After 11 straight losing seasons, the Orioles might struggle to fill Camden Yards in any economy. This year, they'll try to sell a struggling product in the bleakest financial climate since the Great Depression.
"If you don't have a strong-performing team, you're in a really vulnerable situation," said John Moag, chairman of Moag & Co., a Baltimore-based investment banking firm that focuses on sports. "That hasn't been the case in past recessions."
Orioles officials say that with the season opening today at Camden Yards, it's too early to know how much they'll be hurt by the recession. But they're relieved that demand for season tickets, luxury suites and corporate advertising has not plummeted.
"We're pleased that overall, we aren't seeing what some predicted in terms of a major decrease or the losses of customers that some industries are seeing," said club spokesman Greg Bader.
He noted that corporate advertising and suite sales have remained similar to last year and that the season-ticket renewal rate is also steady, though customers are buying fewer tickets per order. Based on early sales, he said the club is cautiously optimistic about matching last year's attendance of 1,950,075, the lowest in its 16 seasons at Camden Yards.
Attendance has dropped steadily over the past five years, and the club hopes to combat that trend with a "stimulus package" of ticket discounts, including free admission to children under 10 on Thursdays and free seats for fans celebrating their birthdays.
Baseball could be a fascinating test case for the recession's impact on professional sports. Though the NFL and NBA have experienced effects, both sold many of their 2008-2009 tickets before the extent of the crisis was clear. The baseball season, however, will steer right into the teeth of the worst economy in decades.
Many analysts had thought professional sports were immune to recession. Moag's firm studied all of the bear markets since 1970 and found that in general, professional leagues grew more profitable in the face of general downturns.
But this recession, with its broad impact on consumers and corporations, has rocked the sports world like no other. Struggling NBA teams have been forced to hawk tickets at greatly reduced prices, and commissioner David Stern recently secured a $200 million line of credit for clubs that are losing money. In baseball, elite free agents dangled far longer than usual this offseason as every team but the Yankees seemed cowed by financial uncertainty. Even the NFL, the industry's financial heavyweight, cut about 10 percent of its staff in December.
"It's been far worse than I expected," Moag said.
Baseball commissioner Bud Selig told the Los Angeles Times that he's worried about the impact of unemployment. "I used to think we were recession-proof," Selig said. "I really did. This is different."
Ticket worries have caused many franchises to get creative. The Minnesota Twins, for example, have tied a block of 6,500 tickets to the success of the stock market. If the Dow sits at 8,000, the tickets will cost $8 each. The Milwaukee Brewers and Atlanta Braves are offering $1 seats. The Houston Astros are selling season-ticket packages for as little as $76.
Some analysts have argued that sports franchises are more vulnerable this time because their budgets are far more tied to corporate sponsorships and suite sales than ever before. With major partners such as the banking and automobile industries faltering, teams are losing revenue (Bank of America, for example, dropped plans to become a lead sponsor for the new Yankee Stadium.)
But the Orioles haven't seen much of a drop, according to Bader. "Baseball has a better chance to hold on to corporate dollars because of the sheer number of games," he said. "Even in an off year, we still get 2 million fans."
The Orioles are most worried about attendance, an area where the club has suffered in recent seasons, regardless of the economy.
"It's the most visible, most obvious way, we'll be affected," Bader said. "We will have instances, especially early in the season, where the crowds aren't what we want them to be."
On the plus side, he said, Opening Day against the always-popular New York Yankees has been sold out for weeks, and Orioles officials have "restrained confidence" that the club can draw 2 million fans again.
The Orioles drew 25,000 a game last year, 24th out of 30 in major league baseball and down about 2,000 a game from 2007. Such drops are to be expected with a perpetually losing team, sports business analysts said, but could be exacerbated by high unemployment and budget worries in American households.
When asked about the club's attendance prospects, Moag said, "It depends on the team's performance, as it always does."
In response to attendance worries, the Orioles have introduced their "Birdland stimulus package," a collection of discounts for potential ticket buyers. Among other deals, the Orioles will allow fans to attend a game for free in their birth month and will offer free admission to children under 10 (two kids per paying adult) on Thursday nights.
More than 30,000 fans have already registered for free birthday tickets, Bader said.
"We've heard in general that fans feel attending a sporting event is an expensive proposition," he said of the stimulus package. "So we believe this sends a timely message to our fans that this really can be an affordable family evening."
The Orioles pay a percentage of revenue from ticket sales, parking, advertising, suites and concessions to the Maryland Stadium Authority every year. Those rent payments, which provide a snapshot of the club's financial state, dropped to $6,157,030 last year, compared with $7,053,839 in 2004.
Fans offered mixed views about the recession's impact on their buying patterns.
"Well, having three kids and one on the way, it is very expensive to go to the park," said Joe Golden of Pasadena. "I love baseball, but with the economy being the way it is and the team that Angelos has been fielding, I will not be attending any games when I can go watch Severna Park High for free."
Others said losing is a bigger deterrent than the economy.
"Oriole games have become more of a social setting than a sporting event," said Jayson Hill of Pasadena. "Everyone goes Opening Day, then the attendance drops back down to nothing the second game. I'll go to a few games to meet up with friends, but until they have a team that can compete with the rest of the AL East, the similar passion of going to a Ravens game just isn't there."
The potential economic concerns aren't lost on players.
"When people are struggling, you're going to cut costs on the things that are not necessities," said Orioles second baseman Brian Roberts. "Everybody still needs entertainment. It's a great way to get away from your struggles sometimes, but I think people will definitely watch how much they spent on entertainment."
Bader said that the renewal rate for season tickets is about the same as last year but that fans are committing to fewer tickets and fewer dates per order.
The Orioles haven't much altered their "This is Birdland" marketing plan from last season. They're not selling a promise of wins so much as a promise that families will have a good time at Camden Yards.
"Within the sports industry, teams that focus on what they can control are more successful than those that focus on what they can't control, which includes the outcomes of games," Bader said.
The Associated Press and Baltimore Sun reporter Jeff Zrebiec contributed to this article.