Saturday, September 30, 2006

The New York Yankees – as Evil an Empire as ever

October baseball begins Tuesday. Eight cities will experience playoff baseball. Tickets are sold out and the secondary ticket market is out of control. World Series tickets are close to crossing into rarified air, where the average baseball fans have little if any access to tickets. The secondary ticket market resembles a runaway train, with the New York Yankees sending a not so subtle message to their ticket holders – try and sell your tickets on the open market and you’ll lose the right to buy your tickets next year.

In the last ten years, the face value of World Series tickets has increased by more than 300 percent. Regular box seats for the World Series are selling this year for $250 apiece, a 35% increase over last year. Tickets for the American/National League Division Series and the American/National League Championship Series are 10% higher then they where last year.

There is good and bad news when it comes to finding post-season baseball tickets. Unlike the National Football League which only offers a small percentage (18 percent) of Super Bowl tickets to each participating team, MLB franchises guarantee full season ticket holders’ access to League and World Series tickets.

When the Pittsburgh Steelers and Seattle Seahawks took whatever tickets they needed for their major corporate partners from the allotment of tickets each team was given for Super Bowl XL in Detroit it likely meant that less than 15 percent of season ticket holders for each respective team where able to buy Super Bowl tickets. Super Bowl XL tickets had a face value of $600 and $700 each. The Super Bowl disenfranchised ‘Joe’ football fans many years ago.

Major League Baseball teams each play 81 home games. Each franchise creates full and mini-season ticket packages that include the right to buy League and World Series tickets. According to a recent Wall Street Journal report, the Los Angeles Dodgers (likely to either win the National League’s Western division or the NL Wild Card) since 2004, have grown their season-ticket base to the equivalent of more than 26,000 full-season ticket holders, from 20,000. (The Dodgers say they left "plenty of seats available" to the general public for the playoffs.") The New York Mets this season increased season-ticket sales by more than 26% over last year.

"You have to accommodate the plan-holders first," says Dave Howard, executive vice president of business operations for the Mets, who clinched the National League East championship in a Wall Street Journal report. The team, he says, has slightly fewer seats available to the public than for the 2000 playoffs, although he says it's within the same 10,000-15,000 per-game range.

The New York Mets have the best record in the National League, and while the Mets have faltered in recent weeks and lost the ace of their pitching staff Pedro Martinez for the playoffs, there is a real possibility the Mets will win the National League pennant. Their cross town rivals, the New York Yankees are playing their best baseball of the season and are the prohibitive favorites to win the American League pennant. A Subway Series may not generate great ratings for Fox, but a Subway Series will push the secondary ticket market through the roof in New York.

A report earlier this week in The New York Daily News suggested average tickets for game seven of a Subway Series played at Yankee Stadium could cost $10,000 per ticket. There are tickets currently being sold at Stubhub, with a price tag of $10,000 per ticket, that can’t even be considered good tickets. Four of the $9,999 tickets are in the front row of the left field stands and the other four are in the front row of the upper deck in right field according to the Daily News.

"It's conceivable," said Sean Pate, spokesman for StubHub, where the $9,999 tickets and hundreds of other playoff seats are already being resold by fans.

"For something like a Yankees-Mets series, you can definitely see someone paying that."

The Yankees were very quick to react to the Daily News report, determining who the ticket holder was. Last month the Yankees sent a letter to longtime season ticket holder Orlando Bautista, informing the Yankees fan the team would be revoking tickets he had tried to sell on StubHub.

“Why pick on me?” said Orlando Bautista, a doctor in Smithtown, N.Y., who was told by the team in August that his upper-deck and bleacher seats at Yankee Stadium, would be revoked after the season.

He added: “I’m a good fan. I don’t drink. I don’t curse.”

The Yankees response, exactly what you’d expect for the Evil Empire – sheer arrogance and gall.

“It’s a violation of our policy to resell tickets,” Lonn A. Trost, the Yankees’ chief operating officer told The New York Times. “It’s in our contract. If you don’t want to sign it, you don’t have to buy tickets.”

As offensive as Trost’s suggestion was, Trost told the New York Times, the Yankees were getting ready to launch their own secondary ticket agency.

“Times change,” he said. “You re-examine everything.”

The hypocrisy is unbelievable, even for an organization as immoral as the Yankees can be at times. The New York Yankees COO isn’t saying you can’t scalp your Yankees tickets, he’s suggesting the Yankees will take care of the scalping for you. The argument has been made before and it will be made again, anytime a ticket for a sporting event or a concert is sold above face value its ticket scalping. Many National Football League, Major League Baseball, National Basketball Association, National Hockey League and NCAA institutions have corporate partnership agreements with secondary ticket agencies. Those are embarrassing enough to the sports teams. But for an organization that has the profile the New York Yankees enjoy to suggest they’re going to set up their own ticket agency and revoke the tickets for any ticket holder who decides to take their business elsewhere is reprehensible.

