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August 04, 2007

New Stadium Says Cha-Ching To Yanks

From CNNMoney.com -

From 1997 to 2005, growth in [Yankee] stadium revenue far outpaced the rise in attendance. Annual attendance rose 58%, from 2.6 million to 4.1 million, whereas ticket and luxury-suite revenue soared 202%, from $52 million in 1997 to $157 million in 2005. The new stadium will boast more than three times as many luxury boxes as the old, and as a result, ticket-and-suite revenues are projected to soar to $253 million when the new ballpark opens in 2009.

They will probably be much higher. The $253 million figure in the prospectus assumes attendance in 2009 of 3.4 million, which is the equivalent of 79% of the new stadium's 53,000- person capacity over 81 regular-season home games. Given that the Yankees sold 90% of their tickets last year, 88% in 2005, and are on pace for another 90% showing in 2007, it's hard to imagine ticket sales sagging when the new stadium opens. Also, the ticket-and-suite figures don't include two other sources of stadium revenue - concessions and sponsorships - that Levine expects will get a boost from the new ballpark. The Yankees' current concessionaire, Centerplate Inc., obtained 9.6% of its 2006 sales - the equivalent of $62 million - from its contract with the Yankees, according to SEC filings. Hal Steinbrenner tells Fortune that the Yankees are considering handling concessions on their own in the new stadium. Were the Yankees to go that route, the team could conceivably net $30 million annually on gross concession sales of $100 million, estimates former Yankees marketing director Joseph Perello.

As for sponsorships, Levine says the Yankees are not planning to sell traditional naming rights: "It's going to be called Yankee Stadium." Nevertheless, according to the bond prospectus, the team's lease with New York City (which will own the new stadium) stipulates that the Yankees keep "all cash and receivables" related to "naming rights" and "advertising" and specifically raises the possibility of the Yankees' selling naming rights "for parts of the stadium." In other words, fans may enter a building called Yankee Stadium but find themselves sitting in the Bank of America bleachers or purchasing snacks at the Pfizer food court. Perello, now a sports consultant, thinks the Yanks could collect $50 million to $75 million a year in sponsorship dough this way.

Great news for the Yankees. Just don't tell Scott Boras what kind of spending power the Yankees will have come 2009.

Posted by Steve Lombardi at August 4, 2007 09:57 AM

Comments

All this assumes no economic downturn (now already underway) and no recession. Fantasy land, IOW. Or, don't count your chickens until they're hatched.

Posted by: Don [TypeKey Profile Page] at August 4, 2007 02:06 PM

"traditional naming rights" ?!?

That dude's sick. Traditionally stadiums had names that stuck usually for their entire lifespan, not changed like a game of musical chairs. This new era I hope will end one of these days and stadiums, arenas and music venues will have respectable names, not Bank Field or Associates Coliseum or Loans Arena or the Dunkin Donuts Civic Center.

Posted by: zooomabooma [TypeKey Profile Page] at August 18, 2007 10:41 AM