Yankee Stadium and the Power of Sports Monopolies

[deejaydana]

Good article about how ticket prices, and not just for baseball, are NOT going to be coming down...ever. Makes you really want to own a sports franchise, don't it?

A growing population that’s also growing richer has set off a scramble for tickets, and as tickets became more prized, businesses have jumped into the fray to compete with the ordinary fan because they can reward prime clients with something that is now scarce and get favorable tax treatment to boot. I can’t say precisely when the era of corporate ticket buying took off, but it’s a good bet that it had something to do with the soaring price of tickets to the four major sports during the 1990s. The average price of a baseball ticket alone increased 93 percent during that decade, compared to a gain of just 26 percent for the Consumer Price Index in an era of low inflation. So far this decade, the average price of an MLB ticket has risen another 60 percent, or more than double the Consumer Price Index. If baseball’s prices had instead increased at the same rate as the CPI over the past 20 years, ticket prices on average would be half of what they are today.

This isn’t by accident. Over the years, professional sports teams have had the leeway to organize and cooperate among themselves. Teams, which are individual businesses, can join together to design a single schedule among themselves and limit the number of participants in a league in order to create a championship format leading to a World Series or Super Bowl. Teams have also been allowed to create a single system of hiring players, such as a draft, and to implement salary caps, on the grounds that it’s in the best interest of the leagues—and fans—to have some sort of competitive balance within a league.

Link from Flink:

http://www.realclearmarkets.com/articles/2009/04/yankee_stadium_and_the_power_o.html

[zoony]

This is what is going to make way for startup leagues sometime in the future.

Slowly but surely, professional sports have simply become Corporate America's pet. And it's absolutely ruining the game for so many fans.

[Lombardi's_kid_brother]

NEW YORK - At the new Yankee Stadium, the best seats in the house have turned out to be the emptiest.

The most expensive spots in America's costliest ballpark have become an embarrassment, packing a financial sting to the proud New York Yankees, as the Legends Suite section in the infield has been filled only once in the six games since the $1.5 billion stadium opened last week.

On most days, the seats that cost $500-$2,500 as part of season tickets and go up to $2,625 for individual games haven't been close to full. And as TV cameras pick up the patchy attendance with every pitch, it serves as a little tweak to the nation's richest baseball franchise.

"We're done talking about seats," Yankees president Randy Levine said Wednesday. "We're not talking about seats."

But fans sure notice.

"It's been pretty phenomenal," said Aaron Feldstein, a native Californian who lived in Brooklyn for a couple of years and now resides in Baltimore. He was part of the far-from-sellout crowd at the Yankees' game Wednesday against the Oakland Athletics on a showery, cold afternoon. The Legend Suite section was about 80 percent empty, and the upper decks -- which have been mostly full -- were a quarter empty.

"I remember watching and you couldn't find an empty seat at Yankee Stadium. And now right behind home plate there's 15 to 20," said the 29-year-old Feldstein, who scored a free ticket from a friend behind home plate -- an area that costs $325 as part of season tickets.

Another snapshot of the problem:

A count by The Associated Press totaled 1,895 seats in the Legends Suite, of which 146 were in the front row from dugout to dugout, costing $2,500 as season tickets and $2,625 individually.

http://www.baltimoresun.com/business/bal-yankee-stadium0427,0,3952930.story

[MattFancy]

A perfect example is the Super Bowl. I wonder out of all the people that were at the game, were actually Steeler or Cardinal fans? I feel like every big company has a suite or box at some nearby stadium. It takes away from the real fans that support the team and actually want to watch the game instead of sitting in some luxury box eating, drinking, and talking to people instead of watching the game and cheering on the team

[Lombardi's_kid_brother]

The New York Yankees are lowering premium ticket prices and offering some ticketholders free passes to fill empty seats as the baseball team deals with the recession.

The team is halving the price of first row Legends Suite season seats to $1,250 from $2,500, and offering fans who already bought those tickets a refund or credit, it said in a statement on Tuesday.

It is cutting other Legends Suite prices to $650 from $1,000. First-row Delta Sky 360 will cost $550 instead of $750.

"There are a few hundred suite seats in our premium locations that have not been sold on a full-season basis," Yankees Managing General Partner Hal Steinbrenner said in a statement. "As a result ... the Yankees are announcing today a program that adjusts certain prices and benefits."

http://www.guardian.co.uk/sport/feedarticle/8479054

[Lombardi's_kid_brother]

All major sports are at a crossroads. We can ***** and moan about the wine and cheesers (which I probably am considering where I sit most times I attend sporting events and concerts). We can ***** and moan about boxes.

But those are the seats that keep the lights on.

The entire economic model in sports is currently built around three things:

1. TV Money

2. Luxury Suites

3. Premium Seats

2 and 3 are already on a steep decline. It's possible that #1 may as well. Though since people are going to watch tv and drink beer more as the economy goes south, maybe not.

