Wednesday, January 25, 2012

A's in Tokyo, Rams in London

This season, the A's will open their regular season at the Tokyo Dome in Japan. The two dates the teams will play will come off the A's home schedule leaving the team with 79 home games. The A's attendance of late, while up year-over-year, has been one of the laggards in all of baseball. Part of the rationale behind the team opening in Japan might be that fewer games increases fans-per-game at the Coliseum. The A's will also make more money on these dates than they likely would have made in Oakland as the games should sell out.

This trend of "home" games being played away from home has been spreading with NBA Raptors games in London and NFL Bills games in Toronto. And now, the St. Louis Rams are set to play three "home" games in London over the next three seasons.

A few common threads run throughout these moves: small market teams and potential global expansion. Remember, the A's are playing for the second time in less than 10 years in Japan -- despite having no significant Japanese talent in either 2008 or now (barring Hideki Matsui resigning).For the Rams, the Raptors and the A's these foreign home dates mean guaranteed profits and, in the case of the Rams, possible leverage in their own sticky stadium situation.

What's 4,000 Miles for True Fans?

The Rams recently announced that they will be playing a home game for each of the next three years at Wembley Stadium in London -- which just so happens to be owned by their owners. Conspiracy theories have blossomed. Rams fans have been wrestling with uncertainty over a new stadium in St. Louis as the team's ownership wants one and their lease with the city contains a provision that if Edward Jones Dome is not a "top-tier" facility (one that is superior to 3/4 of the stadium's in the league) that they can opt out and leave town. The St. Louis Post-Disptach has a good piece on the issue here. Interestingly, the piece notes:

The lease calls for the Rams to stay in town through 2025, but only if St. Louis keeps its end of the bargain. That means the Dome is to be judged at two points: in the 10th year of the lease, in 2005, and again in its 20th year, 2015.

The first time around, St. Louis got a pass. The Rams granted a delay in 2005 and, two years later, agreed to waive the "top-tier" certification in exchange for $30 million in improvements.

The public relations argument/spin for Rams games in London, and A's games in Tokyo for that matter, is that in each instance the team's global brand is burnished. Here is the Rams executive vice president of football operations Kevin Demoff in last Saturday's Post-Dispatch:

"This isn't designed to move the team to Europe, or move the team anywhere else," Demoff said. "It's designed to improve our standing in the NFL and grow our brand. And the stronger our brand is, the stronger our franchise is, the better that is for St. Louis."


So, is the thinking that Londoners will become big Rams fans and maybe even travel to St. Louis for games? Will they buy Rams merchandise? This is surely some of the rationale, but the more likely reasoning is: a) these games pressure St. Louis to move on improving the stadium (with the underlying threat being maybe the team will move to London permanently; and b) the team gets guaranteed higher gates from these home games. Per the article linked to above:

With the Rams struggling to fill the dome during an unprecedented stretch of losing, the Rams will make more money playing "home" games in London. Exactly how much is uncertain, but NFL teams playing in London are guaranteed ticket revenue equivalent to a sellout, plus expenses.

Money and leverage are the key elements in the Rams playing in London. Not only do the Rams owners get a nearly guaranteed sellout, they also likely get a bigger cut of the beer, food and merchandise sales. (The Edward James Dome is owned by the city of St. Louis and so one can assume they take a healthy cut of the revenue there unlike in Oakland where the city basically gives the A's everything.)

Why are the A's Really Playing in Japan?

Money and the lack of robust home attendance figures are they key factors for the A's playing in Tokyo. Without Hideki Matsui, who is currently unsigned, the A's have no real Japanese calling card. This situation is not unlike 2008, when the A's were in the same boat. Then, Boston had natives Daisuke Matsuzaka and Hideki Okajima. Today the Mariners have Japanese superstar Ichiro Suzuki.

Reasons for the Mariners also make sense when you consider that according to Mariners president Chuck Armstrong more M's games have been broadcast in Japan over the past 10 years than any other team -- thanks to Ichiro's presence no doubt.

The A's are going to Japan partially because of a robust Japanese-American presence in the Bay Area, but mainly because, as in 2008, they won't be missing all that much revenue from home gates for these games. Two trips in less than 10 years, which has not happened with any other team, indicates that MLB is treating them as if they are expendable. "Big Market" teams would surely balk if put in the A's position.

But won't the "Opening Series" also build the A's global brand? Of course, but remember merchandise sales on and subscriptions produce revenue that is shared by all clubs equally. The A's make more money on shirts and suds sold in the Coliseum than anywhere else.

MLB make a good amount of money, not building their own fan base. Here is a Financial Times piece breaking down the 2008 series' benefit to MLB:

The move to ship teams to Tokyo is part of MLB’s strategy to expand its international market, particularly in Asia. The two-game opening series, mainly paid for by Yomiuri, Japan’s largest-circulation newspaper and owner of its baseball team the Yomiuri Giants, is expected to generate millions of dollars in revenue for MLB from marketing, television and sponsorship rights. “This is about as big as it gets,” said Jim Small, managing director of MLB Japan.

The "What If" Game

Rams fans worry that their team might bolt for L.A. and now possibly London (the NFL has expressed interest in having a franchise there). Buffalo Bills fans fear their team moving to Toronto based on their recent regular season games at the SkyDome. The Toronto Raptors struggle in terms of attendance, and have seen the league's only other Canadian entree bolt for south of the border in the Grizzlies. Should A's fans worry they might, given the intractable stadium situation, bolt to Japan? Seems unlikely right now, but with more (although still few) Japanese players entering MLB, maybe in commissioner Selig's wildest dreams there would be a team in Japan. Great media market, passionate baseball fans and a currency close to par with the dollar. Again, an excerpt from the 2008 Financial Times piece referenced above:

Through sponsorship, television rights and licensing, MLB’s Japan business has tripled in the past five years to more than $70m a year and now accounts for 60 to 70 per cent of the league’s international revenue.

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