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February 20, 2009If you’re a fan of baseball, or even sports in general, you’re aware of Michael Lewis’ Moneyball. The book paved the way for teams to justify underspending when it comes to building their roster by focusing on Billy Beane’s approach with the Oakland Athletics. While the results of the study can be debated on a player-to-player basis, the impact that the work had on baseball as a whole is still being felt.
While general managers and scouts of all MLB teams crunch numbers in a Bill James fashion to see what diamonds they can find in the rough of baseball players all over the world to maximize their on-field bang-per-buck, the financial-based website Bloomberg.com wrote an interesting analysis piece on the Cleveland Indians and their unique form of statistical number crunching. Sure, Mark Shapiro and crew are always on the lookout for the next Victor Martinez and Grady Sizemore, but when it comes to a middle market franchise, the team has to look to other mediums to maximize profit.
BABIP and Isolated Power are all well and good. But if you ask the Indians front office, so is the impact of things like temperature and opponent when it comes to how many fans are in the seats. Gone are the days of the consecutive sell-outs at The Jake. (And yes, I know, it’s no longer called the Jake). So when you have a team that forecasts itself to have make the playoffs just to break even on their off-season spending, you can bet that they’re going to do whatever it takes to make sure that their forecasts err on the side of conservatism.
While the Indians cannot (and will not) ever make the national news based on their signings of attractive, big-money free agents like Mark Teixeira, they actually are the most progressive in one area: ticket pricing research.
“The Indians are at the forefront of what many teams are trying to do with variable pricing,” said Michael Arya, 47, co- founder of Pasadena, California-based TixTrack Inc., a company that analyzes the secondary ticket market and consults with professional teams. “It’s about more than just charging more when the Yankees come to town. They are trying to make educated decisions, based less on guesswork and more on analysis.”
If you attend multiple games this season, you will notice that the price per ticket may very between each trip to the park. Using a four-tier ticketing platform, games in the summer will cost more than those in the spring or fall – playoffs excluded. If you want to catch the New York Yankees or Boston Red Sox, it will cost you a few more dollars than it would if you choose to admire the actual AL East Champions of 2008 – the Tampa Bay Rays.
And if you think that the giveaways and firework nights are not strategically placed, think again.
Put the name “Grady Sizemore” in a promotion, and you can expect nearly 7,000 more fans in attendance. Give away a bobblehead doll and the rate increases by about 5,000 fans. Unfortunately, no statistical evidence was given for nights that guarantee David Dellucci does not see the field – though one can imagine a decent spike in fan totals then as well.
The good news, though, is that the Indians have a very attractive ticket price in regard to the league median. The average ticket price in baseball for 2008 was $25.40, while Clevelanders pay $25.72. Compare this to the larger markets like Boston ($48.80), Chicago ($42.49) and New York ($36.58), and it costs us a considerably lower amount of money to see those teams play when they come here. The down side to all of this is obviously those that will have to pay for the tickets. With the unemployment rate north of seven percent in northeastern Ohio, the variable pricing may detract the average fan that just wants to see a baseball game. Instead of ponying up for the higher-priced attraction games, they may in fact settle for the lower-tier games.
I would anticipate other teams adaptation of these studies sooner than later. Given that the global credit squeeze has put a relative damper on discretionary spending, these franchises will need to make money in any way possible.
The Cleveland Indians. Your statistical research trailblazers.
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Moneyball II: Statistics Driving Marketing for MLB’s Indians [Bloomberg.com]
17 Comments
“And yes, I know, it’s no longer called the Jake”
Wait, what? What are you talking about? I have no idea. It will ALWAYS be called the Jake in my mind.
“no statistical evidence was given for nights that guarantee David Dellucci does not see the field – though one can imagine a decent spike in fan totals then as well.”
Hahaha. Good read. Just seeing that picture of THE JAKE (not the prog) makes me jacked. Go Tribe!
The Cubs (whose tickets went on sale today) also have a four-tier pricing plan. June, July and August games are all in the top two tiers.
… yes but I’ve been waiting for the 2 hours now in the Cubs waiting room and every 15 minutes more I wait I have a feeling that I’ll be looking to the scalpers on Addison St. or Stub Hub to get tickets for the Cubs- Tribe games in June which means that pricing plan means nothing
Since the crowds at Yankee and Red Sox games are full of front-running fans of those teams, screw ’em and make them pay higher prices for tickets.
