Wednesday, January 14, 2009

Yanks Hire Douglas Elliman To Sell Unsold Premuim Seats and Luxury Boxes

From Richard Sandomir:
The Yankees have hired a division of a prominent Manhattan residential real estate brokerage, Prudential Douglas Elliman, to help sell some of their prime real estate: unsold premium seats and luxury boxes at the new Yankee Stadium.

“They have some customers we may not be able to reach, and they can, so we entered into a nonexclusive agreement with them,” Randy Levine, the Yankees’ president, said Tuesday. “They have customers they have sold real estate to, or will in the future, and they can sell our seats in an innovative way.”

Levine said that hiring Prudential Douglas Elliman was not an indication of a slow sales pace on high-end seats at the $1.3 billion stadium. Seven luxury suites remained to be sold, out of 59, and about 1,000 of 4,000 premium seats were available.

Of course hiring them is an indication of slow sales. Why else would they being hiring them?

The Yankees hope Douglas Elliman will accelerate the sales of seats that range in cost from $350 to $2,500 a game.

“There’s been a lot of press about how expensive the premium seats are,” said Neil Sroka, president of Douglas Elliman Worldwide Consulting, which promotes and markets real estate projects for developers.

He said buyers can still get a 20-game package for $7,000 a seat.

“It’s obtainable,” he said. “In this economic time, people are still looking for things to take their children or grandchildren to.”

I can't say I feel bad for the Yankees. They're getting what they deserve. If they want to charge insane prices like this, they should have realized that maybe it would be a hard sell during these tough economic times.

In other news, Randy Levine has also been subpoenaed by a state assembly committee that is investigating the public funding used to build New Yankee Stadium. He is set to appear at a hearing on Wednesday.

8 Comments:

Anonymous said...

I think a factor here was that the hype around how expensive seats were scared off even those who can afford them. I think many people in the higher income brackets assumed that either the seats were going to be difficult to obtain or priced out of their rage. As word spreads that luxury seats and suites are available, some of which are in a reasonable price range for those with higher (but not unlimited) incomes they will eventually sell.

The Yankees have done the right thing by having so many expensive suites and luxury seats. It's taking advantage of the situation, and they probably overpriced them in the first place sort of like Boras overprices his clients.

In the end, these luxury accomodations help subsidise the $12 bleacher seats and things like that. Without so many suites, I doubt the Yankees would have been able to sign CC, AJ, and Teixeira.

Anonymous said...

Pinstripes,

I agree with everything you said. And, I put my money where my mouth is and bought two seats in section 22, 5th row as soon as they became available months ago. The bottom line is, the media is RIDICULOUS on this issue. They keep saying things like, "the seats cost up to $2,500." Those specific seats are front row only in the legends field section. There cannot be more than 40-50 total seats in that category, if that. The media spins stories exactly how they want them to be heard. If the economy was soaring, the headlines would have been "Yankees Have Almost Sold-Out All 59 Luxury Suites at $600,000 to $1 Million Each!...Only 7 Left!" Because the media is playing up the economic crisis, they run this headline instead: "Yankees Cannot Sell All Their Luxury Boxes." It's all how they spin it.

And as far as the Legends Seats themselves, they have sold 3,000 of the 4,000 seats. I am pretty certain that sections like the one I am in are long gone (check out section 22 on the new stadium map to see what I am talking about). Either way, the best point made here is that these seats enable to other seats in the stadium to remain priced reasonably for the everyday fan, and that is SO IMPORTANT. Rather than doing what the Jets and Giants did with their PSLs all over the Stadium, the Yankees limited that to 4,000 seats out of 54,000! That means, 50,000 seats will still be priced as they were last year (or close to it). I know there are people who have had 3rd row seats for 40 years who have to move back because their seats went from $250 per to $600-$850 per, BUT, those people are the minority. A good majority of them did what we did and took the more expensive seats. At the old Stadium, we were in Section 8, BX 24, in about the 8th row. We were able to improve our seats and I don't think there is anybody who didn't have the same opportunity...Also, keep in mind, that the configuration of the new stadium is such that EVERY seat is so much better and closer to the field. All of this will calm down come opening day when people see how AWESOME this place is and we focus on baseball...

Greg Cohen said...

I have nothing against the luxury boxes or the prices they're charging for them. But to charge $600 - $2500 dollar for tickets that a few years ago cost $250-$500 is insane and I don't care if nobody buys them.

Anonymous said...

Yeah, I understand your logic, Greg. My point is moreso that they had no choice. They can't underprice the seats. They have to plan it this way.

And truthfully, the product is better, so you expect to pay more. If you go to the crappy theater down the street, you're going to pay less than if you go see the same movie in the super megaplex. And you're going to pay more for concessions, etc as well. Same goes for restaurants, where part of the money you pay is for the setting, ambiance, and the service, you're not just paying for the food you eat.

At the new Stadium, the premium ticket offerings are not just to see the Yankees play. There are many more ameneties, the park is new, cleaner, more fan friendly. You're paying for that added convenience, and as a bonus, the NY Yankees have chosen to provide you with not just a better ballpark experience, but reinvestments into the product you see on the field.

