YFSF

Take Your Seats

We have a follow-up on our post earlier this year about frustration over the prices of seats at the new Yankee Stadium.  As we detailed in that missive, our decades-long season ticket holder friend was asked to make a substantial, decade-long multi-million dollar commitment to seats costing, for 2009, more than triple what he paid in 2008 in the old stadium.  He refused to re-up at that time and decided to wait out the situation since the numbers being bandied about were preposterous.  His patience has saved him a great deal of money. 

Late in 2008 he was able to re-up with the Yankees, albeit one section back from the rails, at 2008 prices ($220 a seat) and with no long-term commitment.  Not an insignificant indicator of where the economy stands at the moment, he is also able to pay in four installments as opposed to an up-front payment of more than $200K.  Our question about how the state of the economy has affected, and will affect, baseball teams remains to an extent unanswered, though we have an inkling this season ticket purchase is an indicator of some difficulties to come.  And, these difficulties will likely be endured all across the league.

Monetary Policy

Baseball attendance from 2000-2008, according to the site "Ballparks of Baseball":

• 2000: 72.7M
• 2001: 72.6M
• 2002: 67.8M
• 2003: 67.6M
• 2004: 72.9M
• 2005: 74.4M
• 2006: 76.0M
• 2007: 79.4M
• 2008: 78.6M

Does anyone else wonder how the economic meltdown is going to impact 2009 attendance numbers?  I certainly do.  As a business owner I know about cutbacks in staff and reductions in general operational costs, how it is trickling down from the overall world to me and then to my employees, how it impacts disposable income and spending habits.  A big question, which all baseball owners must be considering, is how much and for how long this might impact their game, financially speaking.  Based on the magnitude of the financial problems facing our country, growing unemployment, and other factors, I don't see how this won't have a substantial impact on next season and perhaps 2010.  Though baseball (and major sport) is certainly an escape and a form of entertainment that has an ability to distract us from reality, it isn't immune from a contraction in spending.  Going to a baseball game, at this point, is certainly a luxury, even when sitting in the cheapies.

I further wonder how this might be impacting free-agent signings -- not just the big name free agents but moreso the upper-middle, middle, and lower tier players. 

Thoughts welcome in the comments of course.

Sox Sign Tazawa

It's official, the Sox have signed Junichi Tazawa to a major-league contract.  The deal, worth $3M, places Tazawa on the 40 man roster.  This is the route the Sox took when signing Craig Hansen, for historical reference.

A few representative signing bonuses (ML status could not be determined, but typically most players, even first rounders, do not get Major League contracts) that were meted out to middle/low first round pitching draft picks in the 2007 and 2008 amateur drafts, used for comparison.  Tazawa has been compared to a draftee at this general position.

    2007:

• Blake Beavan, RHP, Texas Rangers, pick 17/30, $1.5M bonus
• Nick Schmidt, LHP, San Diego Padres, pick 23/30, $1.26M bonus
• Rick Porcello, RHP, Detroit Tigers, pick 27/30, $3.58M bonus
• Andrew Brackman, RHP, New York Yankees, pick 30/30, $3.3M bonus.

Porcello and Brackman are outliers, to an extent, high first rounders who dropped on salary expectations. 

    2008:

• Andrew Cashner, RHP, Chicago Cubs, pick 19/30, $1.53M bonus
• Christian Friedrich, LHP, Colorado Rockies, pick 25/30, $1.35M bonus
• Daniel Schlereth, LHP, Arizona Diamondbacks, pick 26/30, $1.33M bonus
• Gerrit Cole, RHP, New York Yankees, pick 28/30, unsigned.  Cole somewhat famously rejected the Yankees.  Rumor had it that Cole was looking for $3M as a bonus but "family sources" insisted he was going to choose UCLA no matter the dollars offered.

Cole was another guy who slipped down due to puported salary demands.

Yankee Stadium, Bonds (not Barry), and Assessments

"Our assessors jacked up the numbers and the comparables for the Council to justify the stadium bonds," said a Finance Department official familiar with the project.

The Daily News has an intriguing story today about an investigation into the assessments on the land on which the new Yankee Stadium is being built.  Seems that assessments by the City of that land pegged the value at approximately $275 per square foot, pre-development.  This assessment allowed the city to float bonds for the construction of the new park, a linchpin in keeping the team in the five boroughs.  That $275 a foot is a staggering number for the South Bronx, considering that the MTA has a tentative agreement to sell land at the Hudson Yards in Manhattan for $1.05B, a project entailing 12 million developable square feet (or $87 per developable square foot) excluding the costs of a structural platform over the railyards, a cost borne by the purchasing developer.  This platform and attendant structure, estimated at approximately $166 per square foot in construction costs, pushes the developable PSF cost of the Hudson Yards project to approximately $250 per square foot, still less than the land on which the new Yankee Stadium is located.   Realize that the Hudson Yards property is one of the last large-scale pieces of empty land in Manhattan, an incredible commodity located near the transit hub of Penn Station, the Javits Center, a new extension of the 7 train, and with full views of the Hudson River and beyond.  It is, for the city (and the MTA, which is selling the land), one of the more valuable large-scale pieces of real estate to come available, and surely exceeds in value per square foot (even considering the risk and scope of the eventual construction) that of the land in the South Bronx.  The HY site requires a zoning change for the purposes of development, but given the location, the amenities, the inherent quality of the place and the importance of the project to the city such a change seems to be nearly a fait accompli.  The land in the Bronx, zoned as "Park" and not developable as commercial or residential real estate would require a similar zoning change, but the market in that area would probably not support a similar type of development to that in the Hudson Yards, a development type embodying tremendous value, thus depressing (one would think) the assessed value upon which the bond offers were based.

