Business of Sports
St. Louis' All-Star Break Pay Day
1. Meet Me in St. Louis for MLB All-Star Break 2009 What a difference a year makes. While it's been 43 years since the last time St. Louis hosted Major League Baseball's All-Star Game, the economics surrounding the event have perhaps changed more dramatically in the past 12 months than they have in the four decades. That, of course, has as much to do with the circumstances surrounding last year's Midsummer Classic—the last such event to be held at old Yankee Stadium—as it does with the recession. Last year's All-Star game created an unprecedented economic impact of nearly $150 million—more than double the estimated $60 million this year's July 10-14 events at Busch Stadium in St. Louis are likely to bring in. This year, about 230,000 people are expected to attend part of the weeklong celebration, according to the St. Louis Regional Chamber and Growth Assn. Almost half of those fans are anticipated to come from out of town, partially since only about 1,000 tickets—less than 3% of the normal capacity at Busch Stadium—have been made available to the general public. Direct visitor spending on Cardinals operations and on hotels, dining, and retail is expected to top $32 million, triggering another $27 million in indirect spending in the region. In keeping with the economic climate, MLB and the host Cardinals are emphasizing elements of community service and charity like never before. MLB anticipates generating up to $5 million for national and local charities including Stand Up to Cancer and Cardinals Care, while most sponsors of the event, including heavy hitters Anheuser-Busch InBev ( (AHBIF.PK)) and Pepsi ( (PEP)), are incorporating cause-related marketing efforts. While St. Louis is the host city for the All-Star Game, MLB pays most of the bills and hires vendors and businesses for All-Star-related events, focusing heavily on local companies and minority and women-owned businesses, while the Cardinals have been planning every aspect of the celebration since 2006. Under baseball's guidance, caterers, event planners, hotels, restaurants, bars, limo drivers, and many others are stepping up to the plate this weekend. Over 2,500 members of the press from around the world have requested credentials in St. Louis, representing a tremendous opportunity for St. Louis to market itself. More than 100 million households tune in to the game itself on FOX, and to ESPN's Home Run Derby; the events are broadcast in 225 countries in 12 different languages. Tickets to the All-Star Game range from $100 to $360. Last week, SRO tickets on StubHub were listed at $362 apiece; bleacher seats are priced at $550, and some field box tickets are set at $2,500. EBay ( (EBAY)) is offering two diamond box seats for $6,500. 2. MLB All-Star Break: The Buzz and the Events "One swing of the bat, 1 million tickets…No pressure. We play in New York," said Mets third baseman David Wright on ABC's Good Morning America, about a promotion in which 1 million fans could win tickets to the July 24 opening of Disney's ( (DIS)) G-Force movie if a member of the National League squad hits a grand slam during this year's All-Star Game. That level of drama pretty much summarizes all the events comprising the All-Star Break. St. Louis is preparing to play host to a weeklong extravaganza of All-Star activities, including FanFest at America's Center, the Home Run Derby, a 5K fun run on Sunday, a red carpet parade, lots of sponsor parties. And that's all before the All-Star Game itself. On Saturday, Elvis Costello will join Missouri native and nine-time Grammy Award winner Sheryl Crow at the 2009 MLB All-Star Charity Concert. The July 11 event under the Gateway Arch is free to fans and presented by Pepsi, which is also financing complimentary streaming on MLB.com. Budweiser, Taco Bell ( (YUM)), and Sharp ( (SHCAF.PK)) are also backing the event, a benefit for Stand Up to Cancer; MLB is donating $1 million to the organization. Between 60,000 and 70,000 people are expected to attend. Not long after the final crack of Monday's Home Run Derby, roughly 4,000 people will take the party even farther, outside of Busch Stadium to a massive tent in Ballpark Village for the All-Star Gala. Invited guests will enjoy food created by St. Louis chefs and hot local bands. And after these guests fade away, a new wave of workers will clock in at 2:30 a.m. to start setting up for the All-Star Pregame Party. While there are fewer than 70 All-Star players, it takes a very deep roster of dedicated people to pull off the series of events surrounding the game year after year. 3. MLB All-Star Break: The Techno Side Each year, it seems, baseball gets more tech-savvy. This season, baseball's signature Advanced Media group is poised to break a record for online All-Star Game fan voting after passing the 200 million vote mark late last Wednesday night. According to MLBAM, last year's fan voting generated 214.7 million votes, with more than 41 million votes being cast on the final day. 2009 voting concluded at midnight last Thursday night. Once again, the National League's Albert Pujols was the leading vote-getter for the Midsummer Classic, collecting 5,397,374 votes, the second-highest total in MLB history behind Ken Griffey, Jr.'s 6 million votes in 1994. Yankees shortstop Derek Jeter was the leading vote-getter in the American League. MLBAM has also announced a mobile premium product for the new Palm Pre smart phone. The MLB.com Mobile Premium for the Pre contains many of the same features as the popular MLB.com At Bat app, including live audio feeds, in-game video highlights, and greatly expanded scoreboards. The mobile Web-based product will go for $14.99 for the rest of the season, including the postseason, or can be had for $2.99 per month. Not to be digitally outdone, Fox Sports will expand its @mlbonfox Twitter account during the MLB All-Star Game. Announcers will tweet during the game, while reporter Ken Rosenthal will answer Twitter-submitted questions. 