I understand the need/desire to keep ticket prices down . . . but shouldn't a business putting a much better quality product into the market be looking to NOT cut ticket prices?
That's a rhetorical. In the end I would assume City follow the lead of other sports teams and the airline industry in yield management and begin to use dynamic pricing more aggressively, where the prices per seat change more flexibly between on-sale date and event date depending on the opponent, time of day, competition, etc. I know that exists to a certain degree already.
Incidentally, American football and basketball tickets are more expensive than City tickets even for cheap seats. There's also no such thing as hospitality -- suites are private. And for $80 US I can get a decent, not close to great, seat for hockey, and not at premium times or against premium opponents. Baseball $80 gets you a pretty good seat for many teams (but each plays 162 games a year).
Just an observation -- I recognize its apples and oranges.