Stadium Giveaway Promotions: How Many Items to Give and the Impact on Ticket Sales in Live Sports

Abstract

Although stadium giveaways are the most common type of promotion used in Major League Baseball to increase demand, most teams supply fewer giveaway items than there are tickets sold. This study argues that giveaway availability is a major component of teams’ promotion strategies and has been largely overlooked in the literature. The authors document the choice of giveaway availability across all Major League Baseball teams over an 8-year period and demonstrate that attendance increases with giveaway availability up to the point where there are enough giveaway items to serve 40% of a stadium’s capacity. Roughly two thirds of teams set giveaway availability in a fashion that is consistent with the standard price discrimination rationale for promotions found in the economic and marketing literatures. The remaining teams exhibit levels of high availability, indicating an additional investment into fan lifetime value, which is corroborated by these teams’ unique fan relationships.