Far From Cheap Seats
Prices for Premium Baseball Tickets Are on the Rise

By Les Carpenter
Washington Post Staff Writer
Sunday, June 15, 2008

NEW YORK -- If this were only about baseball, the old stadium at the corner of 161st Street and River Avenue would continue serving perfectly as it has for 85 years, 39 World Series and 26 championships. If this were only about baseball, a new Yankee Stadium wouldn't be rising majestically across Macombs Dam Park, a vision that dances in the eye of the Yankees Chief Operating Officer Lonn Trost, who often likens the building to "a five-star hotel" with a ballfield in the middle.

But instead Trost stood one recent evening in a conference room on the doomed old Yankee Stadium's second level urging a visitor to experience the inexpressible comfort of a seat for the new ballpark -- a chair so loaded with special blue cushioning and trimmed with teak armrests that it looked almost incapable of folding itself back up.

"Feel," Trott urged his visitor as the man sat in the chair.

Outside, another 49,000 people settled into the old stadium, with its tight seats and glaring lack of class distinction between sections. In today's baseball a facility such as this won't suffice, which is why Trost was proudly displaying his new stadium seat. When installed in the new Yankee Stadium's front row it will cost its occupant $2,500 a game, a figure so astounding it makes the seats radiating down the foul lines seem like a relative steal at $850 and $650 each.

Not that the purchasers will even need to sit in them. This is because the Yankees are also offering a package of amenities that include a martini bar, a museum, Internet protocol televisions, party suites, conference rooms and a concierge to secure dinner reservations or find theater tickets. All this and an art gallery, too.

"Are we going to charge 5,000 people a lot to go to the game?" Trost asked. "Yeah, but we will deliver."

As big money changes baseball, pushing salaries ever higher, the fan baseball is trying to attract is changing, too. A generation of new stadiums with the latest in innovations has allowed teams to transform the old box seat into an entertainment palace, essentially moving the luxury suite to the field level, bumping families for corporations.

Baseball, with its long seasons and large stadiums, has traditionally been a cheaper alternative to basketball, football and hockey. Now, suddenly, the game has leapt over a three-figure threshold for tickets once considered unfathomable. When Nationals Park opened this spring, many fans were stunned to learn that it would cost $170 to $325 to sit in the lower deck between the dugouts.

In just the last year, the average ticket price has gone up 10.1 percent, according to Team Marketing Report, a newsletter that covers the business of sports. Much of that increase is due to a rise of prices in club seating sections that significantly drive up the cost of a stadium's best seats. This season, six teams, including the Nationals, will have an average premium ticket price of more than $100, and the league average for club seats is up to $76.26, according to Team Marketing Report.

"It has become an event to go to a game," said Jon Greenberg, the newsletter's executive editor. "Especially with teams like the Red Sox, the Yankees and the Cubs, fans won't go several times a year anymore. Now families go once a year and make it a big special day at the ballpark."

A New Era

By the time Major League Baseball moved the Montreal Expos to Washington, it was apparent a new era had arrived. The men hired by the league to run the team understood this. Some had seen it firsthand, including Kevin Uhlich, who was named the team's executive vice president. In a previous stop in Anaheim, he helped develop the concept of dugout suites, where the highest-paying fans could retreat to a restaurant beneath the stands and have a view of the batting cages under the stands.

Armed with these memories and drawing upon a generation of new ballparks around baseball, Uhlich had the architects add as many high-end facilities as the stadium would take, ensuring that when it opened this spring, it would have the latest in expensive entertainment. In went the Presidents Club, a restaurant for patrons in the first 10 rows behind home plate with a view not only of the batting cages but a new feature: the news conference room. Then he added another section of exclusive seating stretching to the back of the lower section, also with a separate dining area and a picnic patio that proved popular in Anaheim.

"It was almost like that video game where you go around the finest golf courses and you can build your own course with the best holes from each one," he said.

An important lesson baseball executives learned as new stadiums sprouted up is that the wealthiest of fans do not necessarily love the luxury suite that was once considered the ultimate amenity. Suites are too private, too removed from the field, too far away to hear the hitters curse as they pop 3-2 fastballs straight up in the air.

Michael Cramer, the former president of the Texas Rangers and now a professor at New York University's graduate school of sports management, realized the money-making power of seats close to the field when he built a ballpark in Frisco, Tex., for the Rangers' Class AA team a few years ago. He had a row of comfortable chairs installed behind the backstop and charged $50 for them -- an exorbitant sum for Class AA baseball. Yet he sold them out in days.

