Small Market Team Not an Excuse

[Otter]

The NFL is the richest sports league in the world, with the average team worth some $957 million. And the Dallas Cowboys, the most valuable team in the NFL, are now the single most valuable sports franchise on the planet, worth $1.5 billion.

Pro football is also the most profitable sport on the planet (mean operating income in 2006 was $17.8 million on $204 million in revenue). Although its television ratings have slipped in the past decade, the NFL still beats the daylights out of other prime-time programming, including every other sport. Nearly three out of every four Americans watched an NFL game on television last season.

The architect of modern-stadium economics and owner of the Dallas Cowboys will unleash a $1 billion stadium (financed with a mix of private and public money) in 2009 that will have other NFL owners begging for mercy.

Thanks to their new stadium, which Jerry Jones will operate, the Cowboys are now worth $1.5 billion, putting them atop the NFL team value rankings for the first time in eight years and making Dallas the most valuable sports franchise in the world. The owners of teams like the Buffalo Bills, Atlanta Falcons and Jacksonville Jaguars have been moaning that the several million dollars they get each year in aggregate from richer teams like Dallas, Washington and New England is insufficient to keep them competitive. Well, wait until Ralph Wilson, Arthur Blank and Wayne Weaver see the Cowboys' new stadium.

The new monster facility in Arlington, Texas, has over 200 suites leasing for more than $350,000 a year. Stadium sponsorships should bring in another $50 million. These numbers are important, because in the NFL, national television, ticket and licensing revenue is shared equally among the 32 teams, but the home team keeps all the suite and stadium sponsorship money.

Yes, the NFL's salary cap limits player salaries to 57% of league revenue. But teams can end-run the cap by paying big signing bonuses that get amortized over the life of the contract. With their new stadium, the Cowboys will have a lot more money than their rivals to lure players with fat signing bonuses--and Jones, who is already worth more than $1 billion, will see his bank account swell.

Sure, New York's Giants and Jets are going to share a new $1.3 billion stadium scheduled to open in 2010. But it is unlikely they will get as much money splitting revenue from an open-roof stadium in New Jersey that Jones will get from a retractable-roof building in Texas. Jones also has less debt tied to his stadium because of $325 million in taxpayer subsidies. The Giants and Jets got nothing from taxpayers for their stadium.

Another plus for Jones: Surrounding the new stadium will be Glorypark, a residential, retail and office complex that will keep the buzz and money flowing all year. Also, with deft maneuvering, Jones already got the league to let his stadium host the 2011 Super Bowl.

But there is no reason to pity the other 31 owners. The NFL is still the richest sports league in the world (the average team is worth $957 million, 7% more than last year) as well as the most profitable (mean operating income in 2006 was $17.8 million on $204 million in revenue). Although its television ratings have slipped over the past decade, the NFL still beats the daylights out of other prime-time programming, including every other sport. Nearly three out of four Americans watched an NFL game on television last season. This explains why the league's money tree will keep growing: the 2006 season marked the beginning of six-year contract extensions with the three major networks--a $3.7 billion deal with CBS (nyse: CBS - news - people ), a $4.3 billion deal with Fox and a $3.6 billion deal with NBC--that award the NFL with an average of $2 billion a year until 2011.

Perhaps the best example of the value of NFL programming: Last season, ESPN decided to pick up Monday Night Football coverage after its sister company ABC punted on it, tossing another $1.1 billion at the league for eight years, more than double per year what its parent had been paying. Stadium sponsorship and advertising has also developed into a big business for some owners, with teams like Dallas, Houston, New England, Philadelphia and Washington generating over $20 million a year. NFL sponsors also sank a record $1 billion into media and marketing support behind NFL-themed ads and promotions.

Will broadcasters and corporate sponsors get a good return on their investments in the NFL? No one knows. But you can be sure that whatever they earn, it will be nowhere near as good a return as Jerry Jones is going to get from his new stadium.

