Reese Kaplan - An Empty Ballpark Equals Empty Bank Accounts

Over this Thanksgiving weekend there has been some discussion on Macks Mets comment threads about whether or not the Wilpons are cheap.  Many people would respond with a resounding “Hell yeah!” without looking to bring up any verifiable data to back up their assertion.  Defenders will point to the payroll levels in the pre-Madoff days as an indication that they are not penny pinching Scrooges after all.  The truth, as it so often happens, probably lies somewhere in between.

However, let’s take a look at the basic economics of baseball in terms of attendance.  It can be said that losing makes ticket sales doubly challenging.  (Ask recently fired VP of Ticket Sales Leigh Castergine how difficult a task it is selling seats on the Titanic). 

One of the things that came up during the previous season was the base canard that the Mets would be open to spending more when they saw more people in the ballpark.  That one was downright insulting to the fans.  After all, people who are loyal to the team were still trickling into the ballpark despite a lineup featuring such luminaries as Omar Quintanilla, Aaron Laffey, Rick Ankiel, Anthony Recker and Jose Valverde. 

Take a look at the attendance record of the Mets over the past several years and you’ll see a trend.  The team crossed the 4 million threshold in the final year of Shea Stadium’s existence in 2008.  Part of that record setting pace likely had to do with the final chance to see the old ballpark but a large part of it also had to do with the fact that the team was indeed playing meaningful baseball in September – finishing with an 83-79 winning record, but 3 games behind the division leading Phillies.

2009 marked the opening of the House of Horrors known as CitiField.  The team plummeted to a 70-92 record under Omar Minaya and Jerry Manuel.  Despite the high curiosity factor of a few ballpark, the fact remains that losing drives people away in droves and attendance dropped by 25%.  It fell another 20% in the following year and then another 20% the following season where it pretty much leveled off at the 2.1 million level during the whole Sandy Alderson/Terry Collins regime.  Of course, we all are painfully aware that the team has also played sub-.500 ball during these four years, too.

So what does this history lesson have to do with economics?  Let’s get overly simplistic and modest in our revenue projects and take a look at how far they’ve fallen.  They current stand 50% below the high water mark in attendance for 2008.  Now it’s unlikely to get to that level again anytime soon, but let’s set the modest goal of returning to 2009’s 3.1 million fannies in the seats.  What would an extra 1 million people mean to the team’s finances?

Well, you can’t go by me as I live out in the hinterlands of West Texas and don’t attend games anymore, but I’ll use the most modest estimate I can for revenue projection.  Assuming a ticket, some food, souvenirs and a share of the parking amounts to $70 per person to attend the game, then the extra revenue generated by another million fans in attendance is $70 million. 

Think about that for a moment -- $70 million added to the current payroll would put the Mets back to where they were before their Madoff demise.  What would $70 million buy you?  Well, for starters you would have Jose Reyes playing shortstop and leading off.  You would have had money to have gotten in on the Cuban sweepstakes that have taken place over the past several years while the Mets sat on their hands.  You would have money available to lock up players like Matt Harvey and Jacob de Grom by buying out their arbitration years. 

Do you think the team would win a few more ballgames with these changes to the roster than they have by shopping for minor league deals, lightning-in-a-bottle Chris Young type contracts or having to settle for short term deals for older players as a hedge against limited payroll resources?

As we sit around and ponder what still needs to be done to the roster, the truth is that the team is still operating under the short sighted vision of “getting by” rather than investing to win.  As attendance shows, winning makes people want to come to the ballpark.  Even the crosstown rivals have seen attendance decline as a result of them missing the post season for each of the past few years. 

In terms of current roster composition, does this analysis mean I think the Mets should trade off every prospect in the system for an oft-injured and expensive Troy Tulowitzki?  No, it does not.  However, it is insulting to the fans’ intelligence to say “Player X is too expensive for the Mets”.  No one is.  The Mets need to change their philosophy.  


Anonymous said...

Excellent points Reese and the inconvient truth about the financing. I would just add one element to your observations. Let us not forget that by opening day 2009, the American economy had bled out over 3 million + jobs over the previous 7 months and just about nobody felt anything like real job security. Discretionary spending, starting with $70 a head trip to the ballpark was simply out of the question for most American in the summer of 09. Tix sales were down everywhere and the Mets would have had to at least go to the World Series to get fans in the seats. Wilpons got nailed with Madoff, bad contracts, lots of injuries and a fan base unwilling to part with precious dollars in a time of crisis. I believe that if the Wilpons have it, they will spend it and hope that the coming success will lead to greater investments. I think it will
Anon Joe F

Anonymous said...

One other point to add to above. In addition to all of the other forces at work, the Wilpons also picked the worst time to assume large scale stadium debt that was based on a rosy pro forma built in 2006. To say that their debt service assumptions were "just a bit outside" would be a gross understatement and the ability to refinance debt when you are facing a $100 million dollar Madoff settlement is near impossible
Joe F

Bill Metsiac said...

I'm one of those who pointed out the pre-Madoff spending record as evidence of the team's willingness to spend when the money was there. If they were that "cheap", they didn't need to use over $30 mil of the '14 budget for Granderson, Colon and CY.

