Economical shifts in baseball have been in motion since 1997 when MLB officially granted the commissioner the power to unequally distribute the revenues from the Central Fund. Previously they were distributed equally. It was the fall of 2006 when the players association and MLB reached the current five-year agreement in which each team contributes 34% of their local revenues*. These local revenues are consisted of local television & cable rights fees, gate receipts, concessions, parking, suite rentals, postseason revenues, advertising & public relations, and spring training. Estimated that local revenues are 70% to 80% of teams’ total revenues, economic factors such as attendance, per capita income and other standard statistical census figures are largely responsible for the level of total revenue each team collects. In 2007, over $300 million was transferred from high to low revenue teams.
AT&T Park: San Francisco
Created in 1999 Giants Enterprises, LLC was established to drive revenue to AT&T Park for non-baseball events and was created in conjunction with the opening of the new park. Capitalizing on one the best rated ballparks in baseball and that the Giants only occupy the venue around 85 days per year, their mission was to become a key member of the hospitality and entertainment industry of Northern California. They provide a wide variety of services including event management, catering, meeting planning, marketing and public relations services, graphic design, sponsorship and special event planning in relation to non-game days.
The motive in driving revenue to the park for events on non-game day, and though it is “local” revenue, does not count against the club as it pertains to the MLB revenue sharing agreement. Another benefit I find that stems from this venture is how it can improve and better enhance the ballparks game day events with greater flexibility and acquired experience. The additional events, though can incur a reasonable amount of overhead, can ease the tax burdens by better facilitating events at such a venue.
Since opening the park in 2000 Giants Enterprises has created and produced over 1,000 public and private events. The man in charge, President Pat Gallagher, was also the co-founder of the Emerald Bowl held at AT&T Park. Also in recent years, the panoramic facility has hosted concerts with the Rolling Stones, Dave Matthews Band, Green Day, Kenny Chesney, Bruce Springsteen, regular performances by Cirque de Soleil, Brian Boitano’s Ice Spectacular, Supercross, AVP Pro-Beach Volleyball and international soccer matches. In 2004, the Giants created one of the largest public internet hot spots in the world by installing one hundred and twenty-two 802.11b wireless access points.
Gallagher serves as the Chairman of the San Francisco Convention and Visitor’s Bureau and is on the board for the California Chamber of Commerce. Prior to becoming the President of Giant’s Enterprises he served as the SVP for business operations for over 20 years. In 2009 he was also named President of Giants Development Services, LLC.
One of the coolest things I think Pat and AT&T Park brought in was the ski/snowboard IcerAir event. Having a ski/snowboard ramp extending from the centerfield scoreboard was an amazing set up. It’s no wonder in the first year of their annual awards; Sports Business Journal named it the “Sports Facility of the Year.”
Fenway Sports Group
According to their LinkedIn Company Profile, Fenway Sports Group develops and executes sales and marketing programs for leading brands and sports properties. They specialize in Sports Property Sales Representation and Strategic Consultation. Current properties represented by FSG include: Boston Red Sox, Fenway Park, NESN, Roush Fenway Racing, Yates Racing, Boston College Athletics, MLB.com, the PGA TOUR’s Deutsche Bank Championship, and Athletes’ Performance Institute. You can also follow Fenway Enterprises on Twitter @FenwayEvents.
New England Sports Ventures (the holding company for the Boston Red Sox, New England Sports Network and Fenway Park) led by Larry Lucchino, Tom Werner and John Henry established Fenway Sports Group with the intent of expanding beyond Major League Baseball. With the clients previously mentioned and one the America’s historical landmarks for a stadium gives FSG a broad hold and knowledge base of their industry. Sources have estimated that FSG generates over $200 million per year.
One great move recently was when it partnered with the NHL for their annual Winter Classic. In getting the rink set up three weeks prior to the New Year’s Day game and one week afterward allowed FSG to rent the ice for $10,000 an hour. They also sold around 30,000 tickets for a celebrity game and sold out two college hockey games. The NHL likened these events to the Super Bowl’s NFL Experience. Liking and learning from all the generated publicity, and if held in an NFL stadium there is the potential of not having the ice time available due to the NFL playoffs makes MLB stadiums attractive for this now largely successful annual event.
In December of 2007 FSG purchased the single A Salem Avalanche of the Carolina League. Next year the Salem franchise was renamed the Salem Red Sox and replaced their Lancaster Jethawks as their High A affiliate. Also by 2008 FSG had announced the opening of a West Coast office in San Diego, California. As of June in 2008, FSG operates as a subsidiary of Sinn Fein, L.P. Most recently in October of 2009 FSG announced a partnership with Fulham F.C. of the English Premiership, with a shirt sponsorship to commence in 2011.
*Correction from previous post where 31% was noted
Image by Jill Clardy
Image by Payton Chung