The Suite Smell of Spring?
This week's warm-up and the arrival of players in Florida for spring training can only mean one thing: Lower heating bills. Well, ok, one more thing: Baseball's coming back. In our case, this promises to be a season of delayed gratification, of watching construction crews finish up the Nationals' new ballpark and hoping that the Nats' front office manages to find a starting pitcher or five in the year remaining before the new stadium opens up.
But as that stadium rises and as the team begins an expensive ad campaign to sell its 66 luxury suites, some other professional sports franchises are moving away from skyboxes as the golden goose of the sports biz. The Wall Street Journal reported over the weekend that the Seattle Mariners ripped out eight skyboxes from Safeco Field a few weeks ago, a symbol of the souring of the luxury suite as the sure shot revenue source for pro teams.
The move away from corporate boxes stems from new laws that make it harder for big businesses to lavish favors on clients, as well as a somewhat more Spartan atmosphere in many cost-conscious industries. Add changes in laws governing tax breaks, lobbying and the ethical boundaries faced by members of Congress and the result is some doubt whether the luxury box model really works for sports franchises these days. The Journal quotes an auto parts supplier in Michigan as saying that General Motors won't let its customers "buy them a cup of coffee anymore," an attitude that has led that particular supplier to drop its suites at four sports venues.
So, with the Mariners and Minnesota Timberwolves of the NBA each knocking out eight suites, and the Chicago White Sox and Toronto Blue Jays each eliminating 10 suites, and the Detroit Tigers thinking about moving in the same direction, what are the Nationals doing? They're selling their 66 suites as the best possible way "to network, entertain clients, reward employees and build relationships." The Nats' ads show a lovely photo of the new ballpark under the headline "This is where baseball gets played," and then a pic of a suite gets this headline: "This is where hardball gets played."
"More than an entertainment expense, your personal suite is a strategic investment," the ad says.
Nats president Stan Kasten tells me that the team has just started the sales process for the suites, so it's too soon to say how hungry Washington businesses are for the suites, but Kasten's sales folks are "meeting with customers every day and we anticipate strong demand." Some suites have already been reserved, he says.
Kasten agrees that some franchises may have built too many suites and in some cities, consistently lousy teams may be less appealing to typical suite tenants. But the prez says those conditions simply don't apply here: "The Red Sox, for example, keep their team in the top tier of competitiveness and there's no shortage of demand for their suites. I don't see this phenomenon in large markets with strong franchises and a limited number of suites," Kasten says.
And indeed, the new Nats ballpark has a somewhat conservative number of suites--66. That relatively low number, Kasten believes, should make the suites a sought after commodity. The congressional lobbying restrictions are simply "not a factor for the vast majority of our customers," he says, noting that the Washington economy is much more diverse than it once was, and "every other market has good demand without having lobbyists in town."
But what some other franchises are finding is that the space previously set aside for suites sells better when it's remodeled to accommodate parties. The Journal reports that in Seattle and other cities, suites that once sold for up to $200,000 per season, racking up huge profits for the teams, were going empty. The growing demand, rather, was from fans who wanted to stage parties at the game, paying, say, $125 per ticket for food and drink instead of $1700 per game for a suite package.
Despite the trend, the Lerner family has been bullish on luxury suites from the moment they took over the Nationals. In December, when the Post's Tom Boswell reported that the family had decided to kick in an extra $30 million to improve the new stadium beyond the amenities that the District's planners had included, a good chunk of that money turned out to be for extras in the suites, such as sliding glass windows, bathrooms.
The Lerners evidently are still bullish on the notion that Washington's business gets done at social occasions--in the expense account restaurants downtown and at sports venues. Last season, the Nats, like some other teams, priced certain box seats at under $50 to stay under the congressional gift ban limit, and there was certainly no shortage of administration and congressional types to be seen at RFK last summer.
I've never seen a game from a luxury box--seems to me if you're going to pay the big money, you'd want to be a good deal closer to the action--but I'm glad the boxes are there, if their existence plays any role in moderating the prices of seats that we mere mortals can buy. If, however, the market for the boxes is drying up, then devoting all that space to chasing after the bigwigs makes little sense. That sound of demolition crews inside luxury boxes at all those other stadiums can't be the most satisfying sound for the Nats' sales folks.
Meanwhile, Kasten isn't talking yet about season ticket sales for this year, the last at RFK. "Good and brisk" is all he'll say about ticket sales, though when I asked him if he expects the number of season tickets sold to continue last year's decline, he quickly replied that the number will be "as high as last year," if not better.
Also meanwhile, our man Barry Svrluga is back in beautiful downtown Viera, home of Panera Bread, and America's Most Consonant-Concentrated Baseball Scribe is blogging up a storm here on the big site--his great big fantabulous Nationals Journal is worth several visits a day. It even comes with video (and free sandwiches from Panera--Ask Barry!)
By Marc Fisher |
February 23, 2007; 7:17 AM ET
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