The folks over at The Goldklang Group have been running a marketing campaign called “Be Your Own Fan” across the four professional baseball organizations that they represent. To support that initiative, they’ve created a great website called “Be Your Own Fan TV” (byoftv.com). Every two weeks, they release a new video that provides an inside look at a different element of sports business. So far, they’ve produced seven videos that cover topics such as reporting, television production, public relations, baseball operations and more.

I’ve included two of their recent videos here to give you all a preview. They do an excellent job in creating both entertaining and informative content. You can visit their website, byoftv.com, to view additional episodes.

First off, I need to congratulate the New York Yankees on their 27th World Series championship (I will admit, I am a Yankees fan, but I always try to keep my views here neutral and unbiased). Anyway, with their victory, I was thinking about what type of economic impact there will be from their 27th title. Then low-and-behold, I see this video on my daily Wall Street Journal email:

Now in all seriousness, this “statistic” about a 5% growth in GDP during the year after a Yankees victory is just a correlation. And as any statistician will tell you, a correlation does not tell you anything about causation (another famous example of this is the statistical correlation between the results of the final Washington Redskins game of the year and the U.S. presidential election). Thus, even if this growth has been seen in the past after Yankees’ championships, there’s no evidence to say the victory itself has a direct impact on economic improvement.

This isn’t to say there will not be some impact from the victory – it just won’t be on the scale of the national GDP. Here are some results that you can expect to see:

• Merchandise Sales: The Yankees are still the most prominent and popular brand in baseball, and New York is the largest market in the country. Combine this with nearly a decade between titles, and you can probably expect the largest World Series merchandise sales numbers since the first Boston Red Sox title in 2004.
• 2010 Ticket Sales and Prices: The Yankees had to overcome some bad publicity and poor initial sales with their original premium seat ticket prices, leading to an early-season price cut. Even with this victory, I’d be surprised to see anything beyond a basic 3-5% annual increase to the adjusted prices, and in turn, I think the team will see a nice uptick in these premium locations next year (especially if the economy does improve by 5%!)
• Postseason Secondary Market: The secondary market started off a little slow this postseason, with several weather-related issues keeping prices on the low side. However, having the World Series in New York and Philadelphia ended up being a big boon to StubHub and other ticket resellers, with tickets being sold for 5x to 20x the face value. In fact, since less tickets were available for resale in Philadelphia than New York, prices for games 3-5 were driven even higher than games 1-2.
• Team Spending: After a few years of “relative” struggle, the Yankees have proven that a large payroll can lead to the title. Will other teams try to up the ante next year to compete with the Yankees? Baseball experts have written that this year’s free agent list is one of the weakest in a while. In addition, the Yankees themselves have a few key players that could test the market. If the economy really is on the upswing, maybe team payroll could increase again next year.

Again, congratulations to the Yankees. I already can’t wait for the 2010 season to get here!

Update: I also just saw this article on Bloomberg.com that reports the Yankees postseason run generated almost $60 million of economic impact for the city of New York, primarily based on increased spending at local business by out-of-town residents.

I think most people have probably seen this already, but just in case, I’m going to share it here as well. Macy’s made a little mistake with an advertisement they ran in Monday’s Philadelphia Enquirer. Take a look (thanks to the AZCentral.com FanBoy Blog for the photo).

In case you weren’t following baseball, the Phillies are currently down three games to two in the World Series, and in fact, they were down 3-1 when this ad actually ran. While I like the idea of having confidence in your team, I think this is taking it a bit too far. The newspaper has since apologized for running the ad. In situations like this, I’m a big proponent of trying to turn a mistake into a gain, so maybe Macy’s can offer a special discount on other Phillies merchandise for anyone that brings in a copy of the unfortunate advertisement. They could gain some goodwill for the mistake and generate some new sales. Do you think this would work?

According to Sports Business Journal, the New York Yankees will become the first team in professional sports to offer streaming video coverage of their games online in their local market.  This is part of an agreement between the YES Network and Cablevision (the service will only be available to Cablevision customers for an additional fee). 

MLB has had a lot of success with streaming their games online via MLB.TV, and their model was copied by the NHL this season.  However, because of regional media contracts, these services cannot show local games online (both services use the viewer’s source IP address to black out anyone that should be able to watch the game via local television). 

Most local media outlets have resisted the idea of making their video content available online as it provides direct competition for their television broadcast.  However, with more and more consumers choosing to consume video content online, it was just a matter of time before someone decided to make this plunge.  Ultimately, with the large variety of sports content options both on television and online, the most important this is making your content available to as large an audience as possible, rather than trying to force your audience to use a specific channel.  YES and Cablevision will still be able to generate significant advertising revenue through this new option, which should more than make up for any loss in value (if any) that this causes to their television advertising revenue.  It will not be long before other teams in baseball and other sports pursue similar options.

