A New York Times report that paints a somewhat bleak financial outlook for the Yankees is not causing panic on 161st Street for members of the organization’s front office, even though Stadium attendance has dipped within the last year and a bond credit rating service recently changed its rating outlook for Yankee Stadium LLC from stable to negative.
“Despite declines in ticket sales, the Yankees’ overall revenue is up since 2009 (when the new Yankee Stadium opened), and that doesn’t even include the equity interests we have,” Yankees president Randy Levine told the Daily News Thursday, referring to the organization’s numerous licensing, sponsorship and marketing deals.
Earlier this year, Forbes estimated the Yankees’ worth to be a staggering $3.7 billion, and the team and the Stadium have undergone significant changes within the last year – everything from general manager Brian Cashman kick-starting an influx of young players to major Stadium renovations being completed for 2017, which are designed to attract younger fans. The overall seating capacity has been reduced by nearly 5,000 seats, from 52,325 to 47,422.
According to Major League Baseball-issued statistics, the Yankees are averaging 36,280 fans this season at the Stadium through 21 games. They are second, barely, to Toronto (36,869) in the American League. But the Times report says that “attendance through the first quarter of (the Yankees’) home schedule is down from the same point last year,” and the report says ticket and suite revenue is down $166 million from 2009.
“First of all, it’s a false comparison to look at any numbers today relative to 2009 – that was the first year of the new Stadium, and it was the year the Yankees won (their 27th) World Series,” said economist Andrew Zimbalist. “You have a new stadium once every 30 or 40 years. The fact that the Yankees won the World Series, that’s an extraordinary year. It doesn’t make any sense to say that they’re doing worse than they were in 2009.”
There are numerous tangible and intangible factors to consider when making Yankee Stadium attendance comparisons within one calendar year: the Yankees had already played their ancient rival Red Sox three times in early May last year, and the Bombers averaged 45,149 fans per game during that three-game series; inclement and chilly weather have wreaked havoc for the Yankee home games in early ‘17, including a Saturday game against the Astros being postponed until the next day, May 14, when the ceremony honoring Derek Jeter and his No. 2 being retired turned into a single-admission doubleheader, meaning no gate receipts for the early game.
Yankee owner Hal Steinbrenner said earlier this month at the New York owners’ meetings that he wasn’t concerned about a dip in attendance.
“I think every April — weather, kids in school — is difficult. I think fans are really starting to enjoy the enhancements to the Stadium we did,” said Steinbrenner. “Clearly, they’re excited about this team and what’s going on on the field. We’re starting to see individual game sales pick up.”
Zimbalist said the Yankees’ biggest fumble after unveiling the new Stadium was charging upwards of $2,500 for the primo “Legends” seats behind home plate. That’s not exactly a price point millennials can afford.
“I think the Yankees made a mistake putting the Legends seats at $2,500, behind home plate. The optics are terrible on television. You want people to watch and say, ‘This is a hot ticket.’ They look at those seats and for a good portion of the game, there are large numbers of empty seats,” said Zimbalist. “It was poorly strategized.”
But Zimbalist quickly added that the Yankees are taking numerous steps to address declining ticket sales, including the team’s announced partnership last year with StubHub, the national ticket resale broker. The Yankees reportedly received $100 million in that deal for five and a half years.
“A lot of those problems will take care of themselves,” said Zimbalist. “I don’t think it’s a secret the Yankees had lower attendance and lower revenues from gate revenues over the last couple years – the team hasn’t been very exciting, Jeter left, they haven’t had a superstar, and expectations for the team have been low. The good news is that they’ve turned it around.”
Yes, with rookie outfielder Aaron Judge and stud catcher Gary Sanchez thumping homers, the Bombers have surged to the top of the AL East, and Steinbrenner and Levine said the club continues to try to market the team toward younger fans – everything from creating Stadium outdoor terraces for viewing to the newly installed “Judge’s Chambers” in right field to Yankee players engaging fans on social media.
As for Moody’s reduced rating outlook, Levine said that came as a result of the Yankees not refinancing the Stadium bonds.
“Last year the bond market got very soft. When the (Federal Reserve) was not raising interest rates, we took a look at refinancing bonds because interest rates were much lower,” said Levine. “Then (Donald) Trump got elected, the economy changed, and interest rates went up. There wasn’t enough savings to go through the whole process of refinancing the bonds. And it doesn’t’ affect the bond rating.”
Added Zimbalist: “Interest rates went up when Trump came in, in part because of expectations of higher inflation and government deficits. It was no longer sensible for the Yankees to refinance their debt.”