Sox losing sponsors...

[southsider2k5]

But I am sure that they have more money this year than last year...

 

http://chicago.whitesox.mlb.com/news/artic...sp&c_id=cws

 

CHICAGO -- Brooks Boyer did not make any direct player personnel decisions in terms of assembling the 2009 White Sox roster. Those decisions are left to general manager Ken Williams, the architect of two American League Central titles and a World Series championship in 2005.

 

Yet, the work put in by Boyer, the team's vice president and chief marketing officer, and his staff holds a direct impact on the moves Williams ultimately is able to make. Boyer recently took time away from his weekend seminars and mingling with the fans at SoxFest to talk with MLB.com about the state of the team.

 

MLB.com: What's the financial state of this ballclub, from your perspective?

 

Boyer: The economy is a significant concern for any sports team or for any business at this particular time. Where we are doing very well is in our season-ticket sales. Knock on wood -- we should be about where we were last year.

 

Where we are getting hurt the most is where our country is getting hurt the most, in our corporate partnerships. We've had two companies who have said it's either the sponsorship with the White Sox or people's jobs. We certainly understand that, and we have to be smarter and we have to be good partners to these people. We have to fight, and scratch and claw, and deliver.

 

Now, people, not only are they spending less dollars, but they have to spend their dollars smarter. So, the dollars they spend with us, we have to look at ourselves as an outside sports marketing agency that helps these people spend their dollars well and puts them to good use. The days of hoping that something will click are over. We now have to be able to prove, before someone commits to us, that we are going to be able to enhance their brand or ultimately add to their bottom line. That's what we are working hard to do for these people who are making the sponsorship decisions, because their jobs are on the line.

 

We have to be smarter and we have to think with them, rather than a lot of times in talking with them and saying, "Here are our options." Now, we are to a situation where we have to say, "Here's the idea." I'm happy about what we have been able to do for our existing partners and the partners that stay on, but we also have to move forward with new ones and be smart with them.

 

MLB.com: When you are talking about being smarter and showing these partners what you have, does that involve including incentives, of sorts?

 

Boyer: It's not about cutting the price. It really isn't. It's about being smarter and making every single dollar work a little bit harder that they are spending. We have to try to put partners together and create an atmosphere of creativity, rather than, "Here's our standard operating procedure." We have to be a little more creative, like every team has to be.

 

MLB.com: You mentioned that you've already lost two corporate partners for the season.

 

Boyer: For this season, we had one partner who said it's our sign or 10 jobs. We have to understand that. Hopefully, that partner will be back when that comes around again.

 

MLB.com: So, how do you react when you lose a partner who contributes some sort of major signage or sponsorship?

 

Boyer: You go out and you have to find someone to replace it, because the money that comes in is an important part of our equation. We have to get out there and hustle, and work and scratch, and see if we can't make the inventory that is now open, make it make sense for somebody.

 

MLB.com: Did the team, as a whole, or at least the front-office staff, kind of see this economic trouble coming before it even happened?

 

Boyer: We didn't get hit by it last year, but it was happening in other sports. We didn't know what it was going to mean to our ticket sales. We could kind of guess what was going to happen to sponsorships. For us to be able to go out and be smart ...

 

[White Sox chairman] Jerry [Reinsdorf] has said this 100 times if he has said it once, he'll say, "I don't need to make any money. I just don't want to lose any money." My projections have to be accurate and on. There are times where I'll sit there with my staff and say, "Can we hit this?" and they will say, "Yes, we can hit this." Then, it will be, "Can we hit this?" We get to a point to where we feel this is where we can be.

 

You don't want to be too conservative. Too conservative ultimately might mean you don't go out and get a certain player. But you can't be too aggressive because then you go out and lose money. So, it depends on the personality and makeup of our group, in terms of what we can put forward. And the personality of our group is aggressive. We believe in our abilities to generate because we are the ones talking to the fans. We know what they are thinking.

 

Certainly, we can't control the weather in April and May, which may ultimately affect walk-ups. Those are things we can't fix. A slew of injuries and an 0-12 start? We can't predict that right now. We are predicting that we are going to have your normal April/May weather, and that gives you the normal walk-up. We are assuming we have a team that is going to be competitive all year, so June, July and August will take care of itself.

 

Then, the team will be in it, so that will take care of September. Certainly, the season-ticket base factors into a large amount of our decision, and the renewal that we have and the fan support we have has been terrific.

