Read The Extra 2% Online

Authors: Jonah Keri

The Extra 2% (21 page)

There were plenty of reasons for those low figures. The Rays were still a relatively new team, with only a decade of history in their favor, versus generations of history for rival teams that had converted wave after wave of fathers and sons and mothers and daughters into fans. Tropicana Field was in an awkward location in South St. Petersburg, making the Rays the major league club with the smallest percentage of fans within a thirty-minute drive of the ballpark. The Trop was one of the oldest nonlandmark ballparks in the game, meaning it benefited from neither the nostalgic draw of Wrigley Field or Fenway Park nor the novelty effect of new stadiums. The national and local economies tanked. Public transit was nearly nonexistent. Roaming packs of rabid unicorns attacked fans in the bleachers. Whatever the relative legitimacy of those excuses, the net effect was the same: the Rays needed to do more than put a baseball team on the field, even a
great
team, to pack the Trop.

One of the Rays’ most visible moves was to bring in big-name acts for postgame concerts. That was hardly a new idea; game-and-concert pairings went back a few years for several teams. But the
Rays expanded the idea, holding more frequent concerts, with a wide range of acts for many different tastes. The Commodores, Kool & the Gang, the Beach Boys, John Fogerty, and Hall and Oates attracted an older set. Ludacris, Daughtry, and Nelly roped in younger music fans. The Rays scheduled most of the concerts against lesser teams, aiming to maximize attendance with the Royals or Orioles in town and worrying less about turnout versus the Yankees or Red Sox. They hosted more concerts in the 2008 through 2010 seasons than any team in baseball.

“We try to select acts with mass appeal,” said senior marketing director Brian Killingsworth in an interview with the
Tampa Tribune
. “We are getting a lot of calls from other teams asking how we do it. A lot of teams are starting to follow us now. We were not the first, but we are among the strongest.”

The concerts worked. The Rays drew an average of 32,697 fans for its eight concert games in 2008, versus the season’s per-game average of a little over 22,000. In 2009, the nine concerts lured 33,350 a game, versus 23,000 and change for the year. Through August 2010, an average crowd of 28,497 had seen the Rays’ ten concert games, compared with fewer than 23,000 a game for the year. The concerts mostly occurred on Saturday nights, with a few Friday night shows, both bigger-drawing days for the Rays and other teams. Even after controlling for day of the week, though, the concerts proved a boon to attendance and concession sales. It didn’t hurt that the Rays played exceptionally well during those games, as Tampa Bay reeled off a 23-4 record for concert games in 2008, 2009, and the first five months of 2010. Casual fans could go to a Rays-Tigers game in the thick of the 2008 pennant race, watch the home team win, then bop to LL Cool J’s greatest hits with more than 36,000 others. After a fun Saturday night like that, those casual fans might start showing up for Tuesday and Wednesday night games too.

“I think it’s great,” said
Diamond Dollars
’ Vince Gennaro. “Having a baseball game break out during another event is a very good, potentially profitable idea.” The profits were rarely huge, as staging
a concert cost tens of thousands of dollars. But the ancillary benefits made the endeavor worthwhile, even more so during the most successful concert nights, which drew 35,000-plus.

The success of the concerts made Sternberg and Silverman realize that they could make money through a variety of nonbaseball activities. A few other pro sports teams had started subsidiaries designed to draw in more revenue, expand into alternative event hosting, and manage investment in other enterprises. The rival Red Sox expanded in 2004 with Fenway Sports Group, a spin-off company with investments in NASCAR, minor league baseball, concert promotions, a Red Sox–centric travel venture, and Fanfoto, a firm specializing in photography at sporting events. In 2008,
Fast Company
reported that Fenway Sports Group was raking in more than $200 million a year.

In the summer of 2009, the Rays followed suit, founding Sunburst Entertainment Group. The new company allowed the Rays to better operate other ventures without getting them mixed in with the activities and balance sheets of the baseball team. Sunburst would be run by existing Rays executives, including Michael Kalt, the team’s senior vice president of development and business affairs. Kalt had served as New York City Hall’s point man for Yankee Stadium and was also a driving force behind the construction of the Mets’ Citi Field and the renovation of the Rays’ spring training complex in Port Charlotte. Kalt, John Higgins, Brian Auld, and Silverman now lead the company, which has taken on a large and diverse set of projects in its brief existence.

