After buying Colorado Rockies season tickets every year since 1995, Jay Lutz threw in the towel last year.
“They weren’t entertaining, and they weren’t winning,” said Lutz, a retired Denver attorney. “It just got to be a drag.”
Lutz joins legions of once-ardent fans who have walked away from a losing team, leaving the Rockies with fewer than half the lucrative season-ticket owners they enjoyed in their heyday.
After losing millions last year and starting the 2005 season with a string of losses and some of the greenest players in the major leagues, principal owners Dick and Charlie Monfort are negotiating what could be the team’s toughest year.
Their strategy leans heavily on frugality and clever marketing to entice casual fans into the seats vacated by disgruntled season-ticket owners.
The Monforts hope it’s a strategy that will help them survive while they reposition the club’s finances and focus on growing a farm system. If that strategy fails, experts advise that their only option may be selling the team to people with pockets deep enough to rebuild it.
Dick Monfort acknowledges the team’s struggles but said the family doesn’t intend to sell it.
“We don’t plan on losing money anymore,” he said. “We’re going to have a down year this year again, but we had that planned. Charlie and I feel that with the organization we have, we can make a winner out of this club.”
A record-setting start
The Colorado Rockies had a strong start 12 years ago. Hungry for major-league baseball, fans snapped up tickets even before the team played a game.
The Colorado Rockies drew 80,227 fans to Mile High Stadium for their first home game in 1993, setting a major-league record. By the end of their first season, the team had drawn a record 4,448,350 fans.
Following their only trip to the playoffs in 1995, the team attracted 35,000 season-ticket holders and an average attendance of nearly 48,000 a game. In 1998, Forbes ranked the Rockies fifth among the league’s 30 teams and valued it at $302 million.The team’s value rose to a high of $347 million in 2002.
As the team’s on-field success began to fade, so did its fans’ love affair. By 2004, the Rockies had posted losing records in six of the previous seven seasons, and season-ticket sales had dropped to roughly 17,000.
While crowds thinned, the payroll grew, culminating in contracts with two free agents that totaled $175.3 million. Pitchers and Mike Hampton failed to deliver and were traded or released, but a portion of their large salaries lingers. Almost two-thirds of this season’s payroll is earmarked for five players – , Larry Walker, Neagle, and – three of whom are gone. Walker was traded to St. Louis. Johnson was released in spring training, and Neagle was released in the off-season after being arrested on a misdemeanor solicitation charge.
“We actually got ourselves into a position three or four years ago where we were predicting revenues were going to be much greater than they were, and we signed some people that we probably shouldn’t have,” Monfort admits.
“We’ve been on a regrouping schedule, trying to get through some of our contracts that were too high and get some more control on our expenses.”
The combination of a high payroll and falling attendance contributed in 2004 to what Forbes calculates was a $7.8 million team loss on revenues of $132 million. It also contributed to a fall in Forbes’ rankings. In 2005, the Rockies slid to 18th of the 30 teams, with a valuation of $290 million.
“They’ve really struggled over the last few years with declining attendance, losses on the field and a lot of capital calls,” Forbes associate editor Kurt Badenhausen said.
After four weeks as the last-place team in the National League West, the Rockies are losing fans as well as games. Season-ticket holders have declined to roughly 16,000, and although Forbes reports the Rockies’ game-day tickets as among the league’s cheapest – $15.01 compared with Boston’s $40.77 – only 18,234 tickets were sold for the April 19 game, the team’s lowest home attendance ever.
Ticket sales are the most important source of baseball revenue, said Aju Fenn, a sports-economics professor at Colorado College in Colorado Springs, but dissatisfied fans aren’t willing to buy those tickets indefinitely.
“There is a great deal of demand for baseball in (your) region, but you have to field a team that people believe has a chance,” said David Berri, who teaches sports economics at California State University-Bakersfield. “If you never field a winning team, you’re going to constantly be facing a shortfall of revenue.”
The solution, according to Berri, involves a bit of cyclical thinking: “First, field a winning team. Then you are able to raise ticket prices.”
