SBJ/March 14-20, 2011/Facilities

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  • Cards skip test run, embrace dynamic pricing for whole ballpark

    Don Muret
    The St. Louis Cardinals will dynamically price their entire ballpark for all 81 home games this season, becoming the second MLB team to do so.

    The Cardinals announced in January that they had signed a deal with software firm and dynamic pricing specialist Qcue. Dynamic pricing adjusts single-game ticket prices as late as the day of the game through computer analysis of team performance, opponent, weather conditions, day of the week and gate giveaways.
     
    This year, those unique factors are being fed into Qcue’s system to more effectively price the 43,000 seats at Busch Stadium and 30 party rooms the team reserves for game-day rentals, said Joe Strohm, the Cardinals’ vice president of ticket sales.

    Baseball rules in St. Louis, and the Cardinals traditionally rank in the top five in MLB attendance despite playing in one of the league’s smallest markets, Strohm said.

    That being said, the Cardinals sold out only 30 of 81 home games in 2010, prompting officials to take a closer look at dynamic pricing, especially how it’s utilized in San Francisco. The Giants, who in 2010 became the first team in all of sports to expand dynamic pricing to cover all seats at their facility after testing Qcue’s system the previous two seasons, generated incremental revenue of more than 7 percent last year.

    Those results, coupled with the Cardinals’ and Giants’ use of the same ticketing firm, MLB Advanced Media’s Tickets.com, and other business practices they share, persuaded St. Louis to dive into dynamic pricing without testing it first on a small portion of seats, Strohm said.

    To promote dynamic pricing and provide greater value for fans searching for ticket bargains, the team has launched a Dynamic Deal of the Week on its website, starting with $5 right-field terrace seats for two April home series, against Pittsburgh and Washington. Those same upper-deck seats are priced up to $35 a game for home games against the Chicago Cubs in July and September.

    The Cardinals are also increasing awareness of dynamic pricing by mentioning those deals during spring training radio broadcasts, Strohm said.

    It was two series in September last year that made Strohm recognize how dynamic pricing could have helped the Cardinals generate more ticket income. The first one, against the division-leading Cincinnati Reds, came over Labor Day weekend. The summer’s final holiday is historically not a big weekend for the Cardinals, and before August, ticket sales for those games had been trending with previous years, Strohm said. The Cardinals were battling Cincinnati for first place when the weekend rolled around, though, and the series sold out.
    The second series against the Cubs later that month, already variably priced at a premium for the Cardinals’ archrival, did not sell out after both teams fell out of the pennant race.

    In both cases, dynamic pricing could have produced additional revenue by increasing ticket prices on short notice for the Reds series and reducing them for the Cubs, Strohm said.

    “Ultimately, what we want is for the price of tickets not to be the reason for people to stay away from the ballpark,” he said.

    Elsewhere in MLB, the A’s, Astros, Diamondbacks, White Sox and Twins are using dynamic pricing this season at their parks. “In the next 10 years, the majority of MLB teams will be doing this,” Strohm said.

    INDIANS’ COUNTRY: The Cleveland Indians are serving as the promoter for the first concert at their ballpark since Jimmy Buffett in 1995.

    Paisley
    GETTY IMAGES
    Brad Paisley will headline the first concert at the Indians' Progressive Field since 1995
    .
    The MLB team recently announced Progressive Field will play host to the Indians Music Festival on June 11 with country stars Brad Paisley and Blake Shelton as headliners.

    To get the date, one of five stadium shows on Paisley’s summer tour, the Indians bought the acts direct from the William Morris Agency. The company represents Paisley, Shelton and Jerrod Niemann, the third artist booked for the main stage. A second stage outside the park will feature smaller acts.

    Instead of renting the stadium to a traditional promoter, the Indians are spending their own money to advertise the concert on television and radio and sell tickets to the show, said Vic Gregovits, the team’s senior vice president of sales and marketing.

    “We have been in the running for many shows but never got to contract,” Gregovits said. “Taking the risk assured us of a show.”
    He would not disclose the club’s investment. Every deal is different, but typically teams keep concessions and parking revenue when renting their stadiums. The Indians, by taking the risk, stand to gain a greater share of most concert-related revenue streams.

    The club hired consultant Tom Rooney to co-produce the concert. Rooney, president of The Rooney Sports and Entertainment Group, did the same thing when Kenny Chesney performed at Cleveland Browns Stadium in 2008. Gregovits and Rooney have a relationship dating to 1985, when both worked for teams at Pittsburgh Civic Arena. Rooney is also a founder of the Gridiron Stadium Network, a group of major league facilities working together to bring concerts and other nonsports events to their buildings. Some members of that group also promote shows on their own.

    “Tom and I have been talking for several years about some opportunities to explore events,” Gregovits said.

    L.A. ELIGIBILITY: The city of Los Angeles issued a proposal Feb. 23 to hire financial advisers to evaluate the economic impact and finance terms tied to Farmers Field, the NFL stadium that AEG wants to build next to Staples Center.

    AEG’s plan to fund the project has the city issuing $350 million in bonds to pay for replacing the Los Angeles Convention Center’s West Hall, the portion that would be torn down to build the stadium. Net revenue from facility operations would pay back those bonds.

    CSL International principal Bill Rhoda is qualified for the job, but he has been working with Majestic Realty on its proposed NFL stadium project east of downtown Los Angeles. Rhoda has no prior relationship with AEG, but has represented the city side in deals connected to the firm’s operations of Sprint Center and Target Center.

    Rhoda, whose firm has been on the ground floor for developing 75 percent of big league sports venues, is communicating with the city to find out whether he is clear to pursue the Farmers Field deal. Proposals are due April 7.

    Don Muret can be reached at dmuret@sportsbusinessjournal.com. Follow him on Twitter @breakground.

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  • Diaz heads across town to Garden

    Madison Square Garden Sports has hired Alex Diaz, general manager of the Barclays Center, to be senior vice president and general manager of its facilities operations, which include Madison Square Garden and the Theater at MSG.

    Diaz
    Diaz
    MSG Sports officials confirmed the hire but declined to comment. Diaz is expected to join the organization sometime before March 25.

    Diaz, 37, now holds the title of senior vice president and general manager of the Barclays Center, the planned home of the New Jersey Nets, which is slated to open in Brooklyn in the summer of 2012. Diaz declined to comment.

    According to the Nets’ website, Diaz joined the organization in February 2006 as general manager of arena operations and was the liaison with the team’s temporary home, the Prudential Center in Newark. For the Barclays Center project, Diaz contributed to the arena’s design and the creation of its standard operating procedures. He also oversaw the May 2008 opening of the Barclays Center Showroom in Manhattan, the arena’s sales and marketing center for suites and sponsorships. Arena construction began in March 2010.

    Before joining the Nets, Diaz was senior vice president of the Miami Heat and general manager of AmericanAirlines Arena in Miami.

    Nets officials declined to comment.

    At MSG, Diaz will oversee the arena’s day-to-day operations and will report to Steve Collins, MSG Sports executive vice president of facilities, who formerly held Diaz’s position. His hiring comes as Madison Square Garden begins its more than $977 million renovation plan, which is expected to be completed in 2013.

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