SBJ/Nov. 8-14, 2010/This Week's Issue

Giants want to become an economic force


GETTY IMAGES

Giants President Larry Baer
speaks to fans during the
team’s victory parade. Those
celebrating fans quickly
heated up merchandise sales.

The San Francisco Giants, newly minted with their first World Series title since moving from New York after the 1957 season, will obviously see broad-based increases in ticket and merchandise sales, local TV ratings, and the other metrics that winning a championship historically improves.

But the club is after something even bigger: a total redefinition of the Giants’ brand that sheds more than five decades of on-field near-misses and underachievement.

“This isn’t a brand elevation we’re talking about. This is a total transformation of the brand. It’s way more than a refresh,” said Larry Baer, Giants president and chief operating officer, last week. “What the Giants are from a brand standpoint is going to be very different going forward.”

In short, Baer and his Giants colleagues see the club becoming a true league economic force along the lines of the New York Yankees, Boston Red Sox and Philadelphia Phillies. With a season-ticket base already standing at 21,000 full-season equivalents and set to grow now into at least the high 20,000s; a roster set to return nearly fully intact in 2011; merchandise sales booming; and a strong TV presence on CSN Bay Area, the club is targeting big days ahead.

“We’ve been fortunate to accelerate our trajectory and we’re going to continue to build on what has been achieved,” said managing general partner Bill Neukom, speaking right after the Giants’ clinching win in Game 5.

The team on a fiscal basis essentially broke even for the 2010 season, with the playoff run providing an eight-figure lift. Strong profits are now expected in 2011 and beyond.

Those lofty aspirations, however, will need to mesh with a continued desire for the growth to come on a measured basis. Baer said last week he anticipates only single-digit percentage increases in both ticket prices and payroll beyond the 2010 Opening Day number of $98.6 million.

“We’re trying to grow this methodically,” Baer said. “I don’t see us going crazy.”

Amazingly, the Giants achieved their on-field success despite three of their five highest-paid players — pitcher Barry Zito, outfielder Aaron Rowand and infielder Mark DeRosa — combining to represent 40 percent of club payroll yet not playing meaningful roles in October due to injury or ineffectiveness.

“This all really shows that [this] is an art and not a science,” Baer said.

One area in which the club stands to see particularly strong benefits is dynamic ticket pricing. With MLB controlling ticket policies for the World Series, the Giants’ program of allowing single-game prices to float based on market forces was not in place for the Fall Classic. But with a second full regular season with the system set to occur in 2011, the club is poised to capture sizable chunks of ticket revenue that otherwise would have gone to the secondary market.

The Giants do not, however, plan to add seats to AT&T Park, believing the current park capacity of 41,915 remains an optimal figure for the San Francisco market.




AP IMAGES

Fans wait in line at the Giants Dugout merchandise
store following their team’s World Series victory.



  Merchandise boom:
Merchandise sales were bullish at both AT&T Park and Rangers Ballpark in Arlington during this year’s series. Customer wait times just to get into team shops often extended more than an hour.

“Before the series started, I thought this matchup might have generated maybe 65 percent of [Philadelphia-New York] last year. Now, it’s probably 85 to 90 percent and growing,” said Howard Smith, MLB senior vice president of licensing. The 2009 Yankees hot market was among the best in MLB history. “What we’re seeing in both of these markets this year,” Smith said, “particularly at the ballparks, has been extraordinary. Pent-up demand is always a good thing.”

More specifically, the Rangers and MLB as of early last week had sold more than 360,000 “Claw and Antler” T-shirts depicting the celebratory gestures embraced by the team. In San Francisco, the Giants sold more than $600,000 worth of merchandise at their team store in just the first 36 hours after winning the National League pennant, with the vigorous sales rates intensifying during the World Series and even more so after the title was clinched.


The Rangers and MLB had
sold more than 360,000
“Claw and Antler” T-shirts.


 

To help meet demand, the club signed a temporary lease at a Borders bookstore near AT&T Park that had closed in order to set up additional merchandising space.

Customization, already an emerging push for MLB and its licensees, was a big component of this year’s merchandise returns. MLB for the first time produced locally specific covers for the official World Series program, with fans responding strongly in both Texas and San Francisco.

Looking forward, Smith believes the Rangers and Giants will both jump into more national prominence with regard to merchandising, joining stalwarts such as the Yankees, Phillies, Red Sox, Chicago Cubs and Los Angeles Dodgers.

“We’re already seeing greater interest in these two clubs from our national chains,” Smith said. “This unquestionably opens up broader opportunities.”



  Rush to history:
For the second consecutive year, MLB Productions will be conducting a rapid turnaround for the official World Series DVD, with a final master film due for reproduction on Thursday, just 10 days after the conclusion of the series. The timing is designed to have a retail release in time for the full holiday shopping season. This year’s DVD will be in stores on Nov. 23.

“It’s always a challenge getting something like this together, but more so with the World Series DVD than probably any other production we do because there’s more riding on it,” said David Gavant, MLB Productions vice president and executive producer. “We are creating a key historical document of the event.”

More than 100 hours of raw footage was shot in San Francisco and Texas to be distilled down into the planned one-hour documentary. Like prior World Series films, this year’s installment will seek to place a premium on exclusive access and vantage points that MLB Productions is afforded, such as accompanying Giants outfielder Cody Ross as he walked from his downtown San Francisco hotel to AT&T Park for the games there, mobbed by fans the whole way.

“We anticipate a great deal of enthusiasm for this film. This is a new team winning the title, and the passion of the fans in San Francisco that we all saw will be an integral part of the film itself,” Gavant said.

This year’s World Series offering is also the first to be produced and edited fully in high-definition.

  Early finish to early start?: The final average rating of 8.4 for this year’s World Series tied the 2008 Philadelphia-Tampa Bay rating for being the worst such mark in World Series history. This year’s rating also likely assured that MLB and Fox will not pursue a repeat of an early start for Game 3.

The shift this year to a 6:57 p.m. ET start time for Game 3, played on a Saturday, was designed as an olive branch of sorts to fans who had long complained of playoff baseball games running too late into the evening. The move was made despite years of industry research showing a trend of TV audiences getting larger the later a game goes, regardless of age.

The early start was tied into a series of youth-oriented marketing promotions, including a World Series of Costumes Halloween contest conducted with the aid of MLB.com. That online promotion performed reasonably well, generating a six-figure number of votes for the best costume. But the 6.7 rating for Game 3, ranking as the second-lowest individual World Series game ever, by itself was enough to pull the 2010 series mark down into the dubious tie with 2008, with quarter-hour ratings standing in lockstep with industry norms.

Had the game started at 7:57 p.m. ET, more consistent with the series’ other games, expectations were that it would have rated better by at least 0.4 ratings points.

MLB Commissioner Bud Selig and other executives were noncommittal on repeating the Game 3 move, but the disappointment clearly extended to both the league and Fox.

“We’re in the ratings business, and the ratings just weren’t there,” said an executive close to the league of Game 3. “The other parts [of the promotion] were great, but the numbers were what the numbers were.”

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