1990's Baseball Case Study

Introduction
During the 1990’s baseball was facing some of the most monumental challenges ever “The realignment issue and its impact on the Chicago Cubs were still in litigation. National television revenues, which had been growing by leaps and bounds, were poised to take a severe dip (as it turned out the next year, by more than 50 percent). Attendance at games fell by 1.6 percent in 1992, with eighteen of the twenty-eight teams experiencing drops. A 1992 Gallup survey showed that MLB now lagged the NFL in popularity by a more than 2 to 1 margin. With the emergence of local cable TV revenues and new ballparks, team revenue disparities were growing rapidly and engendering consternation among the owners. Average player salaries had just passed
the $1 million level for the first time. And MLB had serious image problems, most notably from the messy dispute with, and the resignation of, Fay Vincent” (135). It was time for a change in the best interests of the MLB and a select group of franchises. The Chicago White Sox, Baltimore Orioles, Cleveland Indians, Texas Rangers, Colorado Rockies, Atlanta Braves, Arizona Diamondbacks, and the Washington Mariners all constructed new ballparks during the 1990’s which were part of the Retro-Classic/Retro-Modern ballpark era; a crusade that has repaired or established the image of these franchises. Excluding the teams associated with the 1991 (Colorado Rockies, Florida, Marlins), and the 1998 (Arizona Diamondbacks, Tampa Bay Devil Rays) two team expansions, the six franchises sought financing and approval to construct some of the largest playing fields the professional sport would come to know. The process of creating these monsters involved extensive economic research, innovative architectural designs, legislative authorizations, and the acquisition of funds. The impact of the Retro era ballparks during the 1990’s directly contributed to increased revenues for Major League Baseball and local economies while repairing the image and stimulating growth of Major League Baseball.
The Retro-Classic Ballparks of the 1990’s U.S Cellular Field, located in Chicago, Illinois, is erected directly across 35th Street from old Comiskey Park.
It was the first ballpark constructed specifically for a major league franchise in the 1990’s; Tropicana Field (current home of the Tampa Bay Devil Rays) was built in 1990 with aspirations to one day be home of an MLB franchise. During 1985, following studies conducted to appraise the possible renovation of Comiskey Park which proved that it be too costly of a feat, the City of Chicago started proposing potential locations for a new ballpark. Initially the city offered a location for a “50,000 seat stadium at Roosevelt Road along the Chicago River” (ballparksofbaseball.com). Disinterested in the city’s offer, the White Sox pitched a ballpark in a west suburban Addison location only to be rejected by Illinois voters. The White Sox were infuriated by the discord and threatened to take the team to Tampa, Fl. It was at this time that Illinois Governor James R. Thompson entered into the conflict. With a determined attitude, Thompson was able to scrape together enough revenue for a stadium to be built in an agreeable location. U.S Cellular Field took just two years to finish and was ready for the 1991 season. It sat 44,321 and offered numerous features and attractions such as a fan deck, a rain room, Fundamentals Deck (area devoted to young fans), scout seats, The Patio (area for standing), and the Gold Coast Tickets Club. Only three features were carried over from
Comiskey Park, the Chicagoland Plumbing Council Shower that is used by fans to cool off during hot game days, the home plate, and the same name as its predecessor. However in January 2003, U.S. Cellular purchased the naming rights for $68 million and changed its name to U.S. Cellular Field. Although it has two features from the old park, it is not considered a true Retro-Classic ballpark; instead it is called a Modern Retro-Classic. U.S. Cellular Field started the domino effect of old ballparks falling and new ballparks rising. Without this field being constructed, new parks constructed around the country in following years may have failed to incorporate features from their precursors. Just one year after U.S. Cellular was completed; the Baltimore Orioles opened the gates to one of the most “Influential ballparks built since Shibe Park and Forbes Field pioneered the modern fireproof baseball stadium in 1909” (ballparksofbaseball.com). Nestled on the edge of downtown Baltimore near the inner harbor, Camden Yards is considered the forerunner of the Retro-Classic ballpark era. Eli Jacobs, and head architect, Joseph Spear of HOK Sport, developed the design that resembled parks built in the early 1990’s. Instead of using concrete and steel columns, beams and trusses were used for support. The facade consists of brick arches and the low raked upper deck keeps the ballpark from