Here’s Why Yankees Fans Aren’t the Only Ones Rooting Against the Red Sox
Earlier this year, Massachusetts furniture chain Jordan’s Furniture announced a marketing gimmick that would delight any diehard Red Sox fan: if the Sox went on to win the 2007 World Series, all furniture sales made between March 7 and April 16 of this year would be refunded.
The chain, which is owned by Berkshire Hathaway Inc., sensibly bought an insurance policy to cover the possibility of a Sox victory. While Jordan’s declined recently to comment to Freakonomics.com on any details, the chain’s CEO earlier told TheRedSoxTimes.com that he had “bought insurance that is going to cover the whole thing. I would never have done it if I was going to be rooting against the Red Sox, let’s put it that way.”
The full cost of the promotion reportedly amounted to the “license fee paid to the Red Sox to use their name, advertising spots, and a little bit of insurance.” Meanwhile Jordan’s executives reportedly estimated that the promotion’s total sales might top $20 million.
In Chicago, meanwhile, Cubs fans got a similar chance when Park Avenue Home Furnishings in Libertyville, Ill. announced it was offering a full refund for all goods bought between March 30 and April 29 if the Cubs went all the way.
Andy Alexson, the store’s owner, told Freakonomics.com that he purchased a Lloyds of London policy for 2 percent of the promotion’s total sales. “It was nothing,” he said, “it was like [buying] an ad in the paper.” The policy stated that “if the Cubs win, we rebate everything including tax, delivery, everything.” It also stipulated that Alexson had to regularly report sales figures, which he hoped would total between $500,000 and $700,000 during the promotion.
“But the sale didn’t go anywhere near as well as I’d hoped because the Cubs sucked in April,” he said, “and then a competitor complained to the state attorney general that my offer was a gambling offer, so I had to debate it. We fought the attorney general over it, and argued you’re getting value for your purchase.” A month later, Alexson looked into doing another promotion, this time for the White Sox, and was told that Lloyds now wanted 18 percent of total sales, since the team had played so well two years earlier.
The Boston promotion caused a stir with Massachusetts authorities after locals raised charges of illegal gambling, according to the Boston Globe. Because of the high ticket items available for rebate, along with the substantial risk involved, debate arose over whether the sales were lotteries, classified as illegal gambling in both states.
Ultimately, the Massachusetts Attorney General ruled that the sale showed “no evidence of consumer harm,” and let Jordan’s alone.
Still, there’s at least one party outside of New York and Cleveland rooting firmly against the Sox this year: whoever holds the Jordan’s insurance policy.
Update: The Sox have indeed won the series, sweeping the Cleveland Indians, and claims are pouring in at Jordan’s Headquarters. Eliot Tatelman, president and CEO of Jordans, is reportedly refusing to release the total value of qualifying rebates, as well as the total cost of the insurance policy that will cover them. For an official description of the promotion, see here.