Pay very close attention to Yankee Stadium. You are seeing the future there. And it may not be very pretty.

[zoony]

It is an amazingly beautiful stadium though

http://newyork.yankees.mlb.com/nyy/ballpark/panoramas_2009.jsp

[MattFancy]

The New York Yankees are lowering premium ticket prices and offering some ticketholders free passes to fill empty seats as the baseball team deals with the recession.

The team is halving the price of first row Legends Suite season seats to $1' date='250 from $2,500, and offering fans who already bought those tickets a refund or credit, it said in a statement on Tuesday.

It is cutting other Legends Suite prices to $650 from $1,000. First-row Delta Sky 360 will cost $550 instead of $750.

"There are a few hundred suite seats in our premium locations that have not been sold on a full-season basis," Yankees Managing General Partner Hal Steinbrenner said in a statement. "As a result ... the Yankees are announcing today a program that adjusts certain prices and benefits."

[url']http://www.guardian.co.uk/sport/feedarticle/8479054[/url]

That's still alot of money for one ticket to one game. The most expensive single game ticket at Camden Yards is $80, right behind homeplate. $80 at Yankee Stadium gets you seats in the 2nd deck.

[deejaydana]

This is what is going to make way for startup leagues sometime in the future.

Slowly but surely, professional sports have simply become Corporate America's pet. And it's absolutely ruining the game for so many fans.

It used to be a family of 4 could afford a game. Now it entails a potential loan from your bank. The bigger cities are even more blatant in their greed.

On another related note, the lack of a salary cap, among other things, has really killed baseball for me. My team, the Royals (insert derisive laughter here) can never compete. Basically they are nothing more then a farm team for the bigger city, freer spending teams. It's a given they drop 100 games a year. The owner, Glass I think his name is, has in so many words stated that he doesn't care about fielding a winning team: he makes money either way.

[TheDoyler23]

It is an amazingly beautiful stadium though

http://newyork.yankees.mlb.com/nyy/ballpark/panoramas_2009.jsp

Looks like a theme park with a baseball field somewhere around there. 1.3 billion to watch pop-up homers...nice.

[Lombardi's_kid_brother]

The Yankees may have screwed themselves with that stadium. They have not made money on the baseball side for a while. Their profits come through the YES Network.

The idea of the new Stadium was to make the team itself self-sufficient. The opposite may be happening.

And this becomes intersting. At what point do the Yankees become a drag on the network that exists because of them?

I just don't see any investment firms going crazy on seats in the next few years. It's New York so in five years everyone will have forgotten this mess and it will be Clash of the Titans again. But, that's a long time to have all your premium seats empty.

[Kilmer17]

It's also the reason the Yankees get to spend more than everyone else combined.

If MLB wanted to address it (and they dont) without a cap, the way to do it is to expand the league by 2 teams. One in northern Jersey and the other on Long Island.

[renaissance]

All these fancy stadiums are just that, but when did sports become more about the venue and the presentation than the actual game?

And it's not just pro sports. I mean seriously, the NCAA Final Four is now held in a freaking football stadium. I'm sorry but who really wants to sit the very last row of the upper level of Ford Field to try and watch a basketball game?

Last weekend I walked around the club level at FedEx. Sure, it was really nice, but seriously, is that necessary at a FOOTBALL GAME??? If I want to go to a bar to watch the game, I can GO TO A BAR. Why drive all the way out to the stadium just to sit and watch the game on a plasma screen?

[Lombardi's_kid_brother]

All these fancy stadiums are just that, but when did sports become more about the venue and the presentation than the actual game?

And it's not just pro sports. I mean seriously, the NCAA Final Four is now held in a freaking football stadium. I'm sorry but who really wants to sit the very last row of the upper level of Ford Field to try and watch a basketball game?

Last weekend I walked around the club level at FedEx. Sure, it was really nice, but seriously, is that necessary at a FOOTBALL GAME??? If I want to go to a bar to watch the game, I can GO TO A BAR. Why drive all the way out to the stadium just to sit and watch the game on a plasma screen?

Because it is not about watching the game. It's about treating your business partners, vendors, or customers to an "exclusive" experience.

I've got to tell you: I'm spoiled. Once you've been in a luxury suite or a club seat with waitress service, it's hard to go back to the upper deck and deal with fat drunks vomiting on themselves.

I could go for a fine gouda right about now.

[Lombardi's_kid_brother]

It's also the reason the Yankees get to spend more than everyone else combined.

Actually, it's not.

They Yankees as a self-contained entity are not very profitiable in the years that they are profitable and I don't think that has occurred recently. The Old Yankee Stadium - while not being the 80 year old relic that the Steinbrenners tried to pretend it was - was not exactly a piggy bank. Jacobs Field in Cleveland probably had two or three times the number of luxury suites. Fenway Park is even worse; I'm not sure there is a luxury suite in Fenway.

The YES Network is what makes the Yankees the Yankees. And NESN is what makes the Red Sox the Red Sox.