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MLB makes big ticketing shift with new refund policy

An empty Oriole Park at Camden Yards in Baltimore, Maryland (Getty Images)

  • League makes historic shift to allow refunds on games lost to Covid-19
  • New ticket policy seeks to have common benchmarks while still allowing team flexibility
  • Bonus credits for rolling over ticket money toward future games ranges from 0 to 30 per cent depending on the team

Major League Baseball this week rolled out a new ticket refund policy for games lost to Covid-19 pandemic that represents the first large-scale, coordinated effort among any US sports property to return to fans’ money spent on tickets for events that haven’t been played.

But the league and the 30 individual teams ideally would really prefer fans not take advantage of the historic change in policy. 

Baseball’s new ticket program relies principally on the league shifting the classification of the games that have been lost to public health crisis. Prior to this week, the unplayed MLB games were considered postponed, and not canceled, similar to how rainouts are handled each season. That classification has now changed given the strong unlikelihood of MLB being able to stage a normal 162-game regular season in 2020.

Even with that alteration, many individual MLB teams have set up their specific ticket policies to strongly incentivize fans to roll over their previously paid money to future games, either in 2020 or 2021. The refunds remain available, but many teams are also offering ticket account bonus credits of as much as 30 per cent of the prior spending total if fans apply the funds to attending future games.

And the message with those bonus offers is unmistakeable: Teams first and foremost want fans to pick the rollover options.

Dave St. Peter, president and chief executive of the Minnesota Twins (Jerry Holt/Star Tribune via Getty Images)

“Look, none of us are eager to be refunding ticket money. I’ll just say it,” says Dave St. Peter, president and chief executive of the Minnesota Twins. “But it’s incumbent upon teams to, over time, build relationships rooted in trust. And I think a lot of our fans will take a longer-term view [and opt for the rollover], as difficult as that is in the middle of a pandemic, and that’s what we’re banking on.”

The MLB ticket policy is being closely watched around the industry for numerous reasons. First, the volume of tickets involved is unlike anything else given MLB typically attracts nearly 70 million people each year to its ballparks, far more than any other pro sports league. Again, level of operational coordination in this area among the teams has not been replicated in other sports. 

And several other ticket companies across sports and entertainment, including MLB’s own official resale partner, StubHub, have based their own ticket refund practices during the pandemic on store credits without the possibility of refunds, except in certain states where required by law, something that has sparked frustration, and even lawsuits, among many fans. StubHub’s policy is applying even for events that have already been formally canceled. 

MLB’s policy as a result relies on both emotion and science. The emotion portion rests on giving fans a clear and openly stated option of getting their money back, particularly as the US economy continues to decline during the pandemic, many households are increasingly struggling with basic expenses, and that it remains entirely unclear when, how, or even if the league will be able to play its 2020 season.

“As we continue to evaluate possibilities for the 2020 season, it’s important that we provide options to our ticket buyers for games scheduled in April and May,” said Sam Kennedy, Boston Red Sox president and chief executive. “We appreciate how patient our fans have been as we worked through the implications of the pandemic on our schedule.”

Sam Kennedy, president and chief executive of the Boston Red Sox (Billie Weiss/Boston Red Sox/Getty Images)

The refund process, however, is not entirely quick and seamless, as some MLB clubs are requiring fans to make a phone call to a team sales representative and take the time to make that request orally. Some ticket purchases initially made with cash in certain markets also require refunds to be done by mail.

“I’ve been a little surprised by the diversity of offerings across the teams. I expected a more uniform response,” says Patrick Ryan, co-founder of Texas-based ticket distribution company Eventellect. 

The science, conversely, comes through the heavy involvement of business intelligence staffers and data analysts now employed by most MLB teams. The development of the ticket offers typically involved rigorous modeling to project how many fans might accept the rollover offer versus seeking a refund, and what that meant from a cash-flow perspective for the team. 

And the financial stakes are significant, as MLB clubs on average are estimated to generate more than $1m (€910,000) in gate receipts for each home game.

“It was definitely a multi-faceted, multi-department effort across the organization to develop the plan, with a lot of moving parts,” says Tim Salcer, Cleveland Indians’ vice-president of sales and service. The Indians are offering a 10-per-cent ticket account credit for fans keep their ticket funds with the club.

“We’re going to offer the refund option to all fans, but we wanted to show them value beyond just taking the refund, and encourage them to come back to Progressive Field in both 2020 and 2021,” Salcer says.

The bonus credits to encourage the rollover activity, of course, do ultimately lead toward potential future revenue loss for clubs when those free credits are exercised at the expense of paid activity. But St. Peter called the move a “wise investment” in order to both retain dollars now and help build fan relationships for the long haul.

“We’re going to learn a lot through this whole process,” he says. “We’re still in uncharted waters here.”

Local variances, coordinated timing

The MLB ticket plan also involved a delicate balance both politically and operationally. Even as the league has long had robust national-level sponsorship and media, like any other major property, it has also long operated on a principle of each team knowing their local market best. And there is no part of team operations more locally rooted than ticket sales. 

So after weeks of regular dialogue between MLB headquarters and individual clubs, in both large and small working groups, the sport looked to develop a coordinated response that at once had some core, shared elements, such as the reclassification to allow the refunds, but retained flexibility for individual clubs.

The clubs then used that flexibility to customize their offers, and in turn, created lots of variance from market to market, with local consumer laws also influencing how various plans ultimately developed.

The rollover credits, for example, range between 0 and 30 per cent depending on the individual team. Teams also have numerous differences on the number of games they are making refundable thus far, how long the refund offers are available, and how season-ticket holders are handled versus single-game ticket buyers. Some clubs are even allowing the rollover credits to be used for concessions, merchandise, and unique ballpark experiences.

“Every market is different. Everybody’s ticket philosophies are a little bit different. I give the commissioner [Rob Manfred] credit for recognizing that a one-size-fits-all model wasn’t going to be workable for 30 clubs,” St. Peter says. “But this wasn’t the Wild West. This was a collaborative process.”

The biggest point of coordination was perhaps regard to time. MLB specifically was looking to avoid a situation where some clubs announced ticket refund and rollover plans, and others stayed silent for days or weeks. Instead, the league planned a much more synchronized rollout of public announcements that began April 29.

“Working on the same time cycle I think really helped everyone,” Salcer says. “Going out at the same time creates a consistency for fans that I think makes them feel equally valued.”

The MLB ticket policy for 2020 has also created an unexpected development for 2021: an earlier-than-ever start to the 2021 sales cycle. Season ticket renewal efforts in baseball typically begin in the summer in many markets, with teams using the robust crowds of midseason to get a leg up on sales for the following year.

But with sport still shrouded in uncertainty for playing this year, 2021 was fundamentally folded into the folded into the rollover options for many teams. It’s still far too soon to know, though, how effective that effort will be or whether MLB will eventually shed its multiyear attendance decline.

“It’s hard to say how this impacts a team business for 2021, but just like the game of baseball itself, there will be winners and there will be losers,” Ryan says.

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