Bloomberg Businessweek: The Braves Play Taxpayers Better Than They Play Baseball (house, pricing)

[DJDeadParrot]

Originally Posted by BR Valentine

The focus in MLB and in long season sports generally speaking is on designing stadiums / arenas that maximize revenue per fan not capacity.

^ Exactly! Its Economics 101, really; inflate value by reducing supply. What easier way to maximize value on each seat than by offering fewer of them?

Originally Posted by Gulch

Do we assume that the reconstruction of the farm system is a failure and Dansby is a bust?

Far from it. However, a successful farm system today isn't guaranteed to pay off in higher attendance tomorrow.

[jsvh]

Originally Posted by DJDeadParrot

^ Exactly! Its Economics 101, really; inflate value by reducing supply. What easier way to maximize value on each seat than by offering fewer of them?

I think you missed Economics 101. The goal is not simply to increase value by reducing supply.

The goal is to maximize profitability by optimizing both supply and demand. If you reduce supply you are also reducing total revenue.

That is why the most valuable teams in baseball play in stadiums with over 50k seats.

Make no mistake, the number of seats in Tuner was not the problem.

[sedimenjerry]

Originally Posted by jsvh

You seem to be confusing housing your own AAA team in your metro area with housing a minor leage team in the city center.

The surburbs and the city are different enviroment for baseball. I don't want the Braves farm team in Gwinnett. I want another minor leage team in the city center. It doesn't have to be AAA. They can work their way up from A. Expand their stadium as needed. Either way, they will not have as much trouble with attendence as the G-Braves are having.

Do you even read what I post or check out the links?
I mentioned Charlotte. It is 1) the only baseball team in the metro, 2) right in the center of a metro area with 2.3 million people, 3) in the largest state without a single MLB team, 4) right in downtown area, 5) walkable (though a check shows a lot of parking lots around), 6) it's AAA, just a step below MLB. While highest in the league, their attendance still doesn't crack 10,000. When even a floundering MLB team draws twice that, it makes no sense to bring them in closer.
I decided to actually look into research for this. W Coleman Conley has a good research article. You'll wanna check out page 43 and 44. The original hypothesis was that AAA teams would want to be closer to MLB teams:

"We predicted that a greater distance from an MLB team would lead to a higher probability of having a team at the lower three levels, but a lower probability of having a AAA team"

But,

" However, the AAA coefficient is positive as well, suggesting the opposite of our hypothesis for that level."

Why?

" AAA games may be seen as substitutes for MLB games"

Also,

"Furthermore, because there is a higher quality of play in the MLB, it makes even more sense that a minor league firm would need to locate farther away in order to compete effectively."

It's not happening. Only A would be a possibility and that's not happening with a AAA team in the metro. Can you imagine Rome losing their team to us?


Also for stadium capacity, per Barilla, Gruben, and Levernier "The Effect Of Promotions On Attendance At Major League Baseball Games",

"The regression results further indicate that teams with larger stadiums draw larger crowds, although attendance does not increase one-for-one with an increase in capacity. The results suggest that increasing stadium capacity by 1,000 seats at a stadium raises home game attendance by approximately 160 people."

Removing 10,000 seats (or adding) only lowers home game attendance by ~1,600 (raises by 1,600). Not a lot when you're talking about tens of thousands. Empty seats are embarrassing. Also takes away from the atmosphere. Go to a college game where there are only 5,000 present but in a stadium that only holds 5-6K. Everyone is closer in. Few empty seats, much better atmosphere. Compare that to 15,000 people scattered about a 50,000 seat stadium. Large portions of the crowd are located far from the field with noticeable empty sections. Noise is reduced. You have people buying cheap upper level tickets then moving and occupying more expensive seats. Makes no sense to build for larger than you need.

[MikeHonchoATL]

Originally Posted by jsvh

I think you missed Economics 101. The goal is not simply to increase value by reducing supply.

The goal is to maximize profitability by optimizing both supply and demand. If you reduce supply you are also reducing total revenue.

That is why the most valuable teams in baseball play in stadiums with over 50k seats.

Make no mistake, the number of seats in Tuner was not the problem.

Ummmm... no. There is very little correlation to stadium size and value of franchise. Look at the top 10 franchises and you'll see only 2 have 'very large' stadiums. The rest don't.

There were just 3 teams that averaged 40,000 fans per game last year. A 50,000 seat stadium is ridiculous for most franchises and creates a ton of bad seats.

[jsvh]

Originally Posted by sedimenjerry

Do you even read what I post or check out the links?
I mentioned Charlotte. It is 1) the only baseball team in the metro, 2) right in the center of a metro area with 2.3 million people, 3) in the largest state without a single MLB team, 4) right in downtown area, 5) walkable (though a check shows a lot of parking lots around), 6) it's AAA, just a step below MLB. While highest in the league, their attendance still doesn't crack 10,000. When even a floundering MLB team draws twice that, it makes no sense to bring them in closer.
I decided to actually look into research for this. W Coleman Conley has a good research article. You'll wanna check out page 43 and 44. The original hypothesis was that AAA teams would want to be closer to MLB teams:

"We predicted that a greater distance from an MLB team would lead to a higher probability of having a team at the lower three levels, but a lower probability of having a AAA team"

But,

" However, the AAA coefficient is positive as well, suggesting the opposite of our hypothesis for that level."