Personally, I've felt that going to see a ballgame in person a luxury since the first time I went as a little kid. Watching on TV is what I consider to be the "freebie" part of being a sports fan, even though it's not truly free, it's as close as you're going to get. Going to the game in person has, and always probably will be, a luxury, unless I strike it rich.

The point being, they should do whatever they can to make as much money as they can, and they will. They'll do what the market will bear, and if the market doesn't bear it, so be it. I can't begrudget them that. Every single team in baseball - every single one - would do exactly what the Yankees are doing with ticket prices and premium seats if they had a choice.

Honestly, when I hear premium ticket holders complaining that their $300/game seats are now $500/game, it kinda bugs me. I'm lucky if I get to see one or two games a year in person. Cut back. That's what everyone else does when they can't afford a luxury any more, and I'm sorry to say, watching the Yankees in person, (especially as a season ticket holder) is a luxury that you are not "owed."

And I'm not saying you can't complain Greg, because you're not who I'm talking about. An occasional comment, like the one in this blog entry, for example, is fine. I'm talking about people who are furious and constantly moaning about it.

Again, I don't blame you for being upset that certain tickets have gone way up in recent years or whatever. However, it's supply and demand. It always has been, and it always should be. If people are willing to pay, they should charge what they can. I could complain that the HDTV I want costs $1500 to buy yet only costs them $200 to make, but it's a luxury, and therefore it's the way life works.

Sorry to go on a rant there. I guess my point is that when there are people who are struggling to afford a loaf of bread, the constant harping about how a couple thousand seats at the new stadium are unaffordable makes me just a bit unsympathetic. I'm sorry that some people will have to cut back from 80 games to 40, or you'll have to sit in the 2nd deck instead of being in the main seating. Either way, the Yankees are not the ones to blame, the system (and the fans willing to pay the exorbitant prices) are. Like I said - any team in the history of sports that was in the Yankees current situation would do the exact same thing, and I expect them to do no less.

The Yankees won't get any sympathy from me, don't get me wrong. I don't feel the least bit bad for them. But I see this as a "ho hum" issue. They should charge whatever they can and let the market bear out what the right price is, just like all of america does when it comes to luxury/recreation products.

Greg Cohen said...

I understand what you're saying, and for the most part I don't disagree. I just think when it came to upping their prices they overshot their mark.

The supply for these seats also doesn't seem to align with the demand. Which is why they're not selling as fast as the cheaper seats and boxed over at Citi Field. It is also why we're seeing this desperate attempt to use Douglas Elliman to sell what's left.

I know many people who have given up their season tickets because they were priced out. Yes, they could just buy cheaper seats and call it a day. But then isn't this just another case of the rich getting richer, while the average Joe gets pushed away? And you're right, that's not the Yankees fault, it's the system's fault.

Going to a game with your family wasn't always a luxury, like owning an HDTV. It was something almost anybody could do, and at the same time actually have good seats. And no, I'm not talking about back in the 40's and 50's. Fifteen-twenty years ago a family of four could go to Yankee Stadium and not have to spend a month's pay.

Anonymous said...

You're 100% right - it wasn't always this bad. As you said, they probably did overshoot the mark with the prices, but I still think they smartly did such as it lets the market price itself out. If it turns out that in the end they just charged too much, they'll simply have to forego raising prices for the next 5-10 years in order to maximize sales.

I still have the feeling they're going to sell out everything they have. Once the Stadium is closer to completion and more people get to see what it looks like, and once Spring Training gets going, people are going to start thinking about baseball again (more than they have) and the remaining seats will be sold.

It doesn't make it "right" so to speak; the system blows, and it most definitely screws the average baseball fan who can't afford to go to more than a few games.

There are still plenty of affordable seats, but as you say, it's nothing like it was in the 80s or even the early 90s, but then again, the team is a lot better now so it's a bit of a trade-off in that regard.

And while I do think the prices are out-of-range for a family to go often, going to one game isn't going to be much different than it's been for the past several years if you're going to sit in the cheap seats. $25-$30 per ticket for a family of four, bring your own sandwiches/subs/stuff to eat/drink in the car before or after the game, and you really don't have to spend more than $200-$250 to see a game. That includes tickets, parking, a couple souveniers, and some drinks or snacks at the game.

The Mets have a different situation, partly because they're not as in demand as the Yankees, hence the price differences. They also didn't choose to cater part of their luxury offerings to as high of a class crowd as the Yankees did - or at the very least don't have as many premium seats.

I'm pretty sure the Mets didn't price their offerings lower than they could have just because they wanted to be nice. I really don't see what other options the Yankees had. It's not like you should build an "average" stadium and keep it poorly maintained so that you can make sure the average Joe can afford to go to the game for $10 a pop.

Greg Cohen said...

I'm not saying there's an easy solution to this, especially with a new $1.3 billion stadium. Besides not building a new stadium, the only thing I think they could have done was not shoot so high. They didn't have to try to suck every penny out of us that they could. I know, that's how this country works, and like I said, it's the system's fault.

Unknown said...

I am a full season ticket holder and have my seats but there are some aspects of the premium seats that do take away from what a ball game should be. I have sat in the luxury suites at the old stadium great view but not one of my favorites. Nothing better then sitting in a crowd of true Yankee fans, I was more then happy with the old stadium have been going there for 40 years luxury and ballgame don't go together.