Lebronenomics

August 2, 2010 11:31 AM

After announcing that Lebron James, Chris Bosh, and Dwayne Wade would join the Miami Heat in July the team almost immediately sold out their seasons tickets packages while placing another 6,000 on the waiting list. The result? All 30 seasons ticket salespeople were fired on friday becasuse as a staffer put it `They let us go because there was really nothing left to do anymore.''

Planet money links to a discussion on marginal revolution that points out that

it's a classic case of a machine displacing human labor— but in this case the machine is James, who left the Cleveland Cavaliers.

posted by jourman2 (57 comments total)

Ha! There goes your theory about LeBron being good for the local economy, theorizers!
posted by Mister_A at 11:33 AM on August 2, 2010 [5 favorites]

Reverse trickle-down fading jumpshot?
posted by Burhanistan at 11:34 AM on August 2, 2010

In other news, the Miami scalping industry is predicted to make record profits his year.
posted by clarknova at 11:34 AM on August 2, 2010 [4 favorites]

Man, that stinks. But, then again, a 30-person sales team?
posted by KokuRyu at 11:37 AM on August 2, 2010

As I posted on SportsFilter:

Wait until the team implodes then hire them all back to answer phone calls from angry season-ticket holders.

Problem solved!
posted by mr_crash_davis mark II: Jazz Odyssey at 11:38 AM on August 2, 2010

Considering that they probably got decent bonuses for selling out their inventory, and then further compensation for getting laid off, plus 196 months or whatever it is up to of unemployment pay, I wouldn't really mind being a(n ex) Miami Heat ticket salesperson right about now.
posted by mrgrimm at 11:50 AM on August 2, 2010

Well, that ought to help pay for 2% of LeBron's salary.
posted by briank at 11:50 AM on August 2, 2010 [2 favorites]

Jesus, the comments on the marginalrevolution site are...pedantic.
posted by Xoebe at 11:58 AM on August 2, 2010

I'd short the Heat this year.
posted by Ironmouth at 11:59 AM on August 2, 2010

That's the first time I've seen the name Dwayne Wade in print. I've been hearing about this stuff on the radio and wondering why the Miami Heat wants Dwayne Wayne.
posted by gurple at 11:59 AM on August 2, 2010 [4 favorites]

I don't think it's very easy to get out of a commitment for season tickets.
posted by parmanparman at 11:59 AM on August 2, 2010

Heat are owned by Israeli-American Micky Arison, 94th wealthiest person in the world with a net worth of $6.1 billion in 2006 according to Forbes magazine [1].

Employing 30 people part time for a year at Florida's minimum wage costs ~$226,200; we will round up to $300,000.

Firing these people rather than finding other work for them to do thus represents a boon of 5% to Arison's bottom line.

So now the state of Florida will have to feed and house them until they find alternative employment, which currently is expected to be 35 weeks. The system works!!!
posted by norabarnacl3 at 12:01 PM on August 2, 2010 [4 favorites]

Man, that stinks. But, then again, a 30-person sales team?

I'm kind of blown away at that, too. Now, you need a marketing team to ward against churn. But that's not sales.

Thirty people selling season tickets. American Airlines Arena holds 20,000 at max capacity (which is likely well above what a basketball configuration allows). Figure 75 percent of those can be sold as season seats. That's one person for each 500 tickets. Which are usually sold in blocks of 2-4 -- so now it's one person for each 250 - 125 blocks of tickets. Or less.

Oh, and most seats are renewed year-after-year; you don't actively sell to existing customers. That's what the aforementioned marketing team is doing -- preventing churn.

DUDE. What the heck were these guys doing all day? Working on their jumpshots?
posted by Cool Papa Bell at 12:02 PM on August 2, 2010 [2 favorites]

"About 30 ticket sales employees were told Friday morning they were losing their jobs, and some were being moved to other positions," which is what's actually printed in the linked article, is sort of the same as "All 30 seasons ticket salespeople were fired" in that it's not.
posted by XQUZYPHYR at 12:03 PM on August 2, 2010 [7 favorites]

Maybe they were the marketing team, too?
posted by snuffleupagus at 12:04 PM on August 2, 2010

Even back when the free agency moves were pure speculation, season ticket sales staffers were cold-calling potential customers, taking deposits and adding names to a waiting list that now exceeds 6,000 names.