Why?

" AAA games may be seen as substitutes for MLB games"

Also,

"Furthermore, because there is a higher quality of play in the MLB, it makes even more sense that a minor league firm would need to locate farther away in order to compete effectively."

It's not happening. Only A would be a possibility and that's not happening with a AAA team in the metro. Can you imagine Rome losing their team to us?


Also for stadium capacity, per Barilla, Gruben, and Levernier "The Effect Of Promotions On Attendance At Major League Baseball Games",

I am not denying having other baseball teams near by has a negative effect.

What I am saying is a team in the city center would be very well suited to attract fans the Braves have left on the table with this move (People that prefer walkable, connected stadium / CoA residents / CoA workers / Tourists staying in the city / OTP residents south and east (If G-Braves leave) ) and more than offset that effect. They would have no problem getting the 5k - 10k attendance levels seen at minor league games in other markets compared to the ~3k the G-Braves are bringing in.

Originally Posted by sedimenjerry

"The regression results further indicate that teams with larger stadiums draw larger crowds, although attendance does not increase one-for-one with an increase in capacity. The results suggest that increasing stadium capacity by 1,000 seats at a stadium raises home game attendance by approximately 160 people."

Removing 10,000 seats (or adding) only lowers home game attendance by ~1,600 (raises by 1,600). Not a lot when you're talking about tens of thousands. Empty seats are embarrassing. Also takes away from the atmosphere. Go to a college game where there are only 5,000 present but in a stadium that only holds 5-6K. Everyone is closer in. Few empty seats, much better atmosphere. Compare that to 15,000 people scattered about a 50,000 seat stadium. Large portions of the crowd are located far from the field with noticeable empty sections. Noise is reduced. You have people buying cheap upper level tickets then moving and occupying more expensive seats. Makes no sense to build for larger than you need.

So you are agreeing that smaller stadiums are not about profits but instead about the ego of the owners.

Instead of returning to being America's Team and attracting the same levels of fans as they have in the past and other top-tier MLB teams today, the Braves are concerned with vanity.

[Bloomfield1]

Originally Posted by BR Valentine

You do know that the Yankees reduced stadium capacity significantly when they moved into the new stadium, right?

Not really. Old Yankee Stadium had capacity of 56k when it closed; new Yankee Stadium had capacity of 52k when it opened.

Not an enormous difference, esp. considering the massive amount of suites in the new iteration.

[Gulch]

Originally Posted by jsvh

I am not denying having other baseball teams near by does not have a negative effect.

What I am saying is a team in the city center would be very well suited to attract fans the Braves have left on the table with this move (People that prefer walkable, connected stadium / CoA residents / CoA workers / Tourists staying in the city / OTP residents south and east (If G-Braves leave) ) and more than offset that effect. They would have no problem getting the 5k - 10k attendance levels seen at minor league games in other markets compared to the ~3k the G-Braves are bringing in.

Problem with that is the Braves and MLB would never allow another franchise's farm team to locate less than 15 miles from a major-league park (and it's even debatable that a scenario of moving the G-Braves intown would boost their attendance significantlywhen the major-league club is right up the road).

So you are agreeing that smaller stadiums are not about profits but instead about the ego of the owners.

Instead of returning to being America's Team and attracting the same levels of fans as they have in the past and other top-tier MLB teams today, the Braves are concerned with vanity.

If that's the case, then ever other MLB franchise that has downsized with their new stadiums (yes even the Yankees did it) is "concerned with vanity." Of all the things that are bad with SunTrust Park, the reduced capacity is not one of them.

[jsvh]

Originally Posted by Gulch

Problem with that is the Braves and MLB would never allow another franchise's farm team to locate less than 15 miles from a major-league park (and it's even debatable that a scenario of moving the G-Braves intown would boost their attendance significantlywhen the major-league club is right up the road).

Politics are a separate matter. But they would be more successful. Stadium location matters.

Originally Posted by Gulch

If that's the case, then ever other MLB franchise that has downsized with their new stadiums (yes even the Yankees did it) is "concerned with vanity." Of all the things that are bad with SunTrust Park, the reduced capacity is not one of them.

I actually prefer the expirence of smaller stadiums. But those economics are not what is driving the Cobb move. It is the tax handouts pure and simple.

[DJDeadParrot]

Originally Posted by jsvh

I think you missed Economics 101. The goal is not simply to increase value by reducing supply.

The goal is to maximize profitability by optimizing both supply and demand. If you reduce supply you are also reducing total revenue.

Its not linear; there's a point at which over-capacity yields diminished returns. That's how you optimize supply and demand. If you have more product than there is demand for that product, it absolutely can lose value to the point that your total revenue takes a hit.

I should point out that you were making this very argument in the parking thread.

[jsvh]

Yes. I agree STP is more appropriate size than Turner for what Liberty Media has planned. They took the trade off of reduced demand for games in exchange for $400M tax dollars.

There business model is no longer focused on attracting a lot of fans like they did in the 90s and other top teir teams do today, but instead milking local governments.

Leaving Turner would have made no sense without those handouts.