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Pete Toms Article Archive
Written by Pete Toms   
Monday, 02 May 2011 14:37

Last Week in Bizball by Pete Toms

This week in “Last Week in BizBall, attendance; does April matter?, plus tidbits.

ATTENDANCE: DOES APRIL MATTER?

April has passed, and, like every April, it saw the annual debate amongst baseball’s chattering classes over whether “it matters“. But the April debate this year was not focused on W-L but on league/team attendance. LWIB, Dave Cameron wrote in the WSJ that, when it comes to attendance, April portends much about the season ahead:

We analyzed attendance data from 2001 through 2010 and found that there is a 0.924 correlation between a team's average attendance in April and its average attendance over the rest of the season. Keep in mind that correlations run between 0 (no relation whatsoever) and 1 (a perfect relationship), so a 0.924 mark is about as strong as you will see in most real-world situations.

While teams may cling to hopes for a rebound once the weather warms and schools let out the average bump in attendance from May through September is only 2,000 more fans per game than teams draw in April.

Dave points out that the Mariners, Dodgers and Rays (in descending order) lead MLB in attendance decline this season, while the Rangers, Blue Jays and Padres (in descending order) lead in increased attendance. If I understand Dave correctly, April indicates that those trends will be sustained throughout the season.

I’ve mentioned before that, prior to the beginning of this season, commissioner Selig predicted a year over year increase in attendance of 3% to 7%. If indeed April matters, might Selig have been overly optimistic? LWIB, Jeff Passan wrote, “Barring a bountiful summer, MLB is going to bleed fans for the fourth consecutive year. Through 320 games this season, attendance is down 506 tickets per game. Over 2,430 games, it would add up to 1,229,580 fewer tickets, which would drop MLB to levels unseen since the early 2000s,…” Jeff notes that the decreased attendance has occurred despite widespread ticket discounting this season. Jeff also wonders if the end of the “retro/Americana ballpark” building boom (see my report from May last year) is contributing to the longer trend of diminished attendance in MLB. Jeff also chronicles, team-by-team, the acute attendance woes of the Dodgers, Cubs, Mets and Yankees (amongst others). Save for Boston (and he even argues that the Red Sox sellout streak is a sham), these are obviously MLB’s most important franchises.

Passan was far from alone in reporting on the sagging April attendance numbers. Darren Rovell was ahead of the curve, earlier in the month encouraging fans in attendance at MLB games to post photos of empty seats on his Twitter account. (I was voluntarily removed from the digital world when this was happening but I think it was a roaring success) On April 27, the Yankees set a record for lowest attendance at the new Yankee Stadium, following quickly on the heels of the previous record set April 5. Through the initial 11 games at Yankee Stadium this season, attendance is down 9% over the same period last season. (see here) TicketNews.com reported on the abundance of cheap Wrigley Field tickets available on the secondary market. Within the same report it is noted that the Cubs will play 33 of their 81 home games this season in the undesirable months of April and May. There is also speculation within the report that this Cubs offer of discounted tickets is alienating some season-ticket purchasers. In a separate report LWIB, TicketNews.com detailed the Mariners’ cratering attendance:

In 13 home dates this year, the Mariners have drawn the two smallest crowds in the 12-year history of Safeco Field (13,056 against the Toronto Blue Jays Monday, April 11 and 12,407 for the series finale two days later) as well as three other crowds of less than 13,000 and six of less than 15,000. Last year, the Mariners played to a crowd of less than 15,000 just twice, the last time on May 5.

AND

In addition, the Seattle Times reported earlier this month that the Mariners have likely sold less than 10,000 season tickets for the first time since moving into Safeco Field during the 1999 season (the Mariners didn't confirm the numbers to the newspaper) and will probably fall under the 2 million mark in attendance for the first time in the Safeco era.

I’ve often said that the only thing baseball fans enjoy more than baseball, is complaining about baseball. On that note, David Schoenfield responded to Jeff Passan’s piece with a post titled The real national pastime: Bashing baseball. Schoenfield argues that pieces such as Passan’s, depicting a sport withering in popularity amongst the masses, have been a staple of the punditry since the game migrated beyond the boundaries of the Elysian Fields. According to Schoenfield, there are some straightforward and obvious reasons for April’s attendance decline. In no particular order, the weather sucked (see here), the Mariners still suck, Dodgers fans think their owner(s?) suck and, for many fans, the economy still sucks. Schoenfield argues that diminished attendance in MLB is part of a larger trend, caused by the recession, which has seen less spending on entertainment. He points to declining revenues in both the concert and movie industries, as well as downward DVD sales and an increase in NFL blackouts.

