How the Economy is Affecting Professional Sports: MLB

Not even the nation’s wealthiest baseball franchise is immune from the economic downturn. Recently, New York Yankees’ brand new stadium has plenty of empty seats, and it’s not in the nose bleed section. It’s the seats behind and to the side of home plate, the cleverly named Legends seating. At $2,675 per ticket, a family of four has to make a choice whether to spend a day at the ballpark or pay for their groceries, car payments, mortgage ect. Even Yankee operating partner Hal Steinbrenner seemed to understand.

“I think if anybody in any business had known where this economy was going to go, they would have done things differently. Look, there’s no doubt small amounts of our tickets might be over-priced.”

In response to the negative turnout to games, the Yankees have begun to decrease ticket prices on luxury seating in hopes of bringing in more fans, especially in a time when they need to pay for their ridiculously expensive new stadium. As TV cameras pick up the patchy attendance with every pitch, it serves as a little prick to the nation’s richest baseball franchise. The media response to the seating situation was enormous, sparking speculation that the Yankees were feeling the pressure of trying to pay for the league’s highest total players salaries. (Three of their players, Alex Rodriguez, Jason Giambi, and Derek Jeter have the league’s three highest salaries)

“We’re done talking about seats,” Yankees president Randy Levine said. “We’re not talking about seats.”

But fans notice the effects the economy is having on the ballpark. “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’ 9-7 victory in 14 innings over the Oakland Athletics. At the game, Legend Suite section was about 80 percent empty, and the upper deck, which have been mostly full throughout the season were a quarter empty. Some Fans remember what it used to be like in the old Yankees stadium

“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. The Yankee’s are not the only large and popular New York franchise to feel the economic pinch.

The Mets have similar issues at their new Citifield , where the top ticket is a little over $800 and empty seats have been rampant. And at PNC Park in Pittsburgh, a field level seat can be had for $32 to watch a Pirates team that is playing really well considering they have been awful in the past. And those seats are mostly empty.

Many teams, like the Arizona Diamond Banks, have begun knew programs in hope of helping their fans purchase tickets and attend games. In a move unheard of in MLB history, the Diamond Backs gave out 41 season tickets to 14 different families in the Arizona worth approximately 100,000 dollars. However they are not the only MLB attempting to make ticket purchases a little easier for their fans. The Marlins are doing their part to reach out to the South Florida community.

Team owner Jeffrey Loria has enacted programs attempting to make attending Marlins home games possible to those hurt by the lagging economy. Loria said when asked about why these programs were necessary,

“We are proud to introduce a lineup of industry-leading ticketing initiatives designed to give South Florida baseball fans some economic relief while attending Marlins games. These new programs will continue to keep Marlins baseball the best entertainment value in South Florida and allow our fans to experience our brand in the best way possible: live at the park.”

Among the initiatives are Marlins Mortgage Payout, which ties in to the SuperSaturdays concert promotions. The Marlins official website promotes:

On 11 of the 13 SuperSaturdays, one fan will be awarded a check for up to $2,500 toward his or her monthly mortgage or rent payment. During the June 20 game with the Yankees and the Sept. 26 game with the Mets, a fan at each game will be awarded a check for up to $15,000 toward: 1) the principal on his or her mortgage, or 2) the remainder of the winner’s annual lease. South Florida fans are encouraged to log onto http://www.marlins.com and enter the Marlins Mortgage Payout.

The team’s vice president of marketing, Sean Flynn explains these new programs are solely a reaction to the failing economy surrounding the league and its loyal fans.

“It’s our response to what’s happened with the economy. We always want to position the Marlins to be the best entertainment value out there. We look for initiatives that speak directly toward that.”

Also, in response to the high unemployment rate in the Southern Florida area, the team has introduced Marlins Workforce Mondays. Unemployed residents have the opportunity to take advantage of up to four complimentary tickets to select Monday night home games.

In such a volatile market, MLB teams must take a normative approach to their business management. If teams do not adjust to the changing market phenomenon, their franchise could possibly lose serious money. Teams that are adjusting are gaining ever more loyal fans, and the undying support of the community. I believe all teams in the MLB should take note of these economic based initiatives and begin to think about implementing these programs themselves. It will go a long way in securing baseball’s future and the love of the game in America.

Sources Used:

“D-Backs gives Back to the Fans.” Rick Reilly, ESPN The Magizine. April 20, 2009.

“Pricey Seats at new Yankee Stadium a Bronx Bomb.” Ronald Blum. The Associated Press. April 22, 2009

“Marlins Unviel Economic Initiatives.” Joe Frisaro. MLB.com. March 27, 2009

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6 Responses

  1. I see the reference to normative approach. Can you expand on that?

  2. Because Major League Baseball has so many games (162 overall, 81 at home), ticket revenue is a huge concern for most franchises, especially if they aren’t the highly popular ones like the Yankees and Red Sox. In order to foster fan attendance, owner institute “out of the box” or normative practices in order to create a fan friendly environment. Especially in today’s economy, fans need to feel like their money is being spent on a team and franchise that really cares and understands the hardships the average Joe is going through currently. The Marlins are taking a great normative approach towards the troubled environment outside the ball park by offering incentives to fans when they are defiantly in dire need of them.

  3. Normative institutional processes are something we talk about in org theory. I wasn’t sure if you were using normative in that sense. Is this a concept you are inventing (fine) or are you borrowing (also fine)?

    To give you a made-up example of what normative means to me as an org head: why do teams ban alcohol from stadiums (just assume they do).
    1) Regulatory or coercive: State legislature outlaws it
    2) Normative (professions): local doctors or police pronounce that it is a bad idea and use their professional status to bring pressure on owners.
    3) Cognitive or cultural: owners and fans mutually agree that it a bad idea. Alcohol violates the sense of family atmosphere. Plus, it leads to rioting in countries that are not “American,” you know, where they play soccer and call it football, riot, are too brown, etc. :<)

  4. […] the Economy is Affecting Professional Sports: MLB 2010 January 27 by ej13 This post about how the economy is affecting the MLB makes it clear that baseball organizations have been negatively affected by the recent state of the […]

  5. […] blog about how the economic downturn was affecting ticket sales at New Yankees Stadium.  https://bucknellorgtheory09.wordpress.com/2009/05/10/how-the-economy-is-affecting-professional-sports…  I agree that the current state of the economy certainly deterrs some people away from luxuries […]

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