Got 'Cheap' Beer? Cleveland Indians Strategy to Attract Fans
Peanuts, beer and baseball.
That pretty much sums up America's pastime. Oh, except for one thing.
Peanuts, beer, high prices and baseball. The theme is well known. It costs a lot of money to drink and eat at a Major League game.
One team has decided to do something different: cut prices.
The Cleveland Indians are making the cost of a 12-ounce domestic brew $4 at every home game.
For perspective, according to fancostexperience.com, the average price of a beer in Major League Baseball last season was $6.10 with the highest price at $8.00 for a beer to watch the Miami Marlins (lose).
There are several reasons for doing this.
For one, the Cleveland Indians really like their team and want as many people to see them play — and hopefully, get hooked.
But according to the team, they surveyed fans, and it's also about sending a message: We do listen.
"Through the course of those surveys, we understand that concessions was a barrier to the enjoyment part of attending a baseball game in Cleveland," said Kurt Schloss, the team's Vice President of Concessions. "Based on that feedback, it turned into how do we change the perception of attending a game and turn it into a positive."
Cleveland did not stop at beer. Hot dogs go from $4.50 to $3.00, charging only $1.00 at 15 specific games. Most other food items will see a 25 percent price cut.
It is a franchise-wide re-set on value, and not some short-term PR pop. Most older fans remember what that has meant in Cleveland. Back in 1974, for a game against Texas, the team discounted beer from .65 cents to a dime (limit six per person). Needless to say, there was a drunken riot in the ninth inning, and the Indians had to forfeit the game.
"We want this to be meaningful value for these fans no matter where they are in the ballpark where they can enjoy the savings of a good hot dog, beer or Pepsi," Schloss said.
That is a reference to a place like Houston. Last year, beer at Astros games went to $5.00 — but only in certain parts of the ballpark. This season, the franchise is at $5.00 all across the stadium.
Although rare, this is not without precedent. When Arte Moreno took over the Los Angeles Angels a decade ago, one of the first things he did was reduce beer prices. At $4.50, their prices remain well below the league average.
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"I can't speak to other franchises, but I know when you look at where these prices are, compared to the MLB average, the price of beer here is 34 percent below the average," Schloss said. "I would assume other teams would follow suit, but I can't speak to that."
In the end, it's a classic cost-benefit analysis. If discounted beer and food attracts more people to the ballpark, they still pay for the ticket, pay for parking and may even buy more food since it's perceived as cheaper. Ultimately, it could mean more revenue rather than less.
"Will they come to a game more often? That's our goal," admitted Schloss. "I hate to say we make it up in volume but that's what we're looking for."
There is about $24 million more invested on the field this season with the additions of Nick Swisher, Mark Reynolds and Michael Bourn. The front office expects to win, and the concession and ticket offices want as many people there to see them win.
"It's all based on the same message," Schloss concluded. "Let's get a good team on the field, and let's have a value offering when they get there."
—By CNBC's Brian Shactman; Follow him on Twitter: @bshactman