SBD/July 11, 2012/Franchises

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  • The Big Cheese: Packers Set Franchise Record For Earnings, Revenue In Last Fiscal Year

    Packers can now afford to renovate more than the $134M they previously announced

    The Packers shattered earnings and revenue records in the year ended March 31, 2012. The team reported that revenue hit a record high of $302M, a $19.4M increase, while net income hit $42.7M, up from $17.1M. "To me the fact we had guaranteed labor peace and a 10-year agreement probably was as meaningful as anything,” said Packers President & CEO Mark Murphy. “At a local level, we have seen since the new CBA has been finalized, [the team] entering into long term agreements with sponsors, and a new preseason TV package that would have not have been possible without the labor deal.” Sales also surged at the team’s Pro Shop, reflecting the club’s on-field success. The team has previously announced a $134M renovation to its stadium bowl, and now with the financial success, the club is also considering renovating the Atrium, the stadium’s interior web of shops and restaurants. Overall expenses fell from $270.5M to $259M, reflecting lower player costs and belt tightening that occurred during last year’s lockout. Players costs fell $3.5M to $155.4M. Of that figure, $142.4M reflected salary cap and benefits. The remainder was workers compensation claims, player travel costs and payroll taxes. The $42.7M of net income steamrolled the old record of $25.4M reached in ‘05. The 12-month period covered the first season under the new 10-year CBA, which gave NFL teams at least four to five percentage points more of revenue than the old labor pact. The earnings also reflect the benefit of the Packers winning Super Bowl XLIV during the previous financial period (Daniel Kaplan, SportsBusiness Journal).

    PACKERS FINANCIALS
    CATEGORY
    2012*
    (in millions)
    2011*
    (in millions)
    Total revenue
    $302.0
    $282.6
    Local revenue
    $130.4
    $119.3
    National revenue
    $171.6
    $163.3
    Expenses
    $259.0
    $270.5
    Net income
    $42.7
    $17.1
    Profit from operations
    $43.0
    $12.0
    Player costs^
    $155.4
    $158.9

    NOTES: * Years ended March 31. ^ Includes salaries, benefits, workers-compensation payouts, payroll taxes and player travel costs.

    ADDITIONAL REVENUE DETAILS: In Green Bay, Richard Ryman in a front-page piece reports most of the revenue increase "was in local income.” Packers VP/Finance Paul Baniel indicated the majority of that was from Packers Pro Shop sales, which increased about $11M last year. Murphy: “A big focus for us has been driving more and more people to our website (for online merchandise sales).” He added that online sales are now more than half of Pro Shop sales. Profit from operations -- total operating income minus total operating expenses -- increased from $12M to $43M. Ryman notes the team “considers profits from operations to be the key statistic for gauging financial success.” Money raised from the team’s stock sale over the winter and the cost of its renovation project at Lambeau are not included in the financial report (Green Bay PRESS GAZETTE, 7/11). National revenue totaled $171.6M, up from $163.3M. National TV revenue, a part of national revenue, went from $96.5M to $102.5M. A new national TV deal will go into effect in the ‘14 season, increasing that revenue. For the FY ending March 31, “a record” 156,000 people visited the Packers HOF. Another franchise record of 137,000 people took the Lambeau Field tour. In Milwaukee, Don Walker reported that a year ago, the Packers moved up from 13th to 10th in the 32-team league in terms of team revenue. Given the franchise's profits “this past fiscal year, the team likely will move up the ladder” (MILWAUKEE JOURNAL SENTINEL, 7/10).

    NEXT STEPS: The JOURNAL SENTINEL's Walker noted the team's Packers Preservation Fund, “created years ago as a sort of rainy-day fund,” remains at $127.5M. Murphy said that while that the fund “remains important to the Packers' long term needs, the franchise is now looking to real estate development on land it controls west of the stadium.” Next week, groundbreaking will be held for a 100,000-square foot Cabela's store on Lombardi Ave. The chain “is regarded as the first phase of the Packers' Titletown Development between the highway and Lambeau Field” (MILWAUKEE JOURNAL SENTINEL, 7/10).

