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Baseball Pricing Itself out of Ballpark?

Aired July 12, 2002 - 12:39   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Supplements yes, steroids no: That is what San Francisco slugger Barry Bonds admits to using. He acknowledged yesterday that he has taken both legal creatine supplements and protein pills to replenish his body. Supplements are popular with athletes seeking extra energy and bulk build-up. Bonds holds the single-season home run record.

He also played in Tuesday's All-Star Game, you know, the one that ended in a tie after 11 innings and a lot of angry fans. Now a radio talk show host in Detroit is suing. Dave Barber wants Major League Baseball to finish the game. He argues that calling the game created a loss of faith in the sport.

No doubt some fans think that happened long before the All-Star Game. Between players and owners wanting more, the fans are stuck paying more. Is baseball pricing itself out of the ballpark?

CNN financial news correspondent Ceci Rodgers joins us now from Chicago's Wrigley Field, where I am wondering if you are going to pay for one of the $10 hot dogs, Ceci.

CECI RODGERS, CNN CORRESPONDENT: Well, they are getting ready to play the Florida Marlins. But, in this case, buy me some peanuts and Cracker Jacks may put you in the poorhouse these days.

At Wrigley Field alone, this year concession prices are up almost 10 percent over last year alone. That means that you are paying five bucks for a cup of beer. And at the All-Star Game in Milwaukee earlier this week, we saw $6 glasses of beer. And we talked to some fans who were not too happy about that.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think that five bucks for a beer is too much money.

UNIDENTIFIED FEMALE: With tickets and souvenirs and food, probably $100 a person. That is outrageous. That really is outrageous.

UNIDENTIFIED MALE: There are times when I will say, let's either stop before the ball game and after the ball game, and maybe just -- because, the prices are so high, maybe have one beer at the ballpark. And it's just for that. You are paying 20 bucks for four small beers. (END VIDEO CLIP)

RODGERS: Why are concession prices rising so rapidly? Well, you can blame some of the new stadiums across the country. They have been sprouting up. It costs the owners more to cover those new stadium costs.

Also, you can blame those higher player salaries.

(BEGIN VIDEO CLIP)

DAN MIGALA, TEAM MARKETING RESEARCH: The team obviously wants to get as much money as they can for that to help pay for the players' salaries, which are increasing. And then the concessionaire is going to obviously have to recoup that investment. And how do they do that? By raising their prices and selling larger volume of product.

JEREMY JACOBS, SPORTSERVICE: We always get flak from fans about pricing. There is no avoiding that. The flak from the fans this year, we would gladly take the flak if there were just more of them. We saw a decline in attendance, as I think is well recorded by the media. And that in itself is hurting our margins and our business.

(END VIDEO CLIP)

RODGERS: A couple of interesting things on that note is that the players -- I should say the owners are well aware that fans are upset about the cost of concessions. And they are considering -- several of the ball teams are considering a free concession night, where, instead getting a free hat or something, you are going to get a free coupon for a hot dog for the first 100 or 1,000 people who get to the ballpark. That is one thing.

Another thing is that, you would think that the drop in attendance might cause the concessionaires to drop their prices. It's just the opposite. They are more likely to raise their prices on the popular items like hot dogs and beer. That's where they get most of their profits, in those very high-volume products. And that is why you are seeing those prices go up more.

For example, over the past five years, the cost of a hot dog on average across the league, up to $2.72; the cost of a beer, average cost across cross the league, up to $4.82. That is up almost a buck over 1998. And then that leaves the overall fan cost index also up sharply, much sharper than the rate of overall inflation, to $145.21 just to go to the ball game -- Kyra.

PHILLIPS: Ceci, I got sort of an overall hypothetical here for you. Let's say the prices keep going up and people just stop going to the baseball game. I know it's the all-American sport and people will still go. But let's just say it really, drastically goes down, attendance, etcetera. What kind of effect would we see on the economy? What type of areas would be the hardest-hit from that?

RODGERS: Obviously tourism and obviously the food service business. But, you know, I think the free market might take care of that. These concession prices are going up, but fans don't seem to be suffering enough sticker shock to do a whole lot about it.

The other thing that makes these prices stick is the fact that baseball -- and a lot of sports, you might have noticed -- have become more corporate. In other words, they have the fancy suites and they have the box seats, where you get special services, so that businesses are taking customers there. And their price points are a lot higher. They are expensing those purchases and they are willing to pay almost anything.

PHILLIPS: Yes, that's a good point, Ceci Rodgers from Wrigley Field -- thanks, Ceci.

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