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Money tales for the Yanks

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While Americans are focused on the plummeting global economy these days, the world of sports is no exception. With two new stadiums on the way in New York, questions about about the state of baseball economics. The numbers — at least for the Yanks and Mets — are pretty encouraging.

From Danielle Sessa, Bloomberg News’ sports writer, comes a tale about the Yankees’ new luxury boxes. The team has just seven unsold boxes at the $600,000 price point. She reports:

The New York Yankees have seven luxury suites priced at $600,000 a season left for sale at their new stadium and the club isn’t concerned that the economic crisis will hamper its ability to sell them, chief operating officer Lonn Trost said.

The $1.3 billion ballpark has 47 luxury suites, though the Yankees aren’t selling all of them. Some will be held for corporate sponsors, Trost said today.

Suites priced at $850,000 to $650,000 are already sold out and for a minimum of five years, Trost said. He declined to comment on how many suites in total were sold.

Across town, the Mets have sold out their 49 new boxes but at a price point of just $500,000. It doesn’t take an economics major to know that the Yankees have already made more on luxury box sales than the Mets with seven boxes remaining unsold. Even in a bad economy, the Yankees manage to come out ahead.

For those of you with a few hundred grand lying around, the new suites come equipped with state-of-the-art luxuries. Much as the suites do in the Meadowlands, the new Yankee Stadium suites will come with indoor and outdoor seating as well as HDTVs and private bathrooms.

In other economic news, MSNBC calculated that the Yanks spent the most per win of any Major League team. The team’s 89 wins cost $2.5 million each. While Tampa — at $451,759 per win — was the most economical team, the Yanks probably earned back more for their wins than any team drawing just over 22,200 per game.

A matter of ratings

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It’s all about the numbers for baseball and TV, and this year, the numbers aren’t looking so hot. TBS’s Division Series rounds saw a ratings drop of 20 percent over 2007. While it’s easy to think that the lack of New York teams is to blame, both Los Angeles and Chicago, two of the biggest media markets in the country, had two teams in the first round. Mostly, politics — the Biden/Palin debate was on during two games — and lackluster games are to blame.

On the Yankee front, Richard Sandomir reports that Yankee ratings were down 10 percent this year. While fans went to the stadium for its final year, the folks at home weren’t so keen on watching a third-place team lumber through the season this year.

Baseball, ticket prices and the economy

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While this morning, we joked about the Yanks’ impact on the economy, this afternoon, Maury Brown talks us through the economy’s impact on baseball. Recently, Bud Selig, often accused of being a socialist commissioner, urged owners to think long and hard about raising ticket prices in the future. MLB saw attendance hold steady — and not increase — this year, and with the U.S. economy on shaky ground, luxury events such as sports may suffer if ticket prices fall out of line with what the average fan can afford to pay.

If you win or tear it down, they will come

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Allow me to interrupt coverage of the world’s most boring Division Series playoff round to opine for a minute on attendance. Maury Brown over at the Biz of Baseball analyzing the 2008 attendance numbers, and the findings, at least to me, are interesting.

The 2008 Major League Baseball regular season is the second highest attendance mark in history, drawing 78,624,324, falling just 1.14 percent below last year’s record of 79,502,524 in paid attendance, a sign that baseball’s popularity remains exceptionally strong. While the figure is the second best ever, forecasts at the beginning of the season were for a total attendance in excess of 80 million. Still, the strong attendance figure comes at a time when the economy has been hit exceptionally hard, gas prices impacted travel, and the weather wreaked havoc at open-air stadiums, lowering walk-up ticket purchases…

Next season, MLB will most likely not reach this year’s attendance figure. With both the new Yankee Stadium and the Mets’ Citi Field coming online with reduced seating capacities than the outgoing facilities, attendance for the two strongest attended teams will drop.

Still, MLB has always focused on revenues, and next year should be no exception. While attendance dropped sllightly this year, revenues were up from $6.075 billion to $6.5 billion this year. Even with the expected 2009 decrease in attendance, and concerns about the economy prevailing into next year, expect revenues to remain flat or slightly above this year’s figure.

It’s remarkable that baseball has managed to sustain such lofty attendance numbers over the last few seasons. With the economy in the tank, people are seemingly finding solace in the 81-game home schedule.

What’s interesting about this year’s attendance numbers, as Brown notes, is that they mostly follow team success. While the two Florida teams both enjoyed good seasons, they were the outliers, drawing relatively fewer fans than other good teams. But in general, the teams that won drew more fans that the teams that didn’t win.

