Dodgers Dragging Down MLB Attendance Figures

Tom Verducci for Sports Illustrated yesterday:

4. The Dodgers are a drag on the game.
Through May 1, the Dodgers alone accounted for 63 percent of the decline in MLB attendance. They are down 95,843 fans through 15 dates, or 14.5 percent. One scout said before the Dodgers hired Los Angeles police to address security issues, Dodger Stadium was “the most dangerous ballpark in baseball — 30th out of 30.”
According to baseball sources, Selig seized operational control from owner Frank McCourt for issues that have been “ongoing” and harm franchise value, including the ballpark security problem and accrued debt. Baseball is concerned that McCourt’s plan to take payments from future television revenues will leave the next owner without proper operational funds. McCourt appears positioned for a protracted fight with Selig, which leaves the franchise, which hasn’t played a World Series game in 22 years, which has none of the 20 most popular players in the game according to 2010 jersey sales, in a state of uncertainty.

I feel bad for Dodgers fans. There’s nothing worse than seeing your historic, promising team get ruined by a horrible owner. It makes me happy that I wasn’t around to watch George Steinbrenner ruin the Yankees two decades ago.

MLB attendance has been down since the recession started, and its been getting worse every year. That explains a lot of the decline. But two of the biggest market clubs in the game – the Dodgers and the Mets – have declined especially hard, and a lot of it has to do with ownership. We all know at this point that the Dodgers are under MLB control in part because Frank McCourt’s divorce and poor debt practices, and the Mets are in this spot because a lot of the team’s money was invested with Bernie Madoff. Their poor decisions are a drag on the league in general.

MLB ownership is structured in silly, antiquated ways. So many teams, worth hundreds of millions of dollars, are owned by either one family or a small group of owners. This isn’t the case in all sports leagues – I know that many NHL teams are owned by corporate ownership groups, partnerships of investors, etc. MLB actively discourages such large ownership groups, or owners that would bring some competitive change to the league like Mark Cuban. One of these days, MLB is going to wake up and realize that the whole league would be a lot more valuable if it were run as a diversified, transparently accountable set of businesses, with shares owned by many people. Until that happens, we’ll continue to have ownership standing in the way of baseball.

E.J. Fagan been blogging about Yankee baseball since 2006. He is a Ph.D. student at University of Texas at Austin.

19 thoughts on “Dodgers Dragging Down MLB Attendance Figures

  1. Couldn’t disagree with this conclusion any more strongly. What is the basis for assuming that corporate ownership is in the best interest of a sports league? Citing the experience of the NHL actually seems to be a point against your argument, so I am not sure why you even brought that up. As the chart in the follow shows (http://t.co/mX2Eqgo), attendance is down since the recession, but the long-term trend is still high. In addition to the rare circumstances surrounding the Mets and Dodgers, baseball is also dealing with historically poor weather, so when all things are considered, there is little reason to believe that the decline is systemic. Personally, I believe the advent of a transparent secondary market is the biggest reason.

    • The Mets and Dodgers are two of the five most valuable MLB franchises. The Dodgers have a poorly managed franchise (Security issues for instance) that we would expect from a team bought to be a personal plaything for a millionaire, not from a business worth $800 million in a competitive market. The security concerns have been around for a very long time, and the franchise hasn’t done anything about them. Furthermore, McCourt was trying to make short-term, shortsighted, deals with Fox just to pay the bills due to his divorce.

      But the Wilpons and the Mets are really the case that we should worry about. They got themselves into trouble with nothing but horrible accounting practices and investment decisions. That’s caused them to #1 offer the team for well-below market value ($200 million for 49%) and #2 Risk losing hundreds of millions of dollars in the team’s money to finances. Its the kind of thing that potentially could cripple the Mets financially for years.

      These issues are things that empowered pluralities of shareholders force franchises to cut back on.

      And the NHL has been doing great since the lockout. They are in fantastic financial shape, especially considering where they were just five years ago, and I think offer a great model going forward.

      • Are you familiar with Enron? MCI? Adelphia? The list of corporate scandals is pretty long (in fact, the last one involved the owner of the Buffalo Sabres), so I am not sure why you think corporate ownership would be beneficial.

        As for the NHL, I don’t think it means much that the league is doing well since obliterating its financial structure. During the lockout, the league hit rock bottom, meaning there was only one way to go…up. That’s not exactly a ringing endorsement for the soundness of its model.

