At Pricey New Stadiums, Is Baseball Taking a Backseat to Business?
1. "Shock and Awe": Yankee Stadium Debuts This Week …The New York Mets' Citi Field opened on Apr. 13, but even that monumental occasion was overshadowed, as many things Mets tend to be in New York City, by the debut of the new $1.1 billion Yankee Stadium on Apr. 16. As The New York Times writer Harvey Araton describes it, "Of New York's two new houses of baseball worship, Citi Field is the cozy cousin. Yankee Stadium is shock and awe."
Right up until the home opener, the Yankees continued to run Times ads announcing the availability of the "Greatest Seats in the World." Industry sources claim secondary ticket market traffic for the opening game drew prices comparable to September's closing of the House That Ruth Built. On StubHub, baseball's official ticket resale partner, ticket sales for the Yankees' opener were averaging $397, close to the $380 for the last game at the old facility. The average sale for the Mets' opener, meanwhile, was $327, much greater than the $171 at the Shea Stadium finale.
Overpriced tickets—not to mention the $6 hot dogs—continue to be the main knock on the landmark Yankees facility, which boasts fan-enhancing cutting-edge technology from Cisco Systems (CSCO), high-end locally themed food by Food Network celebrity chefs, and baseline suites. At $2,650 per ticket, however, many top-tier Legends Suite seats are still looking for well-heeled fans, and even seats deep in right field are going for $85 per seat, per game. It's no surprise that hundreds of longtime Yankees season-ticket holders are now saying fugghedaboutit … especially since the highly paid squad got off to a 3-4 start.
2. … As Does Citi Field, New Home of the MetsOn Apr. 13 the New York Mets opened their new $800 million Citi Field to an anticipated capacity crowd of 41,007 … with a stray cat on the field and a 6-5 loss to the San Diego Padres. ESPN aired the game as part of its Monday Night Baseball lineup, with coverage also on ESPN360.com and ESPN Mobile TV. Popular ESPN reporter Erin Andrews gave televised tours of the new ballpark throughout the telecast, and New York City's Empire State Building was illuminated all day in Mets orange and blue.
While crowds were heavy throughout the ballpark, particularly in the Jackie Robinson Rotunda and the bridge walk overlooking the right-field bullpens, the crowd flow seemed to work and people were overheard describing the ballpark as "cozy" and "comfortable," as reported by local news media. Many fans also "seemed impressed with the wide variety of food, the open concourses, and the plentiful views of the field from different parts of the park." But others "sitting in the upper deck, especially deep in left field, echoed what others have said: The warning track and a large chunk of left and center field were out of view," according to SportsBusiness Daily.
Even though home tickets for the Mets are up 8.6% from last year, and two-thirds of their games are in the team's costliest tiers, single-game sales are on pace to be double those of last season when accounting for the smaller ballpark. On the high end: A pair of tickets to the home opener owned by Bernard L. Madoff Investment Securities sold on eBay (EBAY) for $7,500. The tickets, each with a face value of $525, "solicited 68 bids before the auction ended" Apr. 12.
Days before the official opener, the Mets and Harrah's Entertainment announced a multiyear marketing partnership in which Harrah's becomes a "Signature Partner" at Citi Field. The multiplatform deal includes naming rights to a Caesars-branded club seating section and designation as the exclusive casino partner for in-venue signage.
Notably absent at the opening-night festivities—Citigroup (C) brass. Chief Executive Vikram Pandit had publicly stated that many of the company's top executives would not be present in the park in an effort to shield the company, which is taking $45 billion in taxpayer bailout funds, from further criticism by politicians and consumer watch groups.
3. AstroTurf: As the Cookie CrumblesWhat do Oreos and AstroTurf have to do with each other? On Apr. 13, GeneralSports Venue and Kraft Foods (KFT) announced that the world's first synthetic turf system is now the first official sponsor of the Oreo Double Stuf Racing League ("DSRL"), which turned the classic Oreo-and-milk ritual into a brand-new sport.
AstroTurf, introduced more than 40 years ago, was designated as the official turf of the DSRL after deep consideration by "league officials." The DSRL, whose members include quarterbacks Peyton and Eli Manning and tennis stars Venus and Serena Williams, is now able to place itself with other popular sports, such as football, baseball, and soccer that also play competitively, or in this case "lick," on AstroTurf. "Selecting AstroTurf as the 'official turf' for the DSRL makes perfect sense because it's a high-quality product that will make it even more exciting for everyone, from professional athletes to consumers, to compete and show off their lick racing skills," said Stephen Chriss, director of consumer and customer engagement for Kraft Foods.
The first Oreo DSRL competition to take place on a custom-made DSRL/AstroTurf field will be a special lick racing event in West Palm Beach, Fla., on Apr. 24, where two teams of finalists will compete for the title of fastest Oreo "twister, licker, and dunker" and a $10,000 grand prize. (The Mannings and Williamses will be on hand to help "train" the finalists for the competition.)