What I found most interesting LWIB amongst the discussions of MLB attendance was the role of secondary ticketing. A handful of years ago, franchises foresaw newfound riches to be made in secondary ticketing. After years of seeing “their” tickets resold at prices multiple their “face value”, clubs aligned themselves with online secondary ticket providers to share in those profits. MLB, with easily the most ticket inventory amongst the “big 4”, stood to profit the most. Last February I reported that many in the industry believe that MLB’s entry into secondary ticketing had backfired. Many believe that the secondary market has cannibalized the primary market, the lifeblood of franchises. Yes, clubs profit from selling tickets in the secondary market for high demand games but, perhaps more importantly, the secondary market also provides a glut of cheap tickets. And MLB, much more so than the other “big 4”, have large inventories for low demand games on weekdays and in the spring cold. In his aforementioned report, Jeff Passan commented on how secondary ticketing is affecting attendance in MLB: “The Yankees’ issue, as well as other successful teams’: a secondary ticket market that has exploded and encourages fans to buy season tickets for the eventual premiums – access to playoff games – and sell the regular-season ones, often at a loss. Which often skews the market enough to make the rest of the face-value tickets the Yankees (and others) try to sell awful deals.” In 2007, Major League Baseball Advanced Media (aka MLB.com) entered into a 5 year secondary ticketing partnership with industry leader StubHub (part of Ebay). LWIB, Darren Rovell asked StubHub CEO Chris Tsakalakis if he anticipated that relationship continuing:

Darren: Some baseball ticketing officials have regretted the StubHub partnership as their gate walk up has been killed. Do you anticipate that contract renewing next year?

Tsakalakis: Our partnership with Major League Baseball Advanced Media (MLBAM) has been great for StubHub and MLB and, most importantly, has provided a great convenience for fans. We truly value our partnership with MLBAM and hope to continue it in the future.

Going forward, the diminished attendance this April for industry giants the Mets, Dodgers and Cubs should all be reversed in future years when their off and on field problems are resolved. The Mariners won’t always lose 100 games (although some other team will). The economy will eventually right itself and fans will have more money available to attend baseball games. This summer, I suspect that the price of gas, rather than the price of tickets, will be a bigger problem for clubs. I do agree that the novelty off the “Americana ballpark” has worn off, although these stadiums continue to provide a vastly more enjoyable setting for fans than their “multipurpose” predecessors. Attendance at both the “new” NYC ballparks is evidence of the continuing trend of shorter “honeymoon” periods for new stadiums. New ballparks in FLA for the Marlins (next season) and Rays (yes, it will happen eventually) will provide big temporary attendance boosts for both, but longer term, these will remain problem franchises for MLB. MLB will continue to be active in “secondary ticketing” but strict conditions will be imposed on the initial buyer as to where and how they can resell their ticket. (Look for litigation from resellers) And finally, April does matter.

SELECT READ MORE TO SEE THIS WEEK'S TIDBITS

TIDBITS

  • I’ve mentioned a few times that the Padres would be the next team to cash in big on the wildly escalating fees being awarded teams for their local TV rights. Commissioner Selig’s refusal to sign off on the Fox/Dodgers TV rights extension has not deterred Fox from deepening their commitment to MLB. LWIB, John Maffei reported that Fox and the Padres have agreed on a $1.4 billion/20 year deal that will provide the foundation for a new San Diego based Fox RSN. To put this in perspective, the AAV of $70 million is almost a QUINTUPLING of the reported $15 million the Padres currently receive from Cox. (HT Fang’s Bites)
  • In 1999, my not yet wife and I spent a week in SF. I went to a Giants game at Candlestick and an A’s game at…I can’t remember what it was called. I remember that Daryl Kile started for the Rockies and Billy Taylor struck out Dante Bichette (after an intentional walk to Larry Walker) to end the game and I met a guy on BART who was in town for a natural gas convention and, courtesy of his employer Enron, he paid for my seat and big glass o beer in souvenir A’s plastic cup. Anyway, I thought of this LWIB, because the stadium whose name I cannot remember has another new name and I probably won’t remember it either. Overstock.com is paying $7.2 million for the naming rights to this stadium for six years. The Raiders get half, the stadium authority the other half and the A’s get nothing. This is the 4th corporate name for the stadium in the last 14 years according to Neil deMause.
  • The Red Sox formed Fenway Sports Group, the White Sox formed Silver Chalice and the Rays have Sunburst Entertainment Group. Let’s call all of them “entertainment consulting companies” (I ripped that off of Sunburst’s website) Don Muret reports that SEG is negotiating with the University of South Florida to sell season tickets to football and baseketball games. In the same column, Don tells us that the Astros, joining the Phillies, are the second MLB team to launch MLB At Bat’s concessions application for iPhones..
  • In light of the spate of $100 million plus contracts being awarded players (Ryan Braun the most recent), this piece from David Wharton on the “dead money”, aka “sunk costs” on MLB payrolls might be timely. David provides a number of the more infamous examples (ie. Bobby Bonilla’s 25 year/ $25 million annuity) and some explanations as to how clubs end up in these situations. (HT The Sports Economist blog)
  • Previously I’ve brought attention to reports that, due to budget cuts and Title IX commitments, the men’s baseball program at the University of California was soon to end. But necessity is the mother of invention and Hannah Karp tells us how the men’s baseball program was resurrected.


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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