"The front row sells," Cramer said. "And the one behind that and the one behind that. But the problem is people think you can carry that back 100 rows."

Cramer said he is worried that the game may be growing too expensive for the average fan to absorb. Seizing on the fact the Yankees are promising that 55 percent of their seats will $50 or less, he shook his head.

"You take four seats times $45, plus the inflated cost of what it is to park and buy food, it's still a $250-$280 day to go to the ballpark," he said. "I think that's troubling. And that's for the bottom-of-the-barrel seats. It's hard to get people to sit in nosebleed seats and spend $250."

A few weeks ago, at a fundraiser for his son's high school lacrosse team in a pricey New Jersey suburb, Cramer noticed four Yankees tickets for the current stadium had been entered into an auction. The minimum bid was $190 -- face value. As the event wore on he lingered near the tickets, wondering how much people would bid. Instead, people walked by aghast at the prices. By the end of the night, he had made the only offer.

"What does that tell you?" he asked. "They can't afford it."

That is something David Morgereth, a Bethesda software engineer, can relate to. Asked if was bothered by the idea of tickets that cost $170 and $325 at Nationals Park, he said, "Oh my heavens, yes!

"Last year we went to two or three games at Camden Yards and paid between $30 and $60. I think $75 would be my limit, and it would have to be a special event for me to spend that much. My son just turned 18 and has always been very interested in computers and electronics as well as baseball. At $350 a pop I can hear him now: 'Geez Dad, for what you're paying to take me to this game you could have bought me a new laptop.' "

Added Omar Stokes, a baseball fan from Waldorf, who used to attend 15 Orioles games a summer a few years ago when in college: "It just seems like those prices are driving out the real fans that support the teams -- the middle-class guy who reads the sports section every morning and plays in a softball league in the evenings. Soon the only people that can afford it will be rich folks who don't really follow the sport anyway."

The Orioles' average ticket price is now $23.85, compared with the Nationals' average of $25. The average premium ticket price at Camden Yards this season is $46.07, while at Nationals Park premium seats average $125.

Most stadiums do have low-priced seats. The Nationals, for instance, have several sections in the upper deck where tickets are $5 and $10, and the Yankees will have $12 bleacher seats. But it's the increasing encroachment of luxury areas elsewhere in the stadium that has changed in recent years.

Nearing the Limit

For the last four years, Major League Baseball has set records for total attendance. Nevertheless, it wasn't until 2006 that it surpassed the average per-game total set in 1993, the year before a lockout wiped out the second half of the 1994 season. So while the game is suddenly robust again, that strength is only a recent phenomenon, bolstered in part by the great gate success of the Yankees and Red Sox.

"I look at it as that it took us 13 years to get back to the 1993 levels," said Cramer, who is still a Rangers shareholder. "Clearly the strike was substantial. Now, with the prosperity of baseball coming back to 1993 levels, we are hitting the fan with these tremendous ticket prices."

He is bothered, especially, by the Rangers, who are drawing just 23,370 a game this year -- which is on pace to be the worst figure in the 15-year history of the team's ballpark. Troubling, too, is the fact the Nationals are drawing only 29,015 a game in a brand-new park that seats 41,888, with sometimes fewer than half of the Presidents Club seats filled.

"Normally you get a bang from a new stadium and they're getting a pop," Cramer said. "It's a .22 and not a .44."

Nationals President Stan Kasten said he expects attendance to pick up as the summer goes on and in coming years when the team is supposed to improve. He deflects questions away from the empty seats and the exclusivity of the Presidents Club to show, instead, a filled bar and restaurant in the center field stands that is accessible to all fans.

"We're dealing with different customers," Kasten said. "My whole thing is you can't restrict yourself to just your fan who wants to sit in the seats and watch baseball. Baseball for nine innings has a lot of different customers out there. Also nowadays you can attract groups from the whole office who want to come see a game. It's reaching out to get new customers and keep your existing customers entertained in new and different ways. And also to compete in the crowded marketplace."

Still, when the Nationals' previous management group, installed by Major League Baseball in 2005, drew up plans for the Presidents Club and the other premium seating areas for the new ballpark, it priced those areas -- as well as regular seats -- at much lower figures than the current ownership has. Members of the Nationals' previous management group, and others in baseball, suggest privately that this is why the Nationals have not drawn as well as a team in a new stadium should.

