Business of Yankee Stadium: College Football Good, Open-Air Bad

The new ballpark in the Bronx will rekindle one lost tradition from the old Stadium, when it hosts a college football game in 2010, the first at Yankee Stadium in what will be 23 years. Army-Notre Dame will carry the flag, not exactly a 1 vs. 2 match-up, but two teams steeped in tradition with strong national followings and a link to the Northeast.

The game, the matchup, the setting – this deal just feels right. Army subsequently announced matchups for 2011-2013, making it a 4-year annual game deal. For those who go back a few years, it’s impossible to believe Yankee Stadium has not hosted college football since 1987. Given the tradition, the draw that New York and Yankee Stadium bring, and the simple visual of a packed Yankee Stadium on a crisp November day, its even harder to believe.

From a business perspective, it appears part of a bigger plan to make Yankee Stadium an all-purpose facility that monetizes its assets as often as possible. The initial allure of a major college game in the New York area, the venue, and two teams with strong local ties that travel well, should assure a sell out, if not very close. Depending on the deal, the Yanks could reap a few million dollars through tickets/rental fee, food and beverage, parking, and other ancillary services.

Talk of a bowl game is circulating, which would make sense for college football. The sport could use a foothold in the country’s biggest market to help grow its popularity, and boost interest in some of the local teams. And don’t think the Yankees would settle for one of those 7th place mid December bowl games. Either way, Yankee Stadium and NYC have the power to tip a mediocre bowl game into a sell-out. Fans will want to travel, locals will want to catch a game viewed more as an exclusive event given its non-recurring nature. Besides the few million in game day revenue the Yankees would reap, they could extend their tentacles into travel packages and other ancillary activities to grow the pot.

Beyond college football, where it can easily become the neutral site hub in the Northeast for big games within the next 5-10 years if it chooses, hockey is on the radar, and I can’t imagine major boxing events and concerts as far behind. If you look at the history of Yankee Stadium it hosted historical events in each of these genres, with a new state of the art facility it again becomes a destination. Given the expenses the Yanks need to recoup, expect them to slowly dip their toes in every possible revenue stream.

Speaking of costs, the Yankees should have chopped a few of the excess amenities that helped run the bill up way over $1B, and used a few hundred million on a retractable roof. Though I have not run the numbers, I’d be interested in studying how much revenue the team loses when it has to delay games for 1-2 hours and play in front of half empty or a completely empty stadium. No food and beverage revenue, less parking as many who now know the Yanks ways decide to wait it out elsewhere, and typically a free ticket in the future. All lost revenue. While it sounds small on the surface, project it out for the season, then project the season out for 10-15 years, and suddenly the number becomes more significant. Now think of the other revenue opportunities a roof creates – indoor fan fests, indoor basketball games, college basketball tournament, major business or political conferences, year-round concerts. Start projecting potential revenue for all these events, plus the revenue not lost from rain outs and rain delays, now magnified with an in house food and beverage opportunity. An interesting study, but a roof may have paid for itself over time. And, seriously, how much revenue does the cushioned seat in Left CF add.

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2 Responses

  1. I know that the original 2001 plans for the stadium included a roof, before being scaled down. Did they design it so they could add a roof in the future? The LF wall is adjacent to a parking garage, so they could store the roof there when its nice and sunny out, I guess…

  2. Roof was nixed due to expenses at both NY stadiums. My point is it would have paid to cut some of the other excesses in favor of the roof. Interesting study to see how much revenue they could earn as a year-round state of the art facility (see Dallas)

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