looming over other buildings. Bleacher seats, a picnic area behind the centerfield fence, and the famous ivy on the hitters backdrop, give the ballpark a nostalgic atmosphere. Behind the right field wall, the 1898 B&O Warehouse rises up eight stories and spans several blocks. With an overwhelming positive reaction from the public, HOK Sport Architects have had a steady stream of stadium work ever since. The Retro-Classic ballparks that follow in the 1990’s are benchmarked against “Camden Yards instantly became the model for the perfect urban ballpark” (theatlanticcities.com). Meanwhile a franchise lobbying for a new ballpark since the 1980’s was finally successful. The Cleveland Indians were bought in 1985 by Richard and David Jacobs who sought to improve the team and have a new ballpark built. At the time the Indians shared the Cleveland Municipal Stadium with the Cleveland Browns NFL team. After five years of efforts, voters approved a bond to build a sports complex including Jacobs Field, home of the Indians. Construction started in January of 1992 and was complete for the 1994 season. It blends in perfectly with downtown Cleveland, “From its exposed steel design, that matches many bridges on the North coast and the vertical light towers, that match the smoke stacks of Cleveland 's industrial zone and the high-rise office buildings in downtown Cleveland” (ballparksofbaseball.com). With great teams from 1995 to 2000, the Indians sold out 445 consecutive games, a record until Boston surpassed it. In 2008 the naming rights were sold to Progressive Insurance which changed the ballparks name to Progressive Field. The Indians new ballpark was not the only in 1994. The Rangers Ballpark in Arlington was finished and ready for the start of the season after only twenty-three months of construction. It is located just a quarter-mile from the old Arlington Stadium. The park is a true Retro-Classic “From the exterior to the interior many ideas from bygone ballparks were used at Rangers Ballpark in Arlington. As fans approach the ballpark, it resembles Ebbets Field with its red brick facade and arches….In right field is a double decked covered homerun porch, similar to the one that was found at Tiger Stadium in Detroit” (ballparksofbaseball.com), a white steel frieze that surrounds the upper deck was copied from the pre-1973 Yankee Stadium, and the arched windows are a reminder of Comiskey Park. Seating an astounding 48,114, the Rangers Ballpark in Arlington is the 7th largest ballpark in the MLB with the farthest distance from the upper deck to home plate. This is one of the most unique ballparks in all of Major League Baseball and a fan favorite. During 1991 baseball expanded with two teams, the Colorado Rockies and the Florida Marlins. In 1990, before the MLB awarded a franchise to Denver, the city had already passed a one percent sales tax for funding a new ballpark. After being awarded the franchise a site at 20th and Blake Streets was chosen and construction on the ballpark began immediately. While the park underwent construction in the 1993 and 1994 seasons the Rockies played at the Mile High Stadium. The franchise drew over three million fans in the first season leading to an announcement of increased seating at the new park. Originally Coors Field was expected to have 43,000 seats, but after the first seasons results they decided on 50,000. The ballpark’s design followed in the footsteps of Camden Yards and other Retro-Classic’s. It adopted some features from Ebbets Field “With its hand laid brick and clock tower, fans might think that they were entering a modern day Ebbets Field. Coors Field combines the nostalgic feel of a 1920s urban ballpark with 21st century technology and conveniences” (ballparksofbaseball.com). It is currently the second largest ballpark in the MLB and the largest among the Retro era 1990’s ballparks. The Atlanta Braves began pursuing a new stadium in 1987. After three unsuccessful years of lobbying their prayers were answered, the International Olympic Committee announced that Atlanta would hold the 1996 Olympic Games. The city of Atlanta and the Braves joined forces and sought to make the new stadium a reality. Construction commenced in July of 1993 for a field that could be easily transformed. After the games ended, the park was retro-fitted and converted to baseball. In April of 1997 50,000 Braves fans watched their team in Turner Field. Fans have a unique experience when Turner Field, they are able to watch the game from anywhere in the ballpark helping them stay in touch with the game for its duration. In 1998 Major League Baseball expanded with another two teams, the Arizona Diamondbacks and the Tampa Bay Devil Rays. Directly following the announcement that Phoenix would be awarded a franchise, the city started construction of Chase Field. The stadium was the first to incorporate a retractable roof and still have natural grass. A retractable roof was necessary due to extreme heat that