Blog post by Mark Satov Nothing like a long flight to clear my mind! I get uninterrupted time with my email inbox, my list of overdue pursuits and just delightful…
Barry Bonds’ record-breaking 762nd home run cost the San Francisco Giants hundreds of thousands of dollars. On an absolute financial basis, the 2007 game was a resounding success. The stadium was packed; memorabilia sold like hotcakes. Yet amid the thunderous applause of 40,000-plus fans, one man was fixated on the opportunity cost of this historic event.
For those of you who don’t live in Toronto, you may not have heard about the new train service our transit agency has launched, called the UP Express. It runs from the airport to Union Station with a couple of stops on the way. It is a great hit with its regular users…both of them! Nobody else has used the service, and that is because its price is so disconnected from anybody’s willingness to pay that it begs the question of whether the main asset MetroLinx should invest in is a calculator!
Nothing puts fear into the heart of a sales person, or a CEO for that matter, than the thought of changing prices. Input costs tend to rise over time, strategies change, competitors move: all are scenarios where a price change is applicable. But when we work with clients on pricing we meet more trepidation than we do with many other analytical pursuits.
Coming up with a winning bid for a complex asset is a thorny problem, and every deal is unique. At first glance, the recent $5.2 billion purchase by Rogers Sportsnet of the National Hockey League’s TV and multimedia broadcast rights seemed exorbitant. We put the deal through a simple framework to determine if the price was too high.