The tieup demonstrates some marketing creativity necessary in today's economy and provides another stage to show off AstroTurf's benefits to athletes. (AstroTurf is clean and safe—you drop a cookie on the turf, you have no problem applying the 'five-second rule' and eating it anyway!). The sponsorship will include co-branded print advertising, inclusion at trade shows, and a co-branded presence on both the astroturfusa.com and dsrl.com Web sites.
4. NHL Postseason Begins …As the puck drops on the National Hockey League's 2009 postseason, Commissioner Gary Bettman has reason to be pleased with the league's Stanley Cup-worthy performance so far this year.
According to just released league data, the NHL has set a regular-season attendance record for the fourth consecutive year, with total attendance of 21,475,223 and a per-game average of 17,460, both up 1.1% from figures of 21,236,255 and 17,265 for the 2007-08 season. Further, the NHL saw viewership increases across the board, with TV ratings on NBC up 10%, ratings on Versus up 23%, and 17 teams playing at 95% capacity or better.
The Boston Bruins drew 699,073 fans to TD Banknorth Garden and averaged 17,051 fans for the season, the "second-best attendance mark in team history" after 1995-96. In Chicago, the Blackhawks set a single-season attendance record, with more than 835,000 fans coming to games at the United Center. The team, which finished fourth in the Western Conference, made the playoffs for the first time in seven years.
Regarding another storied NHL franchise, as many as 10 potential ownership groups have begun the initial steps toward buying the 100-year-old Montreal Canadiens. The team reportedly asked potential buyers to submit formal offers last week; owner George Gillett, also co-owner of English Premier League club Liverpool, continues to insist that it is "unlikely" he will sell the team.
The Pittsburgh Penguins and Philadelphia Flyers opened the first round of the Stanley Cup playoffs Apr. 15 at Mellon Arena. After an Apr. 17 game there, the series moves to Philadelphia's Wachovia Center on Apr. 19 for Game 3, and Apr. 21 for Game 4. The Columbus Blue Jackets will also face a familiar foe when they make their NHL playoff debut Apr. 16. The Jackets will travel to Central Division rival Detroit to play the defending Stanley Cup champion Red Wings. The game will be the first playoff appearance in the eight-season history of the Columbus franchise.
And on Apr. 13, the NHL unveiled the Portal at NHL.com, a playoff-themed digital media site that will provide behind-the-scenes coverage of all 16 playoff teams. A key feature of the site will be "The Cisco All Access Pregame Show," which will air on demand starting at 4:30 p.m. ET each day during the playoffs and will offer news and analysis for all upcoming games.
5. … While NBA Postseason AwaitsIt's now official—the Cleveland Cavaliers have clinched home-court advantage throughout the NBA Playoffs, presumably giving the scoring, rebounding, and marketing machine—and likely league Most Valuable Player—otherwise known as LeBron James another eight weeks to up his price for the New York Knicks or another team with deep enough pockets to acquire him in free agency next year.
Along with James, most NBA players continue to draw huge salaries, despite the economy. Official league payroll numbers indicate that more than $2.1 billion is being paid to 507 players, netting an average salary of $4.2 million. The Los Angeles Lakers, likely opponent of the Cavs in the NBA Finals, have a $78.6 million payroll, or $1.22 million per win, and a franchise value of $584 million according to the latest Forbes valuations. (The Cavaliers come in at $477 million.)
As the NBA playoffs begin, and in spite of the economy, the Portland Trail Blazers have sold out every home game this season, extending their streak that dates back to December 2007. The Blazers will be competing in the postseason for the first time since 2003. In Minnesota, the Timberwolves have seen season-ticket renewals double and new sales triple from this time last year. The team came up with several perks to entice people to pony up, including invitations to team practices and having players deliver game tickets.
Along with the league's front offices, most NBA franchises are in cost-cutting mode this year, which means that salaries and the salary cap will likely go down during the summer offseason. Only six or seven teams are likely to have significant cap space this year, and a half-dozen, the Knicks among them, are thought to be hording cap space for 2010, when James and Miami Heat star Dwayne Wade could become free agents. NBA Commissioner David Stern has also said that NBA owners will fully open their books to the players when negotiating a new collective bargaining agreement.
6. Golf Post Masters: Amateur HourAlthough it will always remain golf's premier American event regardless of the economy, the Masters saw the cost of secondary-market tickets decrease 30-40% from last year, with hotel rooms and other luxury rentals going for bargain prices. Masters badges were averaging $612 on StubHub on Friday, a 43% drop from last year. Another telling sign—private jet landings at Augusta's Daniel Field were down 50% from 2008.
While ESPN's two-day average for viewers live on Thursday-Friday was 3,435,077, up 16% from 2,961,470 last year, TV ratings for the final round were down slightly. CBS said Monday its coverage drew an overnight national rating of 8.3 and a 20 share, peaking during the playoff at a 10.0/21. (It earned an 8.6/18 in 2008.) People watch less television on Easter Sunday, and it didn't help that Tiger Woods and Phil Mickelson dropped out of contention mid-afternoon.
