Yankees Pile Up Wins, Dollars in 2009
NEW YORK - Here's good news for New York Yankees fans - and bad news for those who revile the club as the Evil Empire: The richest club in baseball is about to get richer.
The Yankees' charge through this year's playoffs and into their first World Series in six seasons will help drive a double-digit revenue gain, estimates Michael Ozanian, national editor at Forbes magazine. The return of the 26-time World Series champion to baseball's biggest stage should help boost revenue by 20 percent to 33 percent to $450-$500 million this year from $375 million last year, he says.
That means the Yankees will be able to afford more big bucks free agent signings like the $423.5 million spending spree this winter that netted Game 1 and 2 starting pitchers CC Sabathia and A.J. Burnett and first baseman Mark Teixiera. That's likely to spark more resentment from rivals like the Boston Red Sox that have trouble keeping up with the pinstriped money machine. If the floundering economy emerges from the two-year recession, corporate customers may come out from under the bed in 2010 and finally buy some of the expensive seats that sat empty this season.
The privately held Yankees don't open their books. But Ozanian expects the team to turn a substantial profit in 2009 after missing the playoffs and posting a $3.7 million operating loss in 2008. As usual, team brass say they'll spend whatever it takes to make the Bronx Bombers No. 1.
"This commitment to winning, this commitment by the Steinbrenner family to put the resources back into the team, to give New York and Yankees fans a winner, is never going to change," team president Randy Levine told CNBC's Darren Rovell on Monday.
The Yankees' return to their first World Series since their 2003 loss to the Florida Marlins couldn't have come at a better time. The team's player payroll of $201 million was still highest in the majors this season.
The club had the misfortune of opening its new $1.5 billion Yankee Stadium in the teeth of the worst economic climate since the Great Depression. The October 2008 meltdown on Wall Street wiped out many of the investment bankers and brokers who would have normally shelled out $500 to $2,500 for premium "Legends Suite" seats. As struggling Wall Street firms lined up for bailout money from the federal government this spring, those who survived the carnage were afraid to be seen in the best seats in the house.
Embarrassed by rows of empty high-profile seats during the first few home stands, the Yankees in April slashed prices in half on their $2,500 per game seats, reduced their $1,000 seats to $650 and gave away loads of complimentary tickets to season ticket buyers. The club went further in September announcing price cuts on 6,454 Legends, field-level and suite seats for the 2010 season.
If missing the 2008 playoffs hurt the Yankees' fiscal bottom line, this year's playoff run is lining the club's pockets again. The Yankees will reap additional ticket, food, beverage and parking revenue from at least seven, and possibly nine, postseason home games. Then there's the extra ad revenue from sponsors advertising inside Yankee Stadium.
The playoff cash is icing on top of the home gate this season in which the Yankees drew 3.72 million fans despite increasing their average ticket price by 76.3 percent to an MLB-leading $72.97, according to Team Marketing Report (The Red Sox had the second-most expensive average ticket at $50.24).
The rising Yankees tide is also helping to lift the economically depressed Big Apple. Each World Series home game will generate an economic impact of $15.5 million , estimates David Lombino of the New York City Economic Development Corporation. The five home games during this month's Divisional and League Championship Series generated a combined $59.5 million.
"I don't know what it means financially. I don't have the books," said Teixiera, who signed an eight-year, $180 million contract in the off-season. "But I know it means a lot to our fans, the city of New York and Yankees fans all over the world."