Stadiums Not the Answer To Save A Franchise

As Tampa Bay and Florida petition for new Major League stadiums, claiming it’s the only way for their respective franchises to generate the revenue to compete, both teams need to reevaluate the misconception that a new stadium alone will lead to increased attendance.

Of the 9 teams that opened new stadiums since 2000, each team benefited from an initial attendance increase, however only the San Francisco Giants – thanks to a World Series appearance and big box office draw in Barry Bonds – and the 2005 champion St. Louis Cardinals, have avoided at least one season of significant attendance decline. Stadiums are only new for so long, fans attention quickly shifts back to the product on the field to make buying decisions.

To underscore that point, every World Series participant since 2001 enjoyed at least a 15% attendance surge the following season, unless that team was already over 90% capacity. The 2003 Yankees, with only a 6.57% increase and still strong 83% capacity in 2004, are the only outlier. But New York had played in six World Series over eight years at the time, so fans expected success.

Similarly, teams that increased their win total by a double-digit percent during that period witnessed a similar uptick at the gate in either that same year, or the subsequent season. Though most people no longer consider US Cellular Field in Chicago or Toronto’s Rogers Centre destination stadiums, each club saw an uptick in attendance thanks to winning seasons, while PNC Park in Pittsburgh, arguably the class of the recent retro stadiums, struggles to beat the attendance numbers from the final seasons at antiquated Three Rivers Stadium.

Teams relying on new stadiums as the primary means to compete with big market teams should use Milwaukee and Detroit as case studies. After opening Comerica Park in 2000 with a 19.5% attendance increase over the final season at Tiger Stadium, and over 70% higher then the penultimate season, the Tigers lost those ticket gains in three seasons by averaging 107 losses, and making a run at the single-season record for losses. Only after restoring its on-field product to respectability did Detroit regain enough fans to draw over 2 million. An American League pennant in 2006 led to eclipsing 3 million at the gate last season, a franchise record. The Brewers have a followed a similar curve since opening Miller Park, initial hype increasing ticket sales, a retreat back to previous stadium attendance levels due to poorly performing teams, before a steady increase correlating with more wins.

Both teams needed new parks and benefit from the advantages, but neither team improved its record, or attendance, solely based on a new stadium infusing revenue. In fact, attendance increased because improved management and player development delivered young, inexpensive stars to the major league team – neither team doling out excessive contracts until Detroit signed Miguel Cabrera this past off-season. Similarly, the Cleveland Indians laid the groundwork for their playoff teams of the mid-1990’s prior to Jacobs Field opening in 1994. Cleveland opened the park with a World Series contender.

In the NBA, where arenas are less of a differentiating factor for consumers, the same fact holds true. Boston and Portland experienced the biggest increase at the gate this season compared to last. Both also made substantial leaps in the standings, the Celtics setting a record for the biggest increase in wins from the previous season.

New Stadiums Still Worth It

Despite new stadiums not guaranteeing sustained attendance increases, they will still benefit a franchises bottom line. Almost all new facilities sacrifice capacity in exchange for more luxury boxes and suites equipped with various amenities that older venues did not have. More amenities lead to higher prices and more sales of suites, which both increase team revenue, one of the most compelling arguments owner give for wanting a new stadium.

The regular stadium seats also benefit from various amenities at modern ballparks, particularly improved views closer to the field, new scoreboards, and various attractions within the concourse. These factors justify ownership raising ticket prices when the team moves, therefore even if attendance falls back to previous levels the team still rakes in more profit because it’s selling the same amount of tickets at higher prices.

Throw in the additional sponsorship opportunities at new facilities, including naming rights, and franchises certainly benefit from new stadiums. However, ownership frequently takes on substantial debt, even with publicly subsidized projects, therefore they need to sustain that additional revenue to cover expenses and raise capital to invest in improving the team.

Where Teams Can Improve

Teams that effectively build strong brands, not tied to a particular player or performance, can withstand a down year without impact at the gate. To no surprise, the Chicago Cubs and Boston Red Sox maintain close to 100% capacity irrespective of fielding a playoff team. The Dodgers perennially fill over 70% of capacity without a playoff win since 1988, although they often field playoff caliber teams.

It’s hard for younger franchises to duplicate the history behind the Cubs and Red Sox, but teams need to use that first season at the new ballpark to make a strong impression on fans while they have their attention.

A new stadium is an opportunity to redefine the brand, create a unique experience, give fans a reason to come back to the stadium, regardless of the outcome of the games. That’s why it’s perplexing that the Washington Nationals rushed to open their new stadium, with a major parking problem, an unsettled concessions situation, and kinks in the overall stadium operations, witnessed by scoreboard malfunctions during the second game. Teams, especially those with recent attendance problems, must be customer service oriented and pay detailed attention to creating a positive fan experience in year one of a new stadium or fans will not return until the team improves.

This season provides a few key stories for teams either opening new ballparks, or proposing to – Minnesota, Oakland, Tampa Bay, Florida. We will find out how strong of a brand San Francisco built in its first season without its big drawing ticket, Barry Bonds, or a competitive team. Same in Houston, who lost future hall-of-famer Craig Biggio, and no longer have a team expected to contend. How will the Nationals, lacking any star power, draw in their inaugural season at Nationals Park, and will fans keep coming despite the problems?

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