Adding even more confusion in the Yankees marketplace when it comes to secondary ticket sources, WCBS the flagship station for Yankees radio broadcasts runs StubHub commercials during Yankees broadcasts that feature the “voice of the Yankees” John Sterling. The Yankees told WCBS they’d ‘prefer’ if they didn’t run StubHub ads, but haven’t demanded the spots not be aired on the broadcast. The average baseball fan isn’t going to understand the Yankees selling the rights to WCBS and they in turn sell the advertising. The average Yankees fan is going to assume if the “voice of the Yankees” is endorsing StubHub, its fine with the Yankees.

If you can believe this, according to the New York Times Yankee game day security regularly question people arriving at Yankee Stadium with tickets in a StubHub envelop.

“It’s a witch hunt against us and eBay for giving fans more access to these games,” Sean Pate, a StubHub said. “These aren’t scalpers. Season-ticket holders are their most loyal fans.”

What makes the Yankees look that much worse – both the Mets and the San Diego Padres operate their own ticket agencies? While both the Mets and Padres try their best to point fans in their direction if they want to resell tickets, both organizations haven’t adopted the Gustopo like tactics the Yankees have set up.

“Our license says not to resell unless it’s on a Padres Web site,” said Jim Kiersnowski, the Padres’s ticket operations director. This season, 36,000 tickets have been resold on the Padres’ site. “We could revoke their tickets, but we don’t think it would help our relationship with our customers,” he told The New York Times.

The Yankees, as Trost made very clear – could care less what anyone thinks! “Most of the individuals say they did it just once. Pity me,” he said. “Or, ‘I gave it to the salesman who gave it to his brother, who gave to his son and he put it on eBay,’ and it’s usually not true.”

The Yankees made it clear in a letter included with their each season ticket holders’ playoff and World Series ticket invoice, you had better pay attention to the rules the Yankees fully intended to enforce, making it very clear what the organization would do if it caught anyone trying to resell Yankees playoff and World Series tickets.

"Please be advised that you will be neither invoiced nor entitled to any tickets to the 2006 post-season," Yankees associate general counsel Alan Chang said in a letter to one season-ticket holder. "And you will not be offered a license for the 2007 baseball season and beyond."

The Boston Red Sox season ends Sunday. Despite a disappointing season on the field, the Red Sox had another great season at the box office selling out Fenway Park for the entire 2006 season. The Red Sox sold out their entire 2004 and 2005 regular seasons as well. The last time a game at Fenway Park wasn’t sold out -- May 15, 2003.

The Red Sox operate their own secondary ticketing service, with a major twist – tickets cannot be sold above face value. Dubbed Red Sox Replay, season ticket holders can list tickets for any games they don’t want to attend. It cost $65 to register to buy tickets; the fee is a one time charge. There is no service fee to resell tickets. You can buy as many tickets you’re interested in purchasing for as many games, subject to availability. The Red Sox regard this as a service to their season ticket holders, not as a revenue generating opportunity.

Jacobs Field opened on April 4, 1994. The Cleveland Indians sold out the first 455 games they played at ‘The Jake’. The sellout streak ended early in the 2001 season. Three times the Indians sold out their entire season before the players reported to spring training. Times have been tough both on and off the field for the Indians since the sellout streak ended. The Indians have only sold out a handful of games since the streak ended. However, the Indians continue to operate a ticket board on the teams’ official website, where season ticket holders can try and sell tickets to games they’re going to miss. More often then not, the Indians are competing against themselves by managing the ticket board. The Indians see the bigger picture and understand its all about the customer, its called customer service, a misnomer for the Evil Empire.

The Yankees will lead Major League Baseball in attendance for the second consecutive season selling close to 4.2 million regular season tickets. The Yankees will average more then 52,000 fans per game, playing to more then 90 percent of Yankee Stadium’s capacity.

Yankees fans love their teams, but do the Yankees love their fans? Any business, that operates with a belief system that treats fans as badly as the Yankees do is a business that is having a great time while they’re on top of the world. In doing so have forgotten how the other half of the world lives. The Yankees have clearly forgotten what goes around comes around. It’s how you treat people when you’re on top of the world that determines how they’ll treat you when you’re on your way down. The Yankees can enjoy the ride while they’re on top of the baseball world, when they fall (and that fall is inevitable), the Yankees are going to pay a terrible price for the appalling examples they’ve set in mismanagement.

For Sports Business News this is Howard Bloom. Sources cited in this Insider Report: The New York Times, The Wall Street Journal and The New York Daily News