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  • Colts Will Require Sellouts To Avoid TV Blackouts Despite NFL's New Policy

    Colts believe most teams will stick to old NFL policy of requiring sellouts

    The Colts intend to “black out home games on local television if they are not sold out despite the NFL having relaxed its rule and allowing such telecasts if 85 percent of seats are sold,” according to a front-page piece by Alesia & Richards of the INDIANAPOLIS STAR. Colts COO Pete Ward said, “We’re a small-market team, and we need people in the stadium.” Ward said that there are 2,000 season tickets remaining and he is "confident those will be sold.” Alesia & Richards note if those season tickets “don’t sell, the Colts will try to sell them on an individual-game basis.” Ward also said that the Colts “were influenced by another part of the 85 percent rule: Teams choosing to show their games locally without a sellout would owe extra money to the visiting team for each ticket sold over 85 percent.” He added that the Colts believe most NFL teams “will stick to the old policy of needing sellouts for local telecasts” (INDIANAPOLIS STAR, 7/11). In Indianapolis, Bob Kravitz wrote the Colts' decision “is terrible public relations.” Fans do not want to hear “any of this, especially a couple of months after letting a legendary player leave the premises.” But Kravitz wrote, "I will also say this: I get it. The bottom line is, well, the bottom line. Which is why I can’t imagine many teams, if any, actually accepting the 85% blackout rule. It’s too expensive” (INDYSTAR.com, 7/10).

    WHAT'S IN IT FOR THE FANS?
    In Nashville, David Climer writes under the header, “NFL's Compromise On Blackouts Doesn't Go Far Enough.” The 85% rule is a “step in the right direction where Joe Fan is concerned.” Climer: “But let’s take it further: The practice of blacking out games should be dropped entirely in NFL cities where taxpayer dollars were used to fund the stadium. … Since you footed that bill, why should the NFL determine whether you can watch the home team play on TV, regardless of how many tickets are sold?” Even "if you never set foot in LP Field for a football game, you have vested interested in the Titans” (Nashville TENNESSEAN, 7/11). SB NATION’s Bomani Jones said, “I keep hearing about the NFL saying they’re going to improve the stadium experience to get guys out there. Why don’t you do something kind of kooky, like go a little easy on the prices for these tickets and concessions” (“Around The Horn,” ESPN, 7/9). In Phoenix, Bob Young wrote a jersey trade-in policy, lower ticket prices, cheaper beer and free parking are among the moves that “might help” to get fans into stadiums for NFL games (ARIZONA REPUBLIC, 7/11).

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  • Bills Lower Ticket Prices For '12 Toronto Series Game By 35%

    Bills home games in Toronto have failed to turn into "genuine events"

    The Bills emailed season-ticket holders on Monday informing them the average ticket price for the Dec. 16 game against the Seahawks at Rogers Centre in Toronto "has been reduced 35 percent compared to previous years," according to Tim Graham of the BUFFALO NEWS. The Toronto deal "has been viewed as a farce by most folks not employed at One Bills Drive." The games "failed to become genuine events, as both sides hoped." The biggest issues have been "outrageous ticket prices and the Bills being a perennial doormat." The team has "tried to correct their problem this offseason" with roster changes, and now Rogers Media "apparently is trying to correct its problem." This will be the "final installment of the original agreement between the Bills and Rogers Media." The NFL has already "approved an extension for five more years" through '17. Lower admission costs "were promised," and fans "won't have to wait for the discount." The email in part stated: "Those that have already purchased tickets as part of the Bills in Toronto Series have the option to receive a refund for the price difference or be upgraded" (BUFFALONEWS.com, 7/10).

