Royals, Indians will join MLB clubs selling stored-value tickets

Sports Business Journal
By DON MURET
Staff writer

The Kansas City Royals and Cleveland Indians will introduce stored-value tickets at their ballparks this season, bringing to eight the number of clubs that will have the technology in place on Opening Day.

Loaded tickets are a ballpark admission with credit to buy food, drink and merchandise loaded into the bar code and folded into the price of a ticket.

The Royals are benching their all-you-can-eat program in favor of loaded tickets in several parts of renovated Kauffman Stadium, including 190 seats in the Diamond Club boxes behind home plate.

Those $70 seats, available only as full-season tickets, include a $20 concessions credit, and were 75 percent sold as of last week, said Mark Tilson, the Royals’ vice president of marketing and ticket sales.

The Indians will roll out their program at Progressive Field to a small number of season-ticket holders, said spokesman Curtis Danburg. The team will expand the program to include groups and single-game tickets later in the season.In addition, the New York Mets plan to offer a combination of stored-value tickets and loyalty cards later in the season after making sure all systems work smoothly at Citi Field, their new billion-dollar ballpark, said Dave Howard, executive vice president of business operations.

The St. Louis Cardinals hope to sell loaded tickets at Busch Stadium, but nothing was firm as of last week, said Joe Strohm, vice president of ticket sales. The Arizona Diamondbacks will make a decision in February whether to offer stored-value tickets in 2009, spokesman Shaun Rachau said.

IMS, the software vendor supplying equipment to six MLB teams, has data dating to 2004, when the Philadelphia Phillies opened Citizens Bank Park and became the first club to use the concept. The information shows that fans holding loaded tickets spend 40 percent to 60 percent more on concessions than those without stored-value tickets, said Jeff Harvey, IMS’ vice president of sales.

The firm’s data also show that “breakage,” the industry term used to describe unused value on loaded tickets, can generate significant returns, averaging 36 percent, Harvey said. The Phillies’ breakage numbers are much smaller, according to John Weber, the team’s vice president of sales and ticket operations. The Phillies sold 90,000 “Power Tickets” containing a $10 credit, and breakage averaged 10 percent to 15 percent, Weber said.

In that case, breakage produced $90,000 to $135,000 in revenue, not including the park’s 350 Diamond Club seats with $30 in value. Still, it’s an element that weighed heavily in the Royals’ decision to use loaded tickets.“It’s a compelling part of the technology,” Tilson said. “The fact that it could pay for itself and ultimately lead to a legitimate revenue stream helped us make the decision to invest in the technology.”

In this recession, some teams don’t have the six-figure sum to pay for installing the software and hardware and back-of-house support. That’s the case at Minute Maid Park in Houston, said Bill Goren, the Astros’ director of ticket sales. “We would have to spend a lot of money [and] it’s not in the budget for this year,” Goren said.

The Royals spent $150,000 for their IMS system. In conjunction with Aramark, their new concessionaire, officials thought it made perfect sense to start promoting loaded tickets now that Kauffman Stadium’s two-year, $250 million renovation nears completion and they can make a fresh start with a redesigned seating bowl.

Stored-value tickets are also available in Kansas City for group sales, family four-pack promotions on Fridays and Sundays and single-game sales, available in increments as low as $5. There is no set limit on the number of tickets that can have value added, Tilson said.

The Royals sold a little more than 17,000 all-you-can-eat tickets in 2008, generating $455,000 in gross revenue. The common complaint among fans buying those tickets was a limited menu; loaded tickets now provide the opportunity for them to buy whatever they want, Tilson said.

“We are waiting to see the reaction of not having all-you-can-seat seats,” he said.