I agree, though, that winning causes attendance, not the reverse, which is why I feel that if they win 90+ (which I fully expect) while the Yankees are falling apart, you'll see the crowds coming out. And if that happens, then we'll see how the budget changes. If they draw 4 mil and still keep the budget at its current level, I'll agree with your points.But I don't expect it.

As for Leigh Castergine, I had several email interactions with her during the Winter of '12-'13, and met with her at the Stadium early in the '13 season. I gave her many suggestions, along with reasons why I and other 10-game plan holders were unhappy. She was very pleasant, and promised to work on the ideas, but nothing was done. As a result, I gave up my plan, and others I spoke to did the same. It had nothing to do with ticket prices, the team's on-field performance, or other factors---just the accommodations that were not made, which would not have cost the team any money.

In any case, these are the same owners who spent freely for over 20 years, and the last few years do not erase tht record.

Ernest Dove said...

It's simply a situation where us everyday fans often forget that owners are businessmen/businesswomen and players are actual human beings.
They spend over $30mil in 2014 on 3 guys alone, and we complain because our favorite team didn't win enough 'games'.
We also get upset (like many Chicago Bulls fans right now) when our favorite players don't simply bounce back from SERIOUS injuries sooner then we want them to.
Bottom line is that this will never change, because the average public wants/expects/needs their form of entertainment (sports) to be a fun distraction from our everyday lives.
And nobody enjoys losing, or watching a loss. (Even though its not supposed to matter in the grand scheme of things).

Thomas Brennan said...

Lots of good discussion. The one really controllable and cheap variable that cost them boatloads of millions in revenues (and wins) was fence depth. Still too deep, but now hopefully the entertainment value (and wins) ramp up with pretty fair dimensions (finally) and dimensions are no longer a bad drag on crowd turn out.

Reese Kaplan said...

I wondered if the team might want to try lowering ticket prices to increase revenue...

Think about it. If taking a family of four to the ballpark cost $100 instead of nearly $300, how many more people might be so inclined? Then you can gradually raise prices again once the team becomes more competitive and the tickets are in demand. Similarly, while I don't advocate the disaster of a nickel beer night as was infamously tried in Milwaukee, some incentives that make the ancillary expenses (parking, food, souvenirs) might make people more inclined for a day at the ballpark instead of the amusement park or theater or whatever.

Thomas Brennan said...

One advantage Met fans (especially over Yank fans) have is a more easily accessible park for folks from Queens, Bklyn and LI. Lower the prices and they will come, especially if team contends. 4MM again would be nice.

FormerMet said...

How refreshing to see a reasonable, balanced exchange on a topic that typically devolves to profane inanity. I think almost all professional sports leagues and franchises have created a serious problem of heightened expectations among their fan bases. As ticket and concession prices have risen, so have fans' demand for a higher quality on-field product. The Mets have lowered prices repeatedly since 2009. They also have gone to great lengths to try to create discounted packages for families and youth groups. Still, the performance level required to justify/validate the cost of going to the ballpark remains high. I'm hopeful that 2015 will be the beginning of a period during which a trip to CitiField will be viewed as "good value."

Mack Ade said...

FormerMet -

Thank you for your comment.

We pride ourselves here at Mack's Mets at our adult approach to discussing our favorite team.

Bill Metsiac said...

As FormerMet said, they have repeatedly lowered prices, though not necessarily across the board. But Upper Level tixx can be had for most games as low as $11 per ticket. "Family Paks", which include a Field Level seat plus soft drink, fries and your choice of Hot Dog, Burger or Pizza, go for $32.

They give free T-Shirts at all Friday Night games, and have post-game concerts or fireworks after Saturday Night games. And you can bring your own food and water or non-alcoholic drinks if you wish.

Unless you want the pricier seats, there's no reason to spent $70 per person.

Thomas Brennan said...

Bill Metsiac
That's a great summary on available, afordable deals at Citi. I'll bet a lot of NY-area fans and possible fans don't know that. Knowledge could lead to increased attendance right there.

Bill Metsiac said...

I suggest checking Mets.com periodically to see deals offered, such as

Right now, they're talking about the annual Coat Drive, coming up next Wednesday. Anyone who donates gets two free tickets to a game.

And during the season, check out StubHub.com for deals.

Michael Geus said...

Good stuff, Reese, a couple of points of clarification.

Attendance went down by design in 2009, as the capacity is much smaller at Citi Field. Stadium Revenue for 2009 was still high due to sky high ticket prices. This was the "Wilpon plan." Shrink the ballpark, create a scarcity, and gauge the fans. It was based on the OPEC model.

The problem was they miscalculated the market. The prices were unsustainable. I know many 2009 season ticket holders who did not return in 2010 for one reason, crazy prices. My season tickets tripled between 2008 and 2009. I did not renew for 2010 and would not have done so if the Mets had won the World Series. Eventually the prices were lowered to sane levels but it took years, and by then the team was horrible.

To your major point, that it would be smarter to invest in the team, yes, you are 100 percent correct. It is not spending, it is investing, the Mets are a business. The market is enormous, and the return would be tremendous. The Dodgers and Yankees do not spend as they do because they are generous, they do it because they understand business.

I do not think the Wilpons are cheap. I suspect they are too broke to have investment capital and too stubborn to sell off enough of the team to raise it.

Mack Ade said...

Michael Geus -

Michael, email me at macksmets@gmail.com

I have something to discuss with you

Mack's Mets © 2012