Stadium giveaways are a common means of increasing attendance at sporting events. In 2019, roughly every third Major League Baseball game featured a gameday promotion, more than two-thirds of which included a fan giveaway.
MLB’s 30 clubs took varying approaches to distribution. While some ensured every fan who walked through the door received a freebie, roughly two-thirds limited their availability. Neither approach is necessarily better; it really depends on the team’s goals. But a recent study published in the Journal of Sport Management suggests clubs prioritizing the fans’ lifetime value over short-term profits would be wise to invest in the high-availability approach. The study’s co-author Jeffrey Cisyk (associate principal, Charles River Associates) explained, “It has to do with the idea that [the team] is building a long-term relationship with its fans [by ensuring they go home happy].”
Our Take: MLB teams do stadium giveaways—and bobbleheads, in particular—because they drive ticket sales. Across the league, “we certainly see a large increase in attendance on those days,” Cisyk said. It’s worth noting the study did not find any cannibalization taking place in the days leading up to or following gameday promotions.
However, the study did find how teams approach giveaway distribution “has a lot of correlations or causations with other aspects of the [franchise]. Teams that gave away a lot of bobbleheads drew larger attendance figures overall,” Cisyk explained. “They are also the teams with above-average fan devotion.” The San Francisco Giants and St. Louis Cardinals are among those successfully using the high-availability approach.
It’s not apparent if high availability is the chicken or the egg. But “teams that give back to their fans have been rewarded,” Cisyk said. A more devoted fan is going to attend more games, spend more at the stadium and carry a greater lifetime value.
If that is the case, it’s logical to wonder why every team wouldn’t take the more-the-merrier approach. Cisyk suggested the reason has to do with profits and losses. Doing a giveaway for every fan “is a costly investment (think: $3 to $5 per bobblehead) and most teams are operating with a limited budget for promotion.” It should be noted that some promotions are sponsored (reducing the cost for the team) and in some cases, the clubs will increase the ticket price to offset the expense.
Taking a more targeted approach also enables clubs to boost revenue and ticket sales at a greater rate than those doing giveaways for everyone, and do so at a lower cost. “The high-availability teams actually elicit a much lower response when they have a bobblehead giveaway,” Cisyk said. “While they get about a 6% increase in attendance, low-availability teams see an 11% increase on those days. [And] high-availability teams need to give out 16 bobbleheads just to get one additional ticket sold. The low-availability teams only need to give out six.” Of course, the high-availability clubs with the most loyal fan bases likely have fewer tickets on the market. So naturally there isn’t going to be as large a spike.
That doesn’t mean clubs that sell out regularly aren’t generating a positive ROI from giveaways. The promotions get fans in the ballpark early, “and fans that show up early are going to spend more on concessions,” Cisyk said.
There’s an argument to be made that the high-availability approach can lead to fan indifference. “A member of the Red Sox front office told us that their team got to the point where they were giving away so many bobbleheads nobody cared anymore,” Cisyk said. As a result, the club reallocated the promotional budget to do more giveaway dates, with limited supply, as opposed to fewer giveaway dates with everybody receiving the item. Cisyk and co-author Pascal Courty identified Boston as the only franchise to pivot in its strategy over the last decade.
Other teams can learn from the Red Sox. “When we look at the whole season, we see that there is less of an impact every time [a bobblehead is given out],” Cisyk said.
For what it’s worth, the remainder of the 2021 sports calendar is expected to be full of fan giveaways. Organizations still need to unload last year’s inventory, and “teams may [choose to] focus on short-term [revenue] gains because they missed out on a whole year of in-person attendance,” Cisyk reasoned.
While all clubs need to be cognizant of how often they run giveaways, low-availability teams also need to ensure they’re awarding promotional items to the right number of ticket holders. Give away too few bobbleheads, and some fans go home disappointed. Give away too many, and “you kind of hit this saturation point where it’s no longer special,” Cisyk said, adding that “40%, maybe 45% [of ticketed fans] looks to be about the sweet spot.” High-availability teams don’t need to worry about pegging the percentage correctly, as they maintain a different relationship with fans.
It’s not clear how teams decide if giveaways will be part of a short-term strategy for maximizing attendance or a means of building fan devotion. But as team values continue to rise and wealthier owners (think: Steve Ballmer, Steve Cohen) increasingly permeate the sports ecosystem, it’s not hard to imagine more teams focusing on long-term gains.