First of all, apologies to those who followed this blog in the past, for the lack of attention the past year. Yes, we're still Royals fans, and yes, we follow the team, but the time required for detailed postings has not been available, but we're hoping to increase the number in the future.
Second of all, on that note, we look forward to some more posts about various aspects of the Royals, from the team now to the team that will be coming in the future, and hope that you enjoy.
In the next few posts, however, we're going to talk about a subject that we addressed the last time we posted a year ago, and that's the issue of ticket prices, and with it, the overall business of baseball and indeed, sports themselves.
In doing so, let's take an overall look at the economy itself. Unemployment is high and has stayed high. Even those who are employed are often underemployed, which means they have less to spend on entertainment. Even those who aren't underemployed are fearing they will be soon, and thus have less to spend as well. Food prices are up, gas prices have skyrocketed with little sign of stopping. None of this is good, in itself, if you're a franchise like the Royals or an entity like Major League Baseball and you're trying to convince fans to come to the ballpark.
Of course, people still do spend money on entertainment, even poor people. Those without much money may elect to get cable every month, but not much more. Those with modest amounts of extra money, but who aren't poor, may elect to go to dinner, but not spend as much on dinner. They may eat at home, now, and then go to a movie. The point is, people are cutting back more than ever before.
That puts baseball, and all sports, in a difficult position. Because, as with all major sports, you're not talking about just a 1-2 hour experience, but a 3-4 hour one, at least, when one considers the time to get to and from the event, and the necessity in arriving early. You're also, unlike with most entertainment options, also talking about paying for parking, in addition to an articifically hiked cost for concessions, and the need to sell merchandise -- all are required to pay the bills.
Baseball is in a particularly unique position becuase unlike football, which has, in the case of pro-football, 8 or 10 (if you include pre-season) dates to sell, or even unlike the NBA, which has 41 dates to sell, it has 81 dates to sell. To a stadium, in the Royals case, which has 38,000+ seats.
And, as anyone who has been to just a few Royals games can tell you, at least half, it not more, of those seats sit vacant on any given night. 20,000, in fact, is considered a good crowd -- a night in which 18,000 seats empty.
What's interesting in the case of the Royals, and most baseball teams, is that despite those attendance issues, they are making money. The reason is TV revenue in addition to the increase in premium seating -- in the Royals case, which is just a refurbished, and not a rebuilt, stadium -- you see such seating throughout the ballpark. In the past, the premium seating was the Club Level -- now, it's actually on the low end, price wise, of the premium seats -- with areas such as the Dugout Box taking the cake. The result is more revenue for the Royals -- a very good thing, no doubt.
However, despite the fact that the taxpayers paid for those renovations and despite the fact that attendance has not gone up (other than a small blip for folks to see the renovations), despite the fact the economy sucks and Kansas, a good portion of the Royals market, is LAST in job growth, and despite the fact the Royals have been awful every single year, the Royals have increased ticket prices across the board, even from 2010 to 2011.
Now, those defending this will say they have to keep the value of their product high. Others will say its the reality of the game, that the advent of MLB.tv and 140 games being on television makes attendance not as important financially. Others will say it doesn't matter at all, and that those who argue for lower ticket prices are thinking with a 1960's mindset. Still others will argue that they are setting what the market will bare.
On each front, we sharply disagree -- and would argue that the Royals, and baseball as a whole, should explore the pricing of their game -- not only from a financial "bottom-line" perspective, but from an overall "good of the game" perspective as well, with the core point being that baseball (and other sports too, but baseball particularly, with its unique qualities) is on the verge of killing itself long term if it doesn't adjust its approach to pricing today.
In doing so, we'll mainly focus on the Royals, as they are here in our market, and what we know the most about. The Royals are, in essence, an ideal fit for this kind of study, as they are a team with decent, but not outstanding, tradition and history (they aren't the Red Sox or Cubs, but they aren't the Mariners), a good fan base (we're not the Cardinals, but we're not the Marlins), and a team with terrible recent on the field performance, but with tremendous hope for the future. They are, though in a small market, a market that has tremendous potential -- they can, with Omaha, Des Moines, Wichita, and Fayetteville/Springfield all within 3 hours, be a regional power, and, with the growth and income levels of Johnson County and some Missouri suburbs, have the potential at a loyal, suburban, fan base that can continue to grow and fit its image -- family friendly, easy access to the game for cars, etc. They are, in essence, the kind of team and franchise that has plenty of room to build and the kind of franchise MLB needs to succeed.
