June 18, 2003

Lies, Damned Lies

Bounces

by Nate Silver

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Baseball is full of bounces, and not just the path of a Jacque Jones double as it skips across the Metrodome turf (or a Carlos Martinez homer as it skips off Jose Canseco's head). Rather, teams can expect a bounce in attendance when they move into a new facility, facilitating a higher payroll, a more competitive club, and ultimately, it is hoped, a couple of pennants to hang on the outfield wall.

Or at least, once upon a time, they could have. The standing-room-only precedent established in places like Toronto and Baltimore and Cleveland no longer seems to hold. Attendance in Detroit, Milwaukee, and Pittsburgh has already regressed to the levels those teams had grown accustomed to prior to the opening of their new stadiums. Attendance in Cincinnati is up, but only barely--and this with reasonable ticket prices and a fun team on the field. Nobody expects the honeymoon to last forever, but the reinvigorated relationships between ballpark and city that the new stadiums were supposed to engender have lasted shorter than a Liz Taylor nuptial.

Since the debut of SkyDome in 1989, 13 of the 26 teams in existence at that time have opened new parks. Two more will open new facilities next year. It has been the longest sustained period of new stadium construction in baseball history. Call them mallparks or, as I prefer, Retroplexes. Either way, there's plenty of evidence that the ball isn't bouncing quite as highly these days.

A quick estimate of the gain in attendance that each new park provided can be determined as follows:

1. Calculate the average per-game attendance in the six years prior to the opening of the new park, excluding the season immediately preceding the opening of the new park. This is done to eliminate the "bachelor party" effect in which an old park receives a nostalgia-inspired boost in attendance in its final year of existence, as was observed in Detroit and Chicago. So, for example, the baseline attendance for Jacobs Field, which opened in 1994, is calculated from the years 1988-1992, with 1993 thrown out. (In the case of Seattle and Toronto, which opened their parks in mid-season, we tossed out the split year instead.)

2. Compare this to the average attendance during the first three years of the new park, when the novelty should be at its highest.

3. Subtract the former from the latter, and here's what you've got:

                                Year    Baseline    New Park
Park                            Opened  Attendance  Attendance   Bounce
-----------------------------------------------------------------------
SkyDome (Toronto)               1989    30,713      49,033      +18,320
U.S. Cellular Field (Chicago)   1991    15,992      33,595      +17,603
Camden Yards (Baltimore)        1992    25,922      45,048      +19,126
Jacobs Field (Cleveland)        1994    15,273      40,027      +24,754
Ballpark @ Arlington (Texas)    1994    25,073      34,327       +9,254
Turner Field (Atlanta)          1997    38,825      41,606       +2,781
Safeco Field (Seattle)          1999    30,676      41,008      +10,332
Minute Maid Park (Houston)      2000    25,083      34,888       +9,804
Pac Bell Park (San Fran)        2000    21,508      40,675      +19,166
Comerica Park (Detroit)         2000    17,102      24,207       +7,105
Miller Park (Milwaukee)         2001    18,635      25,440*      +6,805
PNC Park (Pittsburgh)           2001    17,884      24,138*      +6,254
Great American Ballpark (Cincy) 2003    24,793      28,907*      +4,114

* Includes partial-season data from 2003

While this calculation isn't as precise as it could be--it doesn't account for changes in team quality, ticket prices, underlying economic conditions, and so forth--the underlying trend is pervasive:

The attendance boost that new stadiums provide--and, by extension, the revenue boost--is fading, not with a bang but a whimper. There are a few outliers here that worth discussing, each of which have some extenuating circumstances:

• In Cleveland, the boost in attendance was simply enormous--nearly 25,000 per game--and didn't fade until the team went into rebuilding mode last year. But this is a case in which the old facility truly was unacceptable, and more importantly, that coincided with a dramatic improvement in the team's level of play.

• In Atlanta, the attendance bounce was quite small, but the context was unusual: Turner Field, originally built as part of Atlanta's Olympic complex, was designed with functionality as much as aesthetics in mind, and the Braves had very little room to improve after drawing very well in the last years of Fulton County Stadium.

• San Francisco has managed to buck the trend observed in recent years, producing a very strong attendance bounce. But the Giants are a good club, and Pac Bell Park is a beautiful, unique facility, capturing the synergy between a park and its natural setting in a way that few others have been able to. Even so, attendance at Pac Bell is off a notch this year.

The rest of the teams have traced out a clear pattern, and it's a pattern of exponential decay. What's interesting about that pattern is that it's one that's classically observed when new technologies are introduced. When a valuable, new product is made available for sale, it provides premium profits to its creator in its first years of existence. As competing products are introduced, and what was formerly state-of-the-art becomes an accepted standard, profit margins erode, until the product eventually provides only a little more income than it requires to build. This pattern has been observed among a large number of industries, including everything from aircraft engines to impotency pills.

But baseball stadiums? Ignore the fact that new park designs are hard to think of in the same category as computer chips or shiny new gadgets--they are "technologies" in the way that economists think about them. Still, there are some real problems with expecting baseball attendance to behave in the same fashion as profit margins for manufactured products. In particular, each new ballpark is supposed to be unique: a technology unto itself, available for the first time to the residents of its particular city.

The fact of the matter, however, is that the attendance bounce at the new wave of stadiums has behaved in this way, their comparative advantage eroding with each season. And this reveals a couple of key points about how baseball fans go about consuming this technology.