This was a marketing/sales campaign that reached its end, it would seem to me.
posted by snuffleupagus at 12:07 PM on August 2, 2010

The 30-person sales force number must be wrong. The Heat's arena holds 19,600. If every single one of those seats were season tickets (which they aren't), and each ticket buyer/season ticket holder had only one ticket instead of a pair or more (which they don't), and the ticket office staff had to newly sell the entire stadium each year instead of just processing renewal paperwork (which they don't), and you accounted for six weeks of vacation each year per employee, that would equate to less than 3 sales per person per day.
posted by AgentRocket at 12:10 PM on August 2, 2010

Firing these people rather than finding other work for them to do thus represents a boon of 5% to Arison's bottom line.

Nope - 5 THOUSANDTHS of a percent (he has 6 billion, not 6 million).
posted by rkent at 12:14 PM on August 2, 2010 [6 favorites]

But, then again, a 30-person sales team?

Season tickets are a product that is difficult to sell in a weak economy and needs to be sold very quickly in a limited amount of time. No one's buying season tickets midway through a season any more than someone's paying sticker price for a 2009 automobile.

This article notes that the Chicago Bulls sold roughly 15,000 season-based tickets for the 2010 season. The Knicks sold 3,400 in the off season alone. At even half the number the Heat sold, a staff of 30 people would need to each sell an average of 250 tickets, which I imagine cost in the thousands. Good car salesmen sell maybe, what, 10 cars a month? 20?

Maybe they were the marketing team, too?

I have a friend who works for one of - one of- the marketing firms contracted to the Atlanta Braves. That's just one office, of dozens of people. The "marketing team" for any major league sports team outnumbers the team itself by exponential levels.
posted by XQUZYPHYR at 12:16 PM on August 2, 2010

Seems to encourage you to sell tickets at a mediocre speed. Too slow and you get fired. Too fast and you get fired. Sell at a medium pace that coincides to the yearlong season and you're golden.
posted by Lord_Pall at 12:16 PM on August 2, 2010

Yeah, I've got to say that, once I realized that it wasn't truly the entire sales team, this seems like the right decision as long as you remove the variables from the story that make it headline worthy.

"We've had a hard time selling specialty widgets so we've had to hire a large sales staff to focus on specialty widgets because they are a certain market because if we don't get rid of these specialty widgets, it's really bad for the overall brand. Suddenly, every body wants widgets, even specialty widgets. Thanks, but we no longer need your services."

The thing that I think we're overlooking is that selling season tickets, especially for a team that isn't selling out, isn't about just booking and selling tickets. Some (if not all) of this staff is dealing with corporate clients and the schmoozing and bs that goes along with that. When the tickets become hot items, you don't have to do so much schmoozing.

(See also Chicago, the Chicago Stadium/United Center, and the 1990s, and the peaks and valleys created when Jordan played, retired, and unretired)
posted by MCMikeNamara at 12:17 PM on August 2, 2010

Heat are owned by Israeli-American Micky Arison, 94th wealthiest person in the world with a net worth of $6.1 billion in 2006 according to Forbes magazine [1].

Employing 30 people part time for a year at Florida's minimum wage costs ~$226,200; we will round up to $300,000.

Firing these people rather than finding other work for them to do thus represents a boon of 5% to Arison's bottom line.

Not quite.
posted by matthewr at 12:18 PM on August 2, 2010 [1 favorite]

the problem seems to be that the demand was such that they could NOT sell at a mediocre pace. they didn't have to go looking for sales, the sales just rolled in right in like a huge mob.
posted by sio42 at 12:18 PM on August 2, 2010

It's spelled "Dwyane."
posted by callmejay at 12:23 PM on August 2, 2010 [1 favorite]

Salespeople generally work for commission (on top of a low base rate) - they sell, they get paid. There is also a high turnover rate for sales, as people try it and find out they are not very good at it - thus not making very much money.

And with a high-priced item like season ticket seats, they do not sell every day, much less multiple sets of tickets each day. A quick look online found aftermarket season pass seats for the Miami Heat around $3,300 per seat (before the Lebron thing, the price has obviously skyrocketed since). In a normal market (again, before Lebron), it is increasingly difficult to make a $6,600+ sale regularly.

This sales team probably had 15-20 sales people, and the rest may have been managers, logistics, marketing, etc. I would also guess there might be a few people in this department to act as PR or reps for VIPs in the season ticket system. Doesn't surprise me in the least that they had 30 people to do these jobs, and it also doesn't surprise me that they are cutting back. It would be great if they could move all 30 to other positions, but it is hard to argue with a 6,000 name waiting list for your product.
posted by shinynewnick at 12:29 PM on August 2, 2010

The thing that I think we're overlooking is that selling season tickets, especially for a team that isn't selling out, isn't about just booking and selling tickets. Some (if not all) of this staff is dealing with corporate clients and the schmoozing and bs that goes along with that. When the tickets become hot items, you don't have to do so much schmoozing.

