BOSTON (TheStreet) -- With Major League Baseball's opening day a week away, the league faces a potential attendance decline, financially unstable sponsors and increasingly frugal fans. What's the game plan for 2010?
Swing for the fences.
Despite amassing a record $6.6 billion in revenue in 2008, up 1.5% from a year earlier, attendance dropped nearly 6.6% as a third of teams reported losses and half drew 60% of their capacity or less for the season. As a result, clubs are increasing promotions, expanding facilities and amenities and taxing their marketing teams' creativity to lure both fans and corporate partners alike.
The Boston Red Sox allow fans who buy seats in some luxury boxes to spend time on the field during batting practice.
The MLB is fortunate. The National Basketball Association finished last season $400 million in the red and was 7.6% behind last season's pace almost midway through the 2009-2010 campaign, according to
Sports. The National Hockey League put up $2.6 billion in revenue last season, but saw its Phoenix franchise go bankrupt and franchises in Tampa Bay, South Florida and Long Island struggle with attendance and revenue issues.
If the New York Yankees -- the only team to pay baseball's luxury tax last year after spending more than $220 million on payroll en route to a World Series win last year -- and the cross-town Mets hadn't inflated the league's take with high-priced tickets to their new stadiums, baseball's 2009 numbers could have been much lower. Television, radio and merchandise sales masked the departure of sponsors such as
from stadium advertising and the World Baseball Classic.
"The sponsorship category is part of a strategic issue for a lot of clubs," says Bill DeWitt III, president of the St. Louis Cardinals. "The annual 3% increases year after year in that category just aren't there anymore, and every team is concerned about the fact that the corporate sponsorship dollar is not going as far as it has in the past."
Though the Cardinals drew more than 3.3 million fans to Busch Stadium last year, putting the team's attendance and revenue within the league's top 10, that number is down 2.5% from last year. For a small-market team (its TV market ranks 24th in the league) whose revenue relies heavily on ticket sales, the prospects of losing both fans and advertisers leads to a lot of extra legwork.
"The big categories like beer, auto, banking and cellular have always been the bread and butter for sports marketing," DeWitt says. "Three out of those four have experienced tough times lately, so we're doing everything we can to shore up those relationships and over-deliver to them."
This requires the Cardinals to hold back ad time on their radio and Fox MidWest TV broadcasts so they can offer package deals to sponsors. In-stadium promotions are reserved for big players like
, 60 corporate suites are locked in long-term deals and food and drinks are included in the stadium's 30-person corporate party rooms starting this season.
From the fan side, the Cardinals say they won't limit season ticket sales that already exceed 23,500. Team owners are also increasing efforts to recruit and retain ticketholders by offering better online options and more means to resell tickets, even reselling them on
on the fan's behalf.
This is the franchise that won the 1996 World Series and whose stadium opened four years ago. Across Missouri River in Kansas City, the Royals face the same economic uncertainty with a team that hasn't made the playoffs since its World Series win against the Cardinals in 1985 and plays in a stadium built in 1973.
Still, the Royals' attendance jumped 14% last year and GM's Chevrolet brand and
Stanley Black & Decker
joined the team as sponsors this year. Though partial credit goes to the performance of Royals pitcher Zack Greinke, who won the American League Cy Young Award last season, two years of upgrades to Kauffman Stadium and creative marketing by the Royals including "all-you-can-eat" seats and free hot dog nights also gave fans reason to come to the park. A new restaurant and roof deck in right field, new suites and clubs throughout the facility and a children's activity and arcade area drew not only fans, but new sponsors including
"When you came to a game in Kansas City, for many years, you sat in your seat and enjoyed the game," says Mike Bucek, the Royals' vice president of marketing and business development. "With the renovations, you can walk around the entire park and there's an entire outfield experience with things to do."
Even contenders like the Boston Red Sox have learned they need to do more with less. Though the team has sold out 550 straight games and was one of two teams to report more than 100% attendance last year (the Philadelphia Phillies were the other), the Red Sox play in the league's oldest ballpark, 98-year-old Fenway Park. Ownership increased capacity from about 34,000 in 2001 to 37,400 this season, with each expansion drawing sponsors such as
Despite exceeding capacity by 1.5% last year, Sox brass say they're "not taking anything for granted." The team is packaging its standing-room-only tickets, offering fans deals on popular matchups against the Yankees and Los Angeles Dodgers in exchange for tickets to two games with less demand. The team continues to push luxury packages, including seats atop its Green Monster wall in left field, limo rides to the game and on-field time during batting practice.
"We have a meeting that we have in the offseason called Revenue Thursdays that's a brainstorming session with one or two people from every department in the organization," says Ron Bumgarner, senior vice president of ticketing for the Boston Red Sox. "One idea we threw around two years ago was the centerfield batting practice package, which was one that stuck."
They also considered holding non-baseball events like the NHL's Winter Classic outdoor game, which Fenway Park hosted in January, but Bumgarner says Sox ownership prefers to sell the game itself. Part of the reason the Sox capped season ticket sales at 22,000 is to give prospective ticket buyers a chance to see the game live, which is "how you endear hardcore fans." The Philadelphia Phillies capped season tickets sales at 28,750 at its Citizens Bank Park, which accommodates 43,500 people. With the Phillies winning the World Series in 2008 and selling out season tickets and Diamond Club and Hall of Fame Club luxury suites in 2010, Phillies season ticket sales director Derek Schuster admits on-field accomplishments can somewhat softened the recession's blow.
"We feel very fortunate about the tremendous fan support we have received especially with in this down economy," he says.
-- Reported by Jason Notte in Boston.
Jason Notte is a reporter for TheStreet.com. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, The Boston Herald, The Boston Phoenix, Metro newspaper and the Colorado Springs Independent.