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04-30-2009, 09:52 AM

Loyal Fans Are Batting Cleanup

As Corporate Sales Slide, Teams Look to Reward Long-Ignored Season-Ticket Holders

By KEVIN HELLIKER (http://online.wsj.com/search/search_center.html?KEYWORDS=KEVIN+HELLIKER&ARTICLESEARCHQUERY_PARSER=bylineAND)

John Brandon never dreamed of owning season tickets to the Kansas City Royals, let alone four in this location: First row, upper tier, directly above third base. A few nights ago, the 52-year-old baseball fanatic caught his first-ever foul ball in these seats. "I thought you had to be rich to have seats like these every game," says Mr. Brandon, a machinist, his arms dangling outside the railing.

The cost of his four tickets: $30 a game -- or $7.50 each -- which is a 50% discount.

In an age of fallen circumstances and concerns about revenue, major-league baseball teams are training their attention on a long-overlooked and increasingly endangered species -- those unfailingly loyal fans who buy tickets for every game. In addition to offering lower prices, clubs around the league are rewarding season-ticket holders with other benefits, such as early entrance to games, access to services that resell unwanted seats, exclusive gatherings with players and team executives, and concierges to address their every need.

John Brandon, a Kansas City Royals season-ticket holder, got his seats at Kauffman Stadium this year at a 50% discount.
Ed Zurga for The Wall Street Journal

Wooing baseball's hard-core fans reflects a major-league seat change. In the past, when attendance was rising, the clubs' marketing departments focused on big-dollar sales, such as corporate suites and stadium-naming rights. But last year, attendance at ballparks fell 1% even before the economy crashed. Suddenly, clubs remembered that nobody matters more than loyal fans -- people like Frances Ingemann, a retired linguistics professor who drives 50 miles from Lawrence, Kan., to every Royals home game. "Even if the Royals aren't playing well, you see other teams playing well," says Dr. Ingemann, a 24-year season-ticket holder who fell in love with baseball as a girl listening to games on the radio.

Dramatic Reductions

Last year, not a single club reduced its average season-ticket price, according to Team Marketing Report. But ahead of this season, 10 teams -- a third of the total -- did so, in some cases dramatically.

Season-ticket seats can still cost thousands of dollars. But some teams with high prices are experiencing reality checks. On Tuesday the Yankees slashed premium-seat prices in half and awarded season-ticket holders with gobs of free seats. In Boston, Fenway Park has sold out every game this year, but only after recession-worried Red Sox officials engaged in unprecedented levels of marketing during the off season.

The Kansas City Royals are catering to loyal fans like Ralph Sauceda, a season-ticket holder for 10 years.
Ed Zurga for The Wall Street Journal

"The season-ticket holder represents an annuity that is the life blood of the organization," says Mark Fernandez, senior vice president of the Tampa Bay Rays, whose 2008 World Series appearance along with some new promotions have boosted that club's season-ticket base.

In San Diego, the Padres are studying rewards models akin to those used by airlines, including speedier trips through security. Even as clubs add benefits, they are widening the discount that comes with buying a seat for 81 games. This year, the Padres dropped their average season-ticket price 27%. In Kansas City, the Royals have introduced a season ticket for $400, or $5 a game. The Pittsburgh Pirates, a club that hasn't raised prices in seven years, this year launched four new season packages covering 36% of the ballpark at an average savings of 25% from last year's season-ticket prices.

Yet in many markets, the recession is winning. The Padres say their season-ticket sales are off about 20% from historical levels. In distressed Detroit, season-ticket sales for the Tigers fell more than 40%. Most clubs won't divulge those numbers, and league executives won't comment on national season-ticket figures. But some team executives say the league-wide rate of retaining season-ticket holders -- a percentage usually in the mid-80s -- has fallen into the 70s.

Baseball's Squeeze Play (http://online.wsj.com/media/MLB_Ticket090429.gif)
Why One Royals Fan Keeps Watching

To understand why a working-class man would pay $2,700 a year for a season ticket to the Kansas City Royals -- one of baseball's perennial losers peek inside his wallet.

Ralph Sauceda's billfold holds a baseball card. On it, former big-league first baseman David Segui credits his uncle with teaching him how to switch-hit. Mr. Sauceda, a supervisor at a Hallmark Cards plant near Kansas City, is that uncle. "It says something about David that he publicly thanked me," says Mr. Sauceda, 58.

