August 21, 2014

Economics of MLB Ballparks

February 18, 2012 by · 5 Comments 

Several sources in the literature provide general and specific economic and financial data and basic sport statistics about each current and former Major League Baseball Ballpark (MLBB). These sources, as a group, include academic studies, articles in books, journals, magazines and newspapers, industry reports, and websites. With respect to MLBBs, authors focus on and analyze such details, facts, and results as their capacity, cost and year of construction and any renovations of them, location and specific site, naming rights, ownership, attendances at teams’ home games, and perhaps average ticket prices and gate receipts. In Chapter 3 of Baseball, Inc., for example, I discuss the reasons for and consequences of replacing obsolete MLBBs from a business perspective.[1]

For this essay, I researched the literature to determine significant characteristics of 14 MLBBs in the American League (AL) and 16 in the National League (NL). Besides those that appear in columns of Table 1, other interesting and comparable characteristics of MLBBs are first, the distribution and rank of AL and NL teams’ attendances at their home games and second, the average ticket prices and gate receipts for games played at these ballparks during various MLB seasons. Based on this quantitative information and other criteria, this essay reveals some differences and similarities among ballparks of teams in the AL and NL and their role in earning revenue for franchises and value for owners of them.

American League.  With an average capacity of 43,000, this group of 14 MLBBs averaged $109.7 million in valuation, $79.9 million in gate receipts, and $29.43 for their ticket price (ATP). In 2010, Yankee Stadium ranked first in all characteristics while Fenway Park placed second despite its relatively low capacity and cost. Others AL ballparks that ranked high were the Rogers Centre in capacity, Rangers Ballpark in valuation, Target Field in gate receipts, and U.S. Cellular Field with an ATP of $39. In contrast, The Coliseum, meanwhile, had the smallest capacity and valuation of the group, and tied for 13th in gate receipts with Progressive Field.

There are fundamental reasons, but occasionally unusual or conflicting results, for why some MLBBs had different characteristics among the group of 14 teams. In capacity, for example, six AL ballparks opened in the 1990s and their number of seats varied from 36,900 at Tropicana Field to 49,100 at Rangers BallPark. During most seasons of that period, the Texas Rangers and Tampa Bay Devil Rays performed below expectations yet the Rangers’ home attendances frequently ranked above, and Devil Rays below, the AL average.

With respect to amounts spent for construction and renovations, Safeco Field in small-market Seattle cost $517 million to build in the late 1990s, nevertheless, its valuation and gate receipts each ranked seventh in the AL in 2010. In contrast, Angel Stadium in Anaheim cost $24 million to build in the mid-1960s but its valuation and gate receipts were fourth in the league. Apparently, the Angels recent performances exceeded the Mariners in the West Division and that, in part, explains the differences in these ballparks’ characteristics.

Six or 42 percent of AL ballparks were worth more than $100 million in 2010. Interestingly, the three oldest venues had much higher estimated market valuations than their costs. These were Angel Stadium, Fenway Park, and The Coliseum. Furthermore, it will be at least a decade or more before such owners as the City of New York, Minnesota BallPark Authority, Washington State Public Facilities District, and the Detroit-Wayne County Stadium Authority recoups their investments in their hometown MLBBs.

Regarding another characteristic, while 11 or 79 percent of AL ballparks had public owners, home teams owned 2 or 14 percent. The only private owner of a ballpark is the Gateway Economic Development Corporation, who financed the construction of Jacobs Field (renamed Progressive Field) in downtown Cleveland for the Indians. For the first group of MLBBs, gate receipts in 2010 were highest at Yankee Stadium and Target Field, and lowest at The Coliseum and Kauffman Stadium. For ballparks owned by teams, the Red Sox earned approximately $110 million more in gate receipts at Fenway Park than the Blue Jays did at the Rogers Centre.