      • Professor Longnose

        I could list far more owners who did well by their franchises, and some corporations that didn’t. If you don’t have a systematic compilation of data, you don’t have a case. At most, you have a solution that might apply to two specific cases happening now.

        And I don’t think your analysis of what happened to the Mets is very broad. If, as the trustee says, the Mets actively were a part of the ponzi scheme, we’re talking about criminal behavior that doesn’t fit in with anything that’s happened to MLB before. If the Mets were just duped along with everyone else, it’s not that they made bad investment decisions–the investments made a lot of money. It’s that they got taken in by something that took in a lot of other people.

        The idea that corporations don’t make bad investments is just silly. Or that corporations are never run by millionaires as their own toys. I didn’t think the Enron or WorldCom scandals were that long ago.

        If you want to prove that corporate ownership is less likely to do something like that, then look at the data. What major league teams have been run by corporations and how have they done, in terms of finances, standings, and value? Then maybe we could draw some conclusions.

        • Sorry for repeating much of what you said! Should have read your reply first.

  2. Professor Longnose

    It’s my impression that baseball teams do less well with corporate ownership than with individual ownership. But I don’t have any data. Has anyone done the compiling?

    And I think it’s a more complicated issue than you’ve made it out to be. The Dodgers, for instance, have done better in the standings under McCourt than they did under corporate ownership. That doesn’t excuse the debt problems, but it does mean it’s not so clearcut what’s good for a team.

    And I was there for the entire Steinbrenner reign. He didn’t ruin the Yankees. He brought them back form the irrelevance they had under their previous corporate ownership and made them again the best franchise in baseball, as well as the most valuable one.

    And THEN he ruined them.

    And then he came back from his–let’s call it a sabbatical–when the team was rebuilding without him, bought into the program, and oversaw the franchise becoming the most famous and valuable sports franchise in the world. I watched it all, and I would take a pass on trading it to see what would have happened if CBS had still owned the Yankees for the last 38 years.

    I’m not clear on what you’re suggesting. Is “shares owned by many people” the same as the corporate ownership we’ve already seen at times? Or something different?

    • I think that you’ll get a lot more ebbs and flows with single owners. Steinbrenner definitely made the Yankees relevant again – but he also bought the team at one of baseball’s low points. Its worth so much more now not just because he was successful at turning around the franchise, but also because baseball in general got turned around.

      I think that open ownership – where the commissioner doesn’t have to approve new owners beyond some financial baselines – wouldn’t result in say, CBS buying the Yankees. I think that CBS might buy a share of the Yankees, as would Cablevision, as would Warren Buffet, etc, and together they would appoint a CEO to manage a billion dollar enterprise and return a profit to shareholders.

      Instead, you get odd situations with single owners. Recall the Steinbrenner shadow Tampa cabinet, and the internal wars in the 2000s between Cashman and other people in the organization. You get some of this in competitive companies, but it becomes more prominent with a single owner instead of a plurality group. Pride, egos, loyalty, etc hold more power over economics than they should.

      This isn’t unique to baseball. Its a problem of single family ownership in large companies. But its compounded when entry is restricted – look at what Mark Cuban has been trying to do.

      • Professor Longnose

        That’s really cherry picking the data–complaining about squabbling between the Yankees executives and overlooking the fact that the Yankees were phenomenally successful during the 2000s, on the field and financially.

        Baseball was turned around in large part because of Steinbrenner, not despite him. And that he bought at a low point isn’t an argument against him.

        Do you really think corporate ownership would have spent the kind of money that Steinbrenner did?

        There just is no argument that the Yankees were better off under corporate ownership than under private ownership.

        Would you say the Braves were better run under Time-Warner than under Ted Turner?

        You might have a case with the Cubs, but I really don’t know anything about it. The Dodgers under Fox?

        The problem with the Dodgers is that McCourt was allowed to buy the Dodgers by leveraging them. And that was basically the problem with the whole financial world since that time–people had no respect for debt, and the whole world is paying for it.

        If you ask me, putting baseball in the hands of corporations is hardly the answer. But I’ll admit I don’t know much about it. Can you provide examples of corporate ownership that was noticeably good for baseball? Not what you think should happen, but what has actually happened?