Uncle Ralph played a role in more than just Mr. Segui's hitting. Back in the early 1960s, young Ralph Sauceda begged his father to take him to an autograph-signing session with the Kansas City Athletics. Relenting, his father made Ralph's older sister, Emily, tag along. "I was reluctant to go," she says.

But on that occasion she met the great Cuban pitcher Diego Segui, and within two years she became his wife. She and Diego have been married for more than 45 years. "All because Ralph was whining to go to that event," she says now, laughing.

During David Segui's boyhood summers, his father was often on the road playing with the Mariners, Senators or Red Sox. So David learned baseball tips from his Uncle Ralph, a former All-American college infielder and player in the Oakland Athletics farm system. "Ralph spent hours in the park with our kids," says Emily Segui.

In the stands at Kauffman Stadium, Ralph Sauceda roots for the Royals but enjoys himself no matter the outcome. During a recent home opener against the Detroit Tigers, Mr. Sauceda said, "There's a lot more going on out there than just the score. Watch how the shortstop and second baseman put their gloves over their faces before the pitch. They're deciding which one is going to cover second, depending on the sign the catcher gives the pitcher."

<CITE class=tagline>Kevin Helliker</CITE>

Counting on Gate Receipts

That's bad news for baseball. With broadcast rights contributing a smaller percentage of revenue than in other sports, baseball clubs depend on gate receipts for as much as 60% of revenue. And the season-ticket holder typically accounts for about 15,000 seats in stadiums that generally hold between 30,000 and 40,000.

For fans, the discounts are proliferating. Under pressure from MLB Commissioner Bud Selig, every team is participating in a campaign to offer new and numerous price promotions, with a majority of teams regularly offering tickets for $5.50 or less. To advertise discounts around the league, MLB.com this month launched a page called Fan Value Corner. "Baseball has always served as a diversion for its fans during difficult times," Mr. Selig said.

A visit to Kansas City, Mo., illustrates the depth of the recession, as well as the tenacity of some of baseball's most-devoted -- some would say masochistic -- fans.

After making the playoffs seven times during its first 17 years, Kansas City hasn't entered the post-season since winning the World Series in 1985. Only the Florida Marlins had weaker attendance last year. Even so, the Royals had 9,200 season-ticket holders last year, many of them baseball nuts such as Ralph Sauceda, a 58-year-old former high-school slugger whose brother-in-law and nephew -- Diego and David Segui -- had stellar major-league careers.

For 2009, the Royals hoped for an increase in season-ticket holders. A $250 million remodeling of Kauffman Stadium, financed 90% by taxpayers, added a giant new scoreboard, seats near the outfield water fountains, greater spaciousness throughout the park and expanded food offerings. Moreover, after three consecutive seasons of improvement -- from 56 wins in 2005 to 75 in 2008 -- the club made some off-season acquisitions that boosted its payroll 20% to a team record of $70 million.

But last fall, the economy started wreaking havoc. The club had expected to retain 90% of its season-ticket holders, up from 87% last year. But as it turned out, that number dropped to 75%. "I've never seen so many longtime customers -- some with season tickets dating back to 1969 -- saying they have no choice but to bow out this year," says Mark Tilson, Royals vice president of marketing and sales. Adds Terry Loose, a season-ticket salesman for the team, "I've literally had my customers say it came down to buying the tickets or feeding their families. I told them to feed their families."

Rewarding Longevity

With season-ticket sales down 8% as the season approached, the team rolled out promotions such as the $400 season-ticket offer, and the decline eased to 5%.

Like a few other teams, the Royals are bending the golden rule of season-ticket sales, which awards the best seats to those with unbroken longevity. Long-time holders who bowed out of Kauffman Stadium this year can retain their priority status for 2010 by going to as few as 12 games in 2009. Should the Royals make the playoffs this year -- as many prognosticators expect -- holders who dropped out can reclaim their seats for the post-season by committing to season tickets next year.

The most effective reward, of course, is performance. After the Seattle Mariners lost 101 games last year, Jack Bray canceled his season tickets, telling club officials that his construction company would go broke if he ran it as poorly as they ran their team. In the off-season, however, the team replaced its general manager, hired a new coach and shook up its roster -- moves that persuaded Mr. Bray to return. "I felt like they had listened to me," he says.

Write to Kevin Helliker at kevin.helliker@wsj.com (kevin.helliker@wsj.com)

<CITE class=paperLocation>Printed in The Wall Street Journal, page D1</CITE><!-- article end -->

04-30-2009, 10:31 AM
wait, the royals got featured in SI and the wall street journal? damn, its nice being average.