October 12, 2009

ESPN buys $1200 Yankee tickets so you don't have to

If you've been wondering what those crazy-expensive field-level seats are like at Fake Yankee Stadium, ESPN writer Wright Thompson dropped $1200 so he could tell you firsthand. His verdict: It's great to watch the game from up close, hot dogs go great with a $200 bottle of French wine, and cops are nicer to you when they think you're rich people.

Thompson comes up with a novel theory for the outrageous Yankees ticket prices, saying it's thanks to Wall Street brokers who in recent years became willing to pay just about anything for good tickets, since they were using them as deductible entertainment expenses (Thompson calls them "bribes") to sweet-talk other brokers into conducting deals. But after a bunch of equity traders were caught with free hotel rooms, hookers, and a midget — it's always the midget that gets the headlines — the SEC cracked down, with potentiall huge consequences for the Yankees:

To get out front of the SEC, many firms have instituted their own internal controls requiring gifts worth more than $100 to be reported. A computer program has been purchased by more than 200 companies that, for the first time, allows statistics to be kept on ticket use, including how much business each one brings in.

So ... just as companies were trying to limit extravagant spending, the Yankees came out with the most extravagant tickets in the history of sports, designed in part for a group of people who could no longer buy them. "They killed the golden goose," a former Bear Stearns guy says. "When the new prices came out, everybody said, 'Are you kidding? We can't even give these to clients.'" ...

Yankees games went from something small to something like a trip to the Masters. One buy-sider told me: "I've been offered really good seats a couple of times, but I haven't taken tickets from a broker in the new stadium. I'd feel like I owed the guy."

Meanwhile, Thompson wonders if all the sky-high ticket pricing could risk turning off those who are there for the game, not for the derivatives. He cites ESPN pollster Rich Luker as saying the sports industry is in "harvest mode," and could be in danger of alienating its fan base for good:

A recent poll discovered an unsettling trend emerging for the first time. American families whose household income is $75,000 or less now have zero dollars of discretionary income. According to Luker, that means about 75 percent of the country can never responsibly afford to go to a live professional sporting event. Franchises want them to be fans, to buy the gear and pull for their teams and watch the telecasts the leagues are paid billions for. But they don't need them to come to their stadiums. There are, right now, plenty of rich people who love games. The prices reflect that. The reason sporting events cost so much now, Luker's research shows, is because they are designed to be affordable only to those making $150,000 or more a year.

Luker's stats show, continues Thompson: "For the first time, the largest number of sports fans aren't 12- to 17-year-old boys. The baby boomers are the group that shows the greatest increase in a love of sports, and they'll be dying soon."

All in all, a fascinating read, though I'm not entirely sure about all its conclusions. (My own research points to the massive surge in wealth towards the richest Americans since the Reagan tax cuts for the top income brackets — the increase in in the number of "rich people who love games," in other words — as most to blame for rising ticket prices.) And it's fun to hear about such perks as about the bottomless pile of Twizzlers available to high rollers, without having to plunk down $1200 to visit it.