Actually this sort of makes me wonder why they laid them off, instead of shuffling them around.

The sort of skills they have, not to mention their address books and contacts, seem valuable. You're not always going to have the dream team to draw sales, so why not move them to another position in the company? Especially since you're now flush with cash, and can afford to do so.
posted by codacorolla at 12:31 PM on August 2, 2010 [1 favorite]

When there's no work, you lose your job. I guess not a lot of MeFites had dads who worked on assembly lines. I did. I don't consider this newsworthy, or even news.
posted by ethnomethodologist at 12:31 PM on August 2, 2010 [2 favorites]

When there's no work, you lose your job. I guess not a lot of MeFites had dads who worked on assembly lines. I did. I don't consider this newsworthy, or even news.

My dad didn't, but I'm right with you. Grew up in a fairly boom/bust town. No one is entitled to consistent employment, especially if the work runs out. Strange to me others would think otherwise.
posted by rulethirty at 12:35 PM on August 2, 2010

Well, I guess now we've learned who Jay-Z isn't paying.
posted by l33tpolicywonk at 12:37 PM on August 2, 2010 [1 favorite]

callmejay: It's spelled "Dwyane."

Yes, yes it is.

But seriously, has there ever been any more excusable spelling mistake?
posted by MCMikeNamara at 12:42 PM on August 2, 2010 [1 favorite]

Actually this sort of makes me wonder why they laid them off, instead of shuffling them around.

Does any successful company really just shuffle people around? Best case is that they replace other people who aren't as good as selling.
posted by smackfu at 12:44 PM on August 2, 2010

If they all work on commission, then doesn't this just mean that they all managed to make a year's worth of salary much earlier in the season than they normally would have?
posted by saladin at 12:47 PM on August 2, 2010

Actually this sort of makes me wonder why they laid them off, instead of shuffling them around.

Because they did their job and they don't need them to do their job any more, and if they do next year they can hire them again. Hooray, shitty economy!

I'm temping right now, and there's so much work to do at my office the bosses are instigating mandatory overtime. I don't mind, since I'll get time and a half, but let there be no doubts about it- they're making everyone work harder to get work done faster, and once it's done, they're going to fire half the people here. Like they do every year. And then in March they'll need more people, which is how they hired me.

I should get back to work now.
posted by XQUZYPHYR at 12:50 PM on August 2, 2010 [2 favorites]

In related news I (a Heat fan) am looking forward to a regular season NBA game for the first time since their inaugural season.
posted by oddman at 12:53 PM on August 2, 2010

I too, fail to see how this is newsworthy. Work gone, job gone. Happens everywhere.
posted by davebush at 1:01 PM on August 2, 2010

If it's not newsworthy yet, it will be later this week, when all 30 ex-employees go postal and drive around the city lobbing exploding basketballs at people.
posted by mannequito at 1:19 PM on August 2, 2010 [3 favorites]

Years ago, my family had Laker season tickets (back in the West-Baylor days). My dad died, and so we did not renew. My mom got a call from Lynn Shakleford, who up until then had been a Laker, and now was an ex-Laker working in the front office.

When my mom tried to explain the reason for our not renewing, Shakleford tried to convince her that my dad would have wanted us to keep those tickets. My mom had to say no about 4 times.

My point being that it's like any other commodity, dictated by the laws of supply and demand. When there is no demand, teams (pro and college) will go to unpalatable lengths to unload the tickets. Then there is more demand than supply, they will continue to be assholes, only in another way.
posted by Danf at 1:44 PM on August 2, 2010

I assume that they're looking for experienced seasons ticket salespeople in Cleveland if anyone wants to relocate.
posted by Slack-a-gogo at 1:52 PM on August 2, 2010 [5 favorites]

When my mom tried to explain the reason for our not renewing, Shakleford tried to convince her that my dad would have wanted us to keep those tickets. My mom had to say no about 4 times.

Your mom is probably nicer than my mom. After the 3rd time she said "no", my mom would have then said "Fine, we'll make sure his corpse doesn't miss a game. Make sure you have Lakers flyswatter night for the 30 people around Row 12 Section 4 Seat 11G," or what have you.

