This week in “Last Week in BizBall“, record low attendance in three markets, Yankees update plus the weekly tidbits.
RECORD LOW ATTENDANCE A SIGN OF THE TIMES?
Competitive imbalance in MLB was a popular subject amongst baseball’s chattering classes this off season. The Yankees World Series championship highlighted a 2009 playoffs dominated by large revenue franchises. Carping about competitive imbalance has not been restricted to baseball media and bloggers. Brewers owner Mark Attanasio and Pirates CEO Frank Coonelly have been vocal in support of decreasing economic disparities amongst franchises while Red Sox owner John Henry and Yankees President Randy Levine have expressed frustration with those arguing that the present amount of revenue sharing is inadequate. But perhaps most importantly, are an increasing number of fans in an increasing number of markets losing faith in their local teams ability to compete? 09 MLB attendance declined 6.7% over 08, a very respectable figure given the recession and the smaller ballparks in NYC. (The Yankees alone drew 570,000 fewer fans) More worrisome to MLB might be that 22 of 30 franchises experienced diminished attendance in 09 over 08. A Seton Hall poll conducted during the 09 World Series concluded that 60% of fans “feel that teams located in bigger markets have an advantage in producing winning seasons” . LWIB saw three franchises set records for smallest one game attendance at their present stadiums. Is this coincidence?, anomaly?, or another indicator that fans outside of large revenue markets are abandoning a league that they perceive as unfairly structured? Bob Nightengale reported for USA Today:
They were once the kingpins of the American League, dominating the playoff landscape and packing the houses nightly.
These days, the Cleveland Indians, Baltimore Orioles and Toronto Blue Jays are setting new lows.
This week, each had its worst home crowd since each moved into a new ballpark in a five-year stretch starting in 1989. Cleveland drew 10,071 Wednesday vs. the Texas Rangers: Toronto had 10,610 Wednesday against the Chicago White Sox: and Baltimore had 9,129 Monday vs. the Tampa Bay Rays.
The disinterest and frustrations of the fans in these three markets is easily understood. The Indians lost 97 games last season, their most since 91. Over the past two years the Indians have traded stars Victor Martinez, Cliff Lee and C.C. Sabathia. The Orioles lost 98 games in 09, their 12th consecutive losing season. After 3 consecutive winning - but non playoff - seasons, the Blue Jays lost 87 games in 09. The off season trade of Roy Halladay convinced the fan base that this season’s club will fare worse.
Is it noteworthy that 2 of the 3 franchises setting record low attendance figures LWIB reside in the AL East? Do fans in those markets no longer believe that their teams are capable of garnering a playoff spot over one of powerhouses NY or Boston? The Orioles last reached the playoffs in '97 while the Jays are one of only 3 franchises (the others are Kansas City and Washington/Montreal) to not make the playoffs since the Wild Card was introduced in '95. Is some combination of realignment/expanded playoff format necessary to revive these franchises? Is the debate within MLB over realignment de facto about the long term viability of Toronto, Baltimore and Tampa Bay in the presently configured AL East? (The Rays struggles at the gate last season coming off an 08 WS appearance indicate that that market has problems beyond competitive imbalance).
SELECT READ MORE TO SEE AN UPDATE ON THE YANKEES, PLUS THIS WEEK'S TASTY TIDBITS
Another common factor amongst the three “record setting” franchises LWIB is their “aging” stadiums. Baltimore and Cleveland were at the forefront of the building boom of “retro ballparks”. Camden Yards was the first of the “retro ballparks”, opening in '92. Progressive Field (then Jacobs Field) followed closely, opening in 1994. Nearly 20 years later practically all MLB franchises play in a “retro ballpark”. While these new ballparks have been one of the most important factors in the staggering growth of industry revenues, they are no longer the novelties they once were. Indians General Manager Mark Shapiro was quoted in the aforementioned Bob Nightengale report, "Our ballpark is one of the better places to play," Shapiro says, "but moving into a new ballpark just gives you a 2½- to three-year burst. Our stadium is 17 years old now." The Blue Jays home - Rogers Centre - marked the end of a different stadium era. Opened in 1989, 3 years before the seminal Camden Yards, Rogers Centre (then Skydome) is a throwback to the large (50,000 +) multi-purpose stadium. When it debuted Rogers Centre was a huge hit. The comforts, amenities, retractable roof, jumbo tron etc., were all a quantum leap forward from the dilapidated, cold and uncomfortable Exhibition Stadium. 20+ years later, the Blue Jays missed out on the near league wide move to more intimate, smaller capacity (even the Yankees opted for fewer seats in their new stadium), baseball only, “retro” ballparks.
