Over the past few weeks, Baltimore has experienced rioting, police violence, protests, and shootings after the alleged murder of Freddie Gray while in police custody. These problems, of course, are symptomatic of a crumbling city and a nation whose incarceration rates are wildly out of proportion with our concept of criminality—an alarming state of affairs that has left America pondering a single, soul-searching question...
Just how much money did the Orioles lose, anyway?
Some websites, such as Mashable and Marketwatch, took it upon themselves to estimate how much money the Baltimore Orioles lost from four home games that couldn't be played in front of normal crowds due to the riots: one played in front of an empty stadium and three moved to Tampa Bay.
The manner in which these estimates were jiggered leaves much to be desired. Mashable decided to simply multiply the number of games by the average attendance at Camden Yards this season, plus some more sprinkled on top for food, parking, souvenirs, and so on. And thus Mashable arrived at $7.5 million in lost revenue.
Their first error was multiplying by the wrong number of games. Mashable made all their calculations based on six games of lost revenue, including the two postponed games which will be played as part of a doubleheader later in the season. Tickets to those games are still valid, just like any rained out game. Why that would be "lost revenue" is anyone's (wrong) guess.
But there's a far more fundamental issue than counting incorrectly. "The practice of multiplying ticket price by attendance is flawed," Southern Utah University professor David Berri and author of Wages of Wins told me via email. According to Berri, he was originally interviewed for the Mashable article as well and told them the same thing, but they decided not to listen to him.
It doesn't require an economics degree to understand why you can't just multiply tickets sold by price. The Orioles announced that fans who bought tickets to those four games can trade the tickets for a future game on a dollar-for-dollar basis. In order for that revenue to truly be lost, those fans would have to replace a person in the stands, not an empty seat. Unless every single Orioles game for the rest of the year is sold out—they are not—this policy won't lose the Orioles much money.
Professor J.C. Bradbury of Kennesaw State University has written several books on baseball finances and agrees with Berri. "The losses from [ticket] sales will be minimal," he told me via email. While some fans will redeem their tickets for a game they may have paid to attend otherwise, others may never redeem their tickets at all (they must claim new tickets by June 30). "This is like a rain check."
Reimbursing season ticket holders is a bit more complicated. How many season ticket holders are there and how will they be compensated? The Orioles haven't formally announced their policy here—nor have they replied to repeated requests for comment—so the best we can do is guess. Mashable's guess was that all the tickets sold to those games were season tickets. That is not a good guess.
They also assumed season tickets are $5 more expensive than the average ticket sold to Orioles games this year, which is some really funky logic. Ignore for a second how bulk pricing works and that season tickets cost less per ticket than single game tickets. If you're going to (falsely) assume every ticket sold was a season ticket, how in the hell can they cost more than the average ticket?
Anyways, a quick comparison shows season tickets are about 20 percent cheaper per game. The average ticket price in 2015 is $24.97, meaning season tickets were sold at an estimated average of $19.98. Even if we go with very high estimates of 50 percent of the estimated 33,000 tickets sold for those games belonging to season ticket holders, that would still only cost the Orioles $2.6 million, not the $6 million in ticket sales Mashable thought.
Mashable did mention that the Orioles would get most, if not all, of the gate proceeds to the three relocated games. Yet, they didn't include that revenue in their calculation. It just disappeared. The combined attendance for those three games came to 39,386. Tickets sold for $15-$18, but the Orioles distributed vouchers to Spring Training ticket holders, so let's call it about $500,000 in revenue gained.
Still, we don't know if or how the Orioles will actually reimburse their season ticket holders. They might offer them freebies in return—maybe a cap and food voucher—that will cost the organization significantly less money. Further, the Mashable article suggested the Orioles were in talks with the MLB league office regarding compensation, so the Orioles might not have out-of-pocket expenses at all.
Then, there's the issue of the stadium employees. This week, the Orioles announced they would pay hourly employees for the time they would normally have worked during those home games, but Deadspin's Dave McKenna reported that isn't quite the case:
"As it turns out, only stadium workers directly on the team's payroll will get make-up money. That group includes ushers, ticket sellers, and security screeners. Orioles spokesperson Kristen Hudak declined to provide any stats related to the number of employees that fall in this category, but it's a fraction of the labor force that was put out by the tumult that consumed Baltimore. All food, booze and merchandise vendors, for example, are technically employed by a contractor, Delaware North, and are therefore not eligible for the recompense offered by the O's for the disappeared games."
Because the Orioles declined to provide Deadspin or VICE Sports with numbers, it's impossible to say how much this will cost the Orioles, or whether that money will be part of any MLB compensation. Suffice it to say, the money lost by the hourly employees the Orioles won't compensate is far more important than the money the Orioles won't see.
Beyond that, asking "how much did the Orioles lose?" shifts the focus from a city—country?— in serious upheaval, and from the hourly employees losing important income, to the minimal costs incurred by a billion dollar business. And even after all that, the question posed was answered incorrectly. Luckily, at least this time, it was all about something stupid.