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July 24, 2008

Lies, Damned Lies

Shrinking the Ballpark

by Nate Silver

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Trivia question: Yankee Stadium seats 57,545 fans, which is presently the largest capacity of any park in Major League Baseball. When it closes this year, and is replaced by a ballpark that seats roughly 6,000 fewer fans, which facility will take its place as the largest stadium in MLB?

The answer is Dodger Stadium in Los Angeles, which has a seating capacity of 56,000. To my mind, this is remarkable. Dodger Stadium is not some 1970s-era behemoth; all of those parks are closed now. Instead, it is a beautiful and well-designed baseball-only facility. Dodger Stadium doesn't just have 56,000 seats-it has 56,000 pretty darned good baseball seats.

The Dodgers have taken good advantage of the large capacity at Chavez Ravine, their ballpark having placed in the top three in the National League in attendance in 43 of the 47 years that it has been open. What's interesting, then, is that so many teams seem to be in a rush to decrease their seating capacities. Of the 14 parks that have opened since 2000 or are scheduled to open-I'll be especially generous and count the Marlins' proposed facility in this category-13 had reduced seating capacity from that of the team's old stadium, and the lone exception is Cisco Field, which qualifies only because the A's refuse to sell tickets in the upper deck at McAfee Coliseum. Collectively, these 14 stadiums will take about 10.8 million seats per season out of circulation.

Table 1. Seating Capacities of New Facilities


Open  New Park          Capacity    Old Park            Capacity
2000  Comerica Park      40,950     Tiger Stadium        52,146
2000  Minute Maid Park   40,950     Astrodome            54,816
2000  AT&T Park          40,930     Candlestick Park     58,000
2001  PNC Park           38,365     Three Rivers Stadium 47,971
2001  Miller Park        43,000     County Stadium       53,192
2003  Great American BP  42,059     Riverfront Stadium   52,952
2004  Citizens Bank Park 43,000     Veterans Stadium     62,382
2006  New Busch Stadium  46,861     Busch Stadium        49,676
2008  Nationals Park     41,888     RFK Stadium          43,739
2009  Citi Field         45,000     Shea Stadium         55,601
2009  New Yankee Stadium 51,800     Yankee Stadium       57,745
2010  New Twins Stadium  40,000     Metrodome            55,883
2011  New Marlins Park*  37,000     Dolphin Stadium      42,531
2012  Cisco Field        35,000     McAfee Coliseum      34,077
      Average            41,915     Average              51,479

This phenomenon is not anything especially new. The median capacity of a major league baseball stadium peaked in the 1980s at a little over 50,000, and has steadily declined since, as the once-fashionable multipurpose donuts are replaced with more intimate, HOK-designed facilities. The chart below documents the median, maximum, minimum, and inter-quartile range (25th and 75th percentiles) of seating capacities at major league parks, beginning with 1908 and proceeding at ten-year intervals. I also provide the projected figures for 2012, once five new facilities come on line and the Royals complete a redesign that will reduce their seating capacity.

MLB Ballpark Capacities

Are teams making a mistake by limiting their seating capacities in this fashion? In a global sense, they can't be, since as seating capacities have decreased, attendance has increased. In previous regression analyses that I have conducted, I have found no predictive relationship between seating capacity and per-game attendance, and there are some hints of an inverse relationship between capacity and ticket revenues.

Nevertheless, there are a few teams on that new stadiums list that look like they're leaving money on the table. The Mets are one of them, certainly: why limit seating to 45,000 at Citi Field when you're selling almost 50,000 seats per game at a dump like Shea Stadium? The Nationals and Phillies would also seem to play in large and prosperous enough markets that they could have fit in a few extra seats.

So let's reverse the question. What are the reasons a team might have for limiting seating capacity, even if it expects to have excess demand for its tickets?

