When meaningless numbers are spun

In the eight-plus years I’ve been writing this blog, I’ve remembered a lot of little details. I’ve also forgotten just as many. Such was the case Thursday, when a John Shea article brought up San Jose’s economic impact report from 2009 (Exhibit 3 in the antitrust case filing). Shea asked whether a move to San Jose would boost attendance. He then pointed to the report’s assumption of only 2.1 million in annual attendance at a hypothetical 32,000-seat ballpark.

A’s superfan, radio gadfly and occasional commenter here (and friend of the blog) Bleacher Dave stepped up to push the idea that San Jose has an attendance problem, even though an Athletics game has never been hosted there. I rebutted that the attendance claims were never meant to forecast actual demand, only to provide a baseline for tax benefits (conservatively) and indirect benefits (usually outrageous). No matter, Dave pressed on, citing study author CSL’s experience in the field to buttress his argument.

CSL also did similar reports for the 49ers and Raiders to back those teams’ respective stadium campaigns. So far, only the 49ers have their stadium going. I pointed Dave to the Raiders report. Later I remembered that Let’s Go Oakland did its own report for a hypothetical Oakland ballpark either at the Coliseum or somewhere in the Jack London Square area.

Funny thing. Gruen Gruen & Associates, the firm hired to do LGO’s study, made its own attendance assumptions for a new ballpark:

  • Coliseum: 2.11 million/year
  • Jack London Square: 2.24 million/year

The key difference is that LGO’s study has a ballpark capacity of 36,000 instead of San Jose’s 32,000, which would in theory allow for larger sellout crowds when sellouts occur. The projections put the Coliseum roughly on par with San Jose and JLS ahead of both to the tune of 1,600 fans per game. If San Jose’s capacity were greater and had a similar number of sellouts, San Jose would land somewhere in the middle of the Coliseum and JLS projections.

Now if I wanted to twist these numbers into something they aren’t, I’d say that there’s something definitely wrong with the supposedly rabid Oakland fanbase only increasing attendance over the old Coliseum years by 7-13%. Surely there’d be a better response than that, right?

But I won’t. Because that’s not what these studies are for. The studies base their assumptions on five-year historical ticket sales at the Coliseum, which as we all know isn’t exactly an attractive, modern venue. Only one of those years was a playoff year. A major rebuilding plan marked the following years, which negatively affected ticket sales and fan interest. Wherever the A’s build, they won’t have the luxury of getting a big public subsidy as was the case in Miami or Washington, DC. If this thing actually gets built, it’s reasonable to expect that there will be so much pent-up desire to be there (the wildcard of on-field performance notwithstanding) that attendance should easily surpass those assumptions. It all has to do with season ticket sales.

Before a single pile is driven or brick is laid, the A’s will probably have to get somewhere in the neighborhood of 15,000 season ticket commitments or FSEs (full season equivalents). The closer to 20,000, the better (the A’s hover below 10k currently last I heard). The Giants maintain 25-27,000 FSEs annually, and they were so confident in the demand when their park opened that they only offered full season ticket subscriptions. (Note: More upfront ST commitments – especially multiyear – also proves to banks that the project is worth financing.)

The greater the ST sales, the better for the whole A’s market. It creates scarcity for the remaining seats, it provides a solid secondary market, and if pricing tiers are set correctly, should create good value for fans at multiple levels. It also means a lot fewer really cheap seats, but that’s the price of growing into a better, privately funded facility.

The two economic impact reports written for San Jose and Oakland provided none of this context and took none of these factors into account. All they did was average attendance over a short window, bump it initially upon opening, and taper it down over time as the honeymoon effect wore off. That’s the most basic of analysis and should be treated as such. Actual numbers should be better, but could also be worse if prices are too high or the team is pitiful. There are no guarantees.

If the goal of certain individuals is to create a gotcha moment out of a misinterpreted number, then we’re going to waste a lot of time finding gotcha numbers and moments everywhere. It smacks of a political race. There are much more important numbers to consider, such as the cost of Howard Terminal or a territorial rights payoff. Those are the numbers that matter. Not some previously ignored projections from several years old documents that are easily disregarded.