In 2009, the Rays acquired a 50% stake in the Florida Tuskers, an Orlando-based team in the United Football League. They hoped to tap into the state’s rabid football following and (ideally) someday push Tuskers games to Tropicana Field. When and if the Rays eventually land a new ballpark, they could bring in football games, soccer matches, lacrosse tournaments, and other events, creating a 365-days-a-year model (or close to it anyway) for capturing revenue. Sunburst eventually sold its share of the Tuskers, realizing the UFL’s limited potential wasn’t worth its while. But the company
continued to push for other deals, including luring more concerts, charity events, high school baseball tournaments, NCAA tournament basketball games, and even Cirque du Soleil. Thanks to Sunburst, the Trop now hosts a college football bowl game as well, the Beef ‘O’ Brady’s Bowl St. Petersburg (hey, the name wasn’t Sunburst’s choice).

Sunburst also started offering consulting services. Local companies had peppered Rays execs with questions, asking how they were able to transform the team’s reputation in the community—given the damage done by years of losing and especially the mishaps of the Naimoli era—beyond simply winning more games. Becoming sports and entertainment consultants became the next logical step for the group.

“We’ve always wanted to be more than a sports team,” Auld said.

They always wanted to be more than a Tampa Bay sports team too. Leveraging a connection via Disney marketing whiz turned Rays executive Tom Hoof, the team played a regular-season series at the Disney Wide World of Sports Complex in Orlando in 2007. The idea to shift one series a year to Orlando came about a year earlier, while the Rays were shopping for a new spring training home. The Disney fields were unavailable in March, since the Atlanta Braves trained there. But the Rays still saw untapped potential in the central Florida hub just one hundred miles from the Trop. Impress fans in Orlando and neighboring communities—the thinking went—and they’ll venture down to St. Pete more often, as well as buy team merchandise and follow the Rays on their TVs and radios and computers.

“Becoming a regional club is key to our success,” said Silverman. “If we’re able to take advantage of the entire region, that’s three million, four million, even five million people. We’d become one of the bigger midmarket teams and hopefully have the resources for us to do what we need to do: stay competitive.”

Silverman’s lofty goals will take time, if they’re achievable at all. Part of the challenge involves seducing media organizations outside Tampa Bay to follow the team. The
Orlando Sentinel
doesn’t cover
the Rays despite their relative proximity to Orlando; compare that lack of interest with New England, where media outlets from the Canadian border down through Connecticut cover the Red Sox.

Still, management presses on. Having expanded their efforts to the northeast, the Rays have also sought to extend their reach south of Tampa Bay. In 2009, they got their wish, moving spring training games from Progress Energy Park in downtown St. Pete an hour and a half farther down the coast to Port Charlotte. A newly completed $27 million renovation of Charlotte Sports Park, combined with the Rays’ success in 2008, sent spring training ticket sales through the roof. The team went from 300 season-ticket-holders for spring training games in St. Pete to
3,000
in Port Charlotte, selling out every seat in the Rays’ first year there. The Rays have looked for other ways, however small, to expand their reach. Management quickly realized that legions of baseball aficionados in Hazleton, Pennsylvania (population 23,329), had ditched the nearby Yankees, Phillies, and Orioles to root for their native son, Joe Maddon. The Tampa Bay Rays radio network soon expanded to Hazleton, where fans can now catch every game while sitting on their porches on peaceful Pennsylvania summer nights.

For all the talk of branding efforts, regional outreach, and high-minded subsidiaries, few companies of any stripe put more effort into giveaways and promotions than Major League Baseball teams—and the Rays try harder than most. In 2009, the team needed to capitalize on its amazing postseason run but faced a nasty headwind from a struggling local economy. Nearly every home date on that year’s schedule featured some kind of fan enticement. There were bobbleheads of course, with four different players getting immortalized. There was a Carlos Peña robot, a Japanese baseball–style rattle drum in honor of second baseman Akinori Iwamura, replicas of the AL championship trophy, and that league-leading lineup of concerts. And yes, the infamous cowbells.