  3. bornwithpinstripes

    steinbrenner ruined the yankees???? he made them a 1.7 billion dollar entity..?and made a whole lot of other owners richer..when they are on the road attendance soars..dame yankees

    • In the 1980s, there is absolutely no question that Steinbrenner ruined the Yankees. It took him ruining the Yankees to back off and let the Yankees do well.

      • bornwithpinstripes

        who and how, brought them back from these ruins

  4. nyyankeefanforever

    Thanks to the previous knowledgeable commenters here, I am spared the necessity of explaining for the umpteenth time how Steinbrenner-bashers and Yankee haters are so woefully uninformed regarding the contributions of both to the sport’s viability today.

    As for referring to the Dodgers as “an historic promising franchise,” I have to smile as I haven’t heard such a phrase uttered with a straight face by anyone not named McCourt since Fox Entertainmment bought out the O’Malley family interest in ’98.

    • bg90027

      This is absolutely right. I’ve lived in LA for 17 years now and it has been a long time since the Dodgers were a well-run organization. And while I’m not going to defend McCourt, I’d probably take the first few years of his ownership over the Fox ownership.

      I also think that the safety concerns are overstated. The beating of that SF fan was terrible but an anomaly. I’ve never felt unsafe at a Dodgers game.

      I also agree with everything Professor Longnose said.

  5. Larry Diaz

    Why not be direct? It’s time to bust up the Congressionally empowered baseball monopoly that has ruined baseball by pricing families out of the park. Unless of course, you buy into what Atlanta’s pitching coach said, “Kids do not belong at the ballpark?”

    • What part has the American family been priced out of? The answer is none, especially with the secondary market.

      • bg90027

        All forms of live entertainment have gone up significantly in price. I don’t know whether I’d say that the American family has been priced out of the market and if Clubs can mostly fill stadiums at their pricing who are we to say tickets should cost less.

        That said, I’m sympathetic to the idea that it’s very expensive to take a family to a game. I don’t think it’s particularly worth going to the stadium if you don’t have decent tickets, expecially given how many games are televised and how good games look on big screens. For me, minimally acceptable seats run $45 or so each even discounted through goldstar or on the secondary market. When you add in transaction fees, parking, gas, concessions, programs/scorecards, and maybe a souvenir or two and you are probably pushing $300 for a family of four. That’s not a cheap day of entertainment.

        • With a modest amount of planning, it doesn’t have to cost so much money (unless you have expensive requirements). For example, tier seats behind home plate to last Thursdays game against the White Sox were going for $3.80. With transaction fees, thats about $30 for a family of four. Across the street from YS is McDonalds, a few delis, and several souveneir shops. That same family’s needs in that department could be met with another $50. Parking on the street outside YS is safe and free (and easy to find on a week night).

          There’s no reason a night at the ballpark has to cost the family of four more than $100, assuming of course you are willing to make the effort to plan. Now, if you want the best seats against the best teams with the most convenience, then you should expect to pay more.

  6. john

    I live in Pittsburgh and probably the only Pirates fan out there.. but I went to a game a couple of weeks ago and the Pittsburgh Penguins were playing their first NHL Stanly Cup game the same day vs Tampa Bay.. I went to PNC Park and probably was the only one there to watch the game. (I eventually went to the left field bar to watch the Pens game.) They said the attendance was 8000 but it looked alot less. I bet there were not more than 2000 or less there. Never seen the place so empty. A friend of mine went to the game last night and a Friday night game and posted pictures. It was empty then too! I dont know how MLB expects to put a product on the field but the owners are so greedy they get rid of the good players before the team can even win a few games like the Pirates. I am tired of seeing the Yankees, Red Sox and other large market teams winning all the time. Give the other teams a chance! Greedy bastards…. MLB has lost touch with the fans and it is showing.

    • john

      I remember back in the 1970’s when at least five or six teams like the Pirates,Astros, Mets, Cubs and Phillies were neck to neck in the standings up until the last game of the season. It was exciting to watch because the teams were a half game behind each other ALL SEASON!!. Look at it now…. 15 or more games behind the front runner… give me a break! I dont want to see St Louis or NY Yankees all the time. Give someone else a chance. What ever happened to a player staying on the same team his entire career? Where are the Joe Dimaggios, Mazeroskis,Pete Roses, Willie Stargells of MLB today? …oh yeah, they play for the Yankees. They might as well just give the World Series trophy to them even before the season starts.

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