New ballpark made cents - and dollars - for Phils

The fireworks and celebration after the Phillies' World Series victory were partly made possible by the move in 2004 to Citizens Bank Park. The stadium resulted in more revenue, which meant more money for player salaries.
The fireworks and celebration after the Phillies' World Series victory were partly made possible by the move in 2004 to Citizens Bank Park. The stadium resulted in more revenue, which meant more money for player salaries.
Posted: October 31, 2008

When people tick off names associated with Philadelphia's first World Series victory in 28 years, here's one not usually mentioned with Howard, Hamels and Utley: Citizens Bank Park.

The park was such a smash hit when it opened in 2004 that ticket sales have averaged three million annually during the last five years, about double the number sold at Veterans Stadium.

Those extra fans ate more cheesesteaks, allowed the Phillies to charge more for advertising, and boosted team revenue from $97 million in 2003 to almost $200 million in 2008, according to Forbes Magazine.

And that, among other things, prompted Phillies chairman Bill Giles to open his wallet for the talent that broke one of baseball's longest losing streaks.

"Once the ballpark opened and the revenue went up, so did the payroll," said John Lord, who teaches sports business at St. Joseph's University and has had Giles speak to his classes.

"The team, over time, can't spend more than it makes, and for years, in the Vet, the Phils were saddled with a bad venue and not-so-good splits on concessions and parking," Lord said.

Baseball is a business, and now the economic realities raise questions about whether the Phillies will be able to turn this victory into a streak.

Plenty of teams have built new stadiums and failed to take home World Series rings.

"I think it's been proven in baseball that it's not necessarily the more money you spend, the more wins you get," Phillies chief financial officer John Nickolas said. "Just because you've spent X million on players doesn't mean you've spent it wisely."

The new stadium helped, he said, but general manager Pat Gillick and his aides also spotted talent early, considered whether players would work well together and cultivated that talent.

The team's payroll did rise from $53 million in 2002 to $119 million this year, Forbes said. Eleven of the 30 major-league teams spent more.

Over the long run, team owners act like any other proprietor, said University of Michigan sports management professor Rodney Fort. Owners spend on talent based on how much they think fans will spend.

In the short run, poorer teams can win, but it's hard to sustain unless revenue improves enough to compete with other teams, he said.

"It's human nature to want to attribute it to the actions of people, and so everything has to happen because someone was brilliant or went wrong because they're an idiot," Fort said.

"Sometimes, for any team you might choose, they have a nice thing happen to them; they reach some kind of cohesion, but it's not the regular pattern in baseball," Fort said. "Even Kansas City made it to the World Series once."

Fort said the New York Yankees and Atlanta Braves have a big advantage for a variety of reasons, including wealth and population growth. Few teams can compete over the long run, he said.

"But this is the beauty of sports. This is why we play the games. Because sometimes what we saw [when the Phillies won] happens," he said. "And the rest of the time we bitch about the Yankees and the Braves."

The World Series win itself could reverse the Phillies' fortunes, Fort said. The team's players will demand higher salaries, and unless the Phillies pay them, they will lose the talent that brought cheers to Broad Street.

Jim Solano, a sports agent and tax professor at Philadelphia University, estimated that Ryan Howard, who got a $10 million contract through arbitration this year, could now command $13 million to $14 million.

The Phillies' Nickolas said management would pay for talent.

"Our strategy all along is to obtain and retain the best players, and we feel like we have a great nucleus of players here, and if they earn raises, then we're happy to pay them."

Some evidence also suggests that payroll is not the big bat it used to be.

"Although money does make the world go round, there is less of an emphasis now than there has been in the past," said Maury Brown, founder and president of www.bizofbaseball.com.

On that score, note the recent fortunes of the Yankees and the New York Mets.

"The fact that the Phillies have been to the postseason two years in a row," Brown said, "shows they've constructed a good, solid team."


Contact staff writer Miriam Hill at 215-854-5520 or hillmb@phillynews.com.

 

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