Reds - General

Vottonomics: Attendance Revenue

Can the Reds afford the Votto deal?

A positive answer depends on growing the Reds’ revenue stream. In 2011, the Reds took in about $175 million. That’s a midpoint between two published estimates of $169 million and $179 million.

To provide some context for $175 million in revenue, the Reds took in $91 million in 2003. The Yankees have the league’s highest revenues, estimated at a whopping $439 million for 2012. The smallest revenue stream in baseball is Oakland’s at $160 million. The projection for the Reds’ 2012 revenue ($185m) is near the bottom of the NL Central, below the Cubs ($266m), Cardinals ($233m), Astros ($196m) and Brewers ($195m) and ahead of the Pirates ($168m).

What role can attendance growth realistically play in revenue increases?

In 2011, 2.2 million people clicked the turnstiles at GABP, generating gate receipts of $46 million. This represented a bump of 7% over the previous year, due primarily to enthusiasm in the first half of the season generated by the team’s 2010 division championship.

Milwaukee Parallel

A relevant comparison for what the Reds might expect in the next few years is Milwaukee. According to Forbes, the Brewers are similar to the Reds in average ticket price ($22 vs. $21), metro area population (1.6 million vs. 2.2 million) and seating capacity (41,900 vs. 42,271). They moved into their new park, Miller Field, two years before GABP opened its gates.

The Brewers are also a couple years ahead of the Reds in terms of on-the-field success. After achieving a .500 record in 2007, the Brewers made the playoffs the next year for the first time in 28 seasons, where they lost to the Phillies in the NLDS. After missing in 2009 and 2010, Milwaukee returned to the post-season last year, losing to the Cardinals in the NLDS.

When Miller Park first opened in 2001, attendance spiked for a year, but quickly fell back to previous levels well below 2 million fans per year. As the club returned to respectability on the field, their numbers grew over the decade, surpassing 3 million fans in 2008, a rate they have essentially maintained. The Brewers can expect gate receipts in the area of $71 million this year.

If (a big if) the Reds raise their regular season attendance to 3 million fans, it would generate additional annual revenue in the neighborhood of $17 million. To do that, attendance would have to increase about 10,000 people per game. While a jump of that magnitude is a pretty ambitious goal, an increase of even half that amount would provide important new cash.

Playoff Game Attendance

Sold-out playoff series would also significantly boost attendance revenues. Beside the direct financial benefits – ticket sales, concessions, parking, playoff swag sales – the Reds would benefit from national media exposure that would let them charge more for sponsors and advertisers in the ballpark. Playoff games would also increase the value of the local broadcasting contract.

A large percentage of playoff gate receipts do go directly to the players, particularly from the early games in a playoff series. The way the collective bargaining agreement is structured, the clubs do much better financially when the series goes beyond the minimum number of games.

In summary, can the Reds realistically look toward attendance growth as a meaningful source of increased revenues? With continued success on the field, the answer is definitely ‘yes’ — in the range of $10-20 million.

13 thoughts on “Vottonomics: Attendance Revenue

  1. Nice post. Tom Verducci had an article at noting that the MLB national tv deal will also come due in the next few years, and believes that teams like the Reds are already spending against an expected increase there.

    I don’t know if the Reds can match Milwaukee in attendance or not. It’ll be interesting to see how much winning makes an impact one way or another. With Milwaukee, there is almost an added cultural aspect of going to a Brewers game with the way they have set up the parking around the stadium for tailgating. Going to the game is something to be done, regardless if you like baseball at this point. I’ll have to hand it to someone else in the Cincy area to vouch for what game atmosphere is like at GABP, but Miller Park is one big party at a very nice place to watch a game.

    I’m not saying if the Brewers were to start losing badly that they’d still see millions of fans, but they definitely have something going that just gets people to the park.

  2. Matt: Good tip on the Verducci article. I’ve got a companion post ready on radio and tv broadcast revenue, both from national and local sources. The research I did on the national tv contract is in line with Verducci’s take.

  3. @Matt WI: I concur. Miller Park is my preferred venue to watch the Reds over Wrigley Field for the reasons you mentioned…….and you know you won’t freeze your ass off either. I’m sure you remember games at old County Stadium, right? Makes you wonder what the Twins were thinking with their stadium.

    As a non-Cincinnati resident, I don’t sense much enthusiasm for the team when I’m there. I get the sense it’s more of an entertainment destination, like Pittsburgh, rather than a place where baseball is the focus (St. Louis, Milwaukee). And that’s OK so long as the money keeps coming in. To that end, other out-of-towners I’ve talked with say they really enjoyed GABP. Maybe the product on the field just needs to catch up with the bells and whistles off the field to make it the total package.

  4. Good post.

    Am I the only one who thinks the game atmosphere, what Matt was referencing, at GABP is a little relaxed? I’ve only been to the stadium a handful of times, but the only time the fans really got into the game was when they were facing the Cubs, and that was mostly because all the people that drive in from Chcicago seem to get on everyone’s nerves.

    It’s not as bad as the crowds in San Diego, but it still isn’t optimal.

  5. Milwaukee has a roof. Its not 45 degrees and raining on a Tuesday night in April. Or a heat index of 110 in August.

  6. @TheyDigMyLongballs: I definitely agree that the roof makes a difference. I almost made that point in my post. April weather really hurts the Reds. So does the brutal summer – even night games because of the temp/humidity combo. Great point.

  7. Good article. Big question is the quality of Reds fans out there. If the team is doing well, will they come out to GABP or stay at home and watch the game? After spending 4 years in Pittsburgh, I have gone to my fair share of Pirates games (probably more than most, since I have a buddy that worked for them and would get me free tickets). Plenty of the games I’ve attended have featured mostly empty stands. However, mid-June last summer PNC Park was packed every game I went to and was one of the most exciting game environments I have ever seen. Granted, Pittsburgh is notorious for loving a winning team (The Steelers could double ticket prices and still sell out every game), but if we could see Reds fans get fired up like that we could see at least an increase of 7,500 fans per game, regardless of the weather,

  8. Speaking of attending games, I hope some of you in Redleg Nation are going tomorrow. Opening Day is tommorow people. I call for a breif recess on Votto and let’s celebrate the start of great season. Also, I am pleased that the Marlins have to play tonight, fly to Cincy and play the Reds tomorrow. Maybe they wanted that for their new stadium, but I’ll take any advantage for the Redlegs on Opening Day.

  9. Also… any annual Guess the Record, Club Leaders contest etc coming? We eat that stuff up.

  10. Whew…good thing the reds have that team option for 2024. Otherwise this deal might have been ridiculous. 😉

    Also… any annual Guess the Record, Club Leaders contest etc coming? We eat that stuff up.

  11. Me too..also Tuesday night. Strategically chosen to hit Latos and skip Bronson. 😀

  12. I’m just getting caught up on reading these great articles, but am wondering if Steve addressed the 145 game tv schedule vs attendance question. I know I used to go a lot more before I could sit home and watch nearly every game on tv.

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