Although part of the benefit that a Retroplex provides is an improved ballpark experience--more comfortable seats, better sight lines, superior facilities and so on--there's no doubt that the newness itself is also a big sales point. The new parks in Chicago and Toronto, for example, weren't considered particularly pleasant aesthetically--but those cities experienced a big boost in attendance regardless.

But the novelty effect can wear thin pretty quickly. Baseball markets aren't as isolated as we sometimes make them out to be. A fan in Cincinnati could reasonably make a day trip to a Retroplex in Cleveland, Pittsburgh, Chicago, or even Atlanta. Since most attendees at baseball games are upper-income professionals who have the occasion to travel a lot, chances are that he'd seen a game in one or more of these facilities long before Great American Ballpark had opened. While it isn't a perfect substitute, he's also had plenty of opportunities to see the new parks on TV, their landscapes becoming familiar to him.

The implicit point here is that the Retroplexes aren't very different from one another. Richie Hebner famously commented that, when standing in the infield, he couldn't remember whether he was in the cookie-cutter park in Pittsburgh, Cincinnati, St. Louis, or Philly. If you took the riverboats and the Ferris Wheels away, would he have a considerably easier time distinguishing between Great American and PNC? Pac Bell is the exception, the most idiosyncratic of any of the new parks, and it's no surprise that it's succeeding where others have failed.

The other thing to consider--and maybe this is more obvious than I'm setting it up to be--is that human beings estimate value largely in relative terms. If it had opened 15 years ago, the Great American Ballpark would have been regarded as revolutionary, state-of-the-art. Nowadays, it's more or less average. Especially in cities like Baltimore and Cleveland, which--no offense to our readers there--don't normally have occasion to be ahead of the curve in much of anything, it's reasonable to think that a beautiful new park, one of the best in the country, could indeed have been a source of civic pride. Now that the Smiths and the Johnsons and the Takanashis have caught up with the Joneses, that advantage has evaporated.

The best examples of this phenomenon are in Chicago and Minneapolis. In its first several seasons, New Comiskey drew very well, the grand old ballpark across town be damned. It was only after newer, fancier facilities opened in Baltimore, Cleveland and Arlington that the park began to be seen as the runt of the bunch, and, with an assist to Jerry Reinsdorf's outspoken role in the 1994-95 labor crisis, attendance began to plummet.

In Minnesota, attendance remains soft in spite of an exciting, competitive team and cheap ticket prices. The unspeakable ugliness of the Metrodome is frequently cited as the culprit--never mind the fact that a team of similar quality, playing in the same ballpark, drew more than 3 million fans in 1988. Have the aesthetic sensibilities of Hennipen County residents evolved so considerably since then? I think the more likely explanation is that the Metrodome only seems worse in comparison with its peers.

Unfortunately, this particular quirk of economic behavior has profound implications for every stakeholder in the stadium construction process, each of whom have to think through their cost-benefit calculations more carefully:

• For the cities and taxpayers that are tabbed to finance the new construction, promises of an economic windfall resulting from a new park need to be taken with even greater skepticism. As Andrew Zimblast and others have documented, the proposition that a Retroplex brings income into a city was already a dubious one. Now that the bubble seems to have burst, the argument can be thrown out the window entirely. And the one group of fans who were likely to contribute to a city's bottom line by attending baseball games--visitors from out of town--can't be counted on to do so when they have new parks in their own cities to enjoy.

• The baseball teams who are busy campaigning for new facilities are going to continue to do so, and since $400 million gifts don't fall into one's lap every day, more power to them. But they need to quit using new park construction as a crutch. There are no longer any guarantees as regards revenue boost from a new park, even in the short term. The traditional ways to boost demand--building a good team and marketing it well--need to be attended to first. The approach that Cincinnati employed, deliberately avoiding increasing payroll in anticipation of a flood of ticket sales that might or might not have occurred, was a sensible one.

• The architects responsible for the new stadiums--and the city planners responsible for hiring them--need to think more creatively. Because the good people at HOK Sport are paid based on their ability to sell their ideas to ballclubs and municipalities, they have little incentive to push ideas other than those that have been proven to result in big contracts in the past. But this means safe, replicable, ballpark-by-committee designs that, while surely improvements over their predecessors, might not capture the imagination of fans down the line.

So then, smartypants--what would The New New Thing look like? Like George Constanza, I have my architectural pretensions...I tend to favor tranquil, minimal designs along the lines of Dodger Stadium. But, also like George Constanza, I'm not an architect, and I don't really know. Thinking outside of the box isn't one of those things you can fake, much as all the consultancy commercials you saw when watching the U.S. Open might try and convince you otherwise.

What I do know is that communities need to be more involved during the planning stages of the stadium development process. What the Port Authority had done in New York with respect to the construction of the new World Trade Center is a tremendous example of this. Architects from all over the world had an open invitation to submit their blueprints, including both those with lots of experience in skyscraper construction, and those who had demonstrated considerable creativity in other areas. The designs were put up for public comment, and, when the initial alternatives proved unsatisfactory, were discarded, a new round of architects were commissioned to submit their ideas.

Something similar can be done for ballparks. Make the proposal process open. Invite multiple bidders to compete with one another, and invite fans and community partisans to review their designs in terms of aesthetics, functionality, and cost. Not only is this the right way to handle something that is purported to be a public trust, and which will be financed, in all or in part, with public money. It also might help, in some small way, to ensure that fans continue to fill their new facility long after it is built.

Nate Silver is an author of Baseball Prospectus. 
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