If people want to persist with stuff like this, I can’t stop them. We’ll be here as we always have, ready to provide the nuance that the news articles, tweets, and radio callers often lack.

—–

P.S. – Oakland Fan Pledge, which was started to prove fan commitment to the A’s, has just over 4,000 pledges so far (including mine). We’ve got a long way to go, folks.

P.P.S. – One more thing to consider. The Giants have long maintained that they need attendance of 30,000 every game in order to take care of AT&T Park’s debt service and field a competitive roster. How on earth would the A’s be able to pay for a more expensive park with 25,000 a game, even if prices were jacked up?

22 thoughts on “When meaningless numbers are spun

  1. But “gotcha moments” sell papers RM ;). I also follow political blogs, so I know to much about the “gotcha” phenomena.
    I think Wolff’s equity will take care of the last “ps”..

  2. As I’ve said before, the minute the San Jose move is confirmed, I’ll be back as a season ticket holder. So there’s 2 out of the 15,000 needed. 🙂

  3. Good Read ML.
    Hard to forecast tix sells. The giants had the luxury of having barry bonds’ homeeun chase as well as winning teams. They started strong and never lost momentum. A new stadium eitherin sj or oak would do well once opened but fielding a strong team will keep it full. Id like to see 3-4 straight losing seasons for giants and see what their attendance would be.

  4. The assumption being implied here is more people = more money, which is not always the case. A new stadium will bring boxed and additional premium seats to the mix, increasing the amount of money received from attendance. The key: What location will increase the amount of money from attendance? I’d argue fewer people will buy tickets in San Jose because the venue is new and the downtown area is small, but those who do buy tickets will spend more. For example, San Jose filled the Shark Tank and tickets often go for $80-100 a game! I would rather have a place in an area where you can charge 15,000 fans $35-$50 a ticket than a place where you charge 30,000 fans $5-$10. So having more fans doesn’t really mean anything if you’re having giveaway nights every other day like Oakland currently does.

  5. I will not be joining the Oakland Fan Pledge for the same reason I would not join a San Jose Fan Pledge:

    I now live in the Sacramento area and I just don’t have the time to commit to a number of A’s games no matter where they build in the Bay Area.

  6. Also, Steven: it’s not easy to compare baseball attendance to any other sport out there simply because of the amount of games baseball plays. On any given homestand you can figure 6 games by default, up to 9 or 10 once in a while, then a similar roadtrip for the team.

    In the NHL or NBA, you might have 3 or 4 games at home in a week. Maybe. It doesn’t hurt that the Sharks have made the playoffs in all but 5 of their 21 seasons and 14 of their last 15 years. Fans know they’re going to see a winning team when they go to the arena.

    For the Warriors, as bad as they often were for so long, the Bay Area has a lot of diehard hoops fans, it’s a one-team market, and it’s often about seeing a star from another team during their (sometimes) only visit of the season.

    NFL? What, 2 games a month on average, and mostly Sundays? Those are full day events, or even a whole weekend if you’re really planning to go all-out with a tailgate.

    Anyway, the point is by nature of the way baseball is compared to the rest, your average ticket price HAS to be lower than the three other primary sports. Going to so many games also takes a major commitment in terms of time.

    Just to compare full season ticket plans for teams in the Bay Area, we get this:

    A’s – $738 for bleachers to $3,280 for MVP Infield. Of course, Diamond Level runs $14,760 per seat for a full season, Field Box $6,560 each. For the regular seating, it’s a $150 deposit. Looks like being a full STH saves anywhere from around $6 to $20 per ticket, per game compared to regular prices.

    Giants – $1,925 for LF bleachers to $3,550 for Lower Box, but they don’t even show pricing for the closest seats around the infield. I don’t know if all of those are sold or not. They may be. They require a $500 deposit just to initiate a conversation about signing up for something. It’s almost impossible to compare their STH prices to per-game because of how much their dynamic pricing fluctuates. Depending on the day/opponent, a LF bleacher ticket could be anywhere from $22 or so up to $90 (yes, $90 for a Dodgers game). Lower Box might be $40 (in very rare cases) to $150 or so. Lower Box Premium (which still isn’t the closest in that place) usually goes around $80 all the way up to near $200 in some cases.

