Mets' Citi Field revenue still falling, records show
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Ballpark-related revenue for the New York Mets dropped $8.3 million to $118.6 million this past season -- the third straight year of declines since Citi Field opened, records show.
The revenue decline comes in a year highlighted by team owners Fred Wilpon and Saul Katz's settlement of a $303 million lawsuit by the trustee in the Bernard Madoff scandal. Last March, they agreed to pay back $162 million in fictitious profits, but don't have to pay anything for at least four years.
The financial challenges spurred by their Madoff losses and the specter of the trustee's lawsuit, which at one point sought $1 billion, led the Mets to raise $240 million last spring by selling 12 minority shares in the team. The Mets then paid off $65 million in emergency loans in an effort to give them some financial stability.
But the new data, obtained by Newsday through Freedom of Information requests, show that at the ballpark, the Mets are still trending downward. The records show that ballpark-related revenue such as premium ticket sales, concessions and parking has declined 43 percent since 2009, the stadium's opening year. This year's reported revenue of $118.6 million as of the end of September was down from $180.4 million in 2009 and $126.9 million in 2011.
Bond requires report
The numbers come from quarterly reports that highlight a designated portion of the team's ballpark finances. A Mets subsidiary must provide the information to New York City to show the team's ability to pay back its annual bond payments related to the building of Citi Field, but represents only a slice of the team's full financials.
Not included in the records are the revenue that comes from the Mets' television contract with SportsNet New York, or large expenses such as player payroll. Earlier this month, the Mets signed third baseman David Wright to an eight-year $138 million contract extension. Monday, the team traded National League Cy Young Award winner and fan favorite R.A. Dickey to the Toronto Blue Jays for a package of young prospects.
Dave Howard, the Mets' executive vice president for business operations, said he believes the team -- and its finances -- are on a positive trajectory, although he would not comment specifically on the latest financial records, citing team policy.
"We feel we are at a point where we are starting to move in a positive direction and we feel that our price to value is right where it should be," he said. "And we're confident that the team is going to continue to improve, and then everything will therefore improve."
Last month, Moody's Investor Services upgraded its outlook on Queens Ballpark Company, the subsidiary of Sterling Mets that is responsible for Citi Field operations, from negative to stable. Moody's described Queens Ballpark Company's financials as "adequate" and indicated its belief that the company will continue to make its annual city bond payment of about $43 million.
Obstacles to progress
The Mets have struggled on the field in recent years and must compete in the biggest U.S. sports market with the New York Yankees, a perennial postseason contender. The Mets' paid attendance for their 81 home games this year was 2,242,803, down from 2,352,596 the previous season. Revenue for Citi Field's 10,635 premium stadium seats, representing about 25 percent of the 42,000-seat stadium, was $44,111,395 this season, down from $50,515,652 in 2011 and well short of their budgeted projection of $56,506,733, the new records show.
Experts said the decline in premium seat revenue was likely due to the Mets having reduced ticket prices and the team's poor second half performance. The financial records show the premium ticket revenue was on nearly the same pace last season as it was in 2011 as of June 30, the end of the second quarter.
"These numbers now illustrate the connection between revenue and the play on the field," said sports economist Joel Maxcy, an associate professor at Temple University's School of Tourism and Hospitality Management. "Ultimately their performance on the field wasn't pretty good in the second half, which probably is a reason why they fell short of their projections."
The Mets did, however, see an 18 percent increase in concession revenue from a year ago, marking the first increase in that department since the stadium's opening. That, experts said, indicated the Mets must have gotten more fans inside the ballpark at discounted prices, and once there, they spent money.
"If you get more people in the ballpark, even at lower prices, you still can make up some part of it in terms of concessions," said Kenneth Shropshire, a sports business professor at the University of Pennsylvania's Wharton School.
Robert Leib, a financial consultant who works with professional sports teams, noted that the Mets had to find a "new normal" in terms of expected revenue after experiencing such a steep falloff from the revenue flow they enjoyed during Citi Field's first year.
The Mets have raised ticket prices for 2013 by an average of 2 percent, marking the first year-to-year ticket increase since Citi Field opened. Leib said that could be a positive sign because it shows the team believes it has found the right price point and can start increasing revenue again.
But it's still going to take a winning product on the field to raise revenue substantially.
"The Mets are probably a below-average baseball product, so the casual fan is not going to say 'I'm going to make the extra effort to go,' " said Wayne McDonnell, a sports business professor at New York University. "It's all about getting the casual fan to flesh out your numbers a little bit."
And to get that "casual fan" back to Citi Field, McDonnell said, the Mets' task is simple: "You win."
METS' FINANCES AT A GLANCE
A look at some of the New York Mets' finances, as outlined in reports to New York City obtained by Newsday:
Retained seats: $99,331,174*
Lux suite: $3,755,457
Revenue total: $180,396,221
Retained seats: $50,515,652*
Lux suite: $7,744,900
Revenue total: $126,915,408
REVENUE, 2012 (as of Sept. 30)
Retained seats: $44,111,395*
Lux suite: $8,583,116
Revenue total: $118,661,207
*Represents about 25 percent of all tickets sold; includes 10,635 premium seats
Source: New York City Industrial Development Agency