    IN OR OUT? In Rochester, Leo Roth noted even if the Bills "decide to opt into the so-called '85 percent' program, it's still very likely that late-season games at Ralph Wilson Stadium will be blacked out because December games traditionally are difficult to sell in Buffalo, especially when the team is lousy." And even if the team "is good and sellouts become easier to achieve after 12 seasons of missing the playoffs, Bills management has plenty of incentive not to join a program that will cost hundreds of thousands of dollars in shared revenue beyond what's currently required" (ROCHESTER DEMOCRAT & CHRONICLE, 7/8).

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  • Stars Launch New Ticket Sales Campaign In Hope Of Increasing Corporate Sales Numbers

    The Stars have launched a "new ticket sales campaign for the upcoming season, with hopes of gaining corporate fans," according to Candace Carlisle of the DALLAS BUSINESS JOURNAL. Stars VP/Ticket Sales Matt Bowman said that the industry average of corporate fans "is 60 percent to 70 percent of the audience for a professional sports team." Bowman "didn't have specific figures for the Stars but said the franchise recognizes that it has been losing ground." He added, "We think businesses haven't thought of the Dallas Stars over the past few years, and we want to make sure we are part of the discussion as people make their decisions about sports entertainment." The franchise has "added a corporate ambassador group to its ticket sales team, adding a dozen team members focused on increasing the club's exposure to the Dallas business community." Bowman said, "We've been out there reminding the business community that we have been here since 1993 and telling our story. They are saying, 'Hey we're glad to hear from you guys; we haven't heard from you in awhile.' We have seen an uptick in new business, but we have a lot more work to do." He added that the club's season ticket base "isn't where it should be." Bowman said that the corporate fan base is "important to the Stars as they seek to return to the levels of season ticket holders seen in the 1990s." He said that part of the club's strategy is "reducing ticket prices and adding value to the fan experience." Bowman added that from packages that offer "lower-level inclusive sideline seats at $139 for each ticket to half-season suites at the American Airlines Center that include Stars and Dallas Mavericks games for $75,000 -- it's all about customization" (DALLAS BUSINESS JOURNAL, 7/6 issue).

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  • AEG Takes Over Business, Marketing Duties For AHL Connecticut Whale

    Two weeks after severing ties with Whalers Sports & Entertainment, the NHL Rangers “are turning the operation of their American Hockey League affiliate over to AEG Management CT,” according to Paul Doyle of the HARTFORD COURANT. AEG, which operates XL Center in downtown Hartford, will “run the business side of the Connecticut Whale for the 2012-13 season.” The company will “manage marketing, sponsorship, ticketing and group sales for the franchise that will continue to be owned by Madison Square Garden, Inc., the parent company of the Rangers.” The Whale's lease with the XL Center “expires after the 2013 season, and negotiations on a new lease have been ongoing.” But AEG's contract to run the building “also expires in August 2013, so the future of both the Rangers and AEG are unknown.” XL Center Senior VP & GM Chuck Steedman said, "Our intention is for AEG to stay in Hartford and for the team to stay in Hartford.” The Rangers' AHL affiliate has been in Hartford since ‘97, but the team “grew disenchanted with Howard Baldwin's WSE, which ran the club's business operation for two years.” Steedman said that the team “will continue to be known as the Connecticut Whale.” He also “anticipates employees from WSE joining his company” (HARTFORD COURANT, 7/10).

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  • Rockies Fans Reaching Out To Owner In Calling For Dismissal Of GM Dan O'Dowd

    O'Dowd's 12 seasons with the Rockies make him MLB's fourth-longest tenured GM.

