Monday, August 23, 2010

Looking for a Bump?

This year, the Twins payroll increased almost 50% to $95 million. Next year, they’ll likely increase payroll again, and will need to given the payroll challenges they face. But how much will it go up? Can the Twins (and their fans) expect significant increases in revenues in the second and third years of a new ballpark? Is there any historical precedence for that?

There is, but it’s far from universal, and the average increase is downright depressing.
In this year’s Maple Street Press Twins Annual I wrote a comprehensive review of what other “small market” teams had done when they opened their new stadiums. I identified 13 since Camden Yards opened in 1992 and looked at how they increase payroll and how the new stadium impacted their franchise.

Today, let’s look at what happened the year after a new stadium opened (according to USAToday.com).

There isn’t a ton of consistency here. Some teams, like Baltimore, Cleveland and Seattle, all increased payroll significantly. However, in each case, there was a mitigating factor:

  • Baltimore barely increased payroll as their new stadium opened. The revenues that poured in from Camden Yards remarkable success were more than people really expected, and lasted far longer than it had for previous stadiums.

  • Cleveland was in the middle of a youth movement when Jacobs Field opened and that drove up salaries as those players gained service time.

  • Seattle’s number is a bit misleading because they opened in the middle of 1999. Their first full year wasn’t until the next year, which is when revenue climbed 33%.

But it isn’t crazy to suggest that the Twins could increase payroll by as much as 20% next year. It isn’t common for MLB teams, and it doesn’t look like teams generally see that kind of revenue bump in a stadium’s second year. But it has happened.

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Anyone want to talk about last night's game? No? Fine by me.

Reminder: You're busy for Saturday's Twins Game. You'll be in St. Cloud, watching it with Seth, Sooz and I. 2:30 to 6:30 at Howie's in downtown St. Cloud and we'll have the usual specials and drawing. It's time for out-state Twins fans to flex their muscles a bit, I think.

3 comments:

jack torse said...

All things fair 8 of those 13 teams aren't really small market.

derek said...

Thanks for the heads up! Great article. I failed to watch the game though because I had to do a lot of things back in the office. Your website updates me with a lot of things.

Twins and Multiples

walter hanson said...

John:

Two factors you forgot about Cleveland. One was the year of the lockout. Cleveland must have lost at least twenty home games. That is going to cause a dramatic change.

Two, wasn't Cleveland's young team the divsion winner in 1995 thus helping cause that revenue surge!

And a third factor which it looks like you made no effort to take into account. Which teams generated a sold out stadium on a regular basis. It's going to be kind of hard for the Twins to get a dramatic revenue jump when they have basically sold out every seat.

Walter Hanson
Minneapolis, MN