Thursday, April 8, 2021

Business/Marketing 101 for Rockies Ownership

The people of Colorado are no doubt thrilled to be hosting the All Star Game this year, but that's about all there is to celebrate in regards to the home team. It's tough to be a Rockies fan these days, especially after the loss of franchise player Nolan Arenado to the St. Louis Cardinals. The hardest part is knowing that inept ownership and central management is the problem. Here's my column in The Villager with advice to the Monfort brothers about how to run a mid-market team:

Business/Marketing 101 for Rockies Ownership

Sometimes the free market doesn’t seem to operate as it should. Anyone who’s taken a basic econ or business class knows the market and consumers should decide winners and losers. A well-run company putting out a quality product should profit while a poorly-run business with a consistently substandard and disappointing product should struggle and ultimately fail if it doesn’t change its course or leadership. If that were true, however, then both Dick Monfort and Jeff Bridich of the Colorado Rockies would be out of jobs.

In last week’s Denver Post, two panels of baseball experts examined the problems and challenges of major league baseball and the struggling Rockies. The commentary on the Rockies organization and its ability to make money with a crappy team and poor management was a fascinating lesson in the inadequacies of the market system in professional sports ownership. The publicly-financed stadium which hosts the Rockies only makes the story harder to swallow for Colorado baseball fans.

In explaining why the Rockies cannot compete for the best talent, the team’s tightwad owner and CEO Dick Monfort said the organization cannot go out and sign top-line free agents because they are a mid-market team and can’t afford to take that risk. Yet, the metro population of Denver is actually slightly larger than the metro area of mid-market St. Louis, whose Cardinals took Nolan Arenado and got money-bumbling Monfort to pay them $50 million to do it.

The Milwaukee Brewers are consistently competitive even though the area has half the population of Denver. The Kansas City Royals won the World Series in 2015 in a market half Denver’s size. And the San Diego Padres just signed Fernando Tatis, Jr., one of baseball’s most dynamic players, to the largest contract in MLB history, and they did so in a market only slightly larger than Denver, and one that recently lost its football franchise. Clearly, market size and money aren’t the problem, and Dick Monfort can certainly afford marquee players.

In basic economic terms, Denver is a larger and richer market than St. Louis, and it's a truly sports crazy town. Additionally, it faces almost no regional competition like St. Louis, which has two other MLB teams within fours of it. How can that small town midwest team succeed? Well, it’s arguably one of the best run organizations in all of pro sports. Over the past decade, the city of St. Louis has sent several urban planners to Denver to learn the magic of revitalizing LoDo. Perhaps they could return the favor by inviting the Monforts for a tutorial on running a baseball team.

Clearly, ticket sales are not a problem for Denver, but there is more money to be made in marketing and media. The Monforts have thousands of square miles to develop, yet have failed to capitalize by growing the fan base, instead content to build party decks and sell a few more Coors Lights. That’s not how brands or franchises are built, and it shows surprisingly small-minded business vision. Rockies ownership seems far more interested in developing real estate across the street from Coors Field than it does in developing real estate between the baselines. Rather than thinking of new ways to sell products on the concourse, they should be thinking of ways to sell Rockies baseball from Salt Lake City to Lincoln, Nebraska.

In the 1980s Ted Turner created a huge generation of Braves fans outside of Atlanta by using his cable station WTBS to broadcast the Braves nationwide to communities with no specific team to support. The Cubs have had similar success, with WGN featuring games across dozens of states. The Cardinal Nation fan base is so vast because for decades KMOX was the country’s most powerful radio signal, and with nothing else to watch or listen to, legions of fans from north Texas to South Dakota rooted for the Cardinals. Currently, there is no pro baseball in Wyoming, Montana, Nebraska, Utah, Idaho, Iowa, or the Dakotas, yet the Monfort boys have no idea how to court new fans.

Denver is a sports town with a huge market for baseball, and if the Rockies were run by people who actually had to work hard to achieve their financial success, the team would be much more successful. But that’s the untold lesson of econ 101: sometimes the market doesn’t work as it should. Sometimes the privileged and comfortable can continue to fail with impunity.

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