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Cubs, Sox Losses Spread to Businesses around the Ballparks
Crain’s Chicago Business, May 16, 2011
By Brigid Sweeney
Plunging attendance at Chicago's big league ballparks is damaging the economic ecosystem tied to the Cubs and White Sox.
A horrible start by both clubs and rainy April weather mean slumping sales for T-shirt sellers, ticket brokers, bar owners and other businesses that swim in the teams' wake.
“Two years ago was bad; last year was really bad; this year will be even worse” in terms of game attendance, says Max Waisvisz, owner of Gold Coast Tickets, who has slashed the number of bleacher seats on offer this season due to decreased demand.
Attendance at White Sox games has always fluctuated with the team's performance. But the Cubs built a business model on a “lovable loser” shtick that seems to be losing its hold on fans as the team stumbles toward yet another disappointing season. According to the teams, Wrigley Field paid attendance is down 8% so far this year, or about 3,000 fans per game, while the Sox fan base has plummeted 18%, or almost 5,000 per game.
Dan Rascher, a San Francisco-based sports economist, estimates the average Cubs fan spends $30 outside the stadium, which, based on this year's attendance averages, translates to $90,000 in lost revenue to area businesses per home game.
Tom Gramatis, owner of Wrigley Rooftops, blames the weather and a Cubs schedule front-loaded with April and May home games.
“If you lose 40% of your games (to bad spring weather), it's almost impossible to make that up,” says Mr. Gramatis, who operates three rooftop venues overlooking Wrigley. “Even if the team is on fire in September, it's still tough to make up the revenue.”
At Wrigleyville Sports, a sports apparel merchandiser on Addison Street, co-owner Rexene Carlstrom is disappointed that sales haven't picked up this year since moving to a larger store.
“We're definitely not where we'd like to be,” she says. “We were hoping for a 25% (sales) increase when we doubled the space, but we're just doing the same as last year.”
Her son, co-owner Trey Carlstrom, says weather isn't the only culprit.
“Performance is part of it,” he says. The Cubs “won for a few years, and now fans expect that.”
Anbritt Stengele, owner of Chicago-based Sports Traveler LLC, says the weather has destroyed her business, which sells Cubs and Sox luxury suites and tickets, plus hotel rooms, to sports tourists and corporate groups.
April and May have been “a total washout,” she says, and one of the worst seasons in her company's 11-year history. As a result, she's had to slash her suite prices by 20% and individual tickets by even more.
Tickets For A Song
Many brokers have similarly lowered prices; on StubHub.com, Cubs and Sox tickets go for as little as $6 apiece, compared with face values ranging from $15 to more than $330. This may upset season-ticket holders, many of whom paid several thousand dollars for their seats.
The Cubs “are going to have trouble if they don't reprice their tickets next year,” says Mr. Waisvisz of Gold Coast Tickets.
Both teams also can expect harder bargaining next year from corporate sponsors, says Jim Andrews, senior vice-president at local sports sponsorship firm IEG LLC.
“If attendance continues to be off by this percentage the whole season, when clients go in to renegotiate a deal in November, that's definitely going to affect the tenor of the conversation,” Mr. Andrews says. “They're trying to tap into fan passion, and ticket sales are one indicator that the passion level has declined.”
Local governments also lose when attendance falls.
Each Cubs and Sox ticket includes a 12% amusement tax that goes back to the city of Chicago and Cook County. In 2010, the Cubs paid $17.3 million to the city and county. The Sox won't say how much they paid in amusement taxes.
Based on the attendance decline this year and the average ticket prices for each team calculated by Chicago-based Team Marketing Report Inc., the city and county are collecting about $41,000 less per home game this year.
Another casualty: the Illinois Sports Facilities Authority, the state agency that owns and operates U.S. Cellular Field. The Sox pay $1.5 million in annual base rent, plus an additional $3 per regular-season ticket after the team draws 1.925 million spectators and another $1 per ticket at various attendance targets above that.
ISFA collected an additional $456,000 in rent last year, when attendance slightly exceeded 2 million. If current attendance trends continue, the agency won't get more than the base rent this year.