Yankees winning, but have empty feeling
Low attendance hurting bottom line in the Bronx
With 27 World Series Championships and a roster of legends, including Babe Ruth, Lou Gehrig, Joe DiMaggio, Mickey Mantle, Reggie Jackson and Derek Jeter, the New York Yankees are understandably among the world’s elite sports franchises.
But something interesting is happening in the Bronx.
After years of mediocre seasons in which the Yankees have reached the postseason once in four years, the team (31-20) currently leads their division with the second best record in the American League, trailing only the Houston Astros (38-16), who have the best record in Major League Baseball. They also have one of baseball’s most exciting young stars in rookie right fielder Aaron Judge, who leads the AL in home runs, has landed on the cover of Sports Illustrated, and has an 18-seat section in Yankee Stadium dubbed “The Judge’s Chambers” in his honor.
Still, the Pinstripes are having trouble filling seats.
The New York Times reported this week that through the end of May, the Yankees have an average attendance of 34,642 per-game, a decline of 3,793 compared to the same point last season. The Gray Lady reported that the Yankees reported a $14 million decline in ticket and suite sales in the first-quarter of 2017 compared to the same period last year. It’s a trend that the team has faced since 2009, the year the team moved into the new Yankee Stadium and last won the World Series. According to public filings the team is required to make on $1.2 billion in stadium bonds used to build, the team’s ticket and suite revenues declined $46 million in 2016 and $166 million since earning its last championship.
This month Moody’s bond rating service lowered the Yankee’s bond ratings — currently Baa1 — from stable to negative, due in part to the attendance revenue decline and the team’s failure to refinance its stadium bonds last September in the face of rising interest rates since Donald Trump was elected president.
The Times reports that had the Yankees refinanced, the team had forecast $16 million in savings on their debt service in 2018, $11 million annually from 2019 to 2030 and $6 million a year beyond that until the bonds mature in 2046, according to Moody’s.
The empty seats are causing embarrassment to one of the great teams in sports. However, much of their problems have been self-inflicted. When new Yankee Stadium opened, individual game tickets for seats behind and near home plate went for $2,500 each. They’ve since been cut in half. Still, even in the Big Apple, it’s steep to ask $1,250 a seat and expect it to be filled for 81 home games in a 162 game regular season. For comparison, while a season ticket only option, the Astros’ Diamond Club section right behind home plate at Minute Maid Park sells for an average price of $425.
Management has said the team has had a difficult time reaching the under 35 year old demographic, they have introduced a $15 ticket for standing-room-only entry and a soft drink, water, or beer, and increased their social media efforts.
The team does much to diversify its investment portfolio beyond ticket sales. They earn television and radio broadcast fees, as well as income from advertising and licensing. They also have partnered with the Dallas Cowboys in a sports marketing firm, Legends. Additionally, they partnered with England-based Manchester City Football Club as co-owners of Major League Soccer’s New York City Football Club, which plays home games at Yankee Stadium.
Yet, baseball is the Yankees business. Maybe it’s that their fans have become spoiled and expect playoff baseball or their interest wanes. One way or another, I hope, for the sport, things change. Baseball is better when the Yankees are winning. But it cannot thrive if people aren’t attending games. If better price structuring is needed to draw fans, so be it. Lower prices. If the Yankees continue on their current course, they’ll make the playoffs. If they do, their play needs to be the story, not an empty Yankee Stadium.