The numbers don’t lie, and no one disputes them. Many experts believe that MLB’s business model is broken. The industry as some call it is extremely complex to navigate. Making money as a baseball team owner or executive requires a superior knowledge of market forces, labor relations, a myriad of local regulations and other factors that may or may not impact the bottom line. Teams maintain huge staffs to manage its business affairs. Some of MLB’s teams are constantly losing money. These teams struggle to draw fans to their ballparks and regularly field less than competitive teams. When these teams play the TV cameras avoid panning the stands to avoid showing the empty seats. Revenue sharing among teams and a luxury tax have helped struggling teams compete on the field and to operate in the black. The difference between baseballs haves and have-nots is growing each year.
I am a die-hard baseball fan. My passion for the game has less to do with my geographic location and more to do with my love for the game. I watch college baseball and softball when the seasons begin and only stop watching when the seasons are over. Having said that, I reside in New York City and the Yankees, not the Mets are my team.
Regardless of how the Yankees play, I support them by attending games at Yankee Stadium (old and new), watching them on TV and following the team in the press and Internet. What impresses more than the team’s won-lost record is the fact that Yankee organization is a money-making machine. You may hate the Bronx Bombers for several “emotional reasons.” Put your bias to the side and appreciate the Yankees ability to year in and year out to be one of the world’s most valuable sports franchise. The Yankees are obviously doing something right.
Mke Ozanian, writing in Forbes Sports/Money section, posted an article (Apr 11, 2018) entitled Baseball Team Values 2018. For the past 21 years, Forbes has compared MLB’s teams in terms of revenue and net value. Every year the Yankees came out on top. Ozanian succinctly explains the team’s success as follows:
Short explanation: The Bronx Bombers generate by the most revenue–$619 million last season. The value of the Yankees has compounded annually at 15% since a group led by George Steinbrenner paid $8.8 million for the team in 1973
What advertiser, if they can afford it, would not want to advertise with the Yankee’s brand as a backdrop?
Rivalries in sports are based on several factors. The event that is being played might foster a rivalry. The intensity of the game could be based upon the teams’ geographical locations. Individual players often cause their respective teams to become rivals. Regardless of the reason why teams might be rivals, fans show greater interest in rivalry games than other games. Rivalry games generate more revenue for the teams and the businesses impacted by the teams’ fortunes. The Boston – New York game is not an exception to this rule; it generates millions in additional revenue for the teams and for the local economies of Boston and New York City. The Yankees and the Boston Red Sox are baseball’s biggest rivalry. Because it is a marquee matchup, the teams have been scheduled to play a two-game series in London’s Olympic Stadium. I have no doubt that London’s businesses are thinking how they can profit off the rivalry when the teams play in their city. Businesses and organizations see the rivalry as a golden opportunity to advertise their brands. When the teams meet, you can always feel the electricity in the air.
Recently the Sox came into town to play the Yankees. I had the good fortune to attend one of the games. The tickets to the game were expensive. Eating in Yankee Stadiums is ridiculously expensive. Yet, local merchants were wearing their happy faces. Before and after the game the local area businesses around Yankee Stadium were bustling with business. A Red Sox visit to the stadium signals higher revenues. The local press, social media, and the Internet were ablaze with comments and discussions about the game and the series. What is often not appreciated is the advertising dollars that the Yankee brand commands. The Yankee – Red Sox rivalry is a bonanza for the teams’ advisement departments.
Of course, there are distractors from the Yankees’ in-stadium advertising strategy. Jason Cohen, editor of SB Nation Pinstripe Alley believes that the Yankees have gone too far with their in-house advertising strategy. Cohen is an admitted Yankee fanatic. The Yankees are a business and exist to make a profit. In his Jan 3, 2017 post, Cohen concluded that the Yankees and their stadium had fallen captive to corporate sponsors. The stadium as too brand-y. He wrote:
“We, as a society, are overly advertised to. Brands want to get in our faces about practically everything at all times. For the sake of full disclosure, I actually work in advertisement. Every day I read about how some new brand is changing the way we impede the daily lives of potential customers. Branded content, native advertising, display ads and video ads, brand activation, and corporate sponsorships are just a few of the best methods to garner attention from the masses. The Yankees, as you might have already noticed, peddle in corporate sponsorships—heavily”
It is hard not to remanence about 42nd Street at night when sitting in Yankee Stadium. The adverting is that pronounced. Still, once the game begins, the average spectator becomes engrossed in the play on the field and not interested in the blinking advertisements. Let’s not overlook the fact that advertisers pay millions to place their brands (advertising) in front of a large and targeted audience. Spectators in the stands at the stadium have the disposable income to purchase advertised products and services. When Boston comes to town, advertisers know that it is time to “up their game.”
The Yankees generate money in many ways. The team’s brass understands the value of the brand that they have. An intense rivalry with the Red Sox pushes the brand deeper into the minds of the public. Even if you are a Yankee hater, the team’s logo is permanently imprinted on your thoughts. The Yankee brand has become a world-wide topic of discussion. The Yankees have taken us light-years away from the baseball’s early years as being a “gentleman’s game.” It is a multimillion-dollar enterprise.