The Yankees are clamoring for more tax-free bonds for the team’s new stadium, and club officials are predicting no great increase in revenues when the team moves across 161st St. next year. But according to a recent report in Crain’s, the Yanks stand to make a killing from the new stadium.
Aaron Elstein reports:
The team’s revenues – already the highest in the sport, at an estimated $327 million last year – are poised to double almost immediately. This quantum leap will be driven by factors ranging from higher prices for tickets and hot dogs to increased revenue from the YES Network for game telecasts. There will also be new revenue sources, such as leasing out the new stadium for concerts.
The ballpark promises to once again give the Yankees a decided financial edge over the world champion Boston Red Sox, after their archrival passed them on the field last year and narrowed the monetary deficit by expanding seating in cramped Fenway Park and sharply raising ticket prices.
“The new Yankee Stadium will change the economics of baseball,” says Robert Boland, a sports agent and a professor at [NYU].
Elstein goes on to explain why the Yanks are disputing this revenue claim. The Yanks, looking to cover escalating construction costs, want more tax breaks from New York. If the city knows just what a cash cow the Stadium will be, city reps will cry foul over any additional tax-exempt bonds.
Interestingly, the article also notes that some of the revenue projections are simply underestimated. The Yanks are claiming over $200 million in seat revenues for 2009, but that figure is based on an estimated attendance of 3.4 million. There’s no way the Yanks, in their first season in their new digs, suffer through an attendance drop of over one million. In fact, if all 81 home games aren’t sold out next year, I would be shocked. With concession prices on the rise, the team’s revenue will easily surpass their own estimated figures and approach $400 million or more per year.
Now, for baseball, this bad news. The Yanks are basically building their own version of the Mint at the corner of River Ave. and 161st. They could easily supprot a payroll above $225 million, and invested wisely, the money could create a powerhouse team for years. I can’t imagine Bud Selig or John Henry being too keen on those figures.
For the team, though, we can more clearly see why officials have long wanted a new stadium. It’s all about the money. Forget out-of-date facilities and less than state-of-the-art amenities. The Yanks are going to reach stratospheric profit levels. And as long as taxpayers aren’t footing the construction bills, I won’t complain.