LDN - Business

As the boys of summer return, U.S. economy holds its breath

[March 31, 2021] By Howard Schneider and Chris Canipe

WASHINGTON (Reuters) - The Texas Rangers plan to welcome a capacity crowd of about 40,000 for their Major League Baseball home opener on April 5. In the nation's capital, meanwhile, attendance at the Washington Nationals' first game of the season will be capped at 5,000, roughly 12% of capacity.

In the country's fitful battle for economic recovery from the coronavirus pandemic, a lot may ride on whether, come September, attendance for America's pastime looks more like the Rangers than the Nats.

With nearly a third of U.S. adults having received at least one dose of a COVID-19 vaccine and more states and cities relaxing restrictions that have become a staple of life over the last year, progress toward a full reengagement in public life remains a haphazard affair.

How the MLB regular season unfolds as 30 mostly U.S.-based teams play 2,430 games in stadiums beginning on Thursday, and what that reveals about the public's willingness to gather with cheering, shouting strangers, will serve as one proxy for whether America races or crawls back towards normal life.

Reuters will be tracking attendance at all MLB games this season and will periodically revisit the issue over the next six months to report on what progress has been made and what it reveals about the economy's recovery.

Each team is coordinating with local authorities to set attendance rules, with ticket sales typically limited to 30% or less of stadium capacity at the start of the season and seating confined to socially-distanced pods. Spectators will be required to wear masks, and touchless entry and concessions will be in use extensively.

Under those constraints, Opening Day looks to be a sellout, said Noah Garden, MLB's chief revenue officer.

"There are tickets here and there. There are not many left. The demand as you can imagine is very high," with people itching for in-person experiences again, Garden said.

But compared with a typical Opening Day, Thursday will see at most around 146,000 fans in the 15 stadiums hosting games, less than a quarter of the 635,000-seat combined capacity of those venues. In 2019, about 604,000 people attended the first games of the regular season.

MEET ME IN ST. LOUIS?

The real test is what happens next, with implications for the U.S. job market, the broader economy, and perhaps even the future prospects of American downtowns.

While COVID-19 cases are rising again, the country is on pace for roughly two-thirds of U.S. adults to be at least partially inoculated by June 1, giving some hope that, over time, people will be able to safely move around again in close proximity.

The economy depends on it. Of all the fallout from the pandemic, the blow to the leisure and hospitality industry was the most damaging, and its recovery is critical to regaining the roughly 9 million jobs still lost due to the health crisis. If baseball, theme parks, concerts and theaters can stage a successful reopening - and if the coronavirus is controlled - it will translate quickly into jobs.

[to top of second column]

Sep 24, 2020; Arlington, Texas, USA; A view of the stands and the open roof during the game between the Texas Rangers and the Houston Astros at Globe Life Field. Jerome Miron-USA TODAY Sports

MLB's teams collectively lost about $4 billion in annual revenue in the pandemic-shortened 2020 season, according to MLB officials, though some other estimates peg the overall loss at $6 billion.

Stadium closures also eviscerated seasonal work, with summertime positions at sports venues last year about 50,000 below the number in 2019, according to U.S. Bureau of Labor Statistics data.

The secondary losses to restaurants, bars and hotels was also massive. Many were closed anyway due to social distancing restrictions, but proving the world can get back to normal will be especially important for cities, particularly ones like St. Louis where live sports have an outsized influence.

The hometown Cardinals, for example, are among baseball's attendance leaders, but perhaps a third of the crowd each night comes from outside the Missouri-Illinois region, said Patrick Rishe, director of the sports business program at Washington University in St. Louis' Olin Business School.

After a drive from Tennessee or Kentucky, fans "are spending one or two nights at a hotel, eating at restaurants," Rishe said. "None of that happened last year."

A STEADY CLIMB BACK?

MLB is hoping the success of the COVID-19 vaccination program and broader progress against the pandemic will allow a stepwise climb back to full stadium capacity later in the season - boosting businesses around the cities as well as in the baseball parks themselves.

But the U.S. experience of and response to the pandemic has been patchwork, with some states imposing stricter rules than others. How consumers react in different cities as stadium restrictions are eased may offer an important signal about whether the economic growth expected in the United States this year will be uniformly felt across the country.

The average game attendance in 2019 was 28,660, about 68% of capacity at the typical MLB stadium.

It won't just be fans needing to get comfortable with the idea of mass-attendance events again. Staff have to be protected as crowd density increases, and venues retooled for cashless, touchless operations, a trend in motion before the pandemic.

Yet come the fall, when the baseball season goes into fever pitch, there's hope it will have all eased back into place.

"We think that as it gets closer to summer, and summer progresses, we will welcome more and more back," MLB's Garden said.

(GRAPHIC: Baseball is back! (Sort of...) - https://graphics.reuters.com/USA-ECONOMY/BASEBALL/
qzjpqlzykvx/index.html)

(Reporting by Howard Schneider; Editing by Dan Burns and Paul Simao)

Back to top