Secrets Businesses Don’t Want You To Know – Part 3

Secrets Businesses Don’t Want You To Know – Part 3

The Rainout Revenue

Is there anything more frustrating then going to a baseball game while it’s cold and rainy? We are living in a new climatic time in our world’s history. Due to global warming and the permanent destruction of our weather cycles, we now experience brisk temperatures, snow flurries and rain up until mid-May. This means that playing baseball outdoors in Philadelphia is simply not conducive. This is not a complaint as it’s more a documented fact. Two games have been postponed so far this season with undoubtedly more to come..

So why is it a big deal? In 2001, plans were being made and ideas were being shared on where to put the new ballpark in Philly and what should the design look like. Don’t get me wrong, the finished product (birth 2004) is spectacular. We now celebrate its 5^th year (hard to believe) and it is perhaps one of the top 5 baseball stadiums around the country (depending on what publication you read). My qualm isn’t with the stadium itself. My problem is with the sneakiness of Phillies brass in agreeing on its design. For the $346 million dollars spent on this thing, we could have put a roof on the darn thing. I’m still bitter today. But as you will see in my blog that a rainout is actually good for business.

The traditionalist would say that baseball should be played outdoors. I’d like to think that Abner Doubleday had that same philosophy when he created baseball in 1839. However he didn’t count on America puking out on our environment thus causing the new April to be the Old December. He also wasn’t counting on the extra money lining the pockets of the rich white men in suits quietly building their fortunes in our new venue. Here’s the truth this business doesn’t want you to know…Rainouts are good for business.

Let me explain how. Every Major League baseball team is guaranteed 81 home games. In the Phillies case, we added 2 pre-season (I.E. On Deck Series). So that’s 83 games. But let’s not forgot the other 4 games a year, where it rains pregame, fans make purchases and then the game in cancelled. Something that could be avoided with an indoor baseball park. According to Team Marketing Report, an average baseball fan spends $100 at a game. If you calculate the revenue from tickets sales, parking, concessions and merchandises for 45,000 plus fans each night, you are looking at a cool $4.5 million a night.

Now let’s calculate the rainouts? Why? Because fans still show up, park their cars and buy overpriced ponchos in the team store while they wait 2 hours under the doomed concessions until Dan Baker breaks the news that tonight’s Phillies game has been postponed due to the weather. Minus ticket sale revenues, Phillies still likely chalk up $2.5 million at those rain-soaked games. Plus those tickets can now be used on a new date where more parking, food and merchandise can be purchased. I have personally estimated that the Phillies capitalize on the misfortunes of the weather and rake in about $10 million in revenue from rainouts a season. That’s $250million in rainout revenue in the 25-year lease of the stadium. Good for them, waste of time and money for you.

My philosophy is spend an extra $250 million to protect your fans from April snow showers and prevent the juggling of schedules simply to add another day of revenue. I would even be in favor of the retractable roof that opens up to let the August sunshine seep through. In total there are 7 teams in baseball who don’t have to worry about home games being rained out. It’s hard to compare cost estimates to building an indoor park as most were built in the late 90’s and early 00’s. But to me it’s irrelevant. My point is that Phillies are making a ton of money on games that aren’t being played.

This is the part of my blog where I offer solutions. The truth is I like our new ballpark and as a season ticket holder, I love the team. I recognize building a new stadium after five years is not feasible and complaining about the weather is not constructive. So here’s my alternative. When it’s raining all afternoon, save your fans the time and money and call the games earlier. In the case of the rain catching you in the middle of the game, do your loyal fans a favor and discount the parking next time out. I recognize it cost money to pay parking staff but you can at least give a rebate for postponed games. It’ll at least show that you care without severely ruining your $10 million dollar annual rainout revenue.

To the Phillies credit, they did honor the parking at both parts of the Game 5 World Series. But the cynic in me says that seven home playoff games at higher ticket prices definitely softened up the Phillies’ executives hearts.

So that’s how business is done. After all, this is a business and as I stated numerous times in my blogs, the goal of a business is to generate revenue. Next time the Phillies flinch at signing a player for $2.5 million dollars, we can justifiably say, that’s 1 rainout revenue.