Here’s some good news for fans of the ever-popular MLB.tv service: Bob DuPuy, MLB’s president and CEO, wants to drastically revise the blackout rules and regulations. The current territorial restrictions were put in place long before the advent of the Internet and DirecTV, and it’s high time for an update of these draconian regulations.
A Manny formality, but . . .
Manny Ramirez is the gift that keeps on giving. Today’s Manny-related headline comes to us from the Los Angeles Times: Bud Selig questions Dodgers’ Manny Ramirez trade.
The headline itself is a bit misleading; Selig isn’t concerned with the Dodgers’ acquisition of the future Hall of Famer but rather with the way Manny finagled his way out of Boston. Bud doesn’t like it and plans to send his minions to make some noises before declaring the whole thing a non-issue.
To this, I say: Of course, Selig doesn’t like it. Any self-respecting fan of baseball shouldn’t like it. With an assist from Scott Boras, his agent, who knows what Manny can get on the open market, Manny Ramirez put on a show to get the Red Sox to trade him. He took a few calculated risks, sat out a few key games, said just the right things to the ever-rabid Boston press. Voilà, Manny Ramirez has his options declined and gets himself a one-way ticket to Chavez Ravine.
Now in LA, Manny is hitting .464 with four home runs this month, and the Red Sox aren’t happy. But this is what baseball has become, and while A-Rod’s opt-out shenanigans in October highlighted the baser business side of the game, Manny’s in-season antics drove home the idea with an exclamation point.
When players know they can get more money than their contracts allow and teams are willing to give their top players any sort of leverage with an option, those players and their shrewd agents will do anything they can to get out of seemingly bad deals even when those deals are for more money than you or I will see in our lifetimes. Bud Selig can cry foul; the Red Sox can cry foul. But Selig loves touting the economic health of baseball, and the Red Sox are among the richest, most successful teams in the game these days. They can’t have it both ways, and we the fans just get to watch a shouting match between the rich and the richer. How pleasant.
Thinking Out Loud: A third team in the New York area
When it comes to the economics of baseball, conversations tend to begin and end in New York. The Yankees — and, to a lesser extent, the Mets — hold the blue-chip market captive and command hundreds of millions of dollars in revenues each year. While teams such as the Red Sox, Angels, Dodgers and Cubs can attempt to compete, the potential will always be greater in New York.
To that end, the Yankees have always been Public Enemy No. 1 and everyone’s best friend. They are frowned upon for spending exorbitant sums of money on free agents, but through baseball’s current revenue sharing system, they are funding many of their top competitors year after year. It’s a double-edged sword, and while lately, Bud Selig and the owners have kept the anti-Yankee rhetoric to a minimum, nothing would please the powers-that-be more than a decrease in the power of the Yankees.
To that end, then, the recent news that the new Yankee Stadium would push the Bombers’ revenue streams to stratospheric heights probably isn’t welcome news around the Commissioner’s Office. The rich are getting richer, and while the poor will piggy-back their way to more money, the name of the game these days is equality.
Enter Maury Brown. In a recent piece, Brown brings up the dreaded E word. That’s right; it’s time to talk expansion. As Brown notes, the only major baseball move since 1998 when the Devil Rays and Diamondbacks started play was the relocation of the Expos to Washington, D.C. This is the second longest stretch of stability in baseball since the Marlins and Rockies broke a 16-year hiatus on expansion.
As the other major sports leagues have all expanded more recently than baseball and with attendance booming, might the big wigs be itching to extend their reach? Perhaps so, but with an unstable U.S. economy and Mark Cuban nearly ready to close on the Cubs, baseball may not have the luxury to expand any time soon. But Brown ponders the available markets, and his number one destination is something of a tease to those of us living in the New York Metropolitan Area.
Brown recommends Northern New Jersey as the number one destination without a team that could support one. Drawing on the estimated 21 million people who live in the megalopolis that stretches from Philadelphia to the New York suburbs, this vast media market could easily support another team. There are, of course, the typical catches: The Yankees, Mets and Phillies would have to be compensated a prohibitive amount to waive their territorial rights over New Jersey. There is no stadium that could adequately house a Major League team. Transit options to any potential stadium site are dicey at best.
But I have to wonder if this is a path Major League Baseball could pursue in an effort to decrease the financial clout of the Yankees. A third team in the New York media market would draw fans and TV viewers away from the Yankees. While the Yanks would continue to profit at obscenely high margins, they would have to do so knowing that the local competition won’t roll over and die or play in another league, as the case may be with the Mets.
Brooklynites — I among them — yearn for the arrival of a Major League team in our borough. The day the Dodgers left is still a bitter one for fans from that generation. But what if the key to baseball’s economic inequalities lies not within the five boroughs but across the Hudson River in New Jersey? It won’t happen any time soon, but it’s a very distinct possibility.
