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The Business of Baseball

Going to a baseball game is no longer just about watching the field — it's about the ballpark “experience.” SF Giants Chief Operating Officer Larry Baer says that stadium sales at AT&T Park account for up to 65 percent of overall team revenue. Baer shares his insights on the ever-changing, and highly profitable, business of baseball.

For a more in-depth look into the business of MLB, read The Great American Business Model.

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Tags: Baseball, Major League Baseball, Revenue, Ballpark, Stadium, Larry Baer, SF Giants, COO, Sales Strategy, Management, Retail

 

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The Business of Baseball

Going to a baseball game is no longer just about watching the field — it's about the ballpark “experience.” SF Giants Chief Operating Officer Larry Baer says that stadium sales at AT&T Park account for up to 65 percent of overall team revenue. Baer shares his insights on the ever-changing, and highly profitable, business of baseball.

For a more in-depth look into the business of MLB, read The Great American Business Model.

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>>

Host: It's springtime, and that can only mean one thing. The baseball season is upon us.

sounds of baseball game

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Host: Each year, millions of fans flock to the ballpark to catch a game. But coming to the stadium has changed over the last ten years. It's no longer just about the game on the field, but the overall ballpark experience. From new luxury boxes and tasty concessions to tech enhancements and high-end souvenirs. Amenities are adding entertainment value and opportunities for profit.

>> Game Announcer: Welcome to the ballpark today.

>>

Host: Today, we talked to Larry Baer, Chief Operating Officer of the storied San Francisco Giants baseball franchise. He shares his insights on how execs are changing the business of baseball.

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>> Larry Baer: I think you have to ask what business are we in, and we're in the business of leisure-time activities, and we're in the business of what's the best way to invest three or four hours of your time. People talk about the competition for the entertainment dollar. It's really the competition for the entertainment hour.

>>

Hawker: Programs.

>> Larry Baer: And if you can go to a ballpark and stroll around, do some people watching, do some shopping, let the kids play with the mascot, watch the exploding scoreboard, watch the game for sure, but in a family unit, let's say a family of five, maybe three are into the game, and two aren't. How do you get all five to come? You have something for everyone, and that's a big part of what baseball can do.

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>> Larry Baer: The unique thing about baseball, the unique dynamic to baseball versus the NFL let's say is that really what, what happens in the ballpark with the fans is really the driver, the lead economic driver because there's so many games, and it's a regional sport.

>> Baseball Fan: Let's go Giants.

>> Larry Baer: In the sense that you're loyal to your team, and you come to a lot of games. It's also a good television sport, but it's all driven from, you know, regional attendance essentially. So about 60 to 65 percent of the total revenues come are ticket related. It's tickets and then flowing from tickets concessions and merchandise sales, parking. For some teams, that's a big deal. Ticket per caps can be anywhere, depending on the team, from $30, which is around ours, down to $20 up to $50. The new Yankee stadium will be selling seats for $2,500 per seat on the season-ticket basis. So you can do the math, those are big numbers.

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>> Larry Baer: In terms of the seating allocations, before the last decade or so, it was really there's the lower deck, and there's the upper deck. You were sitting close to the field. You're sitting not close to the field. Now, we're really in the mode where there are club sections with creature comforts and amenities such as waiter and waitress service at the seats, such as great dining inside with big-screen televisions. So you have people that are really focused now on the amenities around where they're sitting and not so much are they sitting downstairs or upstairs.

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>> Larry Baer: Ten years ago, it was perceived to be a, you know, a hot dog and a Coca-Cola business. It still basically a hot dog, peanuts, Coca-Cola, beer business, but Music there are a lot of people that enjoy the environment that offers other things such as sushi and burritos and exotic beers. Number one, it's eye catching, and people like it. Eighty-five to 90 percent is still the hot dogs, beer, and, and Coke, but there are causal fans that like to try the other things. Like to try the vegetarian offerings, and it adds to the panache of the ballpark, and a good margins on the other types of food and non-traditional food.

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>> Larry Baer: If you look at technology and baseball, the game of baseball was made for the Internet. What we've done in the ballpark is allow people through their PDA's to get online and call up unique information that they may not be able to get from our scoreboard. Be able to access replays that they may not be able to get from our scoreboard, and that's a big deal. It's not going to be 50 percent of the crowd. It's not going to be ten percent of the crowd, but it's a growing number, and that's a good thing.

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==== Transcribed by Automatic Sync Technologies ====