In his article “The 10 Best Current Major League Baseball Ballparks,” author Bruce Jones ranked Yankee Stadium first, Fenway Park second, Kauffman Stadium fifth, Oriole Park ninth, and Safeco Field tenth. Based on characteristics and other financial data discussed in this essay, the three latter ballparks are attractive but not ranked as “Best” facilities.[2]

National League.  As reported online in a March 2011 article of Forbes magazine, sixteen NL ballparks, on average, contained approximately 44,000 seats, cost between $250,000 and $700 million to build and renovate, had an estimated market value of $109.1 million, and typically but not always had an owner that was a city, county, district sports commission, or another public entity. According to the article in Forbes, the two largest and then smallest ballparks in the league were respectively, Dodger Stadium in Los Angeles and Coors Field in Denver, and PNC Park in Pittsburgh and Sun Life Stadium in Miami.[3]

As to other characteristics of the NL group, the annual gate receipts in 2010 at Chicago’s Wrigley Field ranked first at $146 million followed by Philadelphia’s Citizens Bank Park at $124 million and then New York City’s Citi Field at $123 million. In addition, average ticket prices paid in their home ballparks were highest at $53 for the Cubs, $33 for the Phillies and $32 for the Mets, but lowest at $14 for the Diamondbacks, $15 for the Padres and $17 each for the Braves and Pirates. For the league, gate receipts were $72.5 million per team with ticket prices that averaged $25.37. Thus, the group of AL teams had higher average gate receipts and ticket prices than NL clubs, for the most part, because of ballparks being located in New York City for the wealthy Yankees, in Boston for the popular Red Sox, and in Minneapolis for the competitive Twins.

Based on economic characteristics in Table 1 and other facts in the literature, the most lucrative NL ballparks include Dodger Stadium, Wrigley Field, Citizens Bank Park, and Citi Field. These venues are located in relatively large baseball markets with plenty of local and regional sports fans available to attend team’s home games. In their performances during recent MLB seasons, the Phillies have been a championship team while the Dodgers, Cubs, and Mets struggled to compete for and win division titles.

In Bruce Jones’s “The 10 Best Current Major League Baseball Ballparks,” he ranked Busch Stadium third, Wrigley Field fourth, PNC Park sixth, AT&T Park seventh, and Miller Park eighth. Rather than emphasize and include economics and financial values in his analysis, Jones primarily used such criteria as atmosphere, cleanliness, coziness, environment, tradition, views of cities and skylines, and other amenities to evaluate and rank MLBBs in both leagues. Consequently, his and my rankings of ballparks differ but nonetheless, they are insightful, practical, and realistic.

To conclude, I identified and compared some characteristics that reflect the economics of MLBBs. For sure, these and other facts associated with teams’ home ballparks like attendances, gate receipts, and ticket prices are important in order to measure the business performance and success of AL and NL franchises in their respective baseball markets, and to understand the decisions of these professional sports organizations’ executives, managers, and owners.