Everything — except the name — is for sale
The Yanks may not be selling the naming rights to their new stadium for hundreds of millions of dollars, but they are going to sell, well, everything else. Via Tyler Kepner in today’s Times: “Since the All-Star break, every time a Yankees pitcher records a strikeout, the P.C. Richard whistle plays over the loudspeakers as part of a sponsorship deal.” I haven’t been to a game post-All Star Break yet to experience this joy, but I believe that this move — the selling of a play on the field — may be a first. TV and radio broadcasts engage in this practice, but no team that I know of has sold plays before.
PSLs invading New York
Personal Seat Licenses. We’ve heard about them as this amorphous concept for which people in other cities have to pay so that their teams can draw in more revenue. We know that some football teams charge outrageously high prices for what amounts to the right to buy tickets for certain seats.
And now starting in a few seasons, PSLs are coming to New York. The Giants, Super Bowl champions, have announced that every season ticket in their new stadium will be sold via PSLs. These prices for these PSLs will run from $1000 to $20,000, and these licenses serve as lifetime guarantees for that seat. It is a one-time payment of an arm and a leg.
I write about this briefly now because of the attention I’ve paid to Yankee ticket prices. Yes, the top seats new stadium is going to be expensive, but the prices are a far, far cry from those we see in other sports. A longtime RAB regular Steve wrote in about this story this morning:
To be fair to the Yankees you should comment on this. Can a regular guy go to see a Giant game anymore, or do you need to know someone? At least you can go to the Bronx with a buddy, have a couple of beers and be under the $300 mark.
Of course, the PSL issue and the price tag for a Giants game are seemingly two separate stories. Football games are very nearly prohibitively expensive and yet most teams have waiting lists that stretch on for years for season tickets. Why? Because they are only eight home games a season, and there is a limited supply for something in high demand. It isn’t affordable — of fun — to see the Knicks anymore.
In a way, this is the great irony of baseball and our complaints about ticket prices. As relatively expensive as it can be to go a Yankee game, it’s still pretty cheap. For example, I recently bought decent Tier Reserve seats for Monday night’s sold-out Yankees-Rangers game for a few bucks over face value off of StubHub. Never would I be able to do that for a Giants game.
For a while, fans have dreaded the PSLs. They fear that baseball teams will begin to sell them for season ticket holders in new stadiums, and sports business exports have guessed that teams could draw in upwards of $40 million off the bat for PSLs. The Cubs are debating it, and rumors have swirled around the Yanks’ ticket holder plans in the new stadium. But again, I think it’s a matter of economics. There are 81 home games, and if teams start charging seat licenses, season ticket holders may opt to buy on a game-by-game basis.
The economics of sports tickets is a prickly issue. Teams set prices; secondary markets set the true value. In the end, baseball remains one of our country’s more affordable sports, and we need to look only at the new Giants Stadium rising in New Jersey to remember why.
Nike to replace Adidas as Yanks sponsor
The 11-year deal between the Yankees and Adidas will come to end when the Yanks move out of Yankee Stadium and across the street to their new digs. According to a report in Sports Business Journal (subscription required), Nike will replace Adidas as the Yanks’ sponsor.
Terry Lefton reports:
Nike and the New York Yankees have agreed in principle to a five-year sponsorship agreement that will begin in 2009, the team’s first in the new Yankee Stadium.
The cash and product deal ends a historic 11-year relationship between Adidas and the Yankees that remains one of Adidas’ biggest U.S. sports marketing expenditures…
But with the deal ending, sources said that the Yankees originally tried to sell Nike a signage package, but that Nike was more interested in other rights. Consequently, Nike’s deal with the Yankees is short on branding and long on marketing. Nike will be able to increase the amount of team apparel it already sells as an MLB licensee and it will have a store-within-store shop at the new stadium. It will also run local marketing campaigns, grassroots initiatives, and outfit Yankee coaches and minor leaguers with cleats and other performance wear.
There is no word yet as to the monetary value of the deal, but it’s sure to be a lot. The Yankees’ deals with this companies tend to pay for themselves rather quickly. Expect to see a lot of Nike signage and branding throughout the new stadium in 2009.
Hat tip to Maury Brown’s Biz of Baseball.
Yanks, MLB set to capitalize on All Star Game
We already know that 2008 All Star Game tickets are going to be the most expensive ever. Today, we can see just how much the Yanks, MLB and the various businesses involved are going to capitalize on New York’s Mid-Summer Classic. Maury Brown’s Biz of Baseball site notes that the 2008 ASG will be the largest revenue-making All Star Game in baseball history. Ticket prices are off the charts for everything from the Fan Fest to the Derby to the game itself; the networks are selling out their ad inventory for levels rarely seen in baseball; and a recent StubHub deal saw field level seats go for $14,500 each. Somewhere, the U.S. economy is struggling, but baseball in New York is doing some brisk business.