It looks like even New York isn’t immune to the current economy.  News came out yesterday that the Yankees have decided to cut the prices of their premium field-level seats (New York Times, 4/28/09).  Front row tickets that had cost $2,500 each have been cut in half to $1,250, and tickets along the first and third base lines have been cut from $1,000 to $650.  Anyone who had paid full price previously will be compensated with free tickets to future games, and additional complimentary tickets are being distributed to premium season and partial plan ticket holders.

In the days leading up to this decision, there had been some heated comments going back and forth between Don Garber, the Commissioner of MLS, and Randy Levine, the Yankees team president.  Garber criticized the Yankees for having so many empty seats behind home plate, which did not look particularly good on television.  Initially the team defended their pricing, but after reevaluating they admitted that some seats “might be overpriced.”  Even with cutting these prices in half, the Yankees will still have far and away the most expensive ticket prices in baseball, and they’ll still be the league leader in ticket revenue.

I’d be curious to know what type of price sensitivity analysis the Yankees did before setting their new stadium prices. I’d have the same question for all New York teams that are opening new facilities and substantially raising their prices. A lot of teams still set their ticket prices by feel, which cannot be a very effective method.  If the team’s did run some sensitivity analysis, when did they do it?  The Yankees and the other New York teams announced their price increases quite a while ago, before we knew the extent of the current recession.  If they do the same analysis today, their results would no doubt be quite different.  Some type of advanced dynamic pricing models might help the teams handle this type of situation more efficiently.

In case you haven’t heard already, the Washington Nationals made some news the other day because a couple of their players were wearing jerseys that said “Natinals” instead of “Nationals” – see the picture on Adam Dunn on the right.  While this story is a little embarrassing for the franchise and the jersey provider, there are two ways the team can respond:

1.  They can try to find someone to blame (an employee or the jersey manufacturer) and then do their best to pretend the incident never happened, or…

2.  They can embrace the mistake and use it to their advantage!

How can they do this?  Here are some simple ideas that could turn a mistake into an opportunity:

• Auction the misspelled jerseys for charity and have the team match the money raised with a donation of their own.  Because of the rarity of this incident and the public exposure, these jerseys could sell for a nice price, and the charity aspect provides wonderful PR.
• Hold a “Bad Spelling Day” promotional day, complete with other players wearing misspelled jerseys, games on the video boards and unique prizes.
• Along the lines of the NHL Winter Classic contest to find the missing Reebok logo, have a contest where fans need to identify the jersey that is missing part of the logo, a letter, etc, and then have them enter an online contest.
• Create a funny viral video with players from the Nationals participating in a spelling bee.  This video would be sure to get a lot of buzz online and shows that the team has a sense of humor.

The basic idea is to put a positive spin on mistakes when they happen.  Anything is an opportunity if you look at it in the right light!

We are about 6 days away from the start of the 2009 MLB season.  Last year was a great year for Major League Baseball, with the league setting records for attendance and revenue.  But the economic landscape has changed a lot over the past few months, so I don’t think anyone expects to see a new record this year.  Regardless, here are some stories that I want to watch closely this year.

• MLB’s use of social media: Other sports have seen a large spike in league, team and player usage of social media tools, particularly a recent Twitter craze.  MLB is traditionally very conservative and controlling regarding their digital content, which does not mesh well with the concepts behind social media.  I’d like to see MLB and MLBAM adjust their position in this area this year, but I don’t know if that would actually happen.
• New York stadiums: There are many things to watch here.  There’s all the publicity (and revenue) that the new ballparks generate. There are still potential naming rights issues with Citi Field. There are the skyrocketing ticket prices with fewer people willing to buy tickets, both season and single-game.  And all these stories are magnified because they are in New York.
• League-wide attendance: Coming off the success of last year, will people spend money to come out to the games this season? MLB is the first top-4 U.S. league to start a new season in this recession, so everyone is watching to see the impact at the gate.
• High-profile contracts: This off-season featured high-priced and high-publicity contracts for C.C. Sabathia, Mark Teixeira, Ryan Howard and Manny Ramirez. Meanwhile, other teams are trying to trim payrolls, expecting a drop in revenue this year. Will these players produce enough to justify their hefty paychecks, or will the teams regret their big spends?
• MLB Network: The network had the most successful launch of any sports-related network in terms of the initial number of homes carrying the channel. But the other league-backed channels have had some early struggles to gain adoption and viewers. Can the MLB Network carry the momentum from their launch over the course of the year?
• Television ratings: Beyond the MLB Network, sports ratings have continued to trend downward over the past 2-3 years, and last year’s World Series had some fairly low ratings, which hurts advertising revenue. Can the ratings rebound this year, on both a regional and national level?
• Alex Rodriguez and steroids: We cannot forget the continuing storyline regarding performance enhancing drugs, which got even bigger with the A-Rod news this spring. Will other names from the list of 104 get released? When Rodriguez comes back from his injury, can he perform under the additional scrutiny and repair his image? MLB desperately wants this story to go away, but it keeps coming back.

