This week in “Last Week in BizBall”, update on the Cards “ballpark village”, the A’s and Cards are the most recent clubs to introduce “dynamic pricing”, and a good number of tidbits
CARDS “BALLPARK VILLAGE” UPDATE
In many instances, pro sports franchises have also evolved into media and real estate development companies. (see here and here) Franchises often negotiate with local municipalities to acquire the development rights to property surrounding their proposed new stadia. In MLB, these developments are often called “ballpark villages”. The promise of ancillary development makes it politically more palatable to support construction of a new ballpark. As well, future tax revenues from the proposed surrounding development are promised to pay off public debt incurred from construction of the stadium. (aka Tax Increment Financing or TIF) And often the franchises benefit from controlling the development rights to these “ballpark villages“. Tom Ricketts hopes to construct “ballpark villages” adjacent to both Wrigley Field and the Cubs new home in Mesa AZ. The Giants are hopeful that their WS championship will build momentum for their proposed Mission Rock development on the waterfront near AT&T Park. The Marlins control the rights to a retail development adjoining their new stadium. Petco Park would not have been constructed if Padres owner John Moores’ real estate development company JMI Realty had not been allowed to control a purported $3billion mixed use development in the surrounding neighbourhood. But not all franchises succeed in realizing their real estate development ambitions. Former Rangers’ owner Tom Hicks Gloryland development never materialized. A’s owner Lew Wolff was forced to abandon plans for a ballpark centred mixed use development in Fremont CA. The Camelback Ranch spring training facility in Glendale AZ was to be part of a mixed use development known as Main Street Glendale. In November it was announced that Main Street Glendale is in foreclosure. When the new Busch Stadium opened in 06 it was to be the centrepiece of a “ballpark village” development which, to date, has yielded nothing. LWIB, Ballpark Digest brought attention to reports that a scaled down version of the Cards “ballpark village” might soon become a reality:
The plan, as presented by reps of the Cards ownership and developer Cordish Co., calls for two of the seven blocks comprising the Ballpark Village site to be developed initially with a Cardinals Nation restaurant, the Cardinals Hall of Fame and Museum, a 12- or 13-story Class A office building, and retail space. The five remaining blocks would be used for surface parking.
This is considerably scaled back from the original plan for more office and retail space, as well as some residential. As such, it does fill the hole left by the demolition of the previous Busch Stadium as well as let the Cardinals fulfill the promise of additional development in the area.
The Cards and Cordish are seeking $57 million in subsidies for the $155-million project. That's raising a red flag among some elected officials and business leaders, who wonder why so many government dollars are going toward a development that will in all likelihood bring no new major tenants to downtown St. Louis and in fact negatively impact an existing landlord to Stifel Nicolas. In any case, it should be interesting as the Cards and Cordish move forward on their requests for various state funding and bonding.
SELECT READ MORE TO SEE DETAILS ON DYNAMIC TICKET PRICING FOR THE A's AND CARDS, PLUS THIS WEEK'S TIDBITS
A’s AND CARDS TO ROLL OUT “DYNAMIC PRICING’ THIS SEASON
In September I noted that the White Sox had joined the Astros and Giants in utilizing “dynamic pricing”. “Dynamic pricing” adjusts the price of tickets in real-time in accordance with demand. Ticketing software continually adjusts the price of tickets according to a broad number of factors including day of week, weather forecast, opponent, standings, recent team performance, starting pitcher(s), etc. The Giants have been at the forefront of introducing “dynamic pricing” in MLB, employing it both before and more extensively than any of their peers. “Dynamic pricing” of ticket inventory in MLB is expected to become more widespread. In July I noted that Major League Baseball Advanced Media and their ticketing subsidiary Tickets.com announced that they would be offering a “dynamic pricing” ticketing platform to clubs. LWIB it was announced that ticketing software leader Qcue will be working with the A’s and Cardinals this season to provide “dynamic pricing”. TicketNews.com has the press release here. No word on how many seats, and in which areas of the stadiums, will be “dynamically priced“. If there are other clubs rolling out “dynamic pricing” this season, please email me
- These past two salary arbitration seasons I read more and more about clubs adopting the file-and-trial strategy. Is this a growing trend? (I ask literally, not rhetorically) Darren Heitner noted that The 3 teams known for implementing a file-and-trial strategy (White Sox, Rays and Marlins) signed all their arb eligible players without “filing”:
Does this tell us that the file-and-trial strategy is an excellent deterrent to drawn out negotiations between team and player? There are still plenty of teams and agents who will negotiate right up to the day of players’ scheduled arbitration hearings. The White Sox, Marlins, and Rays do not have to spend resources and time building up their cases in anticipation of a hearing. My most recent count tells me that over 30 players are currently headed on the path towards a hearing. While we know that a majority of these cases will settle, time is money!
- Did you know that Teams spent $369.5 million last season in salaries for players on the disabled list? Did you know that Five teams, led by the Minnesota Twins, spent more than $30 million on inactive players? I didn’t until I read this (HT Sports Agent Blog) report from Bob Nightengale of USA Today. Evidently this was a topic of discussion at the recently concluded owners’ meeting. According to the report, many in MLB front offices believe this is a growing problem.
- I didn’t know (or maybe I forgot) until LWIB that last year the MLBPA amended their regulations governing player agents. Darren Heitner brought this to my attention as well as the fact that MLBPA ED Michael Weiner recently appointed nine Player Agents to the newly formed Player Agent Advisory Committee. Darren doesn’t like the new regs and promises to tell us why at a later date.
- Remember when one of the principal reasons MLB clubs wanted (needed?) new ballparks was to capitalize on the seemingly bottomless demand for luxury suites? LWIB we saw the most recent example of how times have changed. The Braves became the latest MLB club to reduce the number of suites in their park, instead renovating them into spaces to accommodate larger groups. Don Muret reported for the SportsBusiness Journal:
In repositioning vacant suite inventory to adapt to a shifting premium market, the Braves fall in line with other MLB teams playing in ballparks built in the 1990s, when skyboxes were still a relatively new product. Some parks, such as Progressive Field in Cleveland, opened with more than 100 suites and wound up with many empty units after long-term leases expired and companies declined to renew their deals because of economic conditions, the desire to get closer to the field, or other factors.
Turner Field, built for the 1996 Olympics and converted for baseball, has 58 suites, far fewer than other parks of the era but still too many to keep occupied in a 49,583-seat stadium, according to Schiller. The Braves saw what the Indians did to create their “fan cave” suite, a 12-person skybox with a pool table and video games that sold for $3,000 a game in 2010. For 2011, Cleveland is doubling the size of its fan cave and moving it elsewhere in the park after combining two individual suites, team officials said.
Larry Stone reports on the Mariners’ plans to replace Dave Niehaus.
It was a good week for team bloggers. John Ourand reported for the SportsBusiness Journal that CSN Mid-Atlantic “…bought two Washington, D.C.-area blogs that cover the Redskins and the Nationals.” My congrats to Mark Zuckerman, aka, Nats Insider.
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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