Once the Rock Cats move their franchise from New Britain to Hartford, the team could instantly become one of the top 15 highest earning minor league ballclubs in the country, according to initial revenue projections by a Washington D.C. consultant.
A study commissioned by the city shows the Rock Cats are projected to generate about $8.1 million in revenue during their first year in Hartford in 2016. The money will come from ticket sales, sponsorships, stadium naming rights, various suites, concessions, catering, and merchandising, according to the report by consulting firm Brailsford & Dunlavey.
By comparison, Forbes Magazine’s 2013 most valuable minor league baseball franchise —the AAA Sacramento River Cats—had $14 million in annual revenue. Only 11 other franchises ranked by Forbes in 2013, which include AAA, AA, and A minor league teams, generated more than $8.1 million in revenue including the Round Rock Express in Texas ($12 million) and Albuquerque Isotopes in New Mexico ($9 million). The Rock Cats revenue projections would beat out what the AAA Pawtucket Red Sox made in Rhode Island last year, which was $6.2 million, according to Forbes.
The Rock Cats’ projections are based on variable revenues, which change from year-to-year depending on total annual attendance, and fixed revenues, which are long-term advertising and sponsorship contracts, said Jason Thompson, Brailsford & Dunlavey’s vice president.
Part of the value of the Rock Cats’ move from New Britain to Hartford will be a shift in the team’s business model from relying on a largely family fan base to counting much more on corporate sponsorships and downtown employees attending games after hours, according to a former Rock Cats executive.
Evan Levy, who served as the Rock Cats marketing vice president until the team was sold to the current ownership group in 2012, said in New Britain the team’s revenues have been split evenly among ticket sales, corporate sponsorships, and concessions/merchandising.
By moving from New Britain to a state-of-the-art, $60 million stadium in downtown Hartford, the amount of money flowing from corporations will likely increase significantly, Levy said. Brailsford & Dunlavey estimates revenue from corporate sponsorships, stadium naming rights, and luxury suites will be $1.8 million in 2016.
That revenue will be important as the team covers the higher costs of doing business in the Capital City, said Levy.
“It is driving to be more of a corporate-driven product than a family event,” Levy said, adding that he doesn’t “think the financial model is going to be a burden,” for the team.
Joshua Solomon, the Rock Cats lead owner, his partners, and Rock Cats General Manager Tim Restall did not respond to multiple requests for comment on this story.
More revenues, higher costs
In New Britain, corporate sponsorships came from local companies like tool maker Stanley Black & Decker and Guida’s Dairy, said Levy. Corporations closer to Hartford didn’t lend as much support because the team wasn’t in their backyard.
On the flip side, the Hartford Wolf Pack minor league hockey team, which plays home games at the XL Center, enjoys sponsorships from the likes of People’s United Bank and insurers Aetna and The Hartford Financial Services Group, all of which have a significant Hartford presence.
Increased revenues from corporate sponsorships will be important as the Rock Cats face higher expenses, including rental payments that will quadruple to $500,000 when the team comes to Hartford in 2016, experts say.
Depending on its contract with the city, the team might also have to deal with new expenses like maintenance, bathroom upkeep, winterization, painting, and general overhead that it didn’t have to pay in New Britain, Levy said. Hartford’s high expenses were a frequent complaint of Howard Baldwin, whose Whalers Sports and Entertainment company previously managed the day-to-day operations and marketing of the Wolf Pack.
“Howard Baldwin would say every day, ‘My expenses are too high,’” Levy said. “In New Britain, we didn’t have to worry about those expenses.”
Although the Hartford move gives the Rock Cats the opportunity to charge higher ticket prices to a higher-end fan base, the team’s ownership is still taking some chances relocating to the Capital City, including potentially upsetting a loyal fan base.
But the lure of playing in a new stadium and tapping into a larger corporate market with a myriad of Fortune 500 companies and blue chip legal, accounting, and other professional firms, not only brings the prospects of greater exposure, but also significantly higher revenues as well, Thompson said.
“Hartford is a no-brainer minor league baseball market, but if you have the wrong operator you can still mess it up,” Thompson said. “This is a good operator.”
