Finding new pitches

Tom McDonald’s job isn’t usually this stressful. For the past decade, the San Francisco Giants‘ senior vice president of consumer marketing could sell pennant races, Barry Bonds and one of America’s most widely praised ballparks to one of its most affluent markets.

Since AT&T Park opened in 2000, the Giants had drawn more than 3 million fans every season. Until last year, that is. With no Bonds and a fourth-place team whose best attraction (National League Cy Young winner Tim Lincecum) is only on display every five days, attendance sagged to 2.86 million - nearly 360,000 fewer fans than packed the ballpark to watch Bonds chase Hank Aaron’s home run record in 2007.

Now McDonald is trying to line up season tickets while Californians are saddled with the third-highest unemployment rate in the nation. Around Christmas, that got the Giants into the discount retailer business.

They rolled out a $49 gift card at warehouse club giant Costco, good for four reserved tickets to a 2009 game. They slashed prices on 28 percent of their season tickets, held another 55 percent at the same price as last year and gave fans six months to make season-ticket payments.

On top of all that, they will become the first MLB team to use dynamic ticket pricing, moving prices up or down on 2,000 upper-deck seats until the morning of a game based on a computer model that projects demand.

“It’s probably more difficult than any year since we’ve moved into this ballpark,” said McDonald, who said the Giants are four points off their goal of retaining 88 percent of their season-ticket holders. “It’s difficult for us to project revenue with some sense of certainty. We’ll plan for the worst and work for the best.”

He isn’t alone. In baseball, which might be the most market-driven of all the major sports, the economy is leading teams into territory most haven’t seen since well before the stadium boom started with the opening of Camden Yards in 1992. Even though 2008 attendance was the second highest in MLB history, it represented a year-over-year drop for the first time in five years. In October - just after the start of the financial-services meltdown - commissioner Bud Selig warned teams not to “get too cocky” with ticket prices for 2009.

In the final weeks before pitchers and catchers report, the prevailing sales strategy is to try anything and everything to get fans to the ballpark. Twenty-three of 30 teams have cut or frozen ticket prices or introduced new discount options for the upcoming season. While the Giants are working with Costco, other teams are offering season tickets with the kind of discounts usually found there.

The Indians have a buy-one-get-one-free deal on some full-season packages. In Seattle, it’s buy two, get two free - potentially dropping the price of four full-season packages by $6,300.

“It’s fair to say a lot of people are very concerned. We’re accepting [that] they’re being very cautious,” Mariners public information director Rebecca Hale said. “If someone calls and says they want to stay with us, we’ll see what we can do to try and make it possible.”

Other maneuvers appear to be more long-lasting. Teams are responding to the economic meltdown by splitting season-ticket packages into smaller chunks while expanding the number of price points at the ballpark, attempting to cut as wide an economic swath as possible. Some are paring down their complement of private suites, turning them into meeting rooms or bigger luxury boxes while adding premium options to other parts of the ballpark.

It’s Mass Customization 101, giving fans as many options as a 40,000-seat ballpark allows, and it only figures to get more sophisticated over time. But as teams respond to the deepening recession by packaging tickets in dozens of different ways, they’re still forced to compete with two clubs proceeding as if they don’t have to compromise with the market.

When the New York Yankees and New York Mets open new ballparks this spring, they also will be unveiling teams retooled with cash that most teams just aren’t spending right now.

The Mets made the first big splash of the offseason when they signed closer Francisco Rodriguez to a three-year, $37 million contract. And the Yankees’ scorched-earth policy landed the top two free agent pitchers (CC Sabathia and A.J. Burnett) before they signed first baseman Mark Teixeira to an eight-year, $180 million deal, wrapping up their shopping spree with a $423.5 million tab.

Analysts say the openings of the new parks might not be as robust as they would have been before the recession, but there’s an added bonus: The teams can write off maintenance costs of the new stadiums against their luxury tax bill. And the Yankees’ payroll is still expected to drop next season, meaning the rest of baseball would see less shared money than the $26.9 million the Yankees paid last season.

Story Continues →