Nearly two years before the first pitch is thrown at the new Twins ballpark, club owner Carl Pohlad already has hit a financial grand slam with the publicly financed downtown stadium.
Already one of the 400 richest people in the world, Pohlad has seen the value of his team rise 33 percent in a year to $288 million, thanks to the $522 million stadium going up in Minneapolis
, according to Forbes magazine.
Also, 47 of the 55 suites at the ballpark are leased — including the 14 most expensive ones — and the team expects them all to be snapped up by 2010. They will bring about $8 million a year, or a potential $240 million during the team’s 30-year stadium lease.
Finally, Pohlad controls the naming rights to the ballpark, and a deal expected this year could yield $8 million to $15 million a year, according to one sports marketing expert.
As a result, Pohlad and the Twins expect to pull in $1.2 billion to $1.5 billion from new revenue streams during their lease when they add in receipts from new club seats, restaurants, concessions, concerts and stadium advertising.
“That’s all new money,” said Twins President Dave St. Peter, who notes that the ballpark will generate $40 million to $50 million a year in new revenues.
That’s because the Twins will get virtually all of the revenues at the 40,000-seat ballpark — unlike their lease at the Metrodome, where they control little of the revenue from suites, advertising, concessions and nonbaseball events.
St. Peter points out that the team’s costs also will increase — from about $4 million at the Metrodome to about $16 million a year at the new stadium. Over 30 years, the extra expenses will add up to $480 million.
Also, the team is paying about a third of the stadium cost — roughly $167 million — while the public pays the rest.
“They got a good deal,” said Bob Leffler, one of the top sports marketers in the country and head of the Leffler Agency in Baltimore.
Team officials are well aware of it, too. “This is the antithesis of the Metrodome,” St. Peter said. “We are going from the worst lease situation in Major League Baseball to one of the best.”
The Yankees’ new stadium will have a martini bar. San Francisco’s stadium has a free bike valet. Cleveland’s has a shop just for women.
All are part of a growing trend in Major League Baseball as teams diversify beyond the diamond in pursuit of new revenues while bringing back fans and customers.
“We tried to reflect a five-star hotel and put a ballfield in the middle,” Lonn Trost, chief operating officer of the Yankees, said of the team’s $1.3 billion stadium, which will open next year.
For the Twins, the five-star experience means creating 3,000 premium Legends Club seats and 400 exclusive Champions Club seats, which go for between $175 and $275 per game and are all-inclusive — they come with parking, dinner, beverages and snacks brought by waiters.
Kevin Smith, executive director of public affairs for the Twins, said there also will be tickets for as low as $12, and the average ticket price might be around $17 — the same as at the Dome, but for much better seats.
St. Peter said he is painfully aware that no matter how wonderful the stadium is, the team must perform well on the field.
For a reminder, the Twins need look no further than Washington: The Nationals won their sold-out opener at their new ballpark March 29 but quickly saw attendance plummet when they lost 16 of their first 22 games and posted the worst record in the National League.
“There might be lessons to be learned from what’s happening in Washington,” St. Peter said, noting that the Nationals were mired in a nine-game losing streak when the worst of their attendance problems hit.
Payroll expected to jump
Remaining competitive is one reason the Twins will continue to target 50 to 52 percent of their revenue toward player salaries, St. Peter said.
That could eventually push the Twins’ payroll to between $90 million and $100 million a year, well above last year’s $71 million.
Although the Twins will have the hottest ticket in town when the ballpark opens in 2010, they also are aware that they need to keep marketing the team, the stadium and its amenities if they want to keep a steady flow of local entertainment dollars.
They are competing with three other major-league sports teams for suite sales, corporate sponsors, advertisers and fans. Among the biggest competitors is the Minnesota Wild, whose home arena in St. Paul is considered one of the best sports venues in the country.
That’s why the Twins went all-out in creating their new suites, which feel like lofts, with 14-foot ceilings, kitchens, multiple high-definition TVs and enough seating for 12 people. “We even toyed with the idea of calling them lofts instead of suites,” St. Peter said.
Along with the suites, the biggest moneymaker for the Twins will be the naming rights to the stadium, which Leffler estimates could sell for $8 million to $10 million per year.
But he added that they could go for as much as $15 million a year, given the recent deal in New York, where the Mets got $400 million over 20 years for naming their ballpark Citi Field.
Leffler said it appears the Twins are doing all the right things. Still, he would advise them to double their marketing budget.
“You’ve got a window, an opportunity,” he said. “You never save money on the way in. Once the newness wears off, you’re right back with everybody else.”
Herón Márquez Estrada • 612-673-4280