As Frank and Jamie McCourt’s divorce winds its way through the California legal system, new details about the Los Angeles Dodgers’ business plan are emerging — details that could spell trouble for fans and ticketers alike.
According to court documents submitted by Jamie McCourt, the Dodgers organization plans to increase ticket prices steadily until by 2018 they have nearly doubled their 2007 cost, the Los Angeles Time reported. At the same time it will decrease funds available for player compensation this season to $107 million. This constitutes a drop in commitment of $25 million from the 2009 total, which also included some deferred payments to players, but it is still $16 million below 2008’s figures as well. Overall, player compensation, which hit 46 percent of overall team revenue in 2007, will drop to 25 percent by 2018. This trend is clearly out of line with Commissioner Bud Selig’s position on teams maintaining compensation at around 50 percent of revenue.
In order to sustain the organization, the Dodgers’ financial plan assumes a significant revenue increase over the coming years, from $295 million in 2008 to $529 million in 2018. However, with no plans for a new stadium and no big TV deals on the horizon, it is unclear how the team will generate enough revenue to enact its plan without the big increase in ticket prices.
These changes can’t help but rock the ticketing interests involved, say brokers.
“Everyone will suffer if [the predicted hike in ticket prices] takes place”, Steve Parry, president of Golden Tickets, told TicketNews. “The primary market will suffer, the secondary market will suffer and the season ticket holders will suffer. [There will be] unrealistic prices that won’t sustain in the marketplace.”
Last season, the first in its new stadium, the New York Yankees learned just how much resistance there can be when ticket prices are increased significantly. While the team enjoyed a World Series-winning season on the field, in the stands it was a different matter, with fans balking at the extravagant prices for many premium seats.
Pete Kennedy, president and owner of Pete’s Seats sees ticket prices dropping steeply on the secondary market, and resentful season ticket holders in the Dodgers’ future.
“We already see [MLB] season ticket holders rolling over and giving up their season tickets, and using the same money to select their game and seat choice from the secondary market. I would anticipate you seeing a heck of a lot more inventory on the secondary market at significantly reduced prices in comparison to cost. It just comes down to ticket quality,” Kennedy told TicketNews.
In the meantime, Mrs. McCourt is seeking a hefty spousal support agreement, whether or not she gets her old job back as CEO and Vice-Chairperson.