Unless Mr. Shakleford new how many medications she was on, he would make the awful mistake of thinking he was calling her bluff.
posted by Bathtub Bobsled at 1:54 PM on August 2, 2010

Maybe they should move to Cleveland and work for the Cavs.
posted by anniecat at 1:56 PM on August 2, 2010 [1 favorite]

While it's of course always depressing to hear about anyone losing their job, I'm not sure what the alternative was here. I think expecting an employer to keep 30 people on staff when there is no current need for their position goes beyond any reasonable expectation of goodwill.
posted by The Gooch at 2:25 PM on August 2, 2010 [1 favorite]

Huh? What about commission? If they were on a reasonable commission schedule, they should've made just as much money selling all the tickets in six days as they would selling all the tickets in six months. Is that the case? If so, it's not really anything to wring anybody's hands about.
posted by koeselitz at 2:56 PM on August 2, 2010

(And if they're getting paid commission, the company isn't saving money on salary at all, anyway. They're saving money on facilities cost. The employees get the same amount of money – the company just doesn't have to pay to keep the office open this way. And that makes some sense.)
posted by koeselitz at 2:57 PM on August 2, 2010

"DUDE. What the heck were these guys doing all day? Working on their jumpshots?"

They are cold calling sales on a multi thousand dollar luxury item. A good day would probably be anytime they sold more than a couple packages in a single day.
posted by Mitheral at 3:14 PM on August 2, 2010

That's a pretty large bandwagon.
posted by drezdn at 3:20 PM on August 2, 2010

Cool Papa Bell: Thirty people selling season tickets. American Airlines Arena holds 20,000 at max capacity (which is likely well above what a basketball configuration allows). Figure 75 percent of those can be sold as season seats. That's one person for each 500 tickets. Which are usually sold in blocks of 2-4 -- so now it's one person for each 250 - 125 blocks of tickets. Or less.

Oh, and most seats are renewed year-after-year; you don't actively sell to existing customers. That's what the aforementioned marketing team is doing -- preventing churn.

DUDE. What the heck were these guys doing all day? Working on their jumpshots?

One pair of Celtics box seat season tickets costs $2,580. Selling 250 of those packs means finding 250 people willing to part with $2600 each, thereby racking up $645,000/year in gross sales ($53,750/month). And doing it, mainly, by bothering people who you have little to no reason to assume want this expensive product, in a bum economy.

For comparison, someone who sells new cars may be considered successful, depending on the area, selling as few as 3 cars a month. And that's selling to people who go to the dealership and already are interested in the cars and want to buy one with the advantage of having them in your location and be able to make eye contact and all the rest.

I'm not saying these people ought to be employed to sell something that is no longer for sale, but I'm sure it wasn't a cake-walk job when they had it.
posted by paisley henosis at 4:26 PM on August 2, 2010

oddman: In related news I (a Heat fan) am looking forward to a regular season NBA game for the first time since their inaugural season.

I'm not saying you're incredibly jaded and cynical beyond all measure... but the Miami Heat won the NBA Finals only 4 years ago.
posted by hincandenza at 4:43 PM on August 2, 2010 [2 favorites]

Wow, that is really shady. I'm a partial season ticketholder for a major league sports team and if, by some insane twist of fate, they put together a dream team and sold out all the season tickets and fired all or most of the staff, I would be unbelievably pissed at management and would probably not renew. I'm not a rich person or a company that buys tickets to give away, I'm just a fan who likes spending summer days in a ballpark so I save my pennies. And my team isn't so lucky as to have constant sellouts so they do romance us a little. But even though I'm not really worth huge bank to the team, my sales person calls up every so often when they arrange special events like picnics for ST holders, or to ask if they can get me tickets for games I want, or exchange tickets I can't use, or when they arrange road trips to out-of-town games, or just to ask if I'm having fun this season. And the team has a charity organization that they need volunteers for and so they poke us with sticks to get us to pack food bank boxes and stuff. It's hard for me to believe that a team has thrown the customer service aspect of the ST sales team out the window. Even if they don't have a charity wing that they could throw some staff at - and I have to believe that would be a better use of their time than sitting twiddling their thumbs if there were no new sales to be made, or sitting collecting unemployment - why not start even an unofficial one? It'd look a lot better than firing people. You could even publicize it as sort of a joke - we were so bored around our office after those jokers did all the work for us, so we snuck out of work to go get real jobs! Here's us at the food bank, here's us at the soup kitchen - man, that Joe is such a ham!

No, no one is entitled to constant employment. But I think that both the marketing opportunity and the community-building opportunity for deploying the underused staff in alternate roles like volunteerism and outreach, plus the fact that recruiting and training new staff is expensive, and plus the fans like me for whom season tickets are a Big Deal and they can lose my money very easily, make this a bad move. What team do people take their kids to see and want to build lovely new stadiums for, the one that plays well and goes out telling kids stay in school and don't do drugs, or the one that plays well but totally ignores the community?

