Friday, April 10, 2009

The Business Behind The New Yankee Stadium - Mohegan Sun Sports Bar Obstruction And Fans As An Extension Of The Ticket Office

For the past couple of weeks, sports business writers have been having a field day with New Yankee Stadium material. Amidst all of the chaos, we here at New Stadium Insider have had the privilege of being a source for some these stories, and are racking up the press clippings to prove it.

Today in the NY Times, Richard Sandomir provides an exposé of the business dealings behind The Mohegan Sun Sports Bar. As usual, the Yankees come off looking pretty bad. It was revealed in the article that Mohegan Sun was not informed that they would be associated with the worst obstructions in the entire $1.6 billion stadium until it was too late. The Yankees, for their part, claim that they didn't have to tell Mohegan Sun because there are no obstructed view seats in the Mohegan Sun Sports Bar. According to experts in the field, the naming rights to the sports bar could have cost upwards of $3 million. Shame on the Mohegan Sun for not doing due diligence before dropping that huge of a sum of money on naming rights, but this is completely the fault of the Yankees and their poor planning.

Our quote in Sandomir's article actually elicited a direct response from Randy Levine when we opined that the Yankees should just tear down the bar and start from scratch:
Ross Sheingold, who runs the New Stadium Insider blog, said by e-mail that the Yankees, not the Mohegan Sun, were to blame. “The Yankees are likely too stubborn to do this,” he wrote, “but it might not be a bad idea to tear the sports bar down and go back to the drawing board.”
Levine stayed strong, claiming that there were no plans to eliminate the structure causing the "architectural shadow" in the bleachers. As he explained, "they've [$5 obstructed seats] completely sold out." What he failed to mention was that the seats were sold out before the obstruction was revealed to the season ticket licensees assigned to those seats. Those people were told to "take it or leave it" when the obstruction was announced - there was no other availability in the bleachers, or any other affordable part of the stadium remaining. Those seats might not be completely sold out in the next couple of years when the shine of the new stadium wears off.

Switching gears a bit, there was an article in Crain's Business NY by Aaron Elstein this week, touching on the point we have made in the past about Yankee fans becoming an extension of the ticket office. Elstein is actually a Yankee season ticket holder himself, and has been commiserating with us throughout the relocation process. Because of that, we shared our story:

Ross Sheingold, who holds two $20 seats in the upper deck, says he sold his tickets to next week's home opener for $476. After that windfall, he's now thinking about selling more tickets, to Red Sox and other premium games, so he can cover the $1,700 he spent to buy his 41-game ticket plan with his dad.

“Hopefully, it'll help pay for playoff tickets,” says Mr. Sheingold, who runs the New Stadium Insider blog.

For a while, we were torn on whether to share the story of our opening day tickets with the New Stadium Insider readers. Eventually, we realized that most people reading this blog (or Crain's Business NY) understand that we live in a society built on capitalism, and that selling the opening day tickets to recover 25% of the season ticket investment was a no-brainer. Further, we have work next Thursday, and taking off for the day would have cost us even more money in lost pay.

The Yankees embrace the idea of fans reselling their tickets for huge profits. It means that the same fans are more likely to dump their non-premium games for below face value on Stubhub if they can't make it to the game. Because of the revenue sharing agreement that the MLB has with Stubhub, the Yankees generate secondary market revenue from the sale of these non-premium games even when face value tickets for those games aren't even sold out.

Our readers likely remember our complaints about the Yankees encouraging season ticket holders to become brokers, and the questions we brought up about how people have the time to do it. Upon utilizing Stubhub's system for the first time we now understand that ease of use is the main force. Selling our opening day tickets (and making $476 profit) took us no more than 5 minutes. We listed the tickets for just under market value in order to make a quick sale and two days later, the sale went through. All we had to do was enter the bar code from the tickets and now we are waiting for our Paypal payment. For their efforts, Stubhub took a 15% fee of of our total sale (which was $550), and they added service fees to the buyer's total.

At the end of the day, everyone was happy - the Yankees got their cut (albeit a small one compared to what we received), Stubhub tacked on their fees, and the buyer who obviously has expendable income will be in the new stadium for opening day 2009. Welcome to the new age of ticket sales.

It is pretty exciting that trusted sources like the NY Times and Crain's Business NY recognize the theme of New Stadium Insider and have come to us for quotes. Our goal is to share the stories that affect the every day experience of Yankee season ticket holders, and the mainstream media is starting to catch on. Going forward, we hope that our stories will continue to be shared and that more of the media in New York will stop being lapdogs to the hype of the Yankees PR machine.
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