As the 10 season plays out the issue of competitive balance will be closely scrutinized. Will there be a repeat of the 08 season when 2 small market franchises (Rays and Brewers) qualified for the playoffs? Or will this season be a repeat of 09 when large market/revenue franchises dominated? Have fans in many markets lost faith or are pundits overreacting to the natural ebbs and flows of league play? It’s early, really early. Nonetheless it is difficult to imagine management and ownership in Toronto, Baltimore and Cleveland shrugging off the results LWIB.
Perhaps the predominant baseball biz storyline of the '09 season was the opening of the new Yankee Stadium. While Yankees management was widely ridiculed for overpricing their most expensive ticket inventory in the new stadium, leading to the embarrassing sight of rows and rows of empty seats in the lower bowl, the new stadium proved to be a cash cow. According to the Forbes valuations (which are estimates), Yankees gate receipts rose to $319 million last season, an increase of approximately $100 million over the last season in the old Yankee Stadium. The additional $100 million in gate receipts was generated in spite of a decline in attendance of approximately 570,000 last season over 08. (3.72 million last season, 4.29 million in 08)
LWIB saw evidence that while the allure of the new Yankee Stadium has diminished from a year ago, winning the 09 World Series has boosted both ticket sales and ad revenue for the Yankees RSN. The Yankees home opener of Tuesday last week saw a record setting regular season crowd of 49,293 at the “new” stadium. Ronald Blum reported for the Associated Press that there was plenty more good news for the Yankees:
Spurred by a World Series title and some price cuts, the New York Yankees are ahead of last year's sales pace at their $1.5-billion ballpark.
Managing general partner Hal Steinbrenner said before Tuesday's home opener that the team had reached the equivalent of 37,000 full season tickets.
The Yankees had sold 35,000 full season equivalents by the time the stadium hosted its first regular-season game last April 16, and New York sold 2,000 more by the end of the opening month. Steinbrenner said the Yankees will soon stop selling season plans to keep inventory for individual game sales.
LWIB Aaron Kuriloff reported for Bloomberg that, “Yankees Tickets Resale Value Gains Less From Title Than Stadium”.
Winning the World Series didn’t help the resale value of opening-day tickets for the New York Yankees as much as debuting a new stadium.
Tickets for the champions’ first home game of 2010, against the Los Angeles Angels, today averaged a league-high $230 each at EBay Inc.’s Stubhub online reseller at the beginning of the 2010 Major League Baseball season. That’s still down 42 percent from last year’s $397.
The average Yankees opener ticket at Razorgator Inc.’s online marketplace is down 55 percent, to about $214 from $476 last year, according to Brendan Ross, the Los Angeles-based company’s chief executive.
“Last year, this was what people were talking about in New York City,” he said in an interview. “Now it’s just another baseball game.”
Last month, Terry Lefton reported for the SportsBusiness Journal on the big boost the Yankees 09 World Series championship was providing to YES Network (the RSN owned in part by the Yankees) According to Mr. Lefton, YES had experienced a 50 percent increase in ad sales from a year ago with many renewals paying double digit rate increases.
- Nielsen reported that more than half of local MLB TV markets experienced ratings increases during opening week. The Oakland A’s ratings were up 300% from the same time frame last year. (HT Fang’s Bites)
- 10 is an even number which means that after this season many PDCs (player development contracts) between major league franchises and their minor league affiliates will expire. Josh Leventhal reports for Baseball America that there has already been some activity with a few PDC extensions already announced. Mr. Leventhal also reports on a handful of markets expected to make changes to their present arrangements.
- Jeff Blair speculates that Blue Jays CEO Paul Beeston will pressure Commissioner Selig to implement realignment.
- Largely due to MLB, professional baseball will return to Australia in November. The Australian Baseball League will be comprised of 6 teams playing a 40 game schedule.
Pete Toms is senior writer for the Business of Sports Network, most notably, The Biz of Baseball. He looks forward to your comments and can be contacted through The Biz of Baseball.
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