Baseball Musings
Baseball Musings
December 26, 2008
Why Not Spend?

Matthew Cerrone asks, why don't the Mets spend like the Yankees?

I understand why they had to spend less 10 years ago. But, now the Mets also have a successful regional sports network, they also have a new stadium, they also play in New York City, and also charge a fortune for tickets and hot dogs.

So, what is it? What's the difference? Is it a lack of capital, is it outside forces we are unaware of, is it the team's minority owners, is it personal preference?

The thing is, I'm fine with any answer, because it's their answer, their money and their decision. I won't argue against it, judge or criticize it, because what do i know.

However, as a fan, as a customer, who spends a ton of time and money helping to support their business, spending money on tickets and TV time, popcorn, pretzels and parking, only to drive myself crazy every fall, I believe you and I have earned some sort of response.

The Yankees are taking advantage of being a rich team in a down market to stock up on very good players. However, there is a potential downside. If the economic situation gets so bad that the stadium attendance goes down, and advertising on YES goes down, the Yankees might find themselves in a situation in which they are bleeding money. The probability of that happening may not be that high, but I'm guessing it's more like 10 or 20% than 1%. The Yankees are taking a gamble, probably to get the Boss one more championship before he dies. It's a good gamble, but I can see where lots of teams in this environment don't want to be caught three years down the road with a bloated payroll and reduced revenue.


Posted by David Pinto at 10:03 AM | Management | TrackBack (0)
Comments

One thing you can count on is that stadium attendance for the Yankees will never go down no matter how bad the economy gets. This ain't San Diego, this is the New York Yankees who make gobs of money and then put it right back into the team. Fan loyalty will never be in question because NY'ers recognize that the Yankees are committed to giving their fans the best baseball experience you can get in this country. No one even comes close and as a Yankee fan I love it!

Posted by: Ranchorich at December 26, 2008 11:08 AM

Really? Did you look at the attendance figured of the 80's and early 90's? They weren't selling out every game back then like they are now. No one can say for certain what's going to happen in the future, so to say that they're attendance will never go down is quite naive.

Posted by: sabernar at December 26, 2008 11:19 AM

Stadium attendance is highly correlated with winning. If the Yankees start to dominate the standings again with the new crop of free agent signings, then they will draw fans, making the expenditure on the free agents self-financing.
Just win, baby! and it all falls into place.

Posted by: fred at December 26, 2008 11:36 AM

As long as the Yankees put a competitive team out there, they'll draw. The 80s & early 90s had some pretty bad teams out there (same with late 60s)

Aren't the Mets corporate owned? Corporations will do things differently from a family owned business.

Still, with a declining economy, people may go, they just won't buy souveniers or beer or hotdogs. Maybe a coke, and sneak in some rum.

Posted by: rbj at December 26, 2008 11:36 AM

You would think Cerrone would realize that the Yankees have so much more capital it's ridiculous. For one, they bring more fans into the stadium....both home and away, so their daily cuts add up to much larger. Two, and I think this is huge, their merchandising is much, much larger. I'm in NY and there is clearly more Yankees hats than Mets hat. And if you move away from NY I bet the ratio is 10 times as lopsided, not to mention they have an overseas market to sell to as well, they basically own the japan market. They have had their network much longer, adding up those revenue, which take a while to add up. I may be wrong about this one, but don't they have far more non yankee related money? And finally, they didn't lose half their cash to Madoff as Wilpon did.

Posted by: Tim at December 26, 2008 11:43 AM

This article from CNBC offers a good explanation, I think, for why the Yanks can spend so much when the Mets can't:

http://www.cnbc.com/id/28370215

Bottom line: The Steinbrenner's main business is the Yankees. Most other owners have other businesses they need to worry about in addition to their team. When the economy tanks, those other businesses take a hit and they can't afford to invest back into their team. When your primary business IS baseball, your only priority is to worry how well your team does.

Posted by: Lawrence Boucher at December 26, 2008 11:44 AM

The Mets are not corporate owned. They are owned by the Wilpon family.

I understand nobody can come close to matching the amount of money they put back into the team, but there are certainly teams who put the same amount of their money back into the team. Of course other teams try as hard, and they do it better. I'm willing to bet those red sox fans get the same effort from their guys even though their revenue sources are limited by a tiny stadium.

And to say they get the best experience is a bit off, maybe they get the most money spent, but that leaves you guys with the Giambi's, Browns, Pavano's, R. Johnson's, Lieber's, Igawa's of the world. It also left you for years, unecessarily, with a stadium that while beloved (i'm a met fan who loved it) was far inferior to a majority of stadiums.

Posted by: Tim at December 26, 2008 11:50 AM

Ahh Metsblog, the home of deep questions and delusion Mets fans. Maybe Matt could suggest a cool trade, like Luis Castillo for Chase Utley or Carlos Delgado for Albert Pujols...

My goodness, the Mets have David Wright, Carlos Beltran, Johan Santana, Jose Reyes all locked up for years to come. This winter Minaya (a.k.a. My GM Skills Are Lauded Because My Team HAS MONEY!) went and got Fingers to the Sky Squating Dancing Queen and Pootz. What more does Cerrone want? How about a really expensive stadium from taxpayers? Oh, got that one too.

The Mets are the Mets and the Yankees are the Yankees. I've never lived in New York and can understand this. (Not that I ever pull for the Yankees...I can't stand 'em.)

Posted by: KMD at December 26, 2008 01:19 PM

The demand drivers just aren't the same - longer history I guess for the Yankees, more sustained success?

But the most expensive seats for new Yankee Stadium are $2500 a game, for Citifield $500.

Another example, for essentially the same seats at nYS and Citi, behind the plate top deck, first 4 rows, the cheapest Yankee plan is $8100 a ticket*, for the Mets $2400 a ticket - for a baseball fan rather than a Yanks or Mets fan, the choice was easy for me.

* Yankees have taken away the half season / weekday option - full season or you are not committed enough! Mets still offer these seats for every other game.

I am genuinely interested in how the downturn impacts the Yankees revenue stream - every Yankee fan seems absolutely certain that the revenues are certain - kind of like employees at Bear Stearns, Lehman et al prior to the last year?

Posted by: Neil H at December 26, 2008 01:51 PM

"No one can say for certain what's going to happen in the future, so to say that they're attendance will never go down is quite naive."

Naive? No, foolish. Wonder when Congress gets around to holding hearings on TARP funds getting spent on luxury boxes. Yankees will take a beating on tickets in 2010.

Posted by: dave at December 26, 2008 10:11 PM
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