Dodgers likely to lose $27 million because of dramatic decline in attendance
The sharp drop in attendance at Dodger Stadium this year is likely to cost the Dodgers at least $27 million in reduced ticket sales, concession and parking revenue for the 2011 season.
Based on the Dodgers’ $286 million of total revenue in 2009, the most recent year for which public figures are available, this season’s attendance-related declines would amount to at least a 9.4% drop in the Dodgers’ total annual revenue.
As the Dodgers open a homestand Monday night against the Philadelphia Phillies, announced paid attendance is down an average of 7,902 a game so far this season at Chavez Ravine amid the ownership fight between owner Frank McCourt and Major League Baseball, and the team’s sub-.500 play.
That is the biggest per-game drop this season among the 30 Major League teams. The next-biggest is 4,213 for the Seattle Mariners, and baseball overall is averaging a per-game attendance decline of 91.
With the Dodgers burdened by more than $500 million of debt — and with the attendance drop helping erode the team’s ability to cover payments on that debt — McCourt had hoped to sign a new television contract with Fox to make ends meet.
But after the TV deal was rejected by MLB Commissioner Bud Selig on June 20, McCourt opted to put the Dodgers in bankruptcy proceedings a week later — and there is no telling when the team will emerge from Chapter 11.
Average paid attendance at the Dodgers’ 59 home games so far this year was 36,731, a decline of 7,902 (or 17.7%), compared with its per-game average for the first 59 home games in 2010.
Those figures reflect tickets sold, and there is widespread agreement that the number of people actually attending Dodgers games is down even more, further cutting into the cash the Dodgers receive.
“When people don’t go to the ballpark, the Dodgers lose ticket revenue but they also lose concessions revenue and ultimately sponsorship and advertising revenue” along with parking revenue, said Andrew Zimbalist, a sports economics professor at Smith College.
All told, that $27 million in lost revenue would pay this year’s combined salaries for Dodgers players Matt Kemp, Andre Ethier and Hiroki Kuroda.
Financial statements for MLB teams are closely guarded, and Dodgers spokesman Josh Rawitch declined to comment for this story.
But a rough estimate of the dollar impact caused by the Dodgers’ attendance drop can be made using the attendance figures, the average ticket price calculated by Team Marketing Report and internal Dodgers data on concessions and parking revenue revealed last year in court documents in the Frank and Jamie McCourt divorce case.
According to Team Marketing Report, the Dodgers’ average ticket price this year — which includes season-ticket sales but excludes “premium” tickets and luxury suites — is $30.59. Team Marketing Report, a Chicago-area firm, calculates the well-known “Fan Cost Index.”
Assuming the reduced attendance rate continues for the full season, the 7,902 average fewer fans at Dodger Stadium multiplied by the $30.59 average ticket price comes to $241,722 per game, and that figure multiplied by the season’s 81 home games totals $19.6 million in less ticket revenue.
The lost revenue is likely higher when premium seats are included. About 8.6% of the 56,000 Dodger Stadium seats are premium-priced, and the average price of those tickets is $222.38, according to Team Marketing Report. (That figure does not include luxury suites.)
However, it can’t be determined how much of the Dodgers’ attendance drop is split between “regular” seats and premium seats to pinpoint a more accurate tally of the dollar value of the attendance decline.
Regardless, there’s also been the additional loss of concession and parking revenue.
In 2009, the most recent year available, the Dodgers’ average per capita concession and parking revenue that was lost either from an unsold ticket or a no-show (a ticket bought but not used) was $11.74, according to the McCourt divorce documents.
If the 7,902 fewer tickets this year are multiplied by 81 home games, that’s 640,062 fewer tickets overall this season. And that figure multiplied by $11.74 means $7.5 million in lost concession and parking revenue, at least based on 2009 levels.
The court documents also showed the Dodgers had a no-show rate of 17.4% in 2009, that is, the percentage of tickets that were sold but not used. At the time, that rate was not considered abnormal among MLB teams.
But amid widespread fan disaffection with the Dodgers’ ownership saga and the team’s play, the Dodgers’ no-show rate is thought to be considerably higher this season. If so, that would mean even less concession and parking revenue coming in for the club.
All the declines haven’t been lost on Selig. In his letter to Frank McCourt that rejected McCourt’s proposed new TV contract with Fox, Selig asserted that McCourt’s revenue projections were “optimistic” and failed to “take fully into account the steep recent decline in the Dodgers’ ticket sales.”
The court documents showed that in 2009 — again, the most recent year available — ticket receipts of $107.2 million were the largest contributor (37.5%) to the Dodgers’ $286 million in total revenue that year.
The second-biggest contributor was $42.6 million from MLB funds that the teams divide, such as from national television broadcasts and MLB.com. That was followed by local broadcasting revenue ($41.5 million), advertising promotions ($27 million), concessions ($25.5 million), suite rentals ($20 million) and parking ($11 million).
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