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Volume 21 No. 1

Leagues and Governing Bodies

Major League Baseball’s continued attendance rise in 2012 showed not only a growing fan affection for the sport but also sharp reductions in the traditional lag between winning and ticket-sales spikes.

The league ended the regular season with attendance of 74.86 million, up 2 percent from a year ago (see MLB Turnstile Tracker). The increase was shy of the 3 percent to 5 percent bump projected by MLB Commissioner Bud Selig before the season, but it nonetheless represents MLB’s highest attendance count since 2008. It also marks the first two-year run of growth since 2006-07 and the highest year-over-year percentage increase since the sport’s record-setting year of 2007.

The Philadelphia Phillies led individual clubs for the second straight year with a home attendance of 3.566 million.
Perhaps even more meaningful was the attendance growth among many of the clubs bound for the postseason, driven in part by the introduction of the second wild-card slot in the National and American leagues. This season featured the dramatic on-field rise of several upstart clubs making either their first playoff appearance in their present city or a return after many dormant years, notably Washington, Baltimore and Oakland.

Rather than having to wait a year for increased ticket sales to provide a return on that success, as has historically been the case, clubs saw meaningful gains this year. Eight of the 10 playoff teams posted an increase in total attendance over last year, and while the New York Yankees and San Francisco Giants posted slight declines, they still ranked second and fourth, respectively, among all clubs in attendance.

Among the teams showing the largest spikes compared with 2011, four were playoff teams; also in that group were Miami, playing in a new ballpark, and the Los Angeles Dodgers, now under new ownership.

Similarly, the three clubs with the largest aggregate declines — Houston, Minnesota and Colorado — posted poor second halves of the season.

“Typically, you do have that lag, but we’ve really been preparing for what happened this year for more than two years,” said Andy Feffer, Washington Nationals chief operating officer. The Nationals, winning their first NL East division title since relocating from Montreal after the 2004 season, ended 2012 with an attendance of 2.37 million, up more than 430,000 from a year ago.

“All the many things we did around the ballpark with the new amenities, the free concerts, the revamped promotions, creating additional value and so forth, it was all designed to help put us in a position to take off very quickly when the team came together as we thought it would,” Feffer said.

Some of the tightening correlation between on-field performance and attendance also owes to the maturation of the ticketing industry through continued advances in areas such as the secondary market and dynamic pricing.

MLB attendance is a critical indicator of the health of the league and the sports industry at large. Ticket sales represent baseball’s largest individual revenue source, and the sport has more ticket inventory to sell than any other league.

“We’re right in the zone of where we’d thought we’d be,” Selig said. “There aren’t necessarily any big surprises, but these are still very big, very healthy numbers that reflect the tremendous popularity of the sport.”

Unlike last year, which finished with a historically strong September kick, MLB’s 2012 attendance increase steadily crept down in the season’s second half. The league in June was tracking more than 7 percent ahead of 2011, as early ticket sales were surging even beyond Selig’s estimates. But after the All-Star break, the gains winnowed down on a week-to-week basis. Selig said some of that slowdown was expected, particularly with the conclusion of 2012’s interleague play in June.

Next year, interleague play will be continuous throughout the season, because of Houston’s realignment to the American League, bolstering MLB optimism for further attendance gains next year.

The Philadelphia Phillies led individual clubs for the second straight year with a home attendance of 3.566 million. The Tampa Bay Rays, despite a fifth consecutive winning season, ranked last with a total of 1.56 million, highlighting the club’s continuing problems playing at Tropicana Field.

The United Football League, entering the third week of its season, could shutter shortly if it is unable to pay its players, agents and other sources said last week.

The players, these sources said, have yet to be paid this year.

Late payments and non-payments to players, other employees and vendors have bedeviled the 4-year-old league, calling into question whether the UFL can ever operate as the unofficial minor league to the NFL that it aimed to be at launch. The four-team league, which is operating without a commissioner, several weeks ago hired the law firm Morrison & Foerster to defend it from the claims that have been brought against the struggling outfit from ex-employees and vendors.

Sources said the league’s players have yet to be paid this year. The UFL features four teams.
Photo by: AP IMAGES
Some agents have been advising players not to compete until they are paid, further contending that some players have left clubs. “I have told my clients in writing that until they are compensated they should not play,” said agent David Canter, who has three UFL player clients, each owed $28,000 for the season, and others in the NFL. “My understanding is before one game players were basically begged by the coaches to get on the plane to go to a game.”

The UFL for its part offered two statements.

“We understand our obligation as it relates to compensating players within the week following our games and it is our intention to honor that obligation,” said UFL President Bill Mayer, in a statement through a spokesman.

Referring to the hire of Morrison & Foerster, UFL spokesman Larry Weisman said, “Any claims against the UFL are in the hands of the legal department for examination of their merits and are undergoing thorough scrutiny. The UFL will not comment on any individual claims or reports of claims in the interest of the privacy of those claimants and the league.”

One such claimant is Marc Daniels, who said his TV company is still owed money for work done for the now-relocated Florida Tuskers. He hired a production company, ENX Entertainment, that Daniels said is also owed money.

The Morrison & Foerster lawyer in charge of the UFL account is Sharon Parella. A partner in the firm, Parella referred queries to the UFL.

Some who have submitted claims to the law firm say they have received no response.

“[The] league owes me $4,500; it was submitted to Morrison & Foerster LLP per league request in the last 10 days,” said Windsor Hall, the former director of business management at the Tuskers. “I have requested status and get no response. They owe several vendors in Orlando thousands.”

The UFL has lost tens of millions of dollars since launching, failing to find a niche playing on Fridays in the fall. The reported first-year loss was $30 million; the loss grew to around $45 million the next season. The main financial backers are New York investment banker Mayer, and financiers Bill Hambrecht and Paul Pelosi, whose wife is the former speaker of the house, Nancy Pelosi.

The league has been unable to find an audience at the gate, having originally projected 20,000 fans per game, but contests this season have drawn only a few thousand. Its current TV deal with CBS Sports Network requires the league to pay to air the games.

Another football league is scheduled to launch in spring 2014: the reincarnated United States Football League. Many football insiders believe a spring league, where it will not be competing against the NFL and college football, would have a better chance to thrive.

The UFL played in the fall hoping to become an in-season feeder system for the NFL, and some players did make the jump. But the NFL balked at the UFL’s demands for payment for those players, which was a key element of the new league’s economic plan. The UFL also had hoped the NFL lockout last year would extend into the regular season, allowing the UFL to become the only game in town.

Now the league, which many did not expect to play this year, looks challenged to get through its scheduled eight-week season.