Operating Income: Hightest to Lowest

1. Washington Redskins
2. Oakland Raiders
3. Tampa Bay Buccaneers
4. Chicago Bears
5. Kansas City Chiefs
6. New England Patriots
7. Buffalo Bills
8. New York Jets
9. Houston Texan
10. Philadelphia Eagles
11. New Orleans Saints
12. Tennessee Titans
13. Jacksonville Jaguars
14. Cleveland Browns
15. Green Bay Packers
16. Pittsburgh Steelers
17. San Diego Chargers
18. St Louis Rams
19. Denver Broncos
20. Cincinnati Bengals
21. Miami Dolphins
22. New York Giants
23. San Francisco 49ers
24. Arizona Cardinals
25. Dallas Cowboys
26. Carolina Panthers
27. Baltimore Ravens
28. Detroit Lions
29. Seattle Seahawks
30. Atlanta Falcons
31. Indianapolis Colts
32. Minnesota Vikings

To top that off the primary revenue for each team is tickets sold. Chiefs have the 8th highest ticket prices in the NFL.

Only the Washington Redskins and the New York Jets/Giants Stadiums hold more people than Arrowhead Stadium. Arrowhead is sold out every game.

It's not money or market keeping this team out of a Super Bowl, it's the dipshits in charge. The next person who uses this excuse I get to choose their signature for a year.

:D



Forbes Magazine (http://www.forbes.com/business/2007/09/13/nfl-team-valuations-biz-07nfl_cz_kb_mo_cs_0913nfl_land.html)

[Bwana]

It's not money or market keeping this team out of a Super Bowl, it's the dipshits in charge.


Without question.

[Mr. Laz]

teams can end-run the cap by paying big signing bonuses that get amortized over the life of the contract. With their new stadium, the Cowboys will have a lot more money than their rivals to lure players with fat signing bonuses
just because it's not absurd like baseball doesn't mean that market size doesn't still play a part.


but yes ... football is better, and talent evaluation and coaching are still the most important things.

[Donger]

Wow. Hunt bought the franchise for $25,000 in 1960?

[CoMoChief]

Wow. Hunt bought the franchise for $25,000 in 1960?
Yup, and makes about 50mil a yr now. Not a bad return on your initial investment. Though I think he was losing money for a long time.

[ChiefsCountry]

He lost a million the first year.

[Skip Towne]

He lost a million the first year.
H.L. Hunt, Lamar's dad, was being ribbed by friends about how Lamar was going to break him with his sports losses. H.L., one of the world's richest men at the time, replied "Yeah, if he keeps up what he's been doing, we'll be broke in 187 years.

[KChiefs1]

I thought this was a Royals thread.

[JohninGpt]

I thought this was a Royals thread.
Me too, the salary cap has givin the NFL parity, MLB is fooked for not having one.

[banyon]

Salary cap, leveraged scheduling, and drafting (a top pick pans out more in the NFL than MLB) makes a lot more difference than in MLB.

[tk13]

I think it can be a disadvantage, but it's just like baseball. You can overcome it. I think that was the most overlooked thing of the baseball playoffs... 3 of the final 4 teams were "small-market" low payroll teams.

Baseball is far more competitive than about 6 years ago, because all the have nots realized they have to feed their money into player development and competent management. So now you look everywhere and all these teams are loaded with young talent and the league is much more balanced. Same thing applies to football. The Colts and Patriots are ran so much better than any other team it's digusting, and now they're killing everybody else because of it. Neither team had been big spenders until this year when the Pats went after Moss and Adalius Thomas.

[Otter]

Me too, the salary cap has givin the NFL parity, MLB is fooked for not having one.

NFL salary cap puts a number on how much a team is allowed to spend in a given time period, not how much a team has to spend in that time period.

Just trying to point out that not being on east coast isn't an excuse (as was mentioned for the millionth time yesterday). Indy, Chicago, Dallas and Broncos all seem to be doing good and don't seem to be blaming their woes on not being located near New York City.

But if someone is just looking for a long standing and easy excuse as to why the team hasn't won a playoff game in FOURTEEN YEARS then it's as good as any.

[Eleazar]

Baseball is far more competitive than about 6 years ago, because all the have nots realized they have to feed their money into player development and competent management. So now you look everywhere and all these teams are loaded with young talent and the league is much more balanced. Same thing applies to football. The Colts and Patriots are ran so much better than any other team it's digusting, and now they're killing everybody else because of it. Neither team had been big spenders until this year when the Pats went after Moss and Adalius Thomas.

My thought was that the Yankees' pitching woes weren't that way 7 or 8 years ago. They don't have all the talent anymore, it's more evenly distributed these days.

[JohninGpt]

NFL salary cap puts a number on how much a team is allowed to spend in a given time period, not how much a team has to spend in that time period.

