Cart (0)
business newsAt-Risk Sports Teams: Detroit Tigers
First-place team can't draw crowds.
PRINT
 |
|
Call it an act of solidarity.
For residents of Motor City, the Tigers’ current season is a welcome distraction from their economic troubles. After a disastrous 2008 season, the team is in first place in its division.
But despite the Tigers’ success on the field, no one is blind to the effects Detroit’s slump has had on the team’s bottom line. Attendance is down almost 30% from last year, with 10,000 fewer fans showing up at the games. The empty stands are particularly noticeable given that the team set an attendance record in 2008, drawing 3,202,654.
But then again, a lot has changed since 2008.
For starters, the auto industry -- the lifeblood of millions of Detroit-area residents -- has all but fallen apart over the last few months. GM's bankruptcy meant the elimination of 7 plants and 9,000 jobs in Michigan. Over 140,000 manufacturing jobs have disappeared since 2004. Detroit’s unemployment rate has skyrocketed to triple the national average.
All this means that fewer people have money to burn on tickets, hot dogs, beers and Tigers merchandise.
"We actually had a team meeting about it," Tigers manager Jim Leyland told The Boston Globe. "I told the guys: 'This is not a year to not run out ground balls.' We get a check every 2 weeks, and there are people who just found out they ain't getting a check. We've got to pinch ourselves and realize how lucky we are."
But even the players are a little less lucky in 2009.
Last year, Tigers payroll was $138.7 million, the second-highest in Major League Baseball -- and just behind that of the New York Yankees. But after the team landed in last place, owner Mike Ilitch had a tough time justifying the sky-high salaries. This year, Ilitch slashed payroll $24 million to $114,3 million. The team is now the fifth-highest paid in the league, behind Boston.
Slashing payroll isn’t the only tactic that Ilitch -- who is also the founder and owner of Little Caesars Pizza -- has used to shore up his business. Ilitch raised ticket prices on “premium games” by $2 to $7. Many season-ticket holders are also seeing hikes. But given the sudden drop in attendance, some believe Ilitch’s strategy may have backfired.
For now, the Tigers remain financially solvent. But to sustain the team’s growth, Ilitch will need to find a way to bring the fans back to Comerica Park. Fortunately, with the way the Tigers are playing these days, it shouldn’t be too hard.
 |
 |
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