Further, when you consider the fact that the city is seeking an additional offering of more tax-free bonds for Yankee Stadium you have the stench of a rotten situation, where land in the South Bronx is being assessed at a number higher than some of the most prime real estate in the entire city.  Had the land at YS been assessed at a value and more in line with market for what this land would sell on the open market and under current zoning status, the city could not have offered as much in bonds, thus jeopardizing the project before it started.  This would surely have increased the chances that the Yankees would have fled for more remote climes.  In the end, if these investigations prove that the City engineered a bond offer backed by ridiculously inflated land values, the victims are us taxpayers.  If the assessment is proven to have been inflated, someone should be held accountable. 

Gouged

Wikipedia defines "price gouging" as when "a seller's asking price [is] much higher than what is seen as 'fair' under the circumstances".  Over the weekend we had dinner with a good friend, a season ticket holder at Yankee Stadium whose family has held their seats for decades and decades.  Their seats, incredibly proximate to the field and the Yankee dugout, have, over the years, been increasingly moved further from the magical "front row" -- the team has added additional photographers' pits and supplemental club seats in front of their own.  Despite being somewhat devalued in this manner, the prices for these seats have understandably continued to rise (over 40% last year, from $150 per chair to $220 a seat).  It was to great surprise (and eventual frustration and unbridled anger) that, in the course of being "relocated" to new Yankee Stadium my friends' "equivalent seats" were moved back and away from their present location.  This is par for the course when new arenas or stadia are built -- when the Fleet Center first opened my Dad's Bruins seats, perhaps the best in the house, were magically transformed into much more expensive mediocrities despite being called "equivalent" to his prior seats.   My father no longer has season tickets to the Bruins.  And at Fenway Park my family's seats (in our clan for over 60 years) are now an outrageous $90 a game -- two seats at $180/pair translates to nearly $15K per season for the privilege (and at this point it's a MAJOR privilege) of heading to Fenway.   For the record, the most expensive seats at the Fens are the front row of the field box; these cost $325, a seemingly ridiculous amount to spend to go see a baseball game up close (Fenway price chart here).

But the Yankees are using their move to take this expected shift in price and location to a new level, and this is what my friend, perhaps one of the most diehard Yankee fans I have ever known, is so angry about.  The seats equivalent to his prior location that my friend now has the "right" to purchase will cost either $600 or $850 a game, depending on his final choice (the above chart -- click on it for greater detail -- shows the pricing for this inner circle of seats).  And even more startling (and, to some perhaps, offensive) are the prices of the seats in the front row behind the dugouts and adjacent to them: $2500 a game.  A season ticket therefore cracks $200K.  The cheapest seat in this "Legends Suite" (encompassing the entire mass of the lower box from foul pole to foul pole) is $500, nearly 40% more than the most expensive seat in Fenway, for comparison.  The Yankees have outdone themselves here considering their already formidable wealth, their revenue stream from YES, and their generally spectacular level of popularity that would have insured a relatively full stadium even at reasonably increased prices.  Their dedicated fans should be outraged - God only knows what the "cheap seats" will eventually cost. 

Heaven forbid the Red Sox should ever leave Fenway and build a new park, fans will be singing the same tune up in Beantown. [ED: if they aren't already...]

[Update: I neglected to include the fact that my friend was also asked to re-up to these new seats for a 10 year commitment with yearly escalations in price.  So the math is: 4x$220 = $880 per game x 81 games = $71K for current seats vs. 4x$850 = $3400/game x 81 games = $275K per season x 10 seasons plus an approximate 3% escalation per year = $3.15M commitment upfront to retain his season tickets.  So, an annual commitment of $71K goes to an upfront commitment of $3M+, to a family that has had season tickets for nearly a century, if my math is correct.  This is, even to those with means, a ridiculous demand]

Working in a Bubble

I hesitate to link to Murray Chass, especially to a story regarding yesterday's mini-strike/delay caused by the Red Sox sticking up for their team staffers (in fact, this post is not about yesterday's events and I'd prefer they not become the subject of this post), but buried in his column today is a nugget that reveals quite a bit about reporting, or, at least, his reporting -- I hesitate to generalize. Deep in the story Chass offers this, regarding his attitude towards reporting on baseball's previous labor strife and, perhaps, his relationship to those outside his privileged position in the world of sports:

(Note: Unlike most everyone else who was affected, I looked forward to labor negotiations, strikes and lockouts. They provided a periodic change of pace and a challenge to report them.)

