Springfield nor'Easters

Case Study: Springfield Nor’easters

Executive Summary

Problem/Issue Statement

The Nor’easters are a new Class A minor league baseball team located in Springfield, Massachusetts and currently planning their inaugural season for June 2009. How can the team optimize its ticket pricing plan in order to cover all operating expenses for the season while maximizing attendance and profitability?

SWOT Analysis – Springfield Nor’easters

Strengths | Weaknesses |

* Subsidies from MLB, municipal government, colleges, and corporate sponsorship * Steady increase of investment in the area by small businesses * Tourist attraction (Basketball HOF) * Affordable tickets and exciting product | * Low proportion of high wage residents * Lack of experience in sports marketing * Lack of interest in baseball |

Opportunities | Threats |

* Nor’easters are likely to be the only professional sports league in Springfield * Large proportion of residents (25%) under 18 * College student community is an untapped market | * Other forms of entertainment - College sports teams, movies, etc. * Professional sports teams in the greater Boston Area |

Table 1

Strengths

The Nor’easter team can depend on $909,500 in funding from its Major League Baseball affiliate in order to subsidize the costs of player personnel and ball and bats. Sponsorships and subsidies from local government, colleges, and local businesses add another $46,000 in total. The combined subsidies lower the breakeven point to $1,005,879. These subsidies, combined with Springfield College’s agreement to provide its stadium at no charge, reduce the pressure on team management to produce profits.

Also, Springfield is a tourist attraction, since it is home to the Basketball Hall of Fame. Thus the team can count on a steady flow of tourists to visit, increasing the market for its product beyond merely Springfield residents. Further, Springfield has a growing local business economy, which can...