The message isn’t lost on the Monforts. Across town, the Denver Nuggets have set a franchise attendance record for the season, with an average of 17,656 people per game. They’ve sold out the Pepsi Center eight times since George Karl took over as coach in late January, including an all-time Nuggets record of 19,866 tickets sold against the Los Angeles Lakers in March.
“Winning sure does make a difference,” said Brian Kitts, spokesman for Kroenke Sports Enterprises, owner of the Nuggets and Colorado Avalanche. “Denver loves winners.”
Now, young unknowns
With only an outside chance of a winning 2005 season, Dick and Charlie Monfort are taking a less popular approach to rebuilding their team. They’ve replaced multimillion-dollar players with young unknowns, and they’re pinning their hopes for the team’s future on maturing those fledging players into USDA prime beef – much the way their family grew its fortune in the feedlot business.
As president of Monfort of Colorado Inc., Dick Monfort helped increase the company’s value to more than $350 million before selling it to ConAgra in 1987. But as the brothers have learned, Major League Baseball is a whole different animal.
“It’s a different beast, but it’s still a business,” Monfort said. “It’s still about being in control of your destiny and being able to match your revenues with your expenses.”
While they pay for the last of the big contracts and grow new players, they are focused on attracting new fans more interested in sunshine and hot dogs than home runs and victories.
“We’re in the entertainment business,” Monfort said. “You try anything to get people to come out and watch a game.”
Along with its “Gen R” advertising campaign – which promotes the team’s rookie image – the Rockies have turned to an array of marketing promotions such as “Fridays on the Rocks,” Friday late-afternoon games designed to draw downtown workers, and “Paws in the Park,” which lets fans bring their dogs to the game July 25.
“We’re doing a number of things to try to hit the different demographics and different lifestyles out there,” said Greg Feasel, Rockies senior vice president.
Kent Davis of Highlands Ranch bought into the popular “Guys Night Out” package, paying $99 for two sets of tickets to 12 Rockies games.
“For the price per ticket, it’s a really good value,” he said. Then he admitted to being less than thrilled by the team’s on-field performance. “It’s going to be a long two years, but hopefully it’ll pay off in the long run.”
A good plan, in theory
Industry experts say the belt-tightening strategy is a good one – if it works.
“The Colorado Rockies owners are … in a sense, investing in the future,” said Rodney Fort, a sports economist at Washington State University. “It’s a completely viable business strategy.”
Badenhausen agrees: “At some point, you do have to blow up the ship and start over. The strategy of veterans clearly didn’t work for them. The best way you can build a winner is by putting the money into player development.”
The Monforts negotiated another critical contract in July when the team faced a $20 million capital call. Such calls aren’t unusual for teams that are struggling to cover their expenses, and involve asking team partners to provide more capital.
In this case, the Rockies signed a $200 million, 10-year broadcasting deal with Fox Sports Net Rocky Mountain. Fox got 14 percent of the team in exchange for providing the $20 million cash needed to cancel the Rockies’ capital call. The shares of all owners – including The Post’s operating company, the Denver Newspaper Agency – were diluted in the process.
Local broadcasting rights are among the most lucrative revenue streams, former baseball commissioner Fay Vincent told The Denver Post in 2003.
Ted Turner, owner of the Atlanta Braves, uses the team as “the centerpiece of sports programming for his (TBS) superstation,” Vincent said.
The New York Yankees have long owned their television sports network, and last year’s sale of the Boston Red Sox included not only the franchise and Fenway Park, but also the Red Sox’s regional TV sports network.
Without that combination, the Monforts wouldn’t have been able to turn the team’s finances around, experts say. But at least one said he thinks the brothers may already have cut the team too deeply to save it.
“Quite often, slashing payroll is a prelude to selling the team,” said Michael Leeds, a sports economist at Temple University. “One of the big reasons for owning a team, quite frankly, is to sell it and get the capital gains.”
But Dick Monfort insists his focus is on making the team profitable, not selling it.
“Bottom line is, we’ve just got to win,” he said. “And that’s what we plan on doing.”
Staff writer Julie Dunn can be reached at 303-820-1592 or jdunn@denverpost.com.