is experienced in Phoenix during summer months. The most unique thing about Chase Field is the swimming pool that is located behind the right field fence. It is considered a Retro-Modern ballpark because it has not included any features from old parks. The last ballpark that was constructed during the 1990’s is Safeco Field home of the Seattle Mariners. At the time, the Mariners were losing money as a franchise, with a $17 million loss in 1993 and a $20 million loss in 1994. The Mariners craved a new state of the art facility to help generate revenue. The team made a statement that they would not sign another long-term lease if the city did not agree to build a new ballpark by 1996. Voters rejected a proposed sales tax in 1995 that would help finance the new ballpark. One month later the Washington state legislature permitted funding for the stadium. A cite that was located directly south of their old stadium, the Kingdome, was selected. The ballpark followed in the footsteps of some of the other 1990’s ballparks with the brick facade. Safeco Field also included a retractable roof because of the frequent rain in Seattle. The ballpark was able to increase revenues for the franchise while giving the fan a comfortable experience.
Increased Revenues
Each of the franchises that built new ballparks in the 1990’s experienced an increase in revenue which helps the MLB. A number of different factors can account for the increase in revenue. An obvious component in this equation is the sponsors for these new ballparks. New TV deals also bring revenue to franchises. A main reason is that consumers are attracted to new state of the art goods and services. These new ballparks fulfill this desire for a potential fan. As a result, the consumer will pay a premium just to watch the game in a new stadium. It does not matter to this type of fan who is playing the game; they go for the unique experience. Now, with a greater number of fans wanting to purchase tickets, the franchise can sell more tickets than at the old ballpark because of an increase in capacity. Since these franchises are generating more revenue through ticket sales are merchandise sales, they are able to contribute more in revenue sharing. New ballparks not only increase revenue for the team, they also increase revenue for Major League Baseball as a whole. From an economic view, the creation of these ballparks created jobs and pushed technological advances in the industry “Selig believes passionately that such revenue growth did occur in the metropolitan area and commissioned a study released in October 2006 that showed the financial impact. In addition, he and other baseball supporters say the intangible benefit of a sports stadium to a community - the boost it gives to a city 's image and character - is considerable but not easily measured in dollars and cents” (Miller Park). Furthermore, the attraction to these new ballparks will draw out of state fans that will spend money on hotels, dining, etc. “Selig says he 's aware that some economists dispute the economic impact of sports stadiums. But he says it 's hard to dispute what happens when hotels are full in Milwaukee when the Brewers are home” (Miller Park)
A converse view that some economist have adopted is how MLB succeeded with the new ballparks, but local economies surrounding the ballparks struggled. During times of lockouts surrounding economies did not seem to be effected “Using professional sports strikes and lockouts as a natural experiment, there is no evidence that local economies suffered as a result of these events, further questioning professional sports as an engine of economic development” (The New Stadium Fallacy) "The Economic Consequences of Professional Sports Lockouts and Strikes” (Southern Economic Journal). Consumers that live close to a ballpark and buy tickets with their disposable income could spend that same dollar on a local business, that dollar will then circulate though out the local economy. When spending it on a ball game there is no reallocation of that dollar “In a recent working paper, we find that, based on disaggregated data, although workers in a narrowly defined sector (Amusements and Recreation - SIC 79 - the Standard Industrial Classification System sector that contains professional sports teams and stadium operations) earn more, and employment is higher in this sector, earnings and employment are lower in other related sectors like services and retail. This is consistent with the idea the spending on professional sports is not new spending; it 's just a reallocation of local spending on other entertainment like going to a movie or out to dinner” (The New Stadium Fallacy). As a result, the presence of a franchise tends to slightly lower income in local economies “As it turns out, we found that professional sports tended to lower income by a little bit. But the decrease was important in a statistical sense--not attributable to random variation” (The New Stadium Fallacy).
