finals were priced at $286 in Sydney, whilst ping-pong finals clocked in at $47. Add combination tickets that entitle fans to watch individual or multiple events. Pretty soon one has a severe mathematical headache!
“One of the aspects that we like to touch upon in our discussion of the case,” pursues professor Bertini, “is the identification of the key revenues levers. Which sporting events drive the revenue equation, and how can one focus on those to have an impact on the topline?”
Although the 80-20 rule may not apply (i.e. 20% of events do not necessarily make for 80% of revenues), professor Bertini does underline that certain sports do carry more than their fair share of revenue. Is weightlifting one of them? You’ll have to read the case to find out.