    Warriors – $645 for the top few rows of the upper level behind each basket to $17,200 for Courtside Club. For the typical fan, they’re probably spending around $1,100 or so for upper bowl tickets not in the corners to $3,000 or $4,000 for lower bowl corners. Right now it only looks like they have three upper bowl pricing levels available. Can’t see if they allow a deposit. Also can’t see what their normal per-game prices are since it’s the offseason.

    Sharks – $1,144 for the top end on one side, $1,188 for the “attack end” which the Sharks probably go toward two out of the three periods, up to $2,684 for most of the upper bowl or $4,048 for the upper rim. Then it’s $3,432 to $6,116 for the lower bowl or $9,064 for their best spots against the glass. $200 deposit. They advertise saving an average of 43% off individual ticket prices.

    Raiders – $250 for upper deck (the 300 level) to $950 for “reserved” (basically near the 50 yard line), or up to $1,500 for club level. That’s actually pretty good. Their season ticket prices for a full season are $10 less than individual games for every price level.

    49ers – kind of hard to say right now, since they note 2013 season tickets are sold out and they’re going to have a completely new setup in 2014 with the Santa Clara stadium. They’re also doing seat licenses and list per-game rates from $85 (plus $2,000 SBL) to $200 (plus $12,000 SBL) and that seems very limited as far as what’s left of the closest seats inside the 20 yard lines or so. They list per-seat STH costs of $850 to $2,000, which include the two preseason games (10 total).

    Turns out, not counting those SBLs, NFL season tickets are actually not a bad deal at all compared to the other sports.

    What does this all mean compared to a new ballpark for the A’s? Well, I sure hope it’s not dynamic pricing to the extent the Giants have gone. When Petco Park opened I thought their pricing was fairly decent compared to what I’d seen for a lot of other recent ballparks, but they’ve gone to more of a dynamic pricing structure as well. That whole arrangement is probably here to stay. The law of supply and demand rules.

  7. Giants Charter Seat Licenses went from $1,500 to $7,500 in 1996.

    Since the Giants are the only team in MLB history to sell seat licenses it makes a comparison easier actually since they reside in the same market as the A’s and comparing Silicon Valley to SF/San Mateo is fair.

    That price range was in San Francisco in 1996, during the .com boom.

    They raised 72M for 15,000 seats in the stadium, that means each seat license went for $4,800 average.

    If the A’s in 2015 can sell 15,000 licenses for 6k each they would raise 90M…..Personally I think they can sell 20,000 seat licenses easy at that price average considering the market.

    With 120M already earmarked with Cisco naming rights (this may end up being larger since it was signed in 2006) they would have 210M+ ready to go for a new stadium.

    Forget luxury box sales to the massive corporate base in the backyard and normal season ticket sales where the A’s will be able to charge far higher prices than they do now.

    Seeing the success of the Giants and the 49ers recently next door in Santa Clara it is safe to say the A’s would do quite well selling SLs in San Jose….Assuming they are lifetime rights.

    Not like Oakland who was offering 10 year rights for Raiders PSLs. I still believe had Oakland made them lifetime it would have actually worked. Oakland got greedy and thought they could charge again in 10 years….Foolish.

    Baseball is far cheaper and easier to split up with groups of people. The weather is perfect in Downtown San Jose in the summer. Oakland and SF are flat out cold at night even during the summer.

    San Jose gets 60-65 degree nights, usually when the game starts it is around 70. Not the 50-60 people sit through in Oakland and more so in SF.

    The 49ers are building a 1.2B stadium for 10 games a year privately in Santa Clara. The A’s can’t build a 450M stadium privately in Downtown San Jose?

    You wonder why the Giants fight tooth and nail for Santa Clara County.

    • @Sid – The STL Cardinals also sold seat licenses – 10,000 club and premium seats.

      @Cbscott25 – Is someone really suggesting that the A’s can sell 20k PSLs? The Giants only sold 15k and the A’s can’t even get to 10k season tickets. If someone actually buys that they’re asking for Mt. Davis the sequel.

  8. Would anyone here entertain the the notion of purchasing a PSL? I’d like to hear someone’s honest rational justification for taking on this cost. I’ve never been able to wrap my brain around why someone would pay for PSLs.

