Tuesday, August 27, 2013
How teams can make money like the A$tros
By DJ Gallo
The Houston Astros have the worst record in baseball and are on pace to finish this season with their third consecutive season of 106 losses or more.
But according to a report by Forbes, the 2013 Astros will be the most profitable team in Major League Baseball history, clearing an estimated $99 million in operating income this year. (The Astros denied the Forbes numbers.)
Unfortunately, being horrible and having an active payroll under $13 million is probably not for every team. But there are easy ways for MLB teams -- even the ones that are good at baseball -- to make a nice profit.
Increase stadium advertising
There’s a fine line between maximizing advertising space and deluging fans with corporate signage. But it's a line that can be straddled with a goal toward increased profits.
If the outfield wall and the scoreboard are already filled with ads, where to go next? Try the seats. Every night a team like the Marlins could get tens of thousands of ads seen if they sold space on seat backs. You think those are 30,000 empty seats? No, those are 30,000 tiny billboards. Ka-ching!
And why are the Cubs not utilizing the rats at Wrigley Field? They could be branded with corporate logos or outfitted with sandwich boards. It's found money.
Increase stadium retail space
Teams can always wring more money out of fans if they really want to. For example, every entrance to Target Field in Minnesota should require fans to walk through a Target. It's impossible to get out of one of those places without dropping a hundred bucks. That's a fact. So the Twins could get an extra $200 out of every fan who enters and exits their stadium.
And how about buying a hot dog or beer at a game? You signal to the vendor what you want and it starts getting passed down the row to you. All this time, he's waiting on your money to make it make to him. Is that not a loan he's floating you? How is CitiBank not charging fans at Citi Field 29.99 percent interest on purchases from stadium vendors?
Try pay-for-play fan contests
I have attended minor league games where you buy a bag of five tennis balls for $5. At the end of the game, trash cans are set on the field, and if you successfully throw one of your tennis balls into a can from the stands, you win a prize.
MLB teams could do this. Or they could do something even better: Sell fans bags of cotton candy for $50 and allow them to throw the cotton candy at busted PED users -- Ryan Braun, A-Rod, et al. What's more than a fortune? That's what would be made.
Add to the stadium experience
Kauffman Stadium has fountains outside the center-field wall. Neat. But do they make the Royals a single dollar? Nope. In fact, all it does is increase their water and electricity bills. Call it a family water park and charge fans 40 bucks to get in. Now those fountains will spout both water and money.
Fenway Park has a giant green wall in left field. Screw some hand-holds on there, call it a rock-climbing wall, and let fans scale the thing during games for 10 bucks. (And make even more money on online video ads when people flock to LOL at the wall-climbing fans getting drilled by line drives off the Monster.)
Every stadium has opportunities like this. Tropicana Field, for example? Quiet, dark and joyless, it should be bringing in huge profits for the Tampa Bay Rays as a rental location for funerals.
Build stadium movie theaters
Hollywood makes a fortune gouging the populace on movie tickets; baseball teams can do the same. Let's be honest: Many fans at a baseball game have no interest in watching the actual game; many others lose interest when the score gets lopsided. Why not give fans the opportunity to pay an extra $10 for a seat at an in-stadium movie theater?
Of course, only movies matched to the home team would be shown. The Indians would always show "Major League." The A's would always show "Moneyball." The Angels would screen "Angels in the Outfield." And the Mets would show "The Road."
Don't sign old, past-their-prime players to huge, guaranteed, long-term contracts
This is a fairly complex one that only people with advanced degrees in finance and economics might understand, but it could really work for franchises such as the Yankees and Angels.