Playoffs not ticket to riches
Team owners receive accolades, not windfall, in postseason
Fenway Park is already sold out for the Red Sox playoff series against the Los Angeles Angels. If these were regular season games, sellouts would put millions of dollars in the club's coffers from ticket sales, TV and radio broadcast rights, and souvenirs.
But these are the playoffs, and in Major League Baseball that means money that would typically be kept by the home team is split among players, the league, broadcasters, and even umpires. Despite the higher prices and intense interest in the playoffs, when the series is over the Red Sox will be left with only a fraction of the cash that flowed into Fenway, and still have additional expenses for security, operations, and travel.
"There's no big-ticket items for us, and there's a ton of expense that we incur for the postseason," said Sam Kennedy, Red Sox vice president of marketing.
Of course, being in the playoffs has its benefits. Though their current sellout streak, which is nearing 400 games, started a year before the team won the 2004 World Series, it has been bolstered by the team reaching the postseason in three of the past four years. And there are other long-term benefits: A full stadium and national media exposure in the playoffs mean a team can charge sponsors more for advertising inside the ballpark, and playoff teams also can negotiate richer contracts with the broadcasters that air the games.
The Red Sox take in so much in revenue during the regular season that sharing the playoff take "is not a big deal in terms of what they take home," said Andrew Zimbalist, a Smith College economics professor who studies economics in sports. "Everybody in the ownership group will benefit from it, it's just not a bonanza."
Still, Zimbalist says baseball's playoff teams make out better than those in the National Football League, where the league keeps the majority of ticket and media revenue from the playoffs, giving just enough back to the participating teams to cover their travel and expenses.
"If you talk to the clubs, some of them will tell you they wind up losing money," said NFL spokesman Greg Aiello.
So what does a team get out of the playoffs?
In football's postseason, every team benefits because the league collects all ticket and broadcast revenue and redistributes 80 percent of it.
The system is set up to keep teams from spending tons of money to become dominant, and allows clubs that generate relatively few dollars a shot at a championship, Aiello said.
When a regular season baseball game is played at Fenway, the Red Sox collect all the money from ticket sales, concessions, and the like, and then share a percentage with the league. Not so in the playoffs. In the best-of-five divisional series, 60 percent of the ticket revenue from the first three games goes to the players from both teams, who decide how to divide it among themselves and some other team employees. Another 1.6 percent is collected for the umpires. That leaves 38.4 percent of the gate revenue to be split evenly between the teams.
That figure will drop the closer the Sox get to the World Series; in the American League Championship Series and World Series, players get 60 percent of ticket sales from the first four games. In essence, baseball's playoffs are set up so that teams benefit financially only if they play a full series as opposed to sweeping their opponent.
The commissioner's office also gets a 15 percent cut of ticket sales from the World Series.
Stephen A. Greyser, a Harvard Business School professor who studies sports marketing, said baseball's system is fair to both players and owners.
"My view is this is a pretty fair system, that the dominant share goes to the players who made their way into the playoffs and the teams get almost all of the rest and the commissioner's office gets 15 percent of a very few games," he said. Giving most of the money from early games to players also helps protect baseball's integrity, he said, by eliminating any financial incentives to keep a series going longer than it needs to.
Players for the 2006 World Series champion St. Louis Cardinals split more than $20 million, with 48 players and team employees getting full shares of $362,173 and 23 others getting undisclosed "partial shares." The American League champion Detroit Tigers divided a pool of $13.3 million among 39 people who got $291,667 each. Fifteen others got lesser amounts.
By comparison, the Cardinals and Tigers took in just shy of $6.8 million each from the entire playoffs. That's barely above the $6.7 million the commissioner's office made. And it doesn't take into account how much was spent on added security, employees wages, and other expenses for keeping the parks open in the playoffs.
Larry Lucchino, the Red Sox president, said the cost of running Fenway for an extra game exceeds seven figures but declined to be more specific. All those expenses are factored into a postseason budget prepared before every season, to Lucchino's chagrin.
"I'm a superstitious baseball executive. I don't like talking about the playoffs until we know we're in the playoffs," he said.