  • Firstly, although the number of seats has few theoretical constraints-there are soccer stadiums in Latin America and college football stadiums in the United States whose capacities exceed 100,000-the number of desirable seats is limited. Baseball, more so than football or soccer, is a game that loses a lot when viewed at a significant distance, and particularly when the pitcher-batter confrontation cannot be watched adequately. Dodger Stadium is probably fairly close to the theoretical maximum of "good" baseball seats at 56,000, and more modern facilities will eat into that number by using space on luxury boxes and the like.
  • The availability of cheaply-priced seats might cannibalize one's market for premium seats, as fans may purchase the cheapest seats available and attempt to 'upgrade' them later. Although such strategies can be combated by hiring ushers or creating firewalls between different parts of the stadium, this may make the ballpark experience less pleasant for fans going to and from their legitimately-purchased seats.
  • Teams are increasingly able to reap the benefits of price discrimination by introducing tiered pricing schemes, and by participating in the resale market through partners like StubHub. Therefore, they can recoup some of the loss stemming from excess demand by charging higher effective ticket prices, without having to bear the negative public relations impact of higher face values.
  • There are some marginal costs associated with each additional fan that attends the game, such as security and janitorial services. The price of such services is trivial in comparison to premium seats that are booked at $50 or $100 each, but become more tangible as compared to the cheap seats.
  • In addition, higher seating capacities can create additional congestion both in and around the ballpark, making the experience less pleasurable for all those that attend. Indeed, some existing stadiums are not especially well equipped to handle a capacity crowd. Wrigley Field's bathrooms can require an inning-long trip once everyone has had their fill of Old Style, and it can take 15-20 minutes to exit the ballpark from the upper deck.
  • Larger seating capacities may require a larger ballpark footprint, and therefore higher rents or land-purchase prices.
  • The easiest place to add seats is usually in the outfield, but this may impair aesthetics by blocking views of city skylines or natural landmarks.
  • Stadiums with empty seats look less attractive on television-the importance of which should not be understated.
  • In addition, stadiums with empty seats may create a less intimate experience for people at the ballpark, thereby potentially reducing demand. Baseball tickets may be what is known as a "mob good", in which there are mutually-reinforcing, positive externalities conveyed by crowd behavior. To limit the number of seats is arguably to select out the most intense and passionate fans, who are (within certain boundaries) good fans to have sitting around you.
  • Limiting the supply of tickets may create a greater endowment effect (basically, a sense of ownership) for those fans who do hold seats, thereby increasing the amount of repeat business and encouraging fans to purchase season tickets.

After having articulated all of this, you might conclude that I think teams like the Mets are making the right economic decision by substantially reducing their seating capacities, but I do not. I think it may be the right near-term decision, but I do not know that it is the right long-run decision. By limiting their number of seats, a large fraction of which will be occupied by season ticket holders, corporate clients, or fans that are wealthy enough to pay above-face prices to scalpers and brokers, teams risk shutting out a large fraction of their fan bases from the ballpark experience.

When this subject came up at the Symposium on Statistics and Operations Research in Baseball that I attended last week, the counterargument put forward-most articulately by Alan Schwarz-was that the ballpark experience just isn't all that important anymore. The home viewing experience has been significantly improved by innovations ranging from HDTV to MLB.tv. If fans can watch multiple games at the same time on their flatscreens, and follow their fantasy teams in the process, this may actually be more desirable than attending a game at the ballpark, irrespective of the price of the seats. Speaking personally, I am nowhere near that way with baseball yet, but I remember having attended a block of NCAA (Basketball) Tournament games at the United Center while in college, and regretting that I couldn't catch up with the close finishes elsewhere around the country.

More broadly, there are many ways to follow baseball these days without actually watching it, such as being into fantasy, video games, or even sabermetrics. What might seem like anti-social behavior to a 50-year-old-sitting on one's computer, flipping back and forth between several games, obsessively checking one's fantasy statistics, and IM'ing or text-messaging friends-may seem like the most natural thing in the world to a 20-year-old.

Still, I'll bet you that most of those 20-year-olds were significantly influenced by having attended games as 12-year-olds, or by continuing to attend games occasionally as young adults. The experience of watching a game at the ballpark need not necessarily be a superior experience so much as it is a different experience that allows these younger fans to enjoy and embrace the game in different ways. Conversely, I tend to think that, if one's engagement with baseball becomes overly virtual, it is at more risk of being displaced by other virtual pursuits, such as playing Grand Theft Auto or renting something from Netflix.

For years now, baseball has sought-and has largely succeeded-to make the home experience more like the ballpark experience. It may now be time to make the ballpark experience more like the home experience. Specifically, teams could consider installing large, closed-circuit video monitors that have their backs facing home plate, enabling fans in further-away parts of the ballpark to follow the action on television simultaneously with that on the field. Ballparks can become more wireless- and fantasy- friendly, displaying real-time highlights from other games, allowing fans to share in the communal experience without having to sacrifice the luxuries they might get from watching the game at home.

In addition, with cheaply-priced tickets, as at the Rockpile in Denver, teams could adopt a razor-and-blades approach in which they make significant revenues off concessions while building fan loyalty. Ultimately this may be a moot point, as the era of stadium construction is drawing to a close. But while baseball has become smarter about drawing revenue out of its wealthiest and most passionate fans, it ought not forget about the guys in the cheap seats.

Nate Silver is an author of Baseball Prospectus. 
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