    The cries for Rockies GM Dan O'Dowd's "dismissal have grown so loud," team Owner, Chair & CEO Dick Monfort "must acknowledge fan unrest," according to Mark Kiszla of the DENVER POST. The Rockies recently informed season-ticket holders in an e-mail that "every loss was personally unbearable to Monfort." Rockies fan Nick Coy in an e-mail to Monfort wrote, "Since (your) e-mail doesn't contain the words 'DAN O'DOWD FIRED,' I assume you think we are all idiots and will buy your snake oil about 'caring' hook, line and sinker. Incorrect ... you will NOT be seeing myself (among many others) renew their season tickets until you show us something meaningful." Monfort replied to Coy's e-mail and "was quick and to the point: 'Got it, and if he gets fired you will be perfectly happy?'" Coy said, "I was surprised he wrote me back. ... I think they are a little scared that the Rockies could move to the bottom of the barrel with fans in Denver." Kiszla wrote, "No matter how loyal or patient ownership might want to be, it's hard to see how the Monfort brothers could justify the retention of O'Dowd, unless the Rockies improve considerably from the embarrassing 33-52 record they took into the all-star break. ... Kudos to Monfort for stepping up, being accountable and making the effort to reply to a paying customer" (DENVER POST, 7/10). A DENVER POST editorial stated, "In Denver, where fans have grown accustomed to winning ... fielding a perennial loser doesn't cut it." O'Dowd "has failed," and he "needs to go." The editorial: "Such a move would demonstrate to Rockies fans who continue to pour into Coors Field that the team is indeed serious about building a perennial contender and not simply operating Wrigley Field West." The problem is, the team's ownership "seems blindly loyal to O'Dowd, who has the fourth-longest tenure among baseball GMs." The All-Star break "is the perfect time to make a change" (DENVER POST, 7/10).

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  • MLB Franchise Notes: Selig Calls Rays Attendance Figures At The Trop "Inexcusable"

    MLB Commissioner Bud Selig yesterday during his meeting with the Baseball Writers Association of America said the Rays' home attendance at Tropicana Field was "inexcusable" and "disappointing" amid four consecutive winning seasons and another emerging pennant chase this year. The Rays currently rank next to last in MLB attendance, with an average of 20,583 per game. Though the total is up 7%, in line with overall industry trends. "They've run a great operation. They're a very competitive organization," Selig said. "To see that they're No. 29 in attendance, it's inexcusable. Nobody can defend that" (Eric Fisher, SportsBusiness Journal).

    ADJUSTABLE NUMBER: In Pittsburgh, Bob Cohn noted the Pirates "changed a discount ticket deal" hours after CF Andrew McCutchen’s "disappointing exhibition" at the Home Run Derby. The club on Monday announced that for the July 23-25 series against the Cubs, it would "lower ticket prices in two sections of PNC Park by one dollar for every home run McCutchen hit in the Derby." But after McCutchen "hit only four, the Pirates issued a news release late Monday night revising the plan." The new "'Andrew McCutchen Home Run Derby Discount Ticket Offer' will recognize the 18 homers McCutchen has hit during the season." Pirates Coordinator of Business Communications & Social Media Terry Rodgers said yesterday, "We changed it to give the fans a better value. If he had hit a bunch of homers, we would have gone with the higher total" (TRIBLIVE.com, 7/10).

    WRECKING BALL: In Boston, Dan Shaughnessy writes, "The Red Sox are a trainwreck." Shaughnessy: "It's about abject underperformance. It’s about the third-highest payroll in baseball and not a single playoff game victory" since '08. It is about a franchise that has "become a parody of itself, led by an ownership group that has lost all sense of accountability." The front office "would rather be selling bricks, watching soccer, blaming [former GM] Theo [Epstein], promoting bad NESN programming, and clinging to the notion that they are still popular and relevant on the local sports landscape." The Red Sox "spent freely and they spent badly and now they are done." Shaughnessy writes, "And watch the lips of the folks from NESN telling you how great everything is going" (BOSTON GLOBE, 7/11).

    BASEBALL'S BEST FANS? In Houston, Randy Harvey wrote, "I have been following the Astros closely for about two weeks and have seen them win once in 11 games, but I have noticed one very positive characteristic. It has nothing to do with the team on the field. It has to do with the fans not at the park. As I see it, you are baseball's best fans." Harvey: "The Astros should be thanking you, too. In my experience, the best major league franchises are the ones that respond to poor attendance by concentrating more on acquiring better players and winning more games than they do on bobblehead dolls" (CHRON.com, 7/10).

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