 

MLB.com: At this point, you obviously can't completely read the fan reaction to the 2009 team put together by Williams. But so much of this year is based on last year, such as the season-ticket renewal. A great deal of it is based off what the team did last year.

 

Boyer: Yes, we went from a ridiculously high ticket base in 2006, coming off of '05, with the promotion we did where if you buy season tickets for next year, you get World Series tickets.

 

We had a good year in 2006. We didn't make the playoffs, but we won 90 games, so we stayed high. Then, we were terrible in '07, so we dipped. We went into '08, where it was, "You are into '08, and you had to get some of those people back."

 

Now, going into 2009, we have an economic crisis like we have never had before. There are challenges, but the season-ticket base remains strong. We obviously are trying to add to it and would love to get back to the '06 level. But we've never been there in our history, so it's our goal to get back there.

 

MLB.com: What's advertising revenue like for the team at this point?

 

Boyer: I anticipate sponsorships being down anywhere between 10 to 15 percent, as I sit here [at the start of February], with two months to go before we start. But you just never know. Everyone we've talked to, the lowest we've heard, with the exception of one club, is 10 percent down.

 

The Brewers have said we are going to be up. But then again, they are coming off the first playoff berth they've had in a while. Everyone I've talked to said they are going to be down.

 

MLB.com: Is this a strange dynamic in that what you raise goes into the coffers for Kenny's budget, but if the team doesn't do well, it affects future season-ticket sales and what not?

 

Boyer: One of the great things from being in this industry -- one of the great things I learned from 2005 -- this has a lot to do with Jerry and Kenny, is how much it takes a complete organizational effort to win, be successful and make money in this business.

 

You need someone like Jerry, who is watching over everything. You need someone like Kenny, who understands it's not just about the 25 guys on the field. You need a guy like [manager Ozzie Guillen], who understands it's not just about what he does. Kenny went to my staff to thank them, and he did it during the year because he understands the work they put in is part of the success out on the field.

 

My entire staff knows that the money they bring in goes to Kenny. He spends it wisely for Ozzie. Ozzie needs Kenny. Ozzie needs us. We need Ozzie and the team, and Kenny needs the team to perform to help us. It really is a complete cycle.

 

Our business model is built on: generate the revenue, give it to Kenny and Kenny spends it wisely with Ozzie. Ozzie produces wins, which helps us make that snowball a little bigger and bigger. The more you win, obviously, the more sponsors you get and more tickets you sell and the more people watch you on TV. So, the TV ratings go up.

 

People buy more of your merchandise. The big cycle in circles just gets bigger and bigger and bigger. We are all key components. I tell the interns who come in every year that you are part of what we want to be, a winning baseball tradition. The money they generate goes to the guy who makes the smart decisions about who to put on the field.

 

MLB.com: People have e-mailed and expressed concerns about ticket prices going up. It's the nature of the beast, but how do you explain that to people who are fighting the same economic crunch?

 

Boyer: First of all, we appreciate all of our fans, whether you are an Ozzie Plan holder or own a suite. People are making decisions, and they are making decisions to come and be part of the White Sox this year. We take that responsibility very seriously, which is why we've built the sales and service teams the way we have built them. We want to have a connection with them and want them to feel they are a part of this family.

 

We started in 2004, because I have a pricing philosophy that we believe in, that is you make very small incremental increases in your season-ticket prices. No ticket went up over $2 from last year to this year, as has been the same in the past years, even after we won the World Series in '05. I don't believe in big, meteoric jumps because you had some success. I don't believe in lowering the prices or keeping the prices flat when you have a bad season.

 

Then, what do you do when you have an average season? From a pricing philosophy, I don't like people to get their bill and see a big jump. I like our season-ticket holders to get their bill, look at it and say, "I get it." It's either going to be a $1 or $2 jump from last year.

 

I don't think people look at individual-game prices, unless you are an individual-game ticket purchaser. If you are a season-ticket holder, you look at, "What does my season ticket run?" If it's jumping or staying flat or going down, you can't understand the philosophy. Here, I think our season-ticket holders understand the philosophy of keeping that small incremental increase each year.

 

The best part about the White Sox is we still do have Value Mondays. You can buy a ticket for less than $10 to come see the White Sox. And we have six or seven dates where you can do that. Our partners are great about doing ticket promotions and ticket offers that they have purchased. We have family packs. So we have different ways of offering value in tough times that some other teams don't really have.

 

Scott Merkin is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.