  9. @Briggs

    You get first rights to any special events as a PSL holder so long as they are in your seat(s). You still have to purchase season tickets to retain your PSLs or you forfeit them back to the team. PSLs are just another source for the team to extract money from the fans. Just look at it like a way for you as a fan to feel like you own part of the team so long as you or your family continue to renew their season tickets each year. In my opinion they are not worth purchsing for baseball stadiums. Football, hockey and basketball are the perfect venues for PSLs once you found seats you can afford. I know when I was an A’s season ticket holder I used to like getting different seats each year.

  10. Briggs,

    There is no “rational justification” to buy a PSL.. :). Its a total scam or genius way to get money depending on how you look at it. You are paying for the right to pay them (i.e. buy season tickets). If you ever stop buying season tickets you loose the PSL money you paid, so in other words you are forced to always buy tickets…

    “I dont want to buy ST this year… oh wait damn i will lose that PSL money… ok will have to buy”.. team never has to do anything and money will come in.

    In “Theory” you have the right to buy tickets for your seat to any event in the stadium if you own a PSL… Now i dont know about other PSL contract language but in the fine print for the 49ers PSL contract it says that you have that right “only if the promoter of the event allows it”

    My “rational” reason to buy the PSL: “growing up poor alway a dream to own 49ers ST, finally able to afford them then going to make it happen”, my business mind says i am an idiot but my heart is happy 🙂

  11. Was the Giants Charter Seat License a PSL? If so, then I’d view the PSL as a form of public financing for stadium construction, with only those who attend the venue paying the “tax.” FWIW, I’d buy a PSL for Cisco Field.

  12. Seems like any side can manipulate the numbers to back up their argument. I don’t think the A’s can do 20,000 seat licences as some are suggesting- is there any precedent for that? Now, if they win the World Series a few times before the move to a new facility… then we might see those types of numbers.

  13. Thanks for the replies. I understand what PSLs are and how they work. I just don’t see why anyone would want to buy them. Well, there are plenty of useless things we throw our money at, so I guess this is no different.

    @Tony D.: Yeah, Pacbell sold a PSLs. They called them charter seats licenses. If I’m not mistaken, Candlestick had something similar. I remember games towards the end of each season where seat license owners would tape their selling price on their seats. Fans could shop the various on-sale seats for the following season.

  14. Here’s another little detail you forgot. MLB said that cisco field would have to be between 35-38k seats rather than the original 32k proposal. So none of the studies regarding a 32k seat ballpark in San Jose really matter anymore

  15. @groshawn – You missed the point. None of these studies matter AT ALL.

  16. @briggs,
    I guess I’ll have to sacrifice one Vegas trip in 2017 to buy my Cisco Field PSL’s 😉

  17. @Tony D:

    Or do better there than you have in the past!

  18. @Marine Layer. Yeah, @Sid thought that the A’s could sell 20k “Personally I think they can sell 20,000 seat licenses easy at that price average considering the market.” I agree with you that this is a little out there.

  19. @ML- I stand corrected, I did not know St. Louis sold 10,000 seat licenses.

    The reason why I think the A’s can sell 20k seat licenses is because of the market itself. Granted the A’s have 10k season ticket holders total currently but that is because of Coliseum being such a dump.

    St. Louis is a poor city and their demographics do not make sense for more than 10,000 licenses. San Francisco is more accurate, remember the Giants had 10,000 season ticket holders or less before they moved to Pac Bell, they sold 15,000 seat licenses no problem. Tells you something distinct about the fans and market if there is a new stadium.

    Cisco Field would be located in a perfect spot and if the 49ers can sell 50,000-60,000 seat licenses for football it is not unreasonable to think the A’s can do a fraction of that for baseball in a super rich area like Silicon Valley.

    People in San Jose pay more $$ overall to watch hockey than Warriors fans do in Oakland to watch basketball, which is far more popular.

    20,000 maybe a bit high I will concede, but 15,000 is not that far fetched. Lew Wolff may not have to resort to seat licenses as he may just feast on corporate sales for suites.

    But with this stadium being privately financed no one should be surprised if seat licenses are used to help build the ballpark.

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