This is a big year for Major League Baseball, and I’m sure there are many storylines that I’ve missed. What stories are you most interested in following this year?

Here are my quick picks for this week, “Commercials Edition”:

Baseball: The latest ESPN advertisement for the World Baseball Classic:

This isn’t actually the version of the commercial I was hoping to find.  There is another one that includes Jeter, Ichiro, and Rodriguez, where Jeter says he’s played for world champions, Ichiro says he’s played for the WBC champions, and Rodriguez says he’s played for “division winners.”  The commercial seemed odd that it almost highlighted A-Rod’s lack of a championship compared to the other two.  Also, with his latest controversies, the Dominican Republic’s impressive roster and the fact that A-Rod played for the U.S. last year, I wonder if they could have picked a different player to be in his spot.

Golf:  The latest Nike advertisement with Tiger Woods:

The thing that impressed me with this spot is the willingness for the other golfers to openly admit they play second fiddle to Tiger now that he’s back.  I think this is a very funny and creative way to announce his return, and in a way, it still does highlight the success of some of the recent winners, which actually could help them build their names more in spite of Tiger’s return.  I’m sure the PGA was hoping that Tiger would last a little longer in the Accenture Match Play, but just getting him back out there was a huge lift.

Do you have a good “pick of the week?” Use the Contact Us link at the top of the page and send me your picks!

Clearly, the Alex Rodriguez steroids story is the biggest sports news story of the week.  Without dedicating too much time to the topic, I wanted to share a few quick thoughts:

• Rodriguez learned from Bonds’ and Clemens’ mistakes by confronting the situation directly and honestly.  This gives him the best chance at “redemption.”
• If they wanted to, Rodriguez and the members of the MLBPA have a massive potential lawsuit against the MLBPA for violating their privacy and breach of contract.  Those tests from 2003 were guaranteed to be private, and MLBPA completely dropped the ball by not destroying those results immediately after the season ended.  I doubt this will actually happen, as the results would be disastrous for the MLBPA.
• On that same note, Gene Orza’s career is (or should be) over.  The decision to not destroy the results falls squarely on his shoulders.  Even if his intentions were good (checking for false positives), the privacy and security of the players needed to be his top priority.
• The idea that only one name out of the 104 players was released is troubling. Rodriguez was singled out because of his success, while other equally guilty players get to pretend nothing happened.  This part of the story is not over, and since the government does have the complete list, I expect those names will eventually get out.
• Rodriguez has about $30 million in his contract tied to breaking MLB records, including the career home run record.  Some people, maybe even the Yankees, will question these results and financial incentives.  If I was in charge of his PR, I would have him promise to donate any of those bonuses to charity, specifically programs dedicated to steroid education in youth sports.

News was released today about a new partnership between the NHL and MLB.  Starting next week, fans of both leagues will now have the opportunity to purchase a combined membership to MLB.tv Premium and NHL GameCenter Live, the two streaming video products produced by each league.  The package will be available for purchase at both NHL.com and MLB.com, and will cost $139.95.  This is a very nice price for fans, considering the MLB product costs $109.95 and the NHL’s “Race for the Cup” video package costs $79. 

Along with their typical selection of regular season games, both products have added to their product packages.  MLB.tv will include over 100 spring training games and the first two rounds of the World Baseball Classic, while NHL GameCenter will include select playoff games.  This deal will probably be more beneficial for the NHL in improving adoption of their GameCenter product.  MLB.tv has been around for a few years now and is more well-known by sports consumers, while this is the first year for GameCenter Live.  

“We couldn’t be more excited about this tremendous opportunity to introduce our groundbreaking NHL Game Center LIVE experience to an even bigger audience,” said John Collins, COO for the NHL. “MLB.com has built a great business by engaging their audience with a best-in-breed product. This partnership is all about our mutual commitment to deliver world class digital sports experiences to sports fans everywhere.”

I don’t know what their expectations are in terms of total sales numbers, as I’m sure there are some questions about how much crossover there is between MLB and NHL fans.  But even if the numbers are small, any increase in NHL viewership by sports fans as a whole is a very positive thing.