A top minor league market
Brailsford & Dunlavey’s analysis ranks Hartford in the top 10 percent of AA minor league baseball cities in terms of market size, population, retail sales, household income, personal wealth, and number of business establishments and corporations in the area.
For example, the Hartford region’s 29,007 business establishments, including 83 companies with 500 or more employees, ranks No. 5 among minor league baseball cities, the study said.
Of course, promising demographic numbers won’t guarantee the move to Hartford will pay off. The team’s projected annual attendance in Hartford is 500,000, significantly higher than the 307,000 fans the team drew last year in New Britain.
Thompson said attendance projections factored in a honeymoon period early on. The allure of a new ballpark should bring in over 500,000 fans the first couple of years, drop off slightly in the third year, and then stabilize to 475,000 to 480,000.
Thompson said his projections have the Rock Cats performing significantly better in Hartford compared to New Britain. Greater attendance will contribute to higher revenues and the new ballpark itself will allow ownership to set varying ticket prices.
In the past, Thompson said, minor league teams focused on filling seats through cheap tickets so fans would pack the ballpark and spend money on concessions and merchandise. Now, the focus is on developing stadium “neighborhoods,” where teams offer various seating configurations at different price points.
Early plans, which could change, call for Rock Cats’ Hartford stadium to include about 300 club/loge seats, 6,600 fixed seats, 24 suites, four party suites, and a picnic and grass berm area, Thompson said. Ticket prices could range from $5 to sit on the outfield grass to about $73 for a loge seat.
One estimate by Brailsford & Dunlavey shows the team raking in $3.67 million in general admission ticket sales in 2016, based on an average $9 ticket price and 407,232 paid attendees. Other 2016 revenue estimates include $1.4 million from concessions and $255,323 from merchandise.
“With such a variety of price points you are expanding the market,” Thompson said. “You can tap into the corporate market with luxury seats and also have people who will sit in the berm.”
A new stadium will improve advertising inventory significantly. Naming rights for the ballpark could generate several million dollars over the life of a multi-year deal, while new LED signage boards will allow for more dynamic advertising opportunities, Thompson said.
Electronic scoreboards can change ads between innings, increasing inventory space. The main scoreboard will likely operate as large television as well, creating opportunities for video ads.
Brailsford & Dunlavey’s analysis shows the team earning an estimated $956,682 in ads and sponsorships in 2016, plus $340,000 for stadium naming rights.
Heightened sponsorship competition
The Rock Cats downtown arrival will heighten competition for sponsorship dollars among other entertainment venues.
Chris Lawrence, general manager for the XL Center and the Wolf Pack, however, said he doesn’t view the Rock Cats as a competitor, nor does the XL Center with its summer events. In fact, the Wolf Pack shares best practices in Connecticut sports management with the minor league baseball team.
“We have some incredible corporate sponsors, who have been very supportive of the Wolf Pack,” Lawrence said. “Whether or not there is a baseball team here, we are not going to change our focus.”
Michael Van Parys, president of the Connecticut Sports & Convention Bureau, said the Rock Cats move will offer a consistent summertime event in Hartford.
Right now, the Wolf Pack and UConn men’s and women’s basketball games offer winter and spring entertainment, and UConn football has its autumn home games in East Hartford. Although Hartford puts on a variety of one-time special events like concerts and sports tournaments during the summer, having a 72-game baseball season will be a whole new addition, Van Parys said.
Corporations will respond to the Rock Cats, Van Parys said, not only in corporate sponsorships but also purchasing tickets for employees and clients.
MetroHartford Alliance CEO Oz Griebel said it will be important for Rock Cats ownership to reach out to the business community soon to get them on board with the team’s move.
Because the deal was negotiated in secret with the city, downtown business and property owners have many unanswered questions, Griebel said, including how a new city-owned stadium will help grow the grand list and how ownership intends to market the club so fans follow the team to Hartford.
“It’s important the business community understand the specific ask from the owners and the financial underpinnings of the deal,” Griebel said. “If you want private sector support, you need to share that information so we are all more informed.”