Anyways. Even if you make the argument that my team needs the continual sales efforts to maintain their ST sales (and they do, because we get cranky when the team gets sucky), the other ball team in my town has no trouble selling their season tickets all the time regardless of performance, and I don't recall hearing about them firing their staff just because they don't have to do a lot of legwork. Very shady.
posted by sldownard at 4:55 PM on August 2, 2010 [1 favorite]

Sun Sentinel says they made out pretty well

"While the decision to release part of our sales force was a difficult one, we greatly appreciate their contributions to the company," the statement continued. "We have also hired a placement service to assist those individuals find new employment."

Sources said the employees made a base salary and commission, which was sizable during the sales rush that came on rumors the team might sign LeBron James, Chris Bosh and re-sign Dwyane Wade. Some employees were offered severance of up to a year's salary and extended benefits. Additionally, some staffers might be hired back to oversee season ticket holder accounts, the sources said."

No mention of how all of them did, but chances are they did ok for a division that ran out of work
posted by Sportbilly at 6:07 PM on August 2, 2010

I too, fail to see how this is newsworthy. Work gone, job gone. Happens everywhere.
posted by davebush at 4:01 PM on August 2 [+] [!]

what's newsworthy is the way corporations and the government are allowing larger and larger unemployment percentages to "normalize" into what's called "structural unemployment", as Krugman explains so nicely in today's NYT. Even if these ticket-sellers did make enviable commissions before getting canned, they perform a valuable service to the team and surely could be put to some other use in the organization (thanks codacorolla).

I think it's really weird how many people in this thread don't think it's weird.
posted by toodleydoodley at 7:30 PM on August 2, 2010

Honestly, though, I don't see why people pity these salespeople. I guess nobody thinks they made commission. Maybe they didn't. But if they did, they're lucky they got laid off. They just made a year's worth of pay in a few weeks, and they don't have to work for the rest of it - they can take the time off and enjoy it. And now they can actually end up making more money than they would if they'd stayed with the company they were with, since they're likely to actually earn money in the next year.
posted by koeselitz at 7:38 PM on August 2, 2010

hincandeza, you're too nice. Oddman, enjoy your team. (Cough)SUNSHINE FAN (COUGH).

^{Why yes, I kept watching Bulls games after Jordan retired. It only took ten years for the team to give me an honest sparkle of hope.}
posted by Ghidorah at 8:28 PM on August 2, 2010

Hincandenza, I watch the playoffs avidly. (Incidentally, I thought the team they had with Wade, Butler and Odom, was better than the Wade, Shaq team).

I also watch regular season games. Watching TNT on Thursday nights is the norm in my house during the season. But I don't really look forward to regular season games. I mean there are 82 of them per year, just for my team. I'll watch and enjoy the games, but I don't circle my calendar or anything. It's not appointment television. I watch when it's on. I enjoy the games. But, if my wife want's to see "So You Think You Can Dance?" then I'm not going to put up a fight about it. It's just the regular season after. Plenty of other games to watch later.

I'm not a fair weather fan: I liked the Heat when Seikaly was our best player (he was totally underrated). But this year, I'm definitely going to make a point of watching as many Heat games as I can. This year, for the first time in ages, I'm gonna be looking at the cable listings to see when the Heat are playing.

And I bet TNT and ESPN are going to make it easy for me.
posted by oddman at 8:33 PM on August 2, 2010

Even if these ticket-sellers did make enviable commissions before getting canned, they perform a valuable service to the team and surely could be put to some other use in the organization

I hate to be super bottom line about it, but their valuable service was selling season tickets. There are no more to be sold. As much as I empathize with anyone who loses a job, expecting the organization to magically create 30 new positions out of thin air just to avoid anyone getting terminated is not a reasonable expectation provided we accept the premise that companies employ staff as the need for specific positions exist, not as charitable contributions. This seems to me to be the equivalent of complaining about Christmas tree lots not finding other employment for their seasonal staff the other 9-10 months out of the year.
posted by The Gooch at 8:34 PM on August 2, 2010

I can definitely say that my hometown team, the Washington Wizards, will never have this sort of "problem."
posted by bardic at 9:33 PM on August 2, 2010

I can definitely say that my hometown team, the Washington Wizards, will never have this sort of "problem."

And it was nice of Bosh to make sure this wouldn't happen to the Raps sales team.
posted by mendel at 2:18 PM on August 3, 2010

I've given this whole season ticket sales team thing a lot of thought over the past couple of days. And though there's been a lot of interesting back and forth about market economies and whether or not people are "entitled" to a job and such, I've really only come to one conclusion.

The schadenfreude I will feel if the Heat fail miserably at meeting expectations this year will not be increased due to this story.


(But this is only because it was already at an infinite amount.)

posted by MCMikeNamara at 3:27 PM on August 3, 2010 [1 favorite]