SBJ/May 5 - 11, 2008/This Weeks News

All-Star revenue classic

This summer’s MLB All-Star Game in New York will be the highest grossing event in the long history of the midsummer classic, thanks to the fact that the game will be played in the country’s largest market during the final year at Yankee Stadium.

This year’s festivities will be drawn out over a six-week schedule that will include a free concert put on by MLB featuring Bon Jovi in Central Park. The concert is scheduled for Saturday, July 12, three days before the game.

Given the amount of history connected to the last year of Yankee Stadium, MLB is trying to pull together a fitting farewell for the game itself, assembling every living member of the Baseball Hall of Fame for a pregame nostalgia fest that would rival the 1999 celebration of the All-Century Team in Boston, which included Ted Williams three years before he died.

The heavy hype is driving virtually all of baseball’s businesses to record-high revenue for the game in ad sales, merchandise, licensing and ticket sales.

For example, Fox’s ad sales inventory for the game is 85 percent sold and pacing 25 percent ahead of last year.

The highest price point for 30-second spots — the ones non-MLB sponsors pick up as one-off ad buys — has hit $550,000. Some of the remaining inventory could bring in as much as $600,000.

“We try not to discuss economics, but we’re attempting to execute the grandest All-Star Week ever, in keeping with stature of Yankee Stadium, where it is occurring,” said Tim Brosnan, MLB executive vice president of business.

MLB still is seeking a sponsor for the concert held in Central Park. With 70,000 tickets to be distributed, a retailer is a strong possibility.

Mark Dowley of IPG’s Endeavor Agency has staged concerts in Central Park for American Express (The Dave Matthews Band), Best Buy (Sting) and AOL (Sheryl Crow). He put the baseline cost of a Central Park concert at $5 million.

“It can be a great connection to consumers, especially for a product launch, but there are a lot of politics and moving parts to deal with,” he said.

Given his partial ownership of the AFL’s Philadelphia franchise and the frequency of playing around NFL events, Bon Jovi is more closely tied to football. However, his New Jersey roots and strong local following should guarantee a good crowd as MLB fashions a six-week calendar of events for its “All-Star Summer” from Memorial Day forward.

“The amount of events we’re producing and the history of Yankee Stadium is producing more demand and more sponsorship activation than any time since I’ve been here,” said MLB sponsorship chief John Brody, who would not comment directly on the Bon Jovi concert.

MLB’s other network partners are crediting the excitement generated by the All-Star Game for a strong sales performance across the board.

Fox and Turner Sports said they are virtually sold out for the regular season, and ESPN is planning to hold back inventory for the scatter market.

The All-Star Game has seen a steady decrease in its ratings (see chart), and Fox is not making ratings guarantees or projections for the All Star Game. But industry analysts believe the national rating could increase by 5 to 10 percent simply because it’s being held in New York.

“TV ratings will go up considerably in the New York market, and that will help the national rating,” said Mike Trager, a sports media consultant and former chairman of Clear Channel Entertainment’s television division. “But this game isn’t about ratings. It’s not about CPMs [costs per thousand viewers]. It’s about the aura surrounding the game.”

Bon Jovi will perform a free show
in Central Park.

Aside from MLB’s TV partners, licensees are also cashing in. Faust Capobianco IV, who heads MLB jersey licensee Majestic for VF Corp., said his unit already shipped more All-Star Game apparel than at any comparable time before other midsummer jewel events.

“It has been an unprecedented demand,” he said. “It is almost without saying that this will be the best All-Star Game for MLB’s licensees. With the history of the stadium and players we have to work with around this year’s game and players, it just adds up to really good business.”

Added John DeWaal, vice president of global marketing at exclusive MLB on-field cap licensee New Era, “Retail conditions are tough right now, but the bright spot is that I’m sure this will be our best All-Star Game sales ever.”

Similarly, MLB expects record crowds of more than 150,000 at the DHL-sponsored All-Star FanFest, which will have more space to use at the Jacob K. Javits Convention Center.

Tickets for the FanFest are selling 70 percent ahead of last year’s pace amid substantial price increases that pushed admission this year to $30 for adults and $25 for kids.

“Everyone associated with baseball from a business perspective sees this as the biggest celebration of MLB in the biggest market. They all want a piece of the biggest baseball celebration of their lives,” said David Abrutyn, senior vice president of consulting at IMG, which reps MLB sponsors DHL and KPMG.

He added that the unprecedented demand for FanFest tickets has them looking at expanding hours.

Beyond FanFest, ticket sales for all other All-Star events are similarly trending at historic levels, despite price increases that double the face value of lower-grade tickets compared with last year in San Francisco, and nearly triple the cost for high-end tickets to as much as $725. That latter figure is a record, and more than twice the face value of tickets for last year’s World Series, which peaked at $300.

The Yankees’ league-leading season ticket base of more than 38,000 full-season equivalents has been given the first opportunity to buy game tickets. MLB.com launched a public lottery last week that on June 16 will allocate tickets not claimed by the Yankees’ base or by MLB for internal use.

On the secondary ticket market, StubHub officials said the total dollar volume to date of sales for New York All-Star events is more than 100 percent ahead of last year’s pace, and a recent sale of field championship level tickets for the July 15 game — at $14,500 each — was the one of most expensive single transactions in company history.

The average selling price for All-Star Game seats on baseball’s official resale marketplace is $1,286, with seats for the July 14 Home Run Derby fetching an average of $741 on StubHub.

“Beyond the $14,500 sale, we’ve seen several others in that five-figure range already,” said Joellen Ferrer, StubHub spokesman. “The top end for this year’s All-Star Game is way beyond what we saw in 2007.”

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