4. MLB: The Owners Strike Back…or Out? Baseball's All-Star break normally provides a stage for its stars to shine and its owners to, albeit temporarily, fade into the background. Not so much this year. On Monday, it was widely reported that Tribune Co. has finally reached a firm agreement to sell the Chicago Cubs, Wrigley Field, a 25% stake in a regional cable television sports network, and other assets to the family of J. Joseph Ricketts, the founder of TD Ameritrade ( (AMTD)), for about $900 million. The deal, which comes five months after the Ricketts family's winning bid for the team, has reportedly now been sent to MLB for review. In Texas, some not-so-good financial news surrounded the Rangers, after Sirius XM ( (SIRI)) reported that the team was unable to make payroll last week, forcing MLB to loan the team $15 million from central revenues to cover costs. Rangers owner Tom Hicks continues to try and sell the team; Hicks last week disbanded his sports marketing group and sent employees to the Rangers and his Dallas Stars NHL franchise. Rangers President Nolan Ryan has been "rumored to be part of a group expressing interest in purchasing Rangers ownership," likely in the off-season. The cash flow issues will also likely prevent the team from acquiring prime pitching help by the trade deadline. In New York, Yankees Managing General Partner Hal Steinbrenner is inviting a number of season ticket holders to meetings to give their opinions on the new ballpark. In order to entice people to attend, Steinbrenner is offering perks including signed baseballs and the chance to watch batting practice on the field. Revenue generated from new Yankee Stadium is almost five times the amount needed to cover debt service, according to a recent report by Moody's Investors Service. The Yankees expect to generate over $330 million at their new stadium this season. 5. SI Fortunate 50 and ESPN Ultimate Standings—How Baseball Fits In As it does every year, Sports Illustrated recently released its list of the 50 top-earning American athletes for 2009. Likewise, ESPN the Magazine just came out with its Ultimate Standings, measuring how much all 122 NFL, NBA, MLB, and NHL franchises give back to the fans in exchange for how much the fans invest in them. How did Major League Baseball stack up? On the Sports Illustrated list, the Yankees unsurprisingly captured four of the top 25 spots for top earners, with third baseman Alex Rodriguez coming in at No. 4 with a 2009 income of $39 million. (Rodriguez followed No. 1 Tiger Woods at 99.7 million, No. 2 Phil Mickelson at $52.9 million, and No. 3 LeBron James at $42.4 million.) Derek Jeter followed up at No. 9 ($28.5 million), Mark Teixeira at No. 14 ($25.3 million), and CC Sabathia at No. 18 ($23.3 million). The next-highest-ranked baseball player was San Francisco Giants pitcher Barry Zito, at No. 26 ($18.6 million). The list of 50 contained no tennis or hockey players—and no women. In the ESPN assessment, a year out from their turn at hosting the MLB All-Star Game, the Los Angeles Angels of Anaheim ranked as the most fan-friendly team in America. The Angels have ranked as the most fan-friendly baseball team for six years, but this is the first time they have ranked No. 1 among all teams in the four major leagues. Rounding out the top five behind the Angels were the Carolina Hurricanes, Pittsburgh Steelers, Detroit Red Wings, and Cleveland Cavaliers. The next baseball team to rank was the Milwaukee Brewers, at No. 7; the Tampa Bay Rays, at No. 16, were the only other MLB team to crack the top 20. Among the categories ESPN uses to judge the fan-friendliness of teams are "Bang for the Buck," wins during the past three years per fan revenues (New Orleans Hornets topped this category); Fan Relations (the Red Wings were No. 1); Ownership (Wings again); Affordability (the Rays); Stadium Experience (Green Bay Packers); Players (Cavs); Coaching (tie between San Antonio Spurs and New England Patriots); and Title Track (Angels, Wings, and Cardinals tied for top honors). 6. SI Fortunate 50: Not-So-Fortunate Endorsers? Tiger Woods and Phil Mickelson are the two highest-paid sports endorsers in the U.S. That never changes—but here are five athletes who made the smallest percentage of their income from endorsement deals: 5. Mark Teixeira (0.99%)—Endorsements ($250,000) / Earnings ($25,250,000) 4. Antonio Smith (0.96%)—Endorsements ($150,000) / Earnings ($15,650,000)* 3. Todd Helton (0.90%)—Endorsements ($150,000) / Earnings ($16,750,000) 2. Julius Peppers (0.89%)—Endorsements ($150,000) / Earnings ($16,850,000) 1. Barry Zito (0.54%)—Endorsements ($100,000) / Earnings ($18,600,000) * If you're surprised to see Smith on this list, he was paid $15.5 million upfront to sign with the Texans in the offseason. By comparison, Woods made 92.24% of his income from endorsements, while Mickelson made 88.01% of his through sponsorship deals. 