[shipps]

If I was a season ticket holder I wouldnt be to understanding about any ticket price increase when you cut payroll like you have done, no matter how small the increase.

[jasonxctf]

but will the games still start at 7:11

[Felix]

This shouldn't be a surprise. It's happening all around sports, and will continue to happen until the economy begins to improve.

[Middle Buffalo]

Hopefully, the end result of all this is that salaries come down and tickets come down. Pro teams rely too much on corporations to buy tickets, and the "average" fan can't afford to go to more than a few games anymore.

 

I'm looking at spending around $100 for tickets to a spring training game for my Dad, two kids and me. Then there's parking, food, etc. We're looking at $150 minimum. That's a little steep for a couple hours of low intensity baseball. I don't think that the current MLB price structure is really the best way to build the next generation of baseball fans.

[Kalapse]

If I was a season ticket holder I wouldnt be to understanding about any ticket price increase when you cut payroll like you have done, no matter how small the increase.

They've cut payroll by less than $8M from last year. It's certainly feasible that the ticket price increases allowed them to make only minimal slashes in payroll rather than say $20M or $25M. Since the ad money is no longer there, that money needs to come from somewhere, without the increase in ticket prices we could be looking at a pre 2005 like ~$75M payroll.

[LVSoxFan]

The only way ticket prices are coming down is if the park is sitting half-empty this season. Otherwise forget it. Once things go up, they never come back down.

 

I was surprised, however, at them raising prices in this economy. $47 for a premium game bleacher seat? Ridiculous.

 

I most definitely think you're going to see a lot of empty seats at non-premium games this year. With everybody struggling, that minimum $150-$200 for a family with two kids is going to seem like an awful lot.

[Steff]

The only way ticket prices are coming down is if the park is sitting half-empty this season. Otherwise forget it. Once things go up, they never come back down.

 

I was surprised, however, at them raising prices in this economy. $47 for a premium game bleacher seat? Ridiculous.

 

I most definitely think you're going to see a lot of empty seats at non-premium games this year. With everybody struggling, that minimum $150-$200 for a family with two kids is going to seem like an awful lot.

 

Tickets have been in my family for almost 40 years and never once have they gone down. And I don't agree with "a lot" of empty seats either. Renewal was near 97% again this year for ticket holders (full and split) so not too much of a change. And if we happen to catch a spark the place will be packed again with ease. The Sox have seen much tougher times. Have faith.

[kapkomet]

Tickets have been in my family for almost 40 years and never once have they gone down. And I don't agree with "a lot" of empty seats either. Renewal was near 97% again this year for ticket holders (full and split) so not too much of a change. And if we happen to catch a spark the place will be packed again with ease. The Sox have seen much tougher times. Have faith.

Do you mean by that ownership issues, or just the overall economy? Or both?

 

It's hard to run anything well right now, especially "discrentionary spending" types of businesses... it's going to be interesting if things don't turn around soon.

 

 

[Steff]

Do you mean by that ownership issues, or just the overall economy? Or both?

 

It's hard to run anything well right now, especially "discrentionary spending" types of businesses... it's going to be interesting if things don't turn around soon.

 

 

Both.

 

As for the attendance playing a role, I'm sure many here remember less than 10 years ago seeing 10K, and many times less, in the stands. We aren't as big a piece of the pie as we think.

[kapkomet]

Both.

 

As for the attendance playing a role, I'm sure many here remember less than 10 years ago seeing 10K, and many times less, in the stands. We aren't as big a piece of the pie as we think.

It depends on how they structure their incoming money, of course. It seems like they "counted on" more people after the playoff run of 2005. Of course, they would. It's extra cash straight down. But, I'm not sure that we've seen the kind of erosion of "discretionary spending" that businesses are going through now at any time in the last 20+ years. The effects there remain to be seen, I think.

[caulfield12]

I think the biggest problem was the last two months of 2006 and then the 2007 season on top of it.

 

Kind of stopped all of our forward momentum...at the same time the Cubs were really starting to take off.

 

A number of studies documenting the effects of WS Championships typically shows a 5 year window of benefits accruing....in our case, it was stopped shorted by the 2007 season and the economy a bit...but I'm sure the Rockies aren't enjoying nearly the economic renaissance that some forecasted. Their WS appearance (and it's still different from a championship, of course) hasn't had a demonstrable affect. Perhaps because their season was so screwy...the way they went on a tear at the end but weren't a factor for much of the season, and their subsequent destruction by the Red Sox. I guess their fans didn't really feel their team was "for real" in the end.

