On Wednesday SFGate ran a story Henry Schulman wrote about Larry Baer, and while Schulman’s story leads with how Major League Baseball was set to approve Baer as the new “control person” for the San Francisco Giants (they did), there were some interesting details near the end of the article.
Ever since Bill Neukom was nudged/shoved out of his position as Managing General Partner, we’ve heard about the executive committee that makes decisions about the future of the Giants as a group. We’ve heard whispers about the desire for extra revenues to be pocketed in what has been termed a “rainy day fund,” and Brian Sabean told us repeatedly about the need to “build a budget.”
Taking all that into account, a couple paragraphs in Schulman’s article draw a line between revenue spent and revenue gained.
Payroll in 2012 will be $130 million, up marginally from the $124 million final total for 2011 but substantially more than the $97 million paid to the 2010 title team.
We kind of knew that already. The payroll’s staying about the same, maybe with a little bump. The following paragraph includes some stuff a lot of people didn’t know, because most people aren’t season ticket holders or take the time to find out how much they’d have to spend to sit in the same chair (or area on a metal bench) for 81 regular season games … and two extra Bay Bridge Series games that don’t count:
Baer said season-tickets prices will rise an average of 5-6 percent, though he acknowledged that a handful of customers will see double-digit increases because the team determined that those tickets were undervalued. He said single-game ticket prices will be “pretty much in line with last year,” though they will fluctuate with dynamic pricing.
Season ticket prices increased by about 7% in 2011 from the year before, the season that saw the Giants win their first World Series since moving to San Francisco. Including about 300,000 postseason tickets, the Giants sold 3,343,196 tickets overall in their World Championship season. In 2011, with no postseason, total attendance was almost exactly the same: 3,387,303.
One might figure the Giants earned about the same amount in terms of ticket revenue in 2011 as 2010, since tickets for postseason games cost so much more than ones sold during the regular season. But the Giants also earned extra revenue in 2011 from “dynamic pricing,” which the Giants also utilized when selling 2011 Spring Training tickets.
And don’t forget how championships can change a fan’s relationship with his or her wallet. Winning the World Series makes buying a hat with a picture of a penis on the back seem like a fine use of disposable income.
The Giants paid their players 28% more in 2011 than they did in their championship season, and it’s fair to say they received a little less than a 28% increase in production. The payroll looks to increase by about 5% this season. It appears the Giants are asking fans to make up the difference between 2010 and 2012 when they renew their season tickets this winter.
The anecdotal evidence suggests more than a handful of STHs are facing percentage increases in the double-digit zone. I heard from someone who sits behind home plate that someone in his section got an invoice that showed a 20% increase. Another fan said she didn’t know if the cost of her season tickets in Lower Box 105 had risen 20%, but that they had increased by “a lot.” But these double-digit increases weren’t just in the lower box and club sections.
What does “undervalued” mean?
Look no further than secondary markets. The Giants have employees who monitor ticket brokers, Stubhub, Craiglist and other outlets. They probably even have “fans” out on the street corners chatting up ticket scalpers just to see what the going rate is. Dynamic pricing helps the Giants recoup some of that increased value on individual tickets, but it had to rankle the Giants to see season ticket holders selling their tickets to high-demand games like the opening series against the Cardinals for sums the team could never get away with “dynamically.”
But are season ticket holders angry?
Some fans are pessimistic about the Giants’ ability to find some hitters to support the pitching staff the franchise holds so dear. Others are keeping an open mind until the offseason runs its course. But nobody’s really that upset yet. While the transition from Neukom to Baer was handled awkwardly, it’s not like the Giants’ executive committee consists of Chris Cohan, Donald Sterling, Tiki Barber and two of Frank McCourt’s sons.
But if the Giants start out slowly next year, Sanchez and/or Posey aren’t able to stay healthy, Brandon Crawford is handed the starting job and struggles to hit .200 and the only Giants transactions of note this offseason involve left-handed relievers, there are going to be complaints. Loud ones.
But what can season ticket holders do? They’re hooked on baseball and the Giants. They still remember what the parade smelled like (and some still have the contact high). Then there’s the fact that the Giants have a waiting list for season tickets. For every disgruntled fan there’s a couple of excited fans right behind, ready to plunk down thousands of dollars for his or her seat.
The Giants are maximizing their market, and they have enough smart people and smarter computer programs to feel comfortable toeing the line between “elite franchise” and “the Minnesota Twins” without losing that sellout streak. Without any market disturbances or a massive outcry from their clients, the Giants aren’t in a hurry to start spending like the Yankees anytime soon, even if they’re charging Red Sox prices.