The Rays cowbell started as a goofy little idea from Sternberg. Like just about everyone else who’d seen it, Sternberg fell hard for a
Saturday Night Live
sketch featuring a spoof of rock band
Blue Öyster Cult. In the sketch, a disheveled, bell-bottomed Will Ferrell jumped into the middle of the band’s hit song “Don’t Fear the Reaper” and began banging away on a cowbell. Christopher Walken, playing fictional music producer Bruce Dickinson, ordered the band to stop the music, then demanded, “More cowbell.” It was a silly little premise that somehow evolved into a ubiquitous catchphrase, plastered on tens of thousands of T-shirts. Sternberg liked the sketch and decided to take it one step further: distribute cowbells to fans, get them to make noise throughout the game, and maybe the Rays could gain a home-field advantage.

The plan worked. Players and journalists from other cities complained that the cowbells were bush-league distractions. This only encouraged fans more. Giving out doodads and talking in grand terms about branding were all well and good. But the cowbell became a Rays trademark that—much like the Angels’ Rally Monkey and the Mets’ inability to avoid shooting themselves in the foot—came to define the franchise. Creating that kind of avidity for a product or ritual is the stuff Harvard Business School grads dream of.

“It’s crazy what’s happened,” said Cary Strukel, a Rays season-ticket-holder who dons a Rays jersey, bright blue wig, strands of beads, and Viking horns for every game. During one fifteen-minute conversation, a half-dozen passersby stopped to pose for pictures with Strukel, the interested parties ranging from small children to halter top–wearing blondes. With no prompting from the team, he evolved into an unofficial Rays mascot, going by the handle “Cowbell Kid” and firing up the right-field stands during every game. “It’s kind of a hang-loose, kinda crazy, fun atmosphere. I’m trying to turn right field into WWE wrestling.”

The Rays continued to harness their inner Barnum & Bailey during the 2010 season. That year brought “Senior Prom for Senior Citizens” night, an idea stemming from an MLB commercial in which Evan Longoria jokingly suggested the idea to Johnny Damon. It also featured “Baseball Nightclub,” a Friday night promotion aimed at attracting college kids and twenty-somethings to the Trop
with postgame festivities that included dance music, T-shirts for women that say
I HEART LONGORIA
, and fireworks … yes, indoor fireworks.

“You’re really coming to see a show,” Darcy Raymond told
The New York Times
. “To some people, the traditionalist, it may be sensory overload. If you’re not into a sensory experience, the Trop is not for you. We’re a new-school team.”

Outsiders have noticed the Rays’ efforts. In 2010,
ESPN.com
named the Rays the sixth-most fan-friendly team among all MLB, NBA, NFL, and NHL teams, and the second-friendliest in baseball alone (behind the Angels).

Despite the accolades and clanging cowbells, steep challenges remain. Attendance rose just 3% in 2009 following the Rays’ AL pennant, then fell slightly in 2010, even as the team nabbed the best record in the American League. The Rays must find ways to draw fans to their outdated ballpark, even as negotiations press on with local politicians on a new stadium.

Still, the picture grew much brighter than it had been during Naimoli’s heyday. The most memorable marketing moment of that era occurred during the 2002 season. Outfielder Jason Tyner had batted .280 the year before, with 31 stolen bases. Never mind that Tyner also hit zero home runs that year and graded out as one of the worst everyday players in the game. The pre-exorcism Devil Rays were woefully short on talent, let alone young talent. So in ’02, the team scheduled a Jason Tyner Bobblehead Day. Ten thousand tiny Tyners were handcrafted in China. But by the time the June 2 promotion rolled around, Tyner was toiling away in Triple A Durham, on his way to a disastrous split season in which he hit just .214 with three extra-base hits in the big leagues. Jason Tyner Bobblehead Day, featured prominently in the Devil Rays’ promotional materials, was axed.

And what of the 10,000 bobbleheads? After sitting in storage for a while, the bobbleheads ended up at the Pinellas County Education Foundation. They ended up in the hands of Enterprise Village,
a county educational program that teaches grade school kids about business and commerce. If the present-day Rays ever lose their way, they can always pay a visit to Enterprise Village, plop down in a room full of eager students, and learn the wrong way to promote a baseball team. Tiny Jason Tyner will no doubt nod his head in spirited agreement.

CHAPTER 8
ARBITRAGE

I am purely market-driven. I love players I think that I can get for less than they are worth. It’s positive arbitrage, the valuation asymmetry in the game
.
—A
NDREW
F
RIEDMAN

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