No where was this more evident than in Washington, DC. While the Nationals moved into a new stadium — once a guarantee of lofty attendance figures — the team lost 102 games. They enjoyed an attendance increase over their final 2007 numbers at the RFK Stadium pit, but they had the smallest home attendance for a team in a new ballpark since Camden Yards ushered in a Golden Age of stadiums. People just don’t want to see bad teams play.

Next year, attendance numbers are bound to go down. Neither the Yankees nor the Mets can actually meet their 2008 attendance numbers. The Yanks will probably draw around 4.238 million fans next year, which would be capacity for the new stadium and a few thousand fewer than this year’s totals. The Mets, on the other hand, decided to cut the size of their new stadium by over 12,000 seats. The most the Mets can draw is 3.645 million fans. Why a team in a metropolitan area the size of New York’s would opt to cut capacity by so much is well beyond me.

In the end, though, baseball is alive and well. Fans are flocking to games, and no one is predicting the demise of our National Pastime.

Ticket prices high for the final game

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Here’s a good “duh” story with some interesting analysis attached to it: Ticket prices for the final game at Yankee Stadium are, according to Maury Brown, very high. Brown reports that the median price of tickets on the secondary market for nine of the final ten games at the stadium is $222, but the final game is in a class by itself. Tickets are going for an average of $1111 a pop with the highest marked at $18,300. Whether these seats actually sell at that price point is an entirely different story altogether.

Bank of America nearing major Yankee Stadium deal

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In the name of tradition, the Yankees have opted to forego selling the naming rights on their new stadium. Sports business analysts suggested that, in light of the Mets’ deal with Citibank, the Yankees could have gotten upwards of $25 million a year for the deal, but baseball tradition was strong with the Steinbrenners. Their home field will remain Yankee Stadium.

But, as I reported in February, the Yankees are going to sell naming rights on everything else in the stadium. We’re working on securing the River Ave. Blues bathroom as I type. (I kid.)

Yesterday, via Maury Brown’s Biz of Baseball, comes word that the Yankees and Bank of America are on the verge of signing a significant sponsorship deal for the new stadium. Terry Lefton, a staff writer for Sports Business Journal, reports:

While numerous sources said an agreement on the Premier Partnership package has been reached, an announcement date had not been set at press time for this story. Terms of the deal could not be confirmed and were difficult to discern. Early this year, the package was being shopped at $20 million a year. Sources familiar with the deal said last week that it was worth more than the New York Mets’ deal with Citibank and Barclays’ deal with the New Jersey Nets’ new home, each of which was said to be for an average of $20 million a year over 20 years and set a new benchmark. But another source said the Yankees’ deal was in the mid-teens per annum…

The deal includes a comprehensive financial relationship between the franchise and Bank of America. It also offers the company a vast array of inventory within the new ballpark, which will open next year, including prime signage in and around the park, large signs on the highways around the stadium, prominent exposure on Gate 4, the stadium’s main entrance, several fixed signs on top of the stadium affording an aerial view, a large sign atop the right-field scoreboard, even bigger signage on the back of the scoreboard that will face a new subway stop, signs on interior gates leading to the field, fixed and LED signs inside the stadium and the stadium bowl, permanent dugout branding and behind-the-plate signage and a logo on all Yankees tickets.

Also included are media on Yankees rights holder YES and flagship radio WCBS radio and access to some of the front-row Legends seats in the new stadium, which the Yankees will price at $500 to $2,500 a seat.

It’s hard to understate the impact the Yankees have on the sports business world. Even as a fourth-place team, they’re commanding more money for this non-naming rights sponsorship deal than any other team could ever dream of getting. In effect, they’re receiving the Marlins’ payroll annually from Bank of America in exchange for signage and sponsorship. Wrap your mind around that one for a second. Perhaps Chris Smith would like to amend his argument claiming the Yankees are just another team.

For the fans, all this means is a Bank of American inundation next year. BoA will have their logos literally all over the stadium. Their ads will be ubiquitous on TV and the radio. But for the money, who’s complaining? This game of baseball is, after all, a business, and this deal will be a record-breaker.

Shea seats selling fast

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The Mets on Monday put the current Shea Stadium seats on sale via their Website, and they’ve been selling like hotcakes. According to a report in amNew York on Tuesday, the team has sold over 6000 seats at $869 a pair. David Freedlander writes that the Yanks will soon start putting parts of the old stadium on sale, but final details have yet to be worked out. You can bet that the cost for parts will be much higher than Shea, an ugly and relatively unpopular stadium with far less historical significance than Yankee Stadium.