Last week, the Phillies kicked off their 2012 spring training season in Clearwater, Fla., their home since 1947.
It’s easy to see why the Phils go back every year. The team is allowed to rent the stadium for $70,000 and keep every cent of game-related revenue, along with two-thirds of naming rights revenue from Bright House Field. Clearwater, in return, pays $1.25 million to operate the stadium, while drawing millions more in tourism dollars. It’s a typical arrangement in MLB, where spring training is a cash cow.
In most arrangements, very little revenue is paid to the municipalities that operate the stadiums. Teams keep the money for tickets, concessions, merchandise, advertising and even parking, in some cases. In 2011, Palm Beach County, Fla., hosted about 160,000 fans at Roger Dean Stadium, home of the Cardinals and Marlins. The county paid about $2.5 million in operating costs and received no money in return — not even rent. What it did receive was about 160,000 fans, many of whom traveled from out of town to watch their teams play.
The state of Florida claims the money spent by its cities is more than returned to the economy. A new study from the Florida Sports Foundation claims spring training generated $750 million in tourism dollars in 2009, or about $47 million per city. Most cities spend about $1 million to $2 million per year operating stadiums, so that’s a huge rate of return. The study also says about a quarter of fans at spring training games came to Florida specifically for spring training. This is pretty valuable exposure for cities that would otherwise be overlooked as vacation destinations, like Bradenton, Jupiter or Viera.
Smart municipalities are marketing directly to their team’s fan bases. The San Francisco Giants have their spring base in Scottsdale, Ariz. Not coincidentally, the Scottsdale Convention and Visitors Bureau spends more money on marketing in San Francisco than any city other than New York City. Sarasota, Fla., has a joint venture marketing campaign with their host team, the Orioles, which promotes spring training and Sarasota at Camden Yards, on radio broadcasts and on their MASN regional sports network. This allows Sarasota to have nearly year-round exposure to the Baltimore/Washington media markets.
The Red Sox are a great example of the relationship among fan, city and fan base. Recently, the Sox were being recruited to leave Lee County, Fla. There was no way Lee County was going to give up the team, which has a spring training sellout streak that goes back to 2004 and a waiting list for new subscription tickets. The county responded by spending $78 million to build a new 10,000-seat stadium modeled after Fenway Park, right down to the hand-operated scoreboard and Green Monster. In addition to the new digs, the new lease also gives all game-day and naming rights revenue to the Sox, of course. So while the Red Sox and other teams play out some meaningless games, their fans drive a machine that easily fills the pockets of the team and their host city, year after year.
Bill Sayer is a financial analyst in the insurance industry and holds a degree in economics. A native of Upstate New York, Bill enjoys watching college football, the NFL, NHL and Premier League soccer from his home in Palmyra. Have a suggestion, link or question?