While I find this unsurprising it is akin, at least to me, to weather reporters who actually seem excited at the prospect of a deadly hurricane, who seem to bounce on their way over to the map on the wall, jazzed by the maelstrom and chaos caused by angry low pressure systems. While I understand the fascination with the chaotic, with the different, there is always something unseemly about this subtextual glee: there is danger, harm in these storms. With Chass, the analog is that labor strife in baseball has real economic consequences, and I am not just speaking about players losing their salaries or owners losing their revenue. There are untold employees who rely on baseball to either make a living or supplement their wages: park workers, vendors, business owners who lease near or adjacent to stadia. Not everyone involved in baseball is a fatcat executive in a luxury box who can backslap an all-star, and not every player is pulling down millions a year. So while I understand that, for Chass, there was a challenge in the reportage and an energizing change of pace for him as a journalist, I find it quite selfish and elitist, quite callous that he would actually "look forward" to events that might inflict tremendous suffering on scores of people.

All You Need To Know About The Owners And Selig

Okay, the title is redundant. The owners had 15 million reasons why they liked him (themselves?) last year, and they liked him (ibid) enough to extend his/their reign through ought-twelve with 4% hike (gotta keep up with cost of livin' dontcha know) this year. It's good to be the Bud, king of beermakers.

ht: FanHouse

The Moment Punk Rock Died

First, the Red Sox shed the lovable loser status and win a freaking World Series (or 2). And now they're advertising on their uniforms.

The Boston Red Sox are putting advertisements on their uniforms for the first time.

The World Series champions said Wednesday they will wear sleeve patches with the logo "EMC" when they open the season with a two-game series against the Oakland Athletics at the Tokyo Dome on March 22 and 23. EMC Corp. is a data-storage company based in Hopkinton, Mass.

This is a shame. We Yanks fans enjoy crass commercialism because, after all, we're Yankees fans. Capitalism has done us well. Heck, our beloved Bombers even pioneered this uniform advertising practice a couple of years ago (as the linked article notes). But the Sox?! That's not the franchise's ethos. If the Yanks were Standard Oil, then the Sox were a Mom and Pop operation that sold vintage clothes and used lamps.

This Yanks fan doesn't know what to make of these new Sox. They signed onto a major label and  started singing about things for which the youth did not care. I'm not sure I'm getting their next album.

Next thing you know, their owner will be making overtures in the press  about moving away from good old Fenway.

The Price Of Santana Tickets

When I was 17 I saw Carlos Santana play at the Finger Lakes Performing Arts Center in Canandaigua, New York on a warm summer night. It is arguably the greatest concert I have ever seen, and I have seen quite a few; it was the best three-and-a-half hour musical investment of my young life. I don't remember how much the tickets cost, but I want to say it was somewhere around ten bucks for general admission.

Vince Gennaro writes about the price of seeing Johan Santana on your roster from a Major League Baseball owner's perspective. It is arguably the least interesting way to spend ten minutes of your life, unless you are an sports economics major. Actually, you will probably finish the article faster than I did since I fell asleep part way through and had to start over. Twice.

I know now I am in no way qualified to handle anyone's money, and have no interest in doing so whatsoever. Also, I learned that by signing Santana, Gennaro thinks the Yankees would possibly be good for 98 wins. I think. Graphs are pretty. Now pardon me while I pop in my copy of Caravanserai and curl up on the couch.

Four Finger Discount: Rudy and the Rings

Though this blog avoids politics for the most part, this story by Wayne Barrett of the Village Voice reveals some seriously questionable decisions by one of the country's most prominent politicians, one of New York's icons, and one the Yankees' biggest fans.  Barrett details the saga of four World Series rings purchased by Rudolph Giuliani, along with a skeptical investigation of our former Mayor's game-attending practices.  The story uncovers an extremely suspect relationship between a fan/politician and the team he grew up rooting for, and concludes with details about how this tightness had some very serious financial ramifications for the Bombers and their new stadium endeavor.  It's a long story, followed up this week in another piece with response from Giuliani and others.   

Like Giuliani or not (full disclosure: we don't, at all), these investigative pieces are a telling view into the ethical morass that is big city politics and an indictment of the values of a presidential front-runner, someone who doesn't seem to be able to clearly delineate being a fan from being a pawn, or who simply doesn't care about drawing the line in any way.  The Yankees, like many other franchises who treat the public interest as a collateral benefit trickling down from the profits of their own greed, did their best to take advantage of having a Mayor who loved the team, abusing this convenient relationship at the expense of New York City.