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Pete Toms Article Archive
Written by Pete Toms   
Sunday, 19 July 2009 22:44
Article Index
LWIB: Ballpark Villages, Amateur Draft, Mid-Season Attendance, In-Market Streaming
MID-SEASON ATTENDANCE
IN-MARKET STREAMING
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MID-SEASON ATTENDANCE

LWIB the All Star break provided an opportunity for pundits to examine mid season attendance numbers. How is MLB attendance? Don Walker reported that,”Overall, attendance in Major League Baseball is down 5.9%, compared with the same time period a year ago.” Darren Rovell reported a very similar decline of 5.5%. Also from Mr. Rovell:

The most interesting numbers from the group that has experienced an attendance increase this year is the Kansas City Royals, which are getting the renovation and Zack Greinke bump despite heading into the break 14 games under .500. It also might come as a shock that the Rays, who made it to the World Series and are still in the chase to make the playoffs, are only up 11 percent from their measly attendance at this point last year.

Baseball officials say that the attendance decrease isn’t as bad as one might think because both the Mets and the Yankees are playing in new, smaller stadiums.

The Mets are down 22 percent and the Yankees are down 13.5 percent on a per game basis as compared to this time last year.

But the Mets are actually up (+4.8%) on a capacity comparison, while the Yankees are down less than half their total attendance number (-6.2%) when you consider the cutting of seats at the new stadium.

I know they’re in economic hell, and they even raised some of their ticket prices, but it’s a bit surprising that the Tigers have the second-worst attendance slide in the league (-21%) when they are leading the AL Central and are nine games over .500.

In a Baseball Prospectus column, Shawn Hoffman pegs the attendance decrease at about 5.9%. More importantly, Mr. Hoffman provides some analysis on how gate receipts have been affected to date this season. Not surprisingly, the inclusion or exclusion of the two NYC clubs has a dramatic effect on the league wide bottom line.

...prices are just as important as paid attendance, especially in a year where most teams have either cut or kept them flat. There are also suite and club packages to consider; the Mets and Yankees have both drastically increased inventory in this space, making regular ticket sales seem almost secondary.

Team Marketing Report's annual survey can help with some of this. Coming into the season, the average ticket price rose 4.8 percent year-over-year, to $26.46. But if we combine TMR's numbers with the first-half attendance data, the weighted average so far has actually been $28.72 (which makes sense, since large-market teams generally draw the largest crowds and have the highest prices). That's up from a weighted average of $27.02 at this point in 2008.

So if we multiply it out, total gate receipts (price x tickets sold) are actually similar to last year's, down just three hundredths of a percent. In other words, higher ticket prices may actually be making up for the decline in total attendance.

That's true on an aggregate level, at least. There are still those two enormous new elephants in the room. If we take the Mets and Yankees out of the equation, the average ticket price still rises, but only by about ten cents, meaning that overall revenue is still falling by about 4.3 percent. And even that number is being held higher by the other high-end teams; the Cubs, Red Sox, and Phillies have all raised their average ticket prices, without any negative impact on attendance.

The reality is that most teams are struggling. According to our revenue estimator, twenty teams have seen declines at the gate, led by Toronto, San Diego, Oakland, Cleveland, and Arizona—all of whom are down more than twenty percent from last year. (Note: Toronto may only be there because of their currency; TMR calculated their prices during the winter, when the loonie was much lower against the dollar than it is now.) Given that none of those teams look like they're going to be anywhere near a playoff spot, and the economy still hasn't rebounded like many had hoped, the year-over-year comparisons may only get worse as the season goes on.

While gate receipts remain MLB’s largest single source of revenue, the negative impact of declining ticket sales is mitigated by MLB’s more diversified revenue streams. Mr. Hoffman predicts 2009 will be another robust year for MLB.

In the end, despite all of the negativity, I'm sticking with my prediction that industry revenue will actually be up this year. Attendance will likely be down more than six percent once the dust settles, but the new stadiums in New York should just about make up for that shortfall. Meanwhile, MLB Network is adding $200 million to the top line almost out of thin air, and MLB Advanced Media should at least see mild growth.



 
 
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