Kasten declined to comment directly to questions about the Nationals' ticket pricing policies.

"Everyone in the industry says it's hard to believe prices can go up much more," said Dick Sherwood, the president of Front Row Marketing, a company that consults with teams on such issues as concessions and seat pricing. "What happens is you charge higher and higher prices and the fans balk. Obviously teams need to charge more because salaries are going higher. How do you make your ends meet? Have we seen the limit of ticket prices? Probably not. But are we nearing the limit? Probably."

How Much to Charge

At the start of every home game last season, Trost convened a group of Yankees ticket managers and financial executives inside his office, located off the back of the Yankee Stadium press box. While baseball played on a flat-screen television, the executives sat before a rudimentary drawing of the new Yankee Stadium and argued about ticket prices. They wrote prospective prices on piles of Post-It notes and slapped them on every seating section in the new stadium, haggling over the way to balance every seat's value to ensure there were the right number of inexpensive seats mixed with those that cost several hundred dollars.

It was a tricky task -- trying to determine just how much to charge without charging too much -- one that began with first trying to come up with the price of every seat for this season in the stadium's farewell year, so the process of transferring those seat values to the new ballpark could be completed. It took them the entire 2007 season to price every seat -- the disputes raging from the first inning until the seventh, when the ticket experts had to go downstairs to total out the night's gate.

"We had people saying 'too high, too high, too high,' " Trost said, "and I'd say 'uh oh' -- they're sitting on my left shoulder. Then these people say 'too low, too low, too low,' they're sitting on my right shoulder. I don't know if it was all that complicated, but it took time."

Then Trost gave a wan look. "And we may be wrong," he said.

He figures he is not. Because the Yankees, despite the franchise's apparent wealth, have needs. And those needs can only be filled with a new stadium.

According to Forbes Magazine, the Yankees took in $327 million last year but after spending $253 million on salaries and more than $100 million in revenue sharing, along with other expenses, they operated at a $47 million loss, ignoring other potential money-making ventures the club is involved in, such as the franchise's YES broadcast network. But next year, after moving into the new ballpark, the $50 million they will have to pay annually in debt service on the stadium will be deducted, by baseball rules, from the amount of money they spend on revenue sharing. It should bring them close to breaking even for the first time since 1993.

Other teams have different needs. The Nationals, for instance, are ranked 13th on Forbes list and have an operating income of $43 million, the magazine says. Much of this is based on the fact the team has a new ballpark with new ways to make money.

"They probably figured, 'What we can get from the top-level companies in Washington we better take now while we can get it,' " said Cramer, who, like others, expressed concern that the Nationals have not seen the great boost in attendance that teams normally get in new ballparks. And because the natural honeymoon period in which fans will flock to new stadiums is usually two years, Washington may have trouble remaining in that top half of franchise values, he said.

The same ultimately could be said for many teams, especially as the new stadiums grow older and the novelty of a new ballpark wears off.

Even as tickets rise, there remains a string of cheap seats in most parks. These keep the total average ticket price down, but also serve as a safety valve if teams price themselves too far.

"Having all of your luxury seats filled is not an excuse for not filling the ballpark up," said Vince Gennaro, a consultant to a handful of big league teams and the author of "Diamond Dollars: The Economics of Winning in Baseball." "A lot of it is getting the balance of pricing tickets right."

He added that a half-empty stadium in which only the most expensive seats were full would not "televise well."

Kasten hopes he can maintain the seats priced at $5 and $10 in Nationals Park for several more years. Likewise, the Yankees point out that the $12 bleacher seats in the old stadium will cost the same in the new ballpark.

"I've been saying for years that the most expensive seats are under-priced and the cheapest seats are overpriced," said a former baseball executive, who did not want to be identified because he works in the sports industry. "If you look at it, the most expensive seats are usually filled and the empty ones are the cheap seats. Finally people are understanding that. Of course, it took the Nationals to defy that theory."

Or as Bruce Sokler, a Washington attorney who bought two tickets for eight games in the Nationals Presidents Club said, "You can look at it as a matter of whether you spend $50 and go 20 times or spend $300 and go a half-dozen times."

But in a new baseball era, where salaries continue to rise and teams have to rely heavily upon ticket sales to fund payrolls, while at the same time watching their tickets be resold for twice face value at agencies such as StubHub, the luxury seating is going to expand until the market balks.

The wealthy fans, Trost said, are going to have to "subsidize" the rest.