Just trying to point out that not being on east coast isn't an excuse (as was mentioned for the millionth time yesterday). Indy, Chicago, Dallas and Broncos all seem to be doing good and don't seem to be blaming their woes on not being located near New York City.

But if someone is just looking for a long standing and easy excuse as to why the team hasn't won a playoff game in FOURTEEN YEARS then it's as good as any.
I use the new long standing and easy excuse, piss poor management.

[Otter]

I use the new long standing and easy excuse, piss poor management.

Good, we agree then.

Considering the subject, let us not forget that this team danced around the fact of leaving town if taxpayers didn't flip the bill for renovations at Arrowhead.

[BigRedChief]

NFL salary cap puts a number on how much a team is allowed to spend in a given time period, not how much a team has to spend in that time period..
Supposely the Chiefs have $11 million left under the cap this year.

[Eleazar]

Good, we agree then.

Considering the subject, let us not forget that this team danced around the fact of leaving town if taxpayers didn't flip the bill for renovations at Arrowhead.

I don't think the team ever made a peep about leaving town. I would be surprised if anyone could find anywhere that they even mentioned it.

Most of that talk was around the build a new stadium flap, pimped by 810 and the proprietors of a number of properties in the downtown area, IMO.

I would have preferred a new K and a new Arrowhead, don't get me wrong. But I don't think that either team ever talked about leaving town.

[Amnorix]

Wow. Hunt bought the franchise for $25,000 in 1960?

Yeah, standard AFL signup fee. Billy Sullivan did the same with the Patriots. Of course, he never had much more than two nickels to rub together for the rest of his life...

[Radar Chief]

I don't think the team ever made a peep about leaving town. I would be surprised if anyone could find anywhere that they even mentioned it.

Most of that talk was around the build a new stadium flap, pimped by 810 and the proprietors of a number of properties in the downtown area, IMO.

I would have preferred a new K and a new Arrowhead, don't get me wrong. But I don't think that either team ever talked about leaving town.

IIRC there was some talk of the Kansas side of the border courting the Chiefs if they didn’t get the money to give Arrowhead a makeover.
Though, that could’ve just been 810 hype like the down town stadium :BS:.

[BigRedChief]

I don't think the team ever made a peep about leaving town. I would be surprised if anyone could find anywhere that they even mentioned it.
UHHHHHH you stand corrected.

County officials perceive a heightened need for tax
By JEFFREY SPIVAK and BENITA Y. WILLIAMS
The Kansas City Star

For the first time in stadium improvement talks, one of Kansas City's major teams has raised the possibility of leaving town if the Truman Sports Complex is not renovated.

The Chiefs' new chairman, Clark Hunt, recently told a group of state legislators and local leaders that one or both teams would probably leave Kansas City if Jackson County defaulted on its leases with the teams and the sports complex didn't get a major face-lift soon.

Although the Royals have distanced themselves from that scenario, it is giving Jackson County and local sports officials a new sense of urgency as they try to solve what some are calling a budding stadium crisis.
“That's the first time I've heard an owner state that thought,” said Bill Lucas, a Crown Center executive who leads the Greater Kansas City Sports Commission. “He was definitely raising a red flag.”
Mike Smith, who leads the county's sports complex authority, added: “It's got me real nervous. I would not take it as a threat, but as a message. He's just stating the facts, and the city needs to hear that.”
Now, in the wake of the Missouri legislature's decision not to fund more money for stadium improvements, county and sports officials are starting to meet with the teams to plan a Jackson County tax election sometime this year. The size, scope and even the timetable of any election remains unclear at this point.
“We're leaving all our options open,” said Jackson County Legislator Scott Burnett.

That means the election could be in August or November, although most officials lean toward the latter. It could be for a quarter-cent sales tax or three-eighths cent. And it could last four years, raising an estimated $80 million for minimum maintenance, or go a lot longer and raise hundreds of millions of dollars for renovations such as widened concourses, additional stores and new restaurants.

The ultimate decisions will depend on officials' reading of the political winds and of the teams' desires.

The teams and local sports leaders have already swung and missed three times this decade when attempting to obtain more money for the stadiums — twice with the Missouri legislature and once with a multicounty bistate tax. One additional complication is that both teams' wish lists are more expensive than the improvements included in the bistate package.

Time, however, is slowly running out on the legal tie that binds both the Royals and the Chiefs to Kansas City.