.

7/21/2010

Ballparks prove less is more - The Bost...

THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

bosto".COm
Ballparks prove less is more

Demand, revenues climb as teams reduce seating

By Sasha Talcott, Globe Staff

April 20, 2006

ST. LOUIS -- Not that long ago, Red Sox officials were arguing that Fenway Park was too small to allow the team to remain economically viable. "It's clear we are maxed out on seating capacity and ticket prices," former team chief executi..e John Harrington told the Greater Boston Chamber of Commerce in 2000. "In the long run, it's just not feasible to compete in Fenway." Fast forward six years: The Red Sox ha..e pledged to remain at Fenway, adding some seats but capping capacity below 40,000. Meanwhile, dozens of other teams are shrinking their parks to Fenway-like proportions. Last week, the Cardinals opened the new Busch Stadium in this baseball-mad Midwestern city with 3,500 fewer seats than they had at their old ballpark next door. The Pittsburgh Pirates and Philadelphia Phillies sliced their seating capacities by 9,000 and 19,000 seats, respecti..ely, when they mo\oed into new ballparks. In New York, the Yankees and the Mets are planning new parks with 16,000 fewer seats between them. On the West Coast, the Oakland Athletics put tarps o..er the upper deck of McAfee Coliseum this spring, cutting its capacity from 48,000 to

34,000.
Fans get a more intimate stadium, with better sightlines to the field. Shrinking the ballparks also has another effect: By making tickets scarcer, teams create urgency among fans and dri..e up demand. When fans worry about getting seats, they buy earlier and in..est in season tickets - which brings guaranteed money for the teams and insulates them from slumps on the field. . Since 1995, a..erage seating capacity at major league parks has fallen 11 percent, from 51,106 to 45,395. At the same time, a..erage per-game attendance has jumped 22 percent, to 30,936. And as tickets ha..e gotten scarcer, the prices ha..e more than doubled, to an a..erage ticket price this year of $22.21, according to Team Marketing Report. The small ballparks bring in far more money for teams: At the a..erage park, ticket re..enue per game has more than doubled o..er the last decade, according to a rough, back-of-the-en..elope calculation of higher ticket prices multiplied by higher attendance. In St. Louis, the Cardinals already ha..e sold nearly all their seats this season, e..en though the team has the third most expensi..e tickets in baseball, behind the Red Sox and the Chicago Cubs. On Opening Day here last week, thousands of fans swarmed downtown, some setting up lawn chairs outside the new Busch Stadium to soak up the atmosphere or offering to buy tickets for enormous sums. "The high bid was $1,000 for my tickets," said Kent P. Zimmerman of St. Louis, a Cardinals' season ticket holder who was approached by a "big guy wearing a Cardinals' shirt" to make the sale. He conceded: "I was tempted. I was getting close to catching a cab and going home." Two years ago, before the stadium was built, Zimmerman was so concerned about being able to get seats in the new, smaller ballpark that he and three acquaintances each plunked down $2,000 to buy personal seat licenses, and they agreed to pay another $46 a game on top of that. Some sports finance specialists call it the "scarcity effect," and itworks best in places such as Boston, New York, and St. Louis where baseball fe..er runs high. "It's supply and demand," said Dennis R. Howard, a professor at the Warsaw Sports Marketing Center at the Uni..ersity of Oregon. 'With constrained supply and lots of demand, it's a ballclub's dream to be able to exploit that situation." On a..erage, the nine teams that ha..e built stadiums since 2000 hiked prices 52.9 percent in the first year, Howard boston.com/.. ./ballparks_proveJessJs...

1/3

,7/21/2010 Ballparks prove less is more - The Bost.. said, using data from Team Marketing Report, which tracks ticket prices, In St. Louis, the awrage price has increased about 12 percent this year, mostly because of the new park's layout, with thousands of seats closer to the field and more high-priced premium seats. To be sure, cutting seats is more than just a cold, economic calculation. It coincides with the rise of historic re'.1val ballparks, which replaced stadiums that were built to house both football and baseball teams. The Cardinals' new stadium giws fans sweeping '.1ews that include the city's famous Gateway Arch. The new
concessions put hot dogs and peanuts to shame: Fans can buy ewrything from barbecue pork sandwiches to
chocolate-dipped strawberries.
"The old Busch Stadium was one of those cookie-cutter stadiums - this has a great '.1ew of downtown," said Chris
Macfall, sitting about two dozen rows behind home plate recently. "It's incredible. The stadium is just packed. This
prows how baseball-mad S1. Louis is."
The historic re'.1val parks started in Baltimore in the early 1990s, when Larry Lucchino and Janet Marie Smith - then high-ranking executiws at the Orioles -- proposed a ballpark that flew in the face of baseball's reigning wisdom, which then called for large, modem stadiums. (Lucchino's boss at the time told him, "No one mows from their house to a smaller house. They mow to a bigger house.") Camden Yards, an intimate ballpark downtown, featured an arched brick facade, '.1ews of the city, and steel in place of concrete. The team ewn refused to call it a "stadium," insisting on "ballpark" instead. Attendance soared. Other teams picked up the historic re'.1val theme as well, and soon intimate parks were popping up all owr the league. Lucchino said he and other Orioles executiws wanted to create an irregular, old-fashioned ballpark because of its aesthetic appeal and newr considered that a smaller park might create an "artificial shortage" of tickets. "Baseball is a game enjoyed best by people who feel close and connected to it," he said. "If you're trying to recreate that feeling, that irregularity and charm, you don't do it by dramatically doubling the size." At Camden Yards and its successors, teams found themselws selling not just tickets, but the experience of the game - walking around the stadium, watching batting practice, and shopping on closed-off streets nearby. (Lucchino is now chief executiw of the Red Sox, while Smith is senior '.1ce president for planning and dewlopment. The New York limes Co., owner of the Globe, holds a 17 percent stake in the Red Sox). "It's not just a seat: This is a memory that you will take with you," said Gerald Smith, chairman of the marketing faculty at the Boston College Carroll School of Management. He said baseball's "value pricing" strategy lets teams charge more to those who value the experience at the new parks, rather than sell more seats at bigger stadiums for lower prices. "Essentially, people value that experience so much that they're willing to pay more and more," he said. There are examples from other industries as well. Airlines market seats with extra leg room, a classic instance in which fewer seats improw the life of trawlers, who reward airlines with their loyalty. Technology companies often attempt to build the excitement around new products, such as Microsoft Corp.'s Xbox and Sony Corp.'s PlayStation, by introducing them before they can fully meet demand. In St. Louis, the Cardinals see firsthand the benefits of impro'.1ng fan experience in their ballpark. Cutting seats is a key part of the equation. Fewer seats create a more intimate feeling, making the atmosphere electric. 'We somewhat subscribe to the adage that you don1 build the church for Easter Sunday," said Mark Larnping, the
Cardinals' president. "One of the best experiences is to haw a ballpark be as intimate as it can be. We beliew
there's a connection between intimacy and the number of seats that are occupied."
st. Louis started selling packages of tickets for Christmas two years ago, and haw sold out each time. The team got the idea from the Red Sox. The holiday tickets persuade fans to buy earlier, so teams can count on the money right away. Macfall, the Cardinals' fan seated not far from home plate, marked his calendar for the day tickets went on sale. He said his tickets, $85 each, easily could sell for higher. "I'd pay $250 apiece," he said. 'This is a piece of S1. Louis history." boston.com/.../ballparks-proveJess_is...

2/3