Boom – I’ll gladly watch the Alex Gordons, Nick Markakis’, and BJ Uptons of the world for a lower ticket price…
I didn’t go to any Tribe games last year because of being in college and gas prices in the summer time being at about $4 a gallon. I usually go to about 6 a year for the past 7 years or so. Maybe with these ticket prices in mind and gas being cheaper I’ll get back on track.
VWR’s are absolutely awful. I’m in one just trying to help some friends from Chicago score seats for regular games.
A lot of teams are doing the variable pricing now…the Rockies have been selling April games cheaper for years. We recently moved to Seattle, and while I’m thrilled to be back in an AL market, I did notice that the Indians games in July are considered Premium games here. I’ll still gladly go to all three games…it’s just going to cost us more than we were expecting! But at least we’ll get a Franklin Gutierrez bobblehead on Friday night. 🙂
So how many Grady Sizemore bobbleheads *are* they giving out this year?
While the grady bobblehead would be nice… I don’t think I can look at myself in the mirror if I don’t attempt to go to the game where they are giving out the Choo 80’s bobblehead
It’s all about stuffing the Dolan’s pockets. Bottom line is that the Indians model is to have a lower quartile payroll when in fact they should have a middle of the pack payroll, minimum. Committment from Dolan maximizes at the lower quartile payroll level…….for his pockets must be filled before other goals are established. Why would anyone pay a premium for the same seat that otherwise is much lower priced just to see a game that puts more ching in Dolan’s wallet?
All this talk about a “middle market” team is just crap-do they say that in St. Louis? (similar sized market to Cleveland). And, if we are a “middle market” team, then the payroll should reflect as such……….MIDDLE of the pack payroll.
Middle Market isn’t about size Randy it’s about who your owner is… You can not compare the Cardinals to the Indians in that sense though both Cleveland and St. Louis are of a similar size…
Teams that should be compared to the Indians as a middle market team are teams such as the Brewers, Rockies, and Padres (before the owners messy divorce-sell the team’s assets sale)
St. Louis has a payroll of 100,000,000 … that’s not because St. Louis the city has decided to spend that… it’s that the owners of the team (I’m thinking of Arby’s) have decided that is what they have chosen to spend.
While fiscally conservative and constratined, the Dolans have opened their wallets a little bit more this year to make smart signings and give Cleveland another chance at a weaker division than the one they won in 2007 and for that we should be happy…
With that said… Tribe Time in 09′! (it will never beat Tribe’s alive in 05′)
and one last point… the Tribe’s payroll is 16th out of 30th … making us a Middle of the pack payroll
Well, Randy, you will be happy to know that the Indians have gone from 23rd in payroll last year to 16th in payroll this year adding $17.3 million.
That sounds like the middle to me. And quite frankly, I am buying into the notion that you should rise and fall from the middle in salary by paying your home grown guys as they mature. Think about the fact that the salaries that make up this middle of the league payroll are guys like Victor Martinez, Grady Sizemore, Jhonny Peralta, Pronk and others who weren’t exactly old veterans when they showed up in Cleveland.
And when these guys retire, and leave, hopefully Shapiro and company will have the horses to pay then to stay in the middle.
And another thing…
When the Red Sox complain about the Yankees, they are jealous because they can’t spend the same exact. When I complain about the Yankees or the Red Sox it isn’t out of jealousy. I wouldn’t want stupid J.D. Drew making all that money in order to show up 3 measly times per year. I don’t want to be the guy who steals the next Manny Ramirez away from the town that created Manny being Manny.
So call Dolan cheap if you want, but I don’t really want to be in the game of signing Mark Teixiera or JD Drew. At that point it is just fantasy baseball, right?
The biggest problem I have with this article is that it fails to recognize that the Indians have increased ticket prices each of the past two seasons, in some cases significantly. Having “cheaper” April games means nothing if they still cost more than they did a year ago for July games. The Indians have not yet realized that they are better off selling more tickets cheaper than selling less tickets for higher prices.
Statistics are great, and I’m all for their use. But the Indians are picking and choosing their statistics instead of painting the whole picture. How can the team possibly gauge the effect of give-away promotions when they only give things away on Saturdays?
This article implies that the Indians are making good business decisions, when any person with a brain can see that they are fostering a negative relationship with their fan base by trying to take every penny that they can given the opportunity. That is an incredibly flawed premise in an industry that requires repeat customers. From a strict marketing perspective, the Indians have been an awful franchise for the last three years.