The Yanks may not be selling the naming rights to their new stadium for hundreds of millions of dollars, but they are going to sell, well, everything else. Via Tyler Kepner in today’s Times: “Since the All-Star break, every time a Yankees pitcher records a strikeout, the P.C. Richard whistle plays over the loudspeakers as part of a sponsorship deal.” I haven’t been to a game post-All Star Break yet to experience this joy, but I believe that this move — the selling of a play on the field — may be a first. TV and radio broadcasts engage in this practice, but no team that I know of has sold plays before.
Personal Seat Licenses. We’ve heard about them as this amorphous concept for which people in other cities have to pay so that their teams can draw in more revenue. We know that some football teams charge outrageously high prices for what amounts to the right to buy tickets for certain seats.
And now starting in a few seasons, PSLs are coming to New York. The Giants, Super Bowl champions, have announced that every season ticket in their new stadium will be sold via PSLs. These prices for these PSLs will run from $1000 to $20,000, and these licenses serve as lifetime guarantees for that seat. It is a one-time payment of an arm and a leg.
I write about this briefly now because of the attention I’ve paid to Yankee ticket prices. Yes, the top seats new stadium is going to be expensive, but the prices are a far, far cry from those we see in other sports. A longtime RAB regular Steve wrote in about this story this morning:
To be fair to the Yankees you should comment on this. Can a regular guy go to see a Giant game anymore, or do you need to know someone? At least you can go to the Bronx with a buddy, have a couple of beers and be under the $300 mark.
Of course, the PSL issue and the price tag for a Giants game are seemingly two separate stories. Football games are very nearly prohibitively expensive and yet most teams have waiting lists that stretch on for years for season tickets. Why? Because they are only eight home games a season, and there is a limited supply for something in high demand. It isn’t affordable — of fun — to see the Knicks anymore.
In a way, this is the great irony of baseball and our complaints about ticket prices. As relatively expensive as it can be to go a Yankee game, it’s still pretty cheap. For example, I recently bought decent Tier Reserve seats for Monday night’s sold-out Yankees-Rangers game for a few bucks over face value off of StubHub. Never would I be able to do that for a Giants game.
For a while, fans have dreaded the PSLs. They fear that baseball teams will begin to sell them for season ticket holders in new stadiums, and sports business exports have guessed that teams could draw in upwards of $40 million off the bat for PSLs. The Cubs are debating it, and rumors have swirled around the Yanks’ ticket holder plans in the new stadium. But again, I think it’s a matter of economics. There are 81 home games, and if teams start charging seat licenses, season ticket holders may opt to buy on a game-by-game basis.
The economics of sports tickets is a prickly issue. Teams set prices; secondary markets set the true value. In the end, baseball remains one of our country’s more affordable sports, and we need to look only at the new Giants Stadium rising in New Jersey to remember why.
The 11-year deal between the Yankees and Adidas will come to end when the Yanks move out of Yankee Stadium and across the street to their new digs. According to a report in Sports Business Journal (subscription required), Nike will replace Adidas as the Yanks’ sponsor.
Terry Lefton reports:
Nike and the New York Yankees have agreed in principle to a five-year sponsorship agreement that will begin in 2009, the team’s first in the new Yankee Stadium.
The cash and product deal ends a historic 11-year relationship between Adidas and the Yankees that remains one of Adidas’ biggest U.S. sports marketing expenditures…
But with the deal ending, sources said that the Yankees originally tried to sell Nike a signage package, but that Nike was more interested in other rights. Consequently, Nike’s deal with the Yankees is short on branding and long on marketing. Nike will be able to increase the amount of team apparel it already sells as an MLB licensee and it will have a store-within-store shop at the new stadium. It will also run local marketing campaigns, grassroots initiatives, and outfit Yankee coaches and minor leaguers with cleats and other performance wear.
There is no word yet as to the monetary value of the deal, but it’s sure to be a lot. The Yankees’ deals with this companies tend to pay for themselves rather quickly. Expect to see a lot of Nike signage and branding throughout the new stadium in 2009.
Hat tip to Maury Brown’s Biz of Baseball.
