SBD/Issue 138/MLB Season Preview

MLB Roundtable Part I: Execs Discuss Sales In Tough Economy

Roundtable Discussion Focuses On Baseball's
Fight To Maintain Relevancy With Consumers
After a historic half-decade runup in attendance and revenues, MLB opens the '09 season in a very different place. The recession -- facing baseball for an entire offseason selling cycle -- has blunted that growth curve and instead has the league eyeing a dropoff at the turnstiles and undertaking a fervent fight to maintain its reach and relevancy with consumers. To probe into the baseball sales landscape, SportsBusiness Journal and SportsBusiness Daily held a wide-ranging discussion with Mets Exec VP/Business Operations Dave Howard, Braves Exec VP/Sales & Marketing Derek Schiller, White Sox VP & CMO Brooks Boyer and MLB Senior VP/Corporate Sales & Marketing John Brody last month in our N.Y. offices. The following is part one of the discussion. See tomorrow's issue of The Daily for part two.

Q: How are sales going, particularly with regard to tickets?

Schiller: The current environment for us in ticket sales is balanced. There are certain areas that are down, and there are certain areas that are up. For [selling] full-season tickets, that’s a much more difficult environment, both on the renewal and on the new sale side. Conversely, we’re actually well ahead on smaller game packages. Individual tickets just went on sale last week [early March], so it’s way, way too early to tell on that. But overall, I would say our total sales volume is about the same. It’s just a different mix.

Q: Are you projecting, then, to be flat overall for the season?

Schiller: I would not make that a prediction right now because the trends that we’re seeing are different. The mix of ticket sales is coming from different places. It’s not something we’ve seen over the past couple of years. There’s a different approach people are taking in the way that they’re purchasing tickets, at least in Atlanta.

Q: Dave, your situation is obviously very different. You have a new stadium, but the capacity relative to Shea Stadium is down, so that will affect the numbers. Within that dynamic, what trends are you seeing?

Howard: We’re doing well, considering the marketplace. We’re ahead, year-to-date, with regard to season and plan [purchases] combined, about 9 percent ahead compared to where we were at this time last year. The response has been very good. I think what we’re seeing, though, is that price is an issue. Customers are shopping price, and the lower-priced inventory is moving more quickly than the premium inventory. I’m interested to see how that plays out as we get more into the open marketplace.

Howard Says Mets' New Field
Helping To Sell Tickets
Q: That on-sale date for single-game sales seems a bit later than in prior years, closer to opening day. Is that the case?

Howard: Historically, we’ve gone on sale [for single games] very late in February, and we’ve pushed that back a little bit, a couple weeks or so this year. That was in part because of the interest we’re getting in [full] seasons and plan business. There was also a process issue. We first started talking to our existing ticket holders last year [about Citi Field], and didn’t really get into the new business market until the offseason. There is interest there. I think what we’re finding now is that the building is helping us sell. The tours have been very effective in helping sell new business. 

Q: What is the situation with suite sales at Citi Field?

Howard: Suite sales were good. We’re sold out on suites. We had one company that made a commitment to us several months ago and as we got into the process again to get the deal signed, they reneged. So we are in the process of selling that suite, one of the Sterling Suites, on a quarterly basis. And we’re doing well with that – there’s quite a bit of interest. So we’re confident we’ll sell that. We actually have oversold the Empire Suites. So we’re one suite short in terms of fulfilling some of our marketing deals. So we’ll have to get creative in how we handle that.

Q: Brooks, what’s the story in Chicago?

Boyer: Ticketwise, we are pacing ahead of where we were last year. Obviously, coming off a successful season, making the playoffs, and you look at the city of Chicago, what’s going on on-the-field with both clubs and the high tide, helps both franchises. Similar to a lot of other clubs, our smaller plans are way, way outpacing where we were this time last year.
Brody: As we see things from a slightly different trajectory, we’re always looking for indicators. And there’s a couple of key indicators. Number one, spring training attendance is up 2 percent to date from last year. Last year, for the regular season, we had our second-strongest year in the history of the sport. The [World Baseball Classic], that’s another indicator. Before we even began [the tournament], we were over a half million tickets sold. This is not a baseball issue, what’s going on in the economy, but a universal issue. How you deal with it is very important. The commissioner made a statement in October to all the club owners saying we need to be responsible to what’s going on around us. And we’ve seen that, not just from these three clubs, who are all responding as they should, but across the league, we’ve seen two-thirds of the clubs hold their ticket prices, or cut them. Clubs are really getting creative finding ways to give fans access to the affordable tickets, and in turn, give them access to our sport.

Q: We saw a report the other day that the league is projecting attendance to be down as much as 20%. Is there any validity to that?

Brody: I don’t think the league has made any projections. We’re talking to the clubs every day, trying to come up with ways to bring value to our customers, to bring affordable choices for them to test the sport. You have to remember, 60% of Americans, six out of every ten, have said they are fans of our sport. We join the NFL as the only two properties in our country who can say that. And when six out of ten people say they want to be part of your sport, you have to give them ways to do that. Creative ways, whether it’s in the ballpark, on TV, radio, and I think all the clubs and the league are prepared to do that. 

Schiller Says Putting Budgets
Together Been A Challenge
Q: As you all go through the sales efforts, and you experience this dynamic of smaller buys, more mini-plan holders, later buys relative to the calendar, and so forth, how much stress is that putting on your operational budgets?

Schiller: Putting together budgets for the season, I think for everybody, has been a challenge. It’s been a moving target. Remember, we’re putting together budgets, in our case, six months ago, and there’s a lot that’s happened to the economy nationally, and in Atlanta that’s affected how we might look at our budget and how confident we are, and different ways we might go about planning our revenues and expenses.

Q: We talked last summer about your computerized model for projecting attendance. Has that model been compromised by what’s happening now with the economy?

Schiller: That’s a really interesting question. Obviously, we did use it to help out our budgeting process. In addition to helping our ticket sales, it’s useful from a scheduling standpoint. When we get our first draft of the schedule from the league, we evaluate it on a number of different metrics; there’s the team perspective and all the input that team operations has, and then we on the business operations side evaluate it. The model, we don’t have an indicator built in that helps us understand what the impact is from a significant economic downturn that is occurring. So we’re sort of in uncharted waters. But it’s one of many tools we use to look at the season going forward.

Q: You guys have mentioned the World Baseball Classic a few times. It does appear there was less conflict this time between the business side of the game trying to build this event and baseball operations people protective of their individual clubs. But what has been the dynamic from your perspective trying to harmonize those two sides?

Boyer: From the White Sox perspective, it’s up to the player. The player decides whether to participate. We only have one player playing in the Classic, [P] Matt Thornton. But it’s totally up to them. From a fan perspective, my perspective, the World Baseball Classic has been very fun to watch. It really is something, for our season, the timing is perfect. Dealing with a challenging economy heading into our season, I think it really highlights how great and important baseball is to people, how much they’re thirsting for it. And particularly in cold-weather markets like New York and Chicago, it helps people get excited for the season. There is no discussion at my end, I have absolutely no say whether or not a player goes to this.
Schiller: I am extremely biased toward the World Baseball Classic for a number of reasons, not the least of which is the International Baseball Federation that my father has. But I’m going to be the biggest fan there is for the World Baseball Classic. It only helps the game. It’s exposing many different people, many different ways to experience the game, in a slightly revised way, representing your country instead of the traditional representation of our individual markets, our individual MLB teams. It’s a terrific opportunity for us, and oh by the way, it’s a few weeks before the regular season begins. So it can only help from a marketing perspective, giving us additional exposure in all of our markets.

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