Table 1

Characteristics of MLB Ballparks, by League, 2011

                                                                                                             Characteristics

Ballpark (Team) Year Capacity Cost Valuation Owner
Angel Stadium (Angels) 1966 45.3 24 130 Public
Comerica Park (Tigers) 2000 41.2 361 81 Public
Fenway Park (Red Sox) 1912 37.4 .450 188 Team
Kauffman Stadium (Royals) 1973 37.9 250 61 Public
The Coliseum (A’s) 1966 34.1 26 49 Public
Oriole Park (Orioles) 1992 48.2 107 65 Public
Progressive Field (Indians) 1994 45.1 175 54 Private
Rangers BallPark (Rangers) 1994 49.1 191 134 Public
Rogers Centre (Blue Jays) 1989 49.5 370 67 Team
Safeco Field (Mariners) 1999 47.4 517 83 Public
Target Field (Twins) 2010 39.5 440 127 Public
Tropicana Field (Rays) 1990 36.9 138 58 Public
U.S. Cellular Field (White Sox) 1991 40.6 167 124 Public
Yankee Stadium (Yankees) 2009 50.2 1,100 316 Public
Ballpark (Team) Year Capacity Cost Valuation Owner
AT&T Park (Giants) 2000 41.9 325 153 Team
Busch Stadium (Cardinals) 2006 46.8 357 136 Team
Chase Field (Diamondbacks) 1998 48.6 354 78 Public
Citi Field (Mets) 2009 41.4 688 134 Public
Citizens Bank Park (Phillies) 2004 43.5 346 163 Public
Coors Field (Rockies) 1995 50.4 215 92 Public
Dodger Stadium (Dodgers) 1962 45.1 175 54 Private
Great American BallPark (Reds) 2003 49.1 191 134 Public
Miller Park (Brewers) 2001 41.9 414 85 Both
Minute Maid Park (Astros) 2000 40.9 252 111 Both
Nationals Park (Nationals) 2010 39.5 440 127 Public
Petco Park (Padres) 2004 42.6 285 67 Both
PNC Park (Pirates) 2001 38.3 237 45 Public
Sun Life Stadium (Marlins) 1987 38.5 115 32 Private
Turner Field (Braves) 1997 49.5 235 101 Public
Wrigley Field (Cubs) 1914 41.1 .150 172 Team

Note: Ballpark (Team) is self-explanatory and reflects recent naming rights. Year is when the ballparks opened. Capacity is thousands of seats. Cost includes amounts for the construction and renovation of ballparks in millions of dollars. Valuation is the portion of a MLB franchise’s estimated market value attributable to its ballpark in millions of dollars. Ballpark owners may be a public entity such as a city, county, metropolitan district or sports facility authority, a private investor or investment group, and/or a team. Both are when a public entity, private group, and/or a team jointly own a ballpark. In MLB’s 2012 season, the Florida Marlins will play their home games in new Marlins Park, a facility publicly owned by Miami-Dade County.

Source: Kurt Badenhausen, Michael K. Ozanian, and Christina Settimi, “The Business of Baseball, 2011,” www.forbes.com, cited 27 January 2012.

[1] Frank P. Jozsa, Jr., Business, Inc.: The National Pastime as Big Business (Jefferson, NC: McFarland, 2006).

[2] For more about rankings in the article, see Bruce Jones, “The 10 Best Current Major League Baseball Ballparks,” http://www.bleacherreport.com, 6 February 2010.

[3] Kurt Badenhausen, Michael K. Ozanian, and Christina Settimi, “The Business of Baseball, 2011,” http://www.forbes.com, 22 March 2011.

Comments

5 Responses to “Economics of MLB Ballparks”
  1. fred says:

    Dodger stadium was built in 1994? I think not. Furthermore, most stadiums have been modified and citing the last modification date (plus including the costs) would have been more reasonable.

    Ticket prices are only part of the cost of attendance, a better number would have included the meal and drink everyone seems to get. Even at OAK, there is a crowd in front of the team merchandise store, so there are multiple revenue streams at a park and some estimate could be made for them.

    But I’m glad to know that the Dbacks have nice cheap tickets (having a column for that too would have been nice).

  2. Frank P. Jozsa Jr. says:

    Corrections: (1) Dodger Stadium opened in 1962, and not 1994; (2) Team Marketing Report (TMR) publishes a Fan Cost Index for MLB teams. See Tables 1 and 2 in my essay “MLB Fan Cost Index” for TMR’s estimates of costs to attend games during 2007-2011.

  3. Mike Lynch says:

    Fred,

    That 1994 error was my mistake. I copied and pasted and forgot to change the year.

    Thanks,
    Mike

  4. Great American Ballpark opened in 2003, not 1994. The Reds home in 1994 was Riverfront Stadium.

  5. Mike Lynch says:

    My mistake again. Damn copy and paste. :-(

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!