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Joy and jitters

Red Sox Nation has been hit hard by the recession, and the team is feeling the pain as well

By Bob Hohler and Jenn Abelson
Globe Staff / April 5, 2009
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Much will seem right with the world again, and winter will officially end, when baseball returns to Boston tomorrow and the Opening Day crowd of corporate titans, glitterati, and everyday folks fills the little old ballpark that lives near the emotional center of a sports-mad region.

But something is different this year. Good times may never have seemed so good, or so the fans will sing, but hard times have seldom felt closer.

Retreating corporate sponsors, waning television ratings, fretful retailers, and lagging premium seat sales all confront the Red Sox this year, as the worst recession since the Citgo sign rose in Kenmore Square has dulled the passion of some fans and taken a toll on the team's bottom line.

Indeed, the Sox have rarely faced a stormier financial climate. Buffeted by the loss of some corporate sponsors, including major partners Nikon and PC Connection, the Sox also face slumping sales of premium hospitality suites, a sharp drop last year in television ratings, and a fading fever for baseball among some patrons.

"It's been a very challenging environment," said Sam Kennedy, the team's senior vice president of sales and marketing.

A team that counts on the legendary loyalty of its fans also now finds itself needing to win back customers like Jamie Andrews, a human services worker from Wey mouth and former Fenway diehard. When the Sox acquired Pedro Martinez in 1997 and Manny Ramírez in 2000, Andrews named his cats Pedro and Manny. And when his second child was born the night the Sox won the 2004 World Series, Andrews named the boy Damon after Sox center fielder Johnny Damon.

But Andrews has since lost his taste for the Sox, partly because of the financial pinch.

"I just don't have the money to take my family to Fenway Park anymore," Andrews said. "I have better things to do."

Sox management are proven masters at maximizing revenues from a comparatively small ballpark and at winning, with two World Series trophies in the last five years. But the team is not exempt from the larger economic trends.

"Part of me always thought the Red Sox were recession-resistant, that somehow some way, even in the worst conditions, they wouldn't be affected," said Pat Moscaritolo, president of the Greater Boston Convention and Visitors Bureau.

He knows better now. The Sox not only lost a seven-figure deal with Nikon and a six-figure pact with PC Connection, but they were unable to renew smaller sponsorship contracts with Filene's Basement and Cambridge Eye Center while DHL downsized its deal with the team. The Sox also have taken a hit from companies such as Bank of America Corp., which have scaled back spending on marketing through sports.

Team officials would not disclose sponsorship figures.

"Sponsorship revenue is paramount to our success on and off the field," Kennedy said. "And our ownership has invested these resources into the product on the field and the preservation of Fenway Park."

The Sox also rely on revenues from the New England Sports Network, which pays a fee to air the team's games. But NESN last year lost a significant share of viewers, as ratings for regular-season games tumbled 20 percent in 2008 from 2007 and the network's pregame show absorbed a 33 percent ratings decline over the same period, according to Nielsen Media Research.

The Sox own 80 percent of the network, which means the team's revenues are affected by changes in advertising rates based on viewership. NESN spokesman Gary Roy said network executives were not available to comment. (The New York Times Co., owner of the Globe, holds a 17 percent stake in the team - a stake Times management has been trying to sell, as part of a larger effort to raise cash.)

While the economy deteriorated over the winter, the Sox braced for the backlash by freezing ticket prices for the first time in 14 years. They also froze concession prices for the first time since 2002. Then they designated nine menu items for discounts up to 50 percent for the first hour after the gates open for games in April. Merchandise prices also will drop during "Fenway Family Hour."

Despite the price freeze, the team's ticket sales, while still robust, are down a bit for the first time in recent years. Seats remain available for most games in April and more than 30 games the rest of the season, suggesting that Fenway's major league record for consecutive sellouts (469) could be in jeopardy should the team experience a major slump and nasty weather. The streak dates to May 15, 2003.

"They have everything in the world going against them right now, from the economy to interest in the Celtics and Bruins," said Jim Holzman, president of Ace Ticket, which resells tickets.

Holzman said Sox ticket prices on the secondary market have dropped as much as 30 percent from last year, with seats for as many as 10 games selling at face value for the first time since 2004.

"At the end of the day, the market determines what the prices are," he said.

The downturn is particularly worrisome to businesses near the ballpark. At the Baseball Tavern on Boylston Street, manager Joe Donovan knocked on wood, hoping the private parties he plans to book will help ease the fiscal pain. "We're working on going out and finding business, where it used to just walk right in the door," Donovan said.

Across the street, the Howard Johnson Inn at Fenway Park, which typically sells out for the home opener, was only about 60 percent booked for tomorrow night. The pricier Hotel Commonwealth in Kenmore Square was faring better at about 90 percent occupancy for the opener.

At the Yawkey Way Store, the largest souvenir shop near the park, manager Tim Pettit said no one expects sales to be better this season than 2004, the most profitable year for many Sox-related businesses. He said 2009 is shaping up as an off year.

"We have noticed that customers, instead of buying two T-shirts, are buying one, and, instead of buying several hundred dollars worth of gifts, they are buying a hundred dollars worth," Pettit said.

The lack of "a clear-cut marketing star" on the roster has not helped, he said. No player has yet matched Damon's star power, and David Ortiz's popularity has faded since he set the team's season home run record (54) in 2006, according to Pettit. He said the Sox could have filled the void by acquiring a prized free agent over the winter.

"Mark Teixeira would have helped," Pettit said of the first basemen who spurned the Sox and signed with the Yankees for $180 million over eight years. "He single-handedly would have been enough."

The Sox are far from alone in their financial predicament, as teams across Major League Baseball struggle to close major promotional deals, according to Bob DuPuy, MLB's president and chief operating officer. So far, major league ticket sales are down about 6 percent from last year.

For the Sox, the sponsor shakeup has allowed a few other brands to score new, smaller deals, including Bermuda Tourism, Scotts (the team's official lawn care provider), and Cumberland Farms (the official convenience store).

The new deals are not expected to fully offset the loss of Nikon and PC Connection. But the Sox "are one of the best-managed teams in Major League Baseball," said Andrew Zimbalist, an economist at Smith College who has written extensively about the baseball business. "They will certainly weather the downturn better than most teams."

Meanwhile, hope springs eternal for many recession-weary businesses and fans. At Kenmore Collectibles on Commonwealth Avenue, proprietor Peter Leventhal said he hoped the new season would help boost his sluggish memorabilia sales. On the Brookline Avenue bridge over the Mass. Pike, Walter Green, a homeless panhandler wearing a Sox cap, said he eagerly anticipated the return of baseball crowds. And at The Best Sausage Co., on Yawkey Way, owner Bob Onessimo looked forward to cash-strapped fans lining up for his fare rather than dining in restaurants.

Like thousands of others, three boyhood friends from Western Massachusetts are unswayed by the staggering economy. They were sophomores at Northampton High School when they watched the Sox unfurl their 1967 American League pennant on Opening Day in '68. They have returned every year since, sitting for the last 35 years in Mike Noonan's box seats.

Noonan, 56, an associate court officer at Northampton District Court, said he may attend 25 games this year instead of 30, partly because of the recession. But he said it would take more than an economic crisis to keep him and his pals from joining the throng on Opening Day.

"Even if we didn't have jobs," Noonan said, "we would find a way to go."