March 27, 2009 / 4:40 PM / 9 years ago

Baseball faces more empty seats this season

CHICAGO (Reuters) - The recession is expected to strike a blow to Major League Baseball, leaving many teams to face lower attendance and revenue as frugal fans root, root, root for their favorites from the comforts of home.

A policeman stands by a dugout roof awaiting the entrance of fans to the old Yankee Stadium in a file photo from August 31, 2008. REUTERS/Ray Stubblebine

The U.S. sports league faces a drop in attendance of 5 to 10 percent this year, while revenue generated by sales of tickets, food and souvenirs to fans, and suites and sponsorships to companies could also suffer, baseball officials said. It would mark the second straight year of lower turnout.

The first test of the recession’s impact is season-ticket sales, with many teams reporting lower numbers.

“If you haven’t sold them by now, you’re probably not going to be selling too many,” Oakland A’s owner Lew Wolff said.

Other sports have responded to the new penny-pinching ways — the National Football League, National Basketball Association and NASCAR race teams cut jobs, Arena Football canceled its season and a couple of teams in smaller leagues folded — but they avoided some of the pain.

“The other sports clearly have been impacted, but their season tickets had gone on sale long before the brunt of this hit,” said MLB President Bob DuPuy.

Baseball, coming off record revenue of $6.5 billion in 2008, will feel the impact from the start when its season begins on April 5. Two years after record attendance, the sport is likely to see crowds drop from last year’s 78.6 million.

There are 30 Major League Baseball teams, including one in Canada, which each play a 162-game regular season. Five of the teams are in California.

Last season, the average ticket to a game cost $25.43, according to research firm Team Marketing Report. Many see that number falling as two-thirds of the teams have either frozen or cut ticket prices.

“We worry about California and we worry about some of the cities in the Midwest that have been hit so hard,” said a baseball official who asked not to be identified.

In Detroit, where the economy is staggering as the auto sector struggles, The Detroit Free Press said the Tigers’ season-ticket sales have plunged 44 percent from last year’s all-time high of 27,000. Meanwhile, the San Diego Padres’ season and group ticket sales are down 25 percent.

Tickets are so important because they generate more than half a team’s revenue, with about 25 percent coming from direct ticket sales and a similar amount from concessions, souvenirs, parking and other related areas, team officials said.

The A’s, who cut ticket prices by an average of 5 percent, are at 87 percent of their targeted budget for season-ticket revenue, where normally they would have finished by now, Wolf said. The club budgeted for a 9 percent decline in attendance.

Season tickets are critical because they allow teams to lock in a large number of fans and budget a certain amount of spending, team officials and analysts said.

“When you miss one season-ticket holder, you’re missing 81 games, and generally you’re missing 162 or 324 because people buy in twos and fours,” said Michael Cramer, professor of sports management at New York University and former president of the company that owns the Texas Rangers baseball team.

$1 HOT DOG

Most teams hope single-game sales and partial plans make up for any shortfall. That can be a daunting task, however, as even teams with strong season-ticket sales must still sell as many as 20,000 tickets to each home game in order to sell out.

“One thing we’ve all learned is flat is the new up,” Minnesota Twins President Dave St. Peter said.

That pressure has led teams to offer more low-cost and often creative deals to attract fans, whether $1 tickets, packages that include food and parking at a low price, or the Twins’ plan to set prices for some Monday-game tickets by the level of the Dow Jones industrial average (in which a 7,500 Dow close would translate to a $7.50 game ticket).

Many teams are also offering deals on food.

The Boston Red Sox announced a price freeze on all menu items in its park — the first freeze since 2002 — as well as half off nine popular food items in the first hour after the gates open during April home games. In many parks, the $1 hot dog will be seen more often this year.

Meanwhile, Arizona Diamondbacks officials hope a new light-rail system in Phoenix and a marketing push to alert fans that they can bring in their own food along with other deals, will help the team avoid a drastic decline in attendance.

Sponsorships, which can total millions of dollars, and the suites or blocks of tickets companies buy are also critical, team officials said.

Companies like General Motors Corp, Bank of America Corp and Deutsche Post AG’s DHL unit walked away from team-level sponsorships after they expired last year.

“We lost one client this year that said, ‘Look, it’s either your sponsorship or 10 jobs,’” said Brooks Boyer, chief marketing officer for the Chicago White Sox. “We get it.”

The sport may still come close to matching last year’s record revenue. Baseball officials cited higher-priced tickets in the New York Yankees and Mets’ new stadiums, as well as the additional sales generated by this spring’s World Baseball Classic and the newly launched MLB TV Network.

In the end, success on the field is the biggest driver.

“It’s all the water-cooler talk,” Diamondbacks Chief Executive Derrick Hall said. “The team is winning and as people are watching from restaurants, bars or at home they say, ‘We need to be there.’”

Reporting by Ben Klayman, editing by Matthew Lewis

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