 

Or look at the Tigers from 2006...to where they have fallen today. Almost feel sorry for them, since DET has just been decimated and demoralized, but it sure helps out the White Sox.

 

[Steff]

It depends on how they structure their incoming money, of course. It seems like they "counted on" more people after the playoff run of 2005. Of course, they would. It's extra cash straight down. But, I'm not sure that we've seen the kind of erosion of "discretionary spending" that businesses are going through now at any time in the last 20+ years. The effects there remain to be seen, I think.

 

 

They counted on, and got, and spent the $$ from the '05 run. As they do every year the Sox put all "green" back into the club. I don't think so, but this maybe the first year they run red and don't put anything back into the '10 season. It's been a long time since that's happened.

As for businesses, from what I have heard all the suites that were sold last year are still sold this year. Those are the real cash cows of the park.

[southsider2k5]

They counted on, and got, and spent the $$ from the '05 run. As they do every year the Sox put all "green" back into the club. I don't think so, but this maybe the first year they run red and don't put anything back into the '10 season. It's been a long time since that's happened.

As for businesses, from what I have heard all the suites that were sold last year are still sold this year. Those are the real cash cows of the park.

 

The chairman is worried about that exact thing.

 

http://money.cnn.com/2009/02/18/magazines/...seball.fortune/

 

The Pittsburgh Pirates, another team that recently lost GM as a sponsor, have resorted to selling some season tickets at a 25% discount to 2008 prices. In Arizona the Diamondbacks' season ticket renewal rate has fallen to 83% - still respectable, but down from 94% heading into the 2008 season. Hall says he knows of other MLB teams - though he won't name them - with renewal rates as low as 60%. And as bad as 2009 looks, Chicago White Sox owner Jerry Reinsdorf thinks 2010 could be worse if corporations keep cutting back. "Virtually every team is losing sponsors," Reinsdorf says.

[Dick Allen]

The chairman is worried about that exact thing.

 

http://money.cnn.com/2009/02/18/magazines/...seball.fortune/

He's sitting pretty with Dye, Thome and Dotel, MacDougal coming off the books. Also Vaciedo will be $4 million cheaper not paying his bonus. Well over $30 million right there.

[Kalapse]

The Sox have 13 important players with 3+ years of service under team control for next season, if they want to keep them all around it'll cost them somewhere between $65M and $70M.

[kapkomet]

They counted on, and got, and spent the $$ from the '05 run. As they do every year the Sox put all "green" back into the club. I don't think so, but this maybe the first year they run red and don't put anything back into the '10 season. It's been a long time since that's happened.

As for businesses, from what I have heard all the suites that were sold last year are still sold this year. Those are the real cash cows of the park.

The first part is absolutely true. And, I'm not sure how much money they got from 2008 playoffs... probably not that much? So they may "lose" on that part.

 

I do think 2010, if things don't turn around, could be super ugly for all sports franchises, not just the Sox. 2009's money is already spent.

[caulfield12]

Don't forget Contreras, as well...

 

Well, you'd have to think the home playoff games and Game 163 added a pretty decent chunk of revenue.

 

There's always the possibility we dump Jenks as he becomes more and more expensive. The recent philosophy of the White Sox has typically been to go cheap (with the exception of Koch) on closers, like Howry, Foulke, Takatsu, Hermanson (although he wasn't brought on with the idea of making him one originally), Marte, Tom Gordon (by that point in his career), then Jenks.

 

You really have to go back to Roberto Hernandez to find an older, veteran closer who had a long string of years with the Sox.

 

Is Jenks going to be worth $7-9 million in the type of market where that will get you Orlando Hudson and Bob Abreu? Maybe not. Of course the problem is that you won't get much of anything back for him, either. He's not perceived like a Papelbon or even a Nathan. He's somewhere in that second tier of Top 10-12.

Edited February 21, 2009 by caulfield12

[Middle Buffalo]

How long before the "superstars" still on the market start crying collusion? They're waiting for 2006 era contracts in a recession. Not very bright.

[Steff]

The first part is absolutely true. And, I'm not sure how much money they got from 2008 playoffs... probably not that much? So they may "lose" on that part.

 

I do think 2010, if things don't turn around, could be super ugly for all sports franchises, not just the Sox. 2009's money is already spent.

 

 

2009 revenue is already spent? That's some screwey accounting ya'll do down there.