The Cleveland Indians’ controversial mascot is hurting their bottom line

April 15, 2014
April 15, 2014

Recently, a set of pictures snapped by onlookers at the home opener of the Cleveland Indians (the major baseball team of Cleveland, Ohio) went viral. The images captured an uncomfortable face-to-face encounter between headdress-wearing, garishly face-painted Indians’ fan Pedro Rodriguez and Robert Roche, a Chiricahua Apache who was leading the annual Opening Day protest against the team’s mascot, “Chief Wahoo,” a scarlet-faced, beak-nosed, grinning caricature who’s been emblazoned on the Indians’ gear and branding since 1947.

Wahoo’s profile has been somewhat reduced in recent years, but his crimson visage and toothy grin can still be seen on Indians caps and uniform shoulders and on much of the team’s promotional materials. In response to questions about whether the mascot was being phased out, Indians SVP of public affairs Bob DiBiasio reiterated that the logo is “perhaps the most identifiable piece the organization has,” and is not going anywhere. “There’s no change in philosophy,” he said.

But—should there be? Given that sports teams are motivated first and foremost by the bottom line, what does the real-world economic case look like for retiring Chief Wahoo—or, for that matter, for keeping him?

That’s what Emory University’s Dr. Manish Tripathi and Michael Lewis, professors of marketing at the school’s Goizueta School of Business, sought to find out last December, turning the tools of applied economics on the question of how much mascots are really worth to their teams—and whether teams with controversial mascots like Chief Wahoo aren’t better off without them.

Both Tripathi and Lews have a personal stake in the question. “Mike went to University of Illinois, which for years had as its mascot ‘Chief Illiniwek,’” Tripathi told Quartz. “I graduated from Stanford. Up through the ’60s their teams used to be called the ‘Stanford Indians,’ until they switched the name to the Cardinals in 1972.”

And Tripathi, who’s Indian American (“the other kind of Indian!”), grew up in Silver Spring, Maryland as a die-hard Redskins (NFL) fan. “So this is an issue I’ve been curious about for a long time,” he says. “Although I admit that growing up, I was much more focused on whether the team was winning than what they were named.”

Tripathi and Lewis began their project by exploring the direct financial impact on teams that break with tradition by changing a mascot, starting with an analysis of college athletics, for which they had a much larger sample pool.

“In college basketball, you have quite a few teams that originally had a Native American mascot, but at some point decided to abandon it,” says Tripathi—including Illinois and Stanford, but also many others, like Syracuse, whose mascot from 1931 to 1978 was an “Indian Chief” called the “Saltine Warrior”; St. John’s, who were nicknamed the Redmen from the 1920s until 1994, and who had a Native American mascot through the ’60s and ’70s; Marquette University, which retired its mascot “Willie Wampum” in 1971, and renamed their team from the Warriors to the Golden Eagles in 1994; and Miami University of Ohio, which in 1997 went from the Redskins to the RedHawks.

“Given that we were doing a statistical model, it made sense to start with colleges, because we had tons of schools to work with,” says Tripathi. “And we also had great data: In the NCAA, because of Title IX, teams have to put all of their revenue data out there in public.”

What Tripathi and Lewis found was that, after accounting for factors like a team’s past performance, market size, and median income of the schools’ fanbases, in the short term, teams that eliminated a Native American mascot experienced a small, measurable revenue hit—but over the long term, the decision ended up boosting a school’s revenue. They surmised that this was due to a number of factors, including the elimination of negative publicity, expansion of the potential fan base, and subsequent implementation of new mascots with greater merchandising power.

“Fundamentally, while having a mascot is a valuable thing with a long-term positive effect on financial performance, when you look specifically at Native American mascots, over time there’s been a turn toward negative value,” he says. This led the researchers to wonder whether having a Native American mascot is now an economical liability, especially for professional sports teams, where such mascots might conceivably have a drag effect on team revenue and brand equity.

Examining the financial performance over the past dozen years for four teams—the Kansas City Chiefs and the Washington Redskins in the NFL, and the Atlanta Braves and Cleveland Indians in Major League Baseball—revealed the eye-opening result that having a Native American mascot appears to cost professional sports teams millions of dollars in annual revenue—at least $1.6 million per year in the NFL, and $2.6 million per year for MLB’s Braves and Indians.

Even more disturbingly, over the past five years, Native mascots seem to have produced a dramatic decline in their teams’ brand equity—with the Chiefs and Redskins having two of the NFL’s sharpest brand falloffs over the last half-decade, despite successful seasons in 2010 and 2013 for Kansas City and in 2012 for Washington.

As for the Cleveland Indians, Forbes magazine’s yearly ranking of the most valuable sports brands shows that since Larry Dolan purchased the Indians in 2000 for $323 million, the team’s annualized value growth has been tied with the miserable Houston Astros as the worst in the Majors—indeed, at 4%, it has increased by a rate not much faster than inflation. This despite the Indians’ reasonably successful franchise record over that period, which includes winning the AL Central division in 2001 and 2007, and coming in 2nd last year, and its gorgeous ballpark, named MLB’s best by a 2008 Sports Illustrated poll.

The cost of changing a name can be in the millions. Tripathi cites standard estimates of between $3-$15 million, which includes legal and consulting fees, alteration of merchandise and the replacement of physical touchpoints like stadium murals and signage. There’s also a measurable short-term reduction in box office revenue from disaffected fans.

“But that’s a drop in the bucket,” notes Tripathi—given that the Indians generate revenue of nearly $200 million a year. “And it’s a one-time cost. Meanwhile, if you think about the impact they’re taking from Native mascotry—the damage to brand equity, the subsequent reduction in pricing power—well, in that context, a one-time hit like that is just not a big deal. And there’s a flip side to that as well: You might actually see an increase in sales.”

Having grown up in the DC area, Tripathi saw firsthand what happened when the local NBA team, the Bullets, changed their name to the Wizards, in response to criticism that the name was an unfortunate reminder of the city’s high homicide rate. “They sold a ton of merchandise after the change,” he says, while invigorating corporate interest, opening the way to more box seat sales and bigger sponsorships.

For his part, Tripathi thinks that however long it takes for the Indians to eliminate Chief Wahoo, it is essentially inevitable. “When you’re basically taking a $2.6 million annual revenue hit the way it appears the Indians are, and when you have this ongoing drag on brand equity and team valuation, there’s a basic economic decision you have to make,” he says. “The change wouldn’t be as dramatic as for the Redskins. They’ve already altered many of the touchpoints to de-emphasize the mascot. And the ownership hasn’t taken the kind of firm ‘It’ll never happen’ stance that Dan Snyder has. I just don’t think they have any downsides.”

The team could even make it a positive marketing event by declaring they were intending to change the mascot to something more emblematic of the city, he points out, giving fans the opportunity to decide for themselves what symbol or individual best represents Cleveland.

“There’s just a general consensus building across the country that these kinds of racial depictions are not acceptable,” he says. “You’ve seen it with college and now high school athletics. You’re seeing it across social media. Politicians are getting involved. These symbols are going away; this is their last stand. And team owners have to consider: Is this really what we want—to go down fighting, like Custer?”

Follow Jeff on Twitter @originalspin. We welcome your comments at ideas@qz.com.

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