7. Player Perks As anyone who follows baseball knows, when minor league players move up to "The Show," where the league minimum pay is $400,000, they get shown a lot more than the money. The Fort Lauderdale Sun-Sentinel last week focused on big league player perks. First, there's travel in charter planes as opposed to buses, multi-stop regional jets, and long security lines. If players have to travel commercial and no first-class tickets are available, teams purchase three seats for every two players in coach. Heaven forbid they have to handle their own luggage. Hotels are different, too. "You go from Motel 6s to Ritz-Carltons," said minor league veteran Brian Sanches, and the collective bargaining agreement states that no roommates are allowed. Then there's the $85 per diem players get when on the road, a big jump from the $20 per diem in the minors. "Try and eat three good meals on that, plus have some left to tip the clubhouse attendants," said Marlins rookie outfielder Brett Carroll. And don't forget about seemingly endless supplies of food in the clubhouse, drinks, sunflower seeds, and gum in the dugout, and free equipment, sunglasses, and shoes. For the All-Star game, players are treated to first-class airfare and three days of lodging for the player and one guest. In St. Louis, they'll he housed at the tony Hyatt Regency—the 910-room hotel, which will host both the National League and American League teams, just wrapped up a $63 million renovation. 8. Ballpark Bulletin While the Cardinals appear comfortably perched in Busch Stadium for the foreseeable future, a handful of other baseball teams are poised to make facilities moves. In Minneapolis, the Twins are tentatively scheduled to open Target Field next Apr. 12 against the Boston Red Sox, and Twins President David St. Peter told the Minneapolis Star-Tribune that the ballpark is "a few weeks ahead of schedule." This season, the Twins are on track to draw more than 2.3 million fans to the Metrodome, well ahead of their 2008 attendance totals, and project selling upwards of 20,000 full season tickets at the new ballpark, which would place them in the top 10 MLB teams sales-wise. Naming rights holder Target ( (TGT)) must be doing O.K. despite the economy—the company is reportedly negotiating with the NBA Timberwolves for an extension of its naming rights deal for Target Center, despite the millions it spent in a 25-year deal to name Target Field/Target Plaza. In Miami, the Marlins began clearing land on their new stadium site last week after agreeing to make up a $6.2 million bond deficit (out of a total $300 million bond sale to fund construction). A ground-breaking grip-n-grin is set for July 18, and the ballpark is slated to open for the 2012 season. Across Florida, only 34% of respondents in a St. Petersburg Times poll support using public funding to build a new Tampa Bay Rays stadium. 9. Extreme Makeover: Stadium Edition 5. Texas Longhorns Godzillatron. Everything is bigger in Texas, even scoreboards. Part of a $15 million renovation to DKR Memorial Stadium, Godzillatron was the largest high-definition video screen in the world when it was introduced in 2006. At least the name sounds better than "Longhornatron." 4. Astrodome AstroTurf. When the Astrodome opened in 1965, it had a grass field that didn't grow well inside the domed stadium. The solution was an artificial playing surface called ChemGrass, which later became known as AstroTurf. While the Astrodome is no longer in use, AstroTurf continues to be used in stadiums throughout the world. 3. Wrigley Field Lights. Part of what made Wrigley Field all the more unique was its strict commitment to day games, and it wasn't until 1988 that the "Friendly Confines" decided to add lights for night baseball. However, fret not, dear Cubbies fans. Per a city ordinance, the Cubs can only play a max of 30 night games a season. 2. Green Monster Seats. The most coveted seats in baseball are the 269 that rest atop the Green Monster at Fenway Park. Added in 2002, the only way to get tickets is by joining the Red Sox fan club and entering a lottery. While face value is $150, good luck finding the seats that cheap on Yawkey Way. 1. Wimbledon Roof. Where were you when the Centre Court roof closed for the first time? The retractable roof, which made its Wimbledon debut during the Safina-Mauresmo match last week, was part of a $146.2 million renovation to the AELTC. When the seven-minute closure ended, fans cheered. 10. Isn't the Last Word Always About Death and/or Taxes? In the on-deck circle next Tuesday—the tax man. According to the St. Louis Post-Dispatch, most MLB players participating in next Tuesday's All-Star Game "will receive hefty bonuses from their respective teams." St. Louis officials apparently "view those bonuses as fair game for the city's earnings tax." St. Louis' 1% earnings tax "applies to all individuals who live—or work—in the city," and the tax is "routinely applied on a pro-rated basis to visiting ballplayers and other professional athletes who stop in St. Louis," the newspaper states, and Missouri's Revenue Dept. director of communications says that participating in All-Star events will be taxed as well. However, cited tax experts said that the city's call could be an error, as it is "unclear if playing in the game is even a condition of receiving the bonus," and University of Georgia associate professor of sports economics Joel Maxcy, added that a player "could make a strong argument against the city's position on taxing bonuses." "They're not being paid to play in that game explicitly," Maxcy said. "They're given a bonus for being selected."