16 October 2011

Phoenix 'Small Market', Per Derrick Hall

Gem from Thursday's CEO Chat:

Derrick Hall: We are defined as a small market based on pricing and revenues. The larger markets have the greater revenues, and thus the larger payrolls. Despite our population, we are defined as a small market club.

A characteristically deft and misleading statement. Let's break it down:

We are defined as a small market based on pricing and revenues.
No. The Diamondbacks are more accurately defined as a small franchise, by way of discretionary spending and a thinly veiled corporate disregard for what customers actually want. Resulting gate revenue is a nexus of market and how artfully Hall's tiered prices enable and drive customer utility, which evidenced by a perennially half empty stadium, isnt too artful.

By contrast, the adjacent Suns levy some of the NBA's higher prices, and regularly realize above average attendance (and corresponding revenues). Only eight NFL teams charge less than the Cardinals' $87.58 average ticket, yet the Cards have sold out (99%+ capacity) five consecutive seasons (2006-10). Even our newly challenged "little" baseball franchise on Jefferson exceeded NL average attendance seven consecutive years - under previous ownership - but has mysteriously lagged league average draw for seven straight years under Mr Kendrick.

This isnt to suggest Phoenix is a notable hotbed of rabid fandom, but rather to expose Hall's contrary implication that daunting demographics or economics resign Phoenix sports franchises to an inevitable consequence of half empty stadiums and measly revenue.

Market size is best defined by market size. Refining it with per capita income to better approximate potential market demand, is appropriate. And assuming that the recession eats into ticket sales sounds reasonable. But to imply that some overarching theoretical market ceiling, looming over local sports demand, is inevitably or primarily responsible for the Dbacks' actual and specific "small market" revenues is a deductive fallacy that smacks of artifice.

For years, Hall has spread a narrative that his front office is "doing everything right" off the field, despite the club's poorest extended attendance record coinciding with his leadership. Blame for spotty attendance is lobbed anywhere but there. First he blamed baseball ops for not winning enough games. Then when Byrnes won the most games in baseball between 2007 and early 2008 and still didnt draw much, Hall implicated Jerry Colangelo for the franchise's "lack of identity and continuity". In March 2008, I sat in Hall's office where he posited that this "lack of identity" went back four or five years, which is amusing given five years prior to our meeting, Colangelo's Dbacks were coming off a 98 win playoff season witnessed by 3.2 million paying fans. Or just a tick under 40 thousand per game.

By 2009, excuses planted by Hall and his broadcasting minions about local fans not grasping the game's competitive vicissitudes, or appreciating his efforts to build a "championship style team" under AJ Hinch, were well established. When that narrative died on the vine, he started blaming "the economy". When the team "on the field" inexplicably won another title in 2011 and Hall still drew barely 2 million, now apparently we're a "small market" in "the economy". Who knew.

The unaccountable logic Hall is trying to pass off is the same code language he's crafted for years, and it's the same con game Bud Selig and his daughter tried to pass off in Milwaukee for two decades:

Fans arent coming to our games, but it's not our fault.

It's somebody else's fault.

Yeah, we own the business and set the prices and provide the entertainment, but it's basically the people's fault.

The fans. Customers. The market.

Believe me, we're doing everything humanly possible to attract fans to the ballpark. I dont honestly see how another owner could do more under these circumstances.

Until a Jerry Colangelo or Mark Attanasio or Mark Cuban comes along. Someone who delivers reliable value instead of insisting that a market respond to empty embellishments.

The larger markets have the greater revenues, and thus the larger payrolls. Despite our population, we are defined as a small market club.

For now, I wont quibble with the payroll chain of reasoning because there's something more subtle and interesting here.... and quintesentially Hall. Notice how more lucrative markets are described rather expansively - he doesnt say "large" markets, which tends to limit our focus to behemoths like New York, Chicago and Los Angeles. He says "larger" markets, with "greater" revenues. He's trying to evoke as many markets over Phoenix as possible. Which is fine, until....

...he abandons that rhetorical standard by repeatedly labeling Phoenix as a "small" market. Not "small-er". Not slightly below average. Not ahead of eleven (count em, eleven) franchises in 2010 revenue. And god forbid! Not "middle third". No, no, no. Dont you see? We're just "small". You know, like Pittsburgh and Florida and so on. Poor "small" us. There are, apparently, no "mid market" franchises in Derrick Hall's breezily manipulative lexicon. Only "larger" and....


One irony of this 'deft' salesmanship, of course, is that Mr Hall, Chief Information Operator, has now presided over five of the seven lowest attended campaigns in franchise history. So he's intimately familiar with the concept of small, even if he cheerfully refuses to own up to it.

A final irony, perhaps, is while Mr Hall toasts 2011 by deflecting responsibility for subpar attendance with "small market" fabrications, fifteen years ago his effective predecessor, Colangelo, began selling millions more tickets than Hall in a Valley comprised of one and a half million fewer residents than today. To put that population gap in perspective, one and a half million is the current population of the nation's fifth largest city - which happens to be Phoenix.  Or the population of Milwaukee's entire statistical metro.


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