The Impacts of Promotions/marketing, Scheduling, and Economic Factors on Total Gross Revenues for Minor League Baseball Teams
Cebula, Richard J., Coombs, Christopher K., Lawson, Luther, Foley, Maggie, International Advances in Economic Research
Abstract The purpose of this empirical study is to identify the key marketing and scheduling determinants of game attendance at minor league baseball games. Identification of such marketing and scheduling factors can provide the management of minor league teams in similar environments with information to more efficiently pursue the goal of game attendance maximization. To ensure greater comparability of data between teams and hence relevance of results, this study focuses upon a single grouping of teams, the Carolina League, and a single minor league baseball season, 2006. The Carolina League consists of eight teams serving eight metropolitan areas: Lynchburg City, VA; Winston-Salem, NC; Wilmington, DE; Salem City, VA; Myrtle Beach, SC; Prince William County, VA; Lenoir City, NC; and Frederick County, MD.
Keywords Team revenues * Minor league baseball * Marketing * Scheduling * Economic factors
JEL D12 * L25 * L29
The operation of major league baseball (MLB) teams is a very complex enterprise involving the marketing of a diverse multi-dimensional entertainment commodity (Quirk and Fort 1992; Burger and Walters 2003; Denaux et al. 2011). (1) At the top tier of MLB, as most sports fans are aware, are the franchise teams playing games in either the National League or American League. At a lower level of professional baseball is the multi-tiered "farm" system of minor league teams. Minor league teams have their own economic reality but largely serve as a framework for the development of young or inexperienced players. Due to a combination of talent, hard work, and luck, some portion of these minor league players are called up to the "show" (MLB team) for a chance to gain a spot on an MLB team roster.
General Managers of minor league teams, in theory, seek in part to achieve success by helping players develop their skills to their maximum potential. Within the context of this objective, the most successful minor league team managers develop players though a combination of coaching, guidance, counseling, physical conditioning, and other means, such as challenging players to do better. For example, teaching players to cope with adversity, including game-time distractions, can promote those players' ability to succeed in the major league. Cebula and Belton (1996, p. 151) characterized minor league teams as venues "... where prospective major leaguers are trained and guided into ... maturity, and given the playing experience, develop teamwork skills and knowledge necessary to ... play ball in the major leagues."
Over time, however, the economic reality of the business of baseball has caused minor league baseball to expand beyond this narrow role to one of also generating revenues (Cousens 1997). Indeed, Cousens (1997, p. 320) observed that the minor leagues have been influenced by "... a new breed of professional general managers who employ innovative marketing strategies and promotional techniques." According to Cousens (1997, pp. 320-1), these general managers "... shifted their marketing strategies to emphasize the entertainment aspects of their business in order to attract a larger segment of the population ... for revenue generation ... Indeed, revenues from the sale of merchandise by minor league clubs ..." can enhance profit measurably.
Thus, in addition to pursuing this fundamental function of player development, minor league teams arguably can be portrayed as seeking ways to enhance team revenues, i.e., total gross revenues inclusive of ticket sales. Clearly, given that ticket sales are the principal component of team revenues and that they permit people to attend games, teams achieving higher total revenues are likely to achieve higher attendance as well. Thus, the goals of revenue enhancement and attendance enhancement can be seen as correlative (Cousens 1997; Cebula et al. 2009).
Arguably, marketing strategies and promotions that enhance team revenues (along with game attendance) would appear to serve at least two purposes. …