Even though Angel Cabrera won his second major, a lot of his sponsors (South African Airways, Capital Markets Argentina) are based overseas, and his existing deal with Société Générale (SOGN.PA) makes it unlikely that the golfer nicknamed "the Duck" will be appearing in Aflac commercials any time soon. As for 48-year-old Kenny Perry, who has notable sponsorship deals with Adidas (ADSG.DE) and The Hartford (HIG), the AARP was waiting in the wings had he captured the green jacket, but Perry squandered the opportunity with late bogeys en route to a playoff defeat.
Outside of the Majors, however, the PGA Tour continues to struggle—as do public golf courses nationwide. More than 400 municipal courses have been built since 1990, designed to capitalize on aging baby boomers and the heightened interest in golf in the Tiger Woods era. Many are high-end, real estate connected, heavily leveraged, and on the lookout for bailout money every bit as much as a bank. Privately owned, daily-fee courses and resort golf are down 3.2% and 3.6%, respectively, in the first few months of 2009, according to the PGA. We'll see if usage increases in the next few months as the weather warms up and the PGA Tour hits its peak.
7. Top Sports AdvertisersSportsBusiness Daily just released its list of 2008's top sports advertisers. In many cases, companies spent upwards of half of their advertising budgets on sports. These five companies used the largest percentage of their total ad spending on sports:
1. Southwest Airlines (LUV), 87.2%2. Anheuser-Busch (INTB.BR), 80.8%3. Coca-Cola (KO), 65.6%4. Dodge, 53.7%5. DirecTV (DTV), 52.7%
8. Pro Athletes and the "Jock Tax"While most people moan and groan about paying income taxes this week, pro athletes have a valid reason to complain—it's called taxation without representation. Yes, most of them make far more money than the average Joe. But they're hit hard by the so-called "jock tax," particularly in states in which they don't even reside.
According to an in-depth article on the subject in the Los Angeles Times, 20 of the 24 states with at least one MLB, NBA, NFL, or NHL franchise have laws that require visiting athletes to pay state income tax for every game they play there. The taxes are measured in "duty days" based on the athlete's total salary. In California, the 900-pound gorilla of the jock-tax levy with 15 pro franchises, the Seattle Mariners' Ichiro Suzuki will have to fork over more than $218,000 in Golden State income taxes for the 25 games he will play there this season—even though Ichiro's home state of Washington has no state income tax. California collected more than $102 million in taxes from visiting athletes in 2006-07 alone.
The jock tax can even affect where the Super Bowl is played. As the Times noted, when the Pittsburgh Steelers played the Seattle Seahawks at Detroit's Ford Field in Super Bowl XL in 2006, Seahawks quarterback Matt Hasselbeck reportedly had to pay roughly $10,000 to Michigan. If the game had been contested in Florida like this year's game and many others, he wouldn't have dropped that income.
So why, you ask, aren't lawyers, investment bankers, and entertainers who work in multiple states levied the same way? Their schedules aren't as public and, therefore, accessible; for the moment, states are happy focusing on the easier athlete marks.
9. Nike Pressuring Bayern Munich Star?A hot Internet rumor claims that Bayern Munich midfielder Frank Ribery's new sponsorship with Nike (NKE) could force him to change teams. To clarify, there's no clause in Ribery's Nike contract that dictates where he can or cannot play. However, considering that his current team is synonymous with Adidas, you can guarantee that Nike will pressure him to move to a club that they sponsor.
Ethical? No. Legal? Yes.
Bayern Munich Chair Karl-Heinz Rummenigge has already stated that the club does not intend to let Ribery go. Regardless, it is disturbing how much influence sponsors have within soccer. Unlike American sports, European soccer clubs are able to negotiate their own apparel deals. This opens the door to numerous conflicts of interest.
What if Nike told Tom Brady to leave the NFL because teams wear Reebok jerseys? Or if Kobe Bryant was relegated to playing for Olympiakos in Greece because the NBA has an apparel deal with Adidas?
Obviously, sponsors expect athletes to use the products they endorse, but in the case of Ribery it is entirely out of his control. Currently, nothing is in the works for Ribery to switch clubs, but with Nike giving him $1.6 million a year through 2014, don't be surprised if this rumor grows legs.
10. MLB Team SlogansThe start of a new baseball season brings a clean slate to teams and unbridled enthusiasm to fans, and the best way to bridge the two is with a strong marketing slogan. The most successful marketing campaigns include a slogan that is simple yet concise, evokes a team's rich history or promising future, and tempts you to be part of the action. Here are my top five MLB team slogans for the new season:
1. Cleveland Indians: "Are You in the Tribe?"2. Pittsburgh Pirates: "Pride. Passion. Pittsburgh Pirates"3. Chicago White Sox: "There are Traditions. And There Are White Sox Traditions"4. Detroit Tigers: "Always a Tiger"5. Baltimore Orioles: "This is Birdland"
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