We already know that 2008 All Star Game tickets are going to be the most expensive ever. Today, we can see just how much the Yanks, MLB and the various businesses involved are going to capitalize on New York’s Mid-Summer Classic. Maury Brown’s Biz of Baseball site notes that the 2008 ASG will be the largest revenue-making All Star Game in baseball history. Ticket prices are off the charts for everything from the Fan Fest to the Derby to the game itself; the networks are selling out their ad inventory for levels rarely seen in baseball; and a recent StubHub deal saw field level seats go for $14,500 each. Somewhere, the U.S. economy is struggling, but baseball in New York is doing some brisk business.
Via Maury Brown, we learn that Forbes this week released their annual Business of Baseball report. Why is this relevant to us Yankee fans? Well, because the team is worth $1.3 billion, tops in the league by nearly $500 million.
Forbes’ list of baseball franchises shows the Yanks atop a list of the usual suspects. At $1.306 billion, the Yanks’ valuation puts them ahead of the Mets ($824 million), Red Sox ($816 million), Dodgers ($694 million), Cubs ($642 million) and Angels ($500 million). The Marlins and Rays at $296 million and $250 million respectively hold up the list from the bottom.
While the Yankees’ worth increased by nine percent over 2007, no Major League team saw their value decline. The Orioles and Blue Jays saw one and two percent grown respectively, but it is safe to say that baseball as a business is booming.
On the revenue front, the Yanks have a clear advantage over their competitors. Astheir franchise breakdown shows, the team draws in $171 million worth of gate receipts alone. Factoring in unparalleled attendance numbers, brand management and concession sales, the Yanks are rolling in the dough to the tune of $327 million in 2007 revenue. The Red Sox took in $262 million. Those figures for the Yanks should only increase as the Yanks move across the street to their high-falutin’ new digs next season.
Interestingly, the Yanks — along with the Red Sox and Blue Jays — operated at a net loss. The AP tells us why:
The Yankees were listed by Forbes as having $327 million in revenue last year and a $47.3 million operating loss, up from a $25.2 million loss on revenue of $302 million the previous year. Forbes’ revenue figure is after deducting revenue sharing payments, which the Yankees estimate at about $92 million. The team also paid approximately $24 million in luxury tax, which is reflected in the operating loss.
Now, as far as I understand it, these valuations do not include YES Network estimates and revenues, all of which feed the Yankee Empire. From what we’ve heard over the last few months, the YES Network could in fact be worth more than the Yankees. Considering that George Steinbrenner and his group of investors bought the team from CBS in 1973 for a measly $10 million — approximately $48 million in 2008 — that is a pretty stellar investment all around.
A contextless table of Yankee ticket prices by year has elicited a small reaction from a few bloggers. WasWatching tossed up a brief post on the subject and iYankees noted the cost of going to the game.
The AP presented in the information in a way that suggests that Yankee ticket prices have, by and large, gone up for over forty consecutive seasons now. The tickets for field boxes were $3.50 in 1967 and now cost $250. Except for consecutive years in which the prices were held steady, then, the cost to attend games has been on the rise since the days of Lyndon Johnson, right?
|Year||Ticket Price||2008 Dollars|
A funny thing happens on the way to 2008. It now appears as though ticket prices for the Yankees remained steady, in 2008 dollars, for nearly thirty seasons. In 1967, it cost $3.50 to purchase a Yankee field box seat. That’s $22.18 in 2008 dollars. Twenty four years later, in 1994, it cost $17 to purchase the same ticket or $24.28 in 2008 dollars. In 1994, $3.50 from 1967 would get you $15.53. Ticket prices, in other words, were tracking inflation.
The spike — and we seem to still be in the middle of it — occurred following the 1994 season when ticket prices went through the roof. All of a sudden, the Yankees were good, the Yankees were popular, and the Yankees were very, very expensive. In 14 years, Yankee ticket prices have increased by a factor of 10 from a 2008 value of $24.28 in 1994 to $250 in 2008. That’s crazy.
Meanwhile, some bloggers and fans always ask why, and for that, we turn to the market. The Yankees are selling tickets at a face value of $250 per, and they’re selling out the stadium. Tickets for premium games sell on StubHub for well over that value. The market, in other words, can afford it, and the Yankees are just trying to capture their revenues.
If you can sell out a stadium at $150 a ticket and at $250 a ticket, what owner wouldn’t charge the higher amount? The fans, of course, are the ones who lose out, and it times like these when we remember that baseball is a business. It’s all about the bottom line.