Blue Jackets’ big year also will pay off financially in year to come
The Blue Jackets had the best year in their history this season with the most points (108) and victories (50).
But on the financial side, the real payoff could be in the years ahead, especially if the club can consistently make the playoffs.
Already, the team is seeing some financial benefit of this year’s success.
Ticket sales were up 8 percent from the 2015-16 season with a corresponding increase in concessions and merchandise sales, team officials said. And TV ratings on Fox Sports Ohio set a record.
“All those numbers are up. The activity we have here is at a high level. We’re bullish on that next year and in the years beyond,” said Cameron Scholvin, the team’s senior vice-president and chief revenue officer.
Season-ticket renewals for next season already have hit the 90 percent mark, a key target for professional teams, and 12 percent of those with season-ticket packages are upgrading their plans. The team is expecting season-ticket sales of 10,000 to 11,000 per game next season, compared with 9,000 this past season.
Group sales, which jumped 35 percent this season and set a franchise record, are increasing as are corporate sponsorships and other partnerships,
which can take a long time to develop, he said.
Scholvin won’t say whether the team will be profitable this year, but said the team’s success, coupled with making the playoffs, is helping.
“The financial model is a challenging one, particularly for a small market,” he said. “That doesn’t change for us.”
Even if the Jackets lose their first-round playoff series against Pittsburgh — Columbus has never won a playoff series — the success of this year’s team figures to spill over into coming seasons, said David Carter, principal of the Sports Business Group and executive director of the Marshall Sports Business Institute at the University of Southern California.
“If fans believe this success is sustainable over the near term, even if they do not advance far into the playoffs this season, they will continue to embrace the team,” he said.
“As they do this by purchasing advanced tickets, renew premium seating and buy merchandise ahead of next season, advertisers, sponsors, media partners and all those doing business with the team have meaningful upside. This will help the team both over the next season or two and can help it build a longerterm financial base.”
A good example
The Cleveland Indians might provide the best clue of what is in store for the Jackets.
Even though the Indians came up one game short of winning the World Series last year, the team’s big year was not reflected in the stands, with Cleveland ranking 28th in attendance at less than 20,000 fans per game.
Crowds are certain to be bigger this year, however, because of what happened in 2016. The Indians already have sold 1.3 million tickets for this season, a mark the team didn’t hit last year until late July, and the team is in a position to possibly draw 2 million fans for the first time since 2008.
Season-ticket accounts have jumped 130 percent, driven by 20-game packages. Group-ticket suite rentals are up 40 percent, corporate sponsorships are up and television ratings for last Tuesday’s home opener against the White Sox on SportsTime Ohio set a record.
“To meet what ownership envisions, we have to keep the momentum going,” said Curtis Danburg, a team spokesman.
Danburg wouldn’t say whether the team was profitable, only that the Dolan family remains committed to taking extra revenue and reinvesting in the team, whether it is signing free agents, making stadium improvements or investing in player development.
The signing of Edwin Encarnacion to a three-year, $60 million contract was made possible, in part, because of the team’s run through the playoffs last year, he said.
“It took a leap of faith that fans would respond in a positive manner and so far they have,” he said.
The organization also has been making improvements at Progressive Field.
“Winning can’t be everything,” he said. “You still have to provide a great fan experience and a great product.”
Just getting going
Most teams in the National Hockey base a budget on a 41-game regular home season, so having extra home playoff games means millions of additional dollars, said Ian Thomas, who writes about the business of hockey for the Sports Business Journal.
“These are things you certainly don’t plan for, but certainly hope for,” he said.
The extra revenue from the playoff games, season-ticket renewals and more sponsorship deals can be put to work on things like youthdevelopment programs and marketing, he said.
“Hopefully, the perception of the fans is that (the Jackets) are going to be challenging for a couple of years, that this is not just a one-off,” Thomas said.
The 16-game Blue Jackets winning steak during the season was something that captivated fans throughout the league, he said, providing the kind of success that makes the team more popular and brings in more deals for sponsors and other partners, bolstering the team’s bottom line. Consistently making the playoffs is an important element of financial health, he said.
“The playoffs are a big barometer on the long-term health and long-term success of the franchise,” Thomas said.
Scholvin of the Blue Jackets said the club talks about raising the bar when it comes to attendance, corporate sponsors and other activity that could boost the club’s finances.
“This market hasn’t seen what it can do yet,” he said.
If the Blue Jackets manage to beat Pittsburgh in the first round of the playoffs and advance to the next round, look out, Scholvin said. That kind of victory would just intensify the feelings that fans have.
“When you get to the next level, this market will go crazy.”