Larry Johnson has a funny look at the premium seating situation at Yankee stadium. Last night the author attended a game in MLB seats on the third base side (almost premium seats). This was the first time in over 35 years of attending Red Sox/ Yankee games at the stadium that I can remember that the majority of the empty seats were at field level (and it was not due to rain, which only started in the 6th inning)
Less you think that my posts about the Steinbrenners’ ticket pricing errors are “small beer”, please reflect on the following math. If the Yankees’ pricing policy results in an average of 3,000 premium seats going unsold at every game, that represents a year long total of 246,000 unsold tickets over a full season. Depending on your assumptions as to the price needed to sell all of those seats, here are the amounts of foregone income:
Mrkt Clrng Price Foregone Income
$250 per ticket $61.5 million
$300 per ticket $73.8 million
$350 per ticket $86.1 million
$400 per ticket $98.4 million
$450 per ticket $110.7 million
$500 per ticket $123.0 million
If the number of unsold seats is higher, the foregone income is even more. Not included in this total are incremental income from souvenirs etc. Of equal import, such revenue drops to the pre-tax line with very limited incremental expense as operating a stadium is largely a fixed cost endeavor. Regardless how rich you are, this is an extraordinary amount of money to forego because you do not want to admit a mistake!
The last five years have been the best of times for Red Sox fans. Starting with their infamous collapse in 2004, they have been the ugliest, if not the worst, of times for Yankee fans.
One could argue that the performance dichotomy is the result of two disparate economic strategies. The Yankees continue to follow strictures established by Col. Jake Rupert in 1920: spend significantly more than any other team to hire away the biggest names in the majors. The Red Sox operate with a hybrid version of Money Ball relying heavily on home grown talent, making strategic bets on reclamation projects like David Ortiz, Bill Mueller, Mike Lowell, Brad Penny, John Smoltz et al. and using Sabremetrics to execute on the field as well as in drafting players.
The two strategies are also seen in their approaches to free agents. The Yankees tend to use muscle to outbid others for big name free agents regardless of the cost. In dealing with free agents, their own and other teams’, the Red Sox tend to have price limits and stick to them (this even was true with Daisulke Matsuzaka). The Yankees hardly ever are outbid in auctions unless it is a onetime sealed bid process where they do not have a chance to up their offer (this is how they lost Daisulke Matsuzaka). This year, the Yankees out did themselves with signings of CC Sabathia, AJ Burnett and Mark Texeira. The Red Sox made a run at Texeira but would not match the Yankees bid. Their real focus was to add four reclamation projects (Takashi Saito, Brad Penny, John Smoltz and Rocco Baldelli) for a combined annual compensation level less than any one year salary of the three big Yankee additions.
Surprisingly, though the Yankees are the huge spenders, they exhibit less alacrity than the Red Sox at jettisoning stars or exploring new strategies. Mid-season trades of Manny Ramirez and Nomar Garciaparra were bold moves by the Red Sox which improved team chemistry without significantly reducing run generating firepower. The Yankees seem less willing to adopt new approaches. Perhaps this is why they still stick with the almost 90 year strategy of Jake Rupert.
The sad reality is that, since 1978, their high priced players strategy has been a bust. The Yankee championship teams of the late 90s were built along the lines of the Red Sox model. This happened during a period when George Steinbrenner was banned from baseball. In Steinbrenner’s absence, Gene Michel and Buck Showalter were able to develop home grown players like Derek Jeter, Bernie Williams, Jorge Posada, Mariano Riveira and Alphonso Soriano who took them to the promised land. As those players aged, and Steinbrenner was reinstated, it was “déjà vu all over again” with more spending, off the charts payrolls and diminishing performance.
One has to wonder what goes through the Steinbrenner’s heads. If there is a proven strategy to win more games win with less expense, why not try it? It could result in less gut wrenching failure and greater profitability. Red Sox fans regularly thank the lord that George and his boys have not figured out the new paradigm. They do this because they know that God IS a Red Sox fan!!!
For another take with some interesting statistics, check out Alex Speier’s piece, “A Different Shape to the Red Sox-Yankees money Wars”.