Baseballs Enriched Image
Before each of the 1990’s Retro era ballparks were created, the old parks were proving to fail at keeping existing fans and acquiring new fans. The image of each franchise was losing value primarily due to the discomfort experienced when visiting one of these ballparks. These teams needed something to boost morale and bring more fans to each game; the answer was new ballparks. But to really entice existing fans and potential fans to buy tickets, the ballparks must be state of the art. After seeing the success of U.S. Cellular, teams started to follow suit. The appreciation for beautiful ballparks was apparent during the 1990’s. Camden Yards revolutionized the architecture of ballparks with the innovation of Retro-Classic designs, and was praised by any fan across the country. It started a trend of Retro-Classic/Retro-Modern ballparks that helped repair the image of baseball while connecting with fans nationwide.
Growth of the Major Leagues During the 1990’s Major League Baseball expanded two separate times and each time with two teams. After a series of scandals and a decreasing interest in select teams in the 1980’s it is surprising that baseball was able to recover and actually grow. Franchise moves seemed more likely than expansions. Despite some franchises experiencing incredible losses and the entire MLB experiencing losses, cities still wanted their teams to stay. With the creation of new ballparks the image of baseball was continuously improving which lead to new cities seeking franchises. With a strong economy in the 1990’s these cities were able to appear fit to handle a franchise successfully, and in the case of the Rockies and Diamondbacks, able to build brand new state of the art ballparks that are architectural marvels to this day.
Conclusion
The ballparks of the 1990’s started to sculpt the current image of baseball today. Innovations and technologies associated with the Retro era ballparks originated with U.S. Cellular Field and Camden Yards. Since the construction of those two revolutionary ballparks, franchises across the country took interest and pursued financing for new ballparks of their own. Benefits of creating new ballparks are seen from Major League Baseball’s perspective due to the increase in revenue it created for the franchises and also the local economies. In a time when baseball’s reputation was being questioned due to corporate scandals, player betting and PED use, and facilities that were barely operational, the MLB weathered the storm by giving fierce penalties to policy negligence to set an example while working diligently to help franchises acquire financing to build new ballparks, all in a collective effort to repair the image of baseball. This strategic decision not only proved successful but it also stimulated growth with two expansions during the 1990’s. The impact of the construction of the Retro era ballparks during the 1990’s directly contributed to increased revenues for Major League Baseball and local economies while repairing the image and stimulating growth of Major League Baseball.
Importance
This subject is important to learn and understand while taking a Business of Baseball course.
Without the creation of the 1990’s Retro era ballparks, baseball would be in a very different state than it is today. It helps one appreciate the leaders that dictate the difficult decisions in the MLB. These ballparks brought beauty to the venues we choose to watch baseball while educating us about the history of the game. Baseball is a wonderful sport that has many secret stories that one could go through life overlooking, but to have a superior knowledge of the game know need to know its
history. Work Cited
The Imbalance Sheet. “The New Stadium Fallacy”. Keith Law. April 12, 2001

Miller Park. “Economic promises got it built. Has it paid?”. Don Walker, Milwaukee Journal Sentinel.April 7, 2008.

http://www.ballparksofbaseball.com/. Retrieved 11/6/13

www.theatlanticcities.com. Retrieved 11/5/13

In the Best Interests of Baseball. “The Revolutionary Reign of Bug Selig”. Andrew Zimbalist. 2006.