Yet, despite these pluses, we are concerned that the current ticket price structure at the Royals, particularly when coupled with the recent status of the economy, partiuclarly in Kansas, that the Royals are limiting the opportunities for young sports lovers to become fans, for average fans to become super fans, and for super fans to attend as many games as they otherwise would.
In our last post a year ago, we highlighted the differences between 2003 pricing and 2010 pricing -- a 7 year difference. Those prices have gone up a little again in 2011. So again, we are not talking about comparing 2011 to 1960, we're talking about the same decade period, where prices have increased anywhere from 50 to 300%, while income has gone down or barely stayed the same, at a time when the Royals have been bad on the field, at a time when revenue-generating seats were added, and at a time when the taxpayers that pay for those tickets are paying a special tax to fund the stadium that they barely can afford to get into.
This post, we want to bring back those arguments but also add into it some broader arguments about the uniqueness of baseball and why high ticket prices are not sustaintable nor wise, both economically (lost potential revenue, both short term and long term) and culturally (for the health of the game itself).
Looking at the uniqueness of baseball for a moment, consider these points:
1. Baseball has 81 games. For the Royals, at 38,000 seats, that's the potential of around 3,100,000 fans attending in any given year. Compare that to football -- look at the Chiefs, who have the potential of just, regular season only, 624,000 fans in any given year. Or KU football, which has the potential of just 300,000. The point is, the Royals capacity should dictate, at least for upper deck and non-premium seating, much lower prices that would encourage fans to come to more games. The Royals need fans to come 5-10 times in a year, not 1 or 2. Yet, if you look at the realistic cost to attend one Royals game, the Royals have -- as other teams in baseball have -- priced even upper deck tickets to the point where fans can not expect to attend more than a couple games, let alone buy season tickets.
2. Baseball is a unique experience. Attending a baseball game is different than football, hockey, or basketball. Going back to point 1, with 162 total games, not every game is a huge deal, whereas in football, it is, same as in college fooball and college basketball. Even in the 82 game NBA season, the regular season game is twice as meaningful as in baseball. But it's also the nature of the sport -- those other sports are nearly all action, all the time -- whereas in baseball, there is a lot of downtime, even during play. An at-bat vs. one play in football for instance, is one measure -- an at-bat can go on for 10 minutes, with numerous foul balls. Baseball is the game where you leave for a half inning to grab a beer and peanuts and you do not care, as that is part of the reason you came, whereas in football, you tailgate before so you don't have to grab the beer, because the play you miss could be the season. Baseball is the game with unique sounds - like the crack of the bat or the smack of the mit. It is the one game that isn't timed. It is the one game where players object is to essetially make it around in a circle, rather than go across a goal line. It's the one game where people go just to go, not because they care who is playing. It's the one game, where, due to its minor league system, we remember when a player broke in, and we truly can develop a connection to that player, due to the number of times we see him, whether it is on TV or in person.
3. Baseball is not, due to its nature, made for TV. This is partially related to point 2, but the TV doesn't always capture the guy stealing second, the left fielder moving in, the way the wind is blowing in or out. It usually just captures the pitcher throwing a ball to the batter. It's the kind of sport where you turn away for an inning and come back, and you barely notice. Also, again due to point 1 and the number of games played, it's also not conducive to people watching it every single game, like they do in football or even other major sports.
4. Baseball was made for the regular guy. It was made for the stat geek who follows every walk and every strikeout. It was made for the anti-stat geek who loves to simply "feel the game" and watch the intangibles of a player, from the way he carries himself in the on deck circle to how he runs out to the field. It was made for the new couple who is looking for a fun date or the single guy who is looking for something to do or the married guy who wants to get out of the house or the father and son who want a time together at the park they will remember forever. It was made for the fan who on a whim goes out the park and lays down a few bucks to park and a few bucks for a ticket. It was made for the family looking for something to do together on a Friday night that will empahsize family but also is fun as well.
The point of all this is to say that baseball, more than any other sports, requires attendance to not only survive financially, but to emphasize what is uniquely great about baseball -- attending the game itself. If people aren't attending games, and in good numbers, and more than once or twice a season, the game is not healthy. And baseball isn't healthy, in our view, at the present time.
In the next few posts, we'll examine the cost of attending games, looking at realistic, real life scenarios families face, why the Royals and baseball should care about attracting fans in such situations, and the potential revenue the Royals and baseball are losing out on in their current structure, and creative things they could do to attract those fans back to the park on a consistent basis.
