Wednesday, February 16, 2005

Brewers Adopt New Revenue Strategies

From the Milwaukee Business Journal

by Mark Kass

The variable ticket pricing plan to be introduced by the Milwaukee Brewers for the upcoming season could generate an additional $1.5 million to $2 million for the financially strapped team.

The ticket plan is one product of a review the club's management conducted of its business operations under new owner Mark Attanasio, said Rick Schlesinger, Brewers' executive vice president of business operations. Attanasio, a Los Angeles investment banker, purchased the team for $220 million in a deal approved by Major League Baseball owners in January.

"We've looked at everything we do to see if we can find a better way to do it to make more money," Schlesinger said. "Our mission on the business side is to increase revenue and give it to the baseball operations people so they can put a better team on the field."

Attanasio has already committed to increasing the team's payroll for the 2005 season from $28 million to about $40 million.

Some changes have already been implemented, such as the variable ticket pricing and a new nine-game ticket package. Other improvements are likely to be announced over the next several months, including specialty retail shops at Miller Park, more in-game activities for children and more business sponsorship opportunities.

The variable pricing will only apply to the 10 games against the Chicago Cubs and the three games vs. the New York Yankees at Miller Park. The additional fee, which will range from $3 to $9 per ticket, will depend on seat location. For example, a field infield box seat that normally costs $35 per game will sell for $44 for the 10 "marquee games."

The additional fees will not be charged to fans who buy full season tickets or partial packages, including the nine-game packages the team recently introduced.

Market research

The Brewers conducted market research before introducing both the nine-game season ticket package and the "marquee game" plan.

The team hired Milwaukee-based Dieringer Research Group to conduct focus groups after the 2004 season. The Brewers followed up with in-stadium and telephone surveys.

"We analyzed this carefully to make sure we were making the right decision for our fans and for this team," Schlesinger said.

Brewers management decided to try the variable pricing on what are expected to be the most popular games of the home schedule. In 2004, all 10 Cubs games drew at least 40,000 fans, almost double the team's single game attendance average.

"From the studies we've done, it is clear that a large number of fans for these games come from out of town," Schlesinger said.

Variable pricing has been adopted by more than half of the teams in Major League Baseball, Schlesinger said.

"It is becoming a fact of life in baseball," said Jim Pokrywczynski, an associate professor of advertising and public relations at Marquette University. "It has become another resource that teams like the Brewers have tried to increase revenue to become more competitive."

Pokrywczynski said fans who want to attend the Cubs and Yankees games are likely to not mind paying the extra fee, which they would have to do if they bought the tickets from a ticket broker.

"Why shouldn't the Brewers be able to pocket some of that extra money that people are willing to pay to see those games?" he said.

Ticket sales

The Brewers' season ticket sales are running ahead of last year's pace, which Schlesinger attributed to the enthusiasm among fans about Attanasio's purchase of the team.

The team had about 7,000 season ticket holders in 2004 and would like to build the ticket base back to more than 10,000, where it was in 2001, the first year in Miller Park.

In addition, the number of businesses that have renewed sponsorships is ahead of the team's goal.

A year ago, the Brewers were dealing with the public relations fallout of the departure of team president Ulice Payne and the decision to sell the club.

"The environment around this team has changed dramatically in the past year," he said. "Everything is very positive right now."


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