Three trends from the upfront season Kroenke comfortable wearing 2nd hat From the Field of Risk Management Plaintiff seeks documents from FSG Demos key to Microsoft’s MLS deal People: Executive transactions Reinsdorf values people he knows, trusts Racetracks attract music festivals For the WNBA, time for a clutch 3 Super Bowl’s numerals: Still a classic
SBJ/20090907/SBJ In-DepthPrint All
The Jacksonville Jaguars say every one of their home games will be blacked out because of poor ticket sales, which raises the question of how the league will respond. Will a season of blackouts move the league to consider relocation and abandon the Jacksonville market?— Compiled by Daniel Kaplan
One morning in August, Ronald Garratt pulled up beside a parking lot where San Jose policemen on motorcycles were accelerating around traffic cones, and he made a conceptual leap.
“Right there,” he said, gesturing toward the cones, “is the stadium site.”
In California, visualizing a new NFL stadium is all anyone can do. Nobody has built one in the state since the 1960s.
But Garratt, the assistant manager of the city of Santa Clara and the head of its development team, may be close. He has spent nearly three years working with the San Francisco 49ers on a new facility to replace their nearly 50-year-old warhorse on San Francisco’s Candlestick Point. The project — which is in the midst of environmental review and remains subject to a popular vote by Santa Clarans — has been approved by the city council. It also has the blessing of 49ers owners John and Denise DeBartolo York, and their son, Jed, who has led the negotiations.
What they’ve agreed to can be seen as either the last stadium deal of a passing era … or as the first deal of a new one.
In addition to the land, Santa Clara will do what municipalities have been doing for decades and ante up as much as $114 million in public funds toward the project: $40 million in tax increment financing, $2 million in development fees, around $20 million to move an electric substation near the site, $17 million toward a parking garage, and $35 million or so from a hotel tax.
That’s substantially less than the $160 million the team requested from the city — not to mention the sweetheart deals that numerous NFL teams were able to negotiate during better economic times. If you set the current price of a new football stadium at $1 billion, Santa Clara’s entire contribution weighs in at slightly more than 10 percent, giving the 49ers some $900 million to finance on their own (and an onerous debt service that, some observers believe, will never get approved by NFL owners). The San Francisco Giants spent less than half of that nine years ago to build an entire baseball stadium.
But Santa Clara’s $114 million is also $114 million more than anywhere else in California is offering (and the Yorks say they haven’t looked further afield.). “They’re not going to find this in another municipality,” Garratt said. (San Francisco has earmarked $100 million of a developer’s money for a stadium as part of a mixed-use project in Hunters Point, but thus far no developer has contractually committed to the enterprise.)
So the 49ers are moving forward with a deal that includes a $5 million annual payment by the franchise to a stadium commission, no income from naming rights, and the obligation to cover any shortfalls in non-NFL events — a deal, in short, that would have been laughed out of the conference room had it been proposed to Eddie DeBartolo in the mid-1990s when DeBartolo began to explore possibilities for the team he owned at the time.
“It’s not your traditional ‘Here’s your $100 million,’” Jed York said, “but it’s a deal that works. And you can actually see the light at the end of the tunnel.”
Little public support
Entering this NFL season, California’s three franchises — the 49ers, Oakland Raiders and San Diego Chargers — all seek new stadiums. So does the city of Los Angeles, which remains only a viable venue away from one, and perhaps two, NFL teams.
This would be a challenging situation in boom times, which these decidedly aren’t. With the state issuing $2 billion in IOUs and its municipalities attempting to remedy shortfalls with unprecedented firings, layoffs and service cutbacks, public funding for sports venues ranks as low as it ever has on most civic to-do lists, and maybe even lower than that in terms of public perception.
Gov. Arnold Schwarzenegger has met with task forces in several markets, “But it’s very tough to have the state get involved in those things,” he said recently. “Because of our financial situation that we are in, we’re not about to go and say ‘Yes, we’re going to help financially build a stadium.’ It wouldn’t make any sense. People would be outraged.”
Not surprisingly, local politicians are reading the same script.
“With all of the tremendous enthusiasm that people have about sports and sports teams, they realize that we’re in economic trouble,” said Oakland Mayor Ron Dellums, whose city’s revenue fell $51 million in 2008, helping to create an overall budget deficit of $144 million — or more than Santa Clara’s entire proposed contribution to the 49ers. “Getting voters to approve millions and millions of dollars for a stadium at a time when we have all these problems is just unrealistic. It won’t happen.
“We want our teams here, and we want Oakland to benefit from their presence. But do we have money to pay for the stadium? The answer is no, my friend.”
This aversion to public funding, which an executive of one California franchise calls a “political third rail,” hasn’t come overnight. Baseball’s Giants failed to get substantial public funding for a new facility and almost left town before agreeing to build their own ballpark a decade ago. And even support for the sold-out 49ers wanes when brought to a public vote. In 1997, San Franciscans voted on a $100 million contribution toward a mixed-use development and stadium proposed by DeBartolo (a development that was never built because DeBartolo was forced to relinquish control of the team shortly afterward and the Yorks apparently didn’t have the same appetite for risk). The measure passed, but only by some 1,500 votes.
“We had unbelievable cachet at that time because of the five Super Bowl trophies on our shelf and the future hall of famers who were either part of the team or just retired,” said Carmen Policy, who ran the 49ers for DeBartolo and now consults for the city of San Francisco in an effort to get a stadium built there. “We were the toast of the town. And you saw how close it was. So I think the chance of public money today is absolutely out of the question.”
During a presentation at a recent NFL meeting, Raiders CEO Amy Trask cautioned league owners not to underestimate the difficulties inherent in doing a deal in California, difficulties that help to explain why all three of the current NFL stadiums are at least four decades old. New taxes enacted by the state or a municipality require a two-thirds vote, not a mere majority. Environmental reviews are onerous and expensive. Voters, through ballot initiatives, occasionally decide not to fund schools, let alone stadiums.
But it also may be that California, as it often does, is showing the rest of the country its future. This economic downturn is national, not regional, and cities and states haven’t just frozen budgets, but slashed them. The next two new NFL venues to open, in Dallas and New Jersey, will have been built largely with private dollars, while prospects of legislative funding in Minnesota appear dim. In Seattle, lawmakers refused to approve funding for a new basketball arena, letting the NBA’s SuperSonics depart for Oklahoma after more than 40 years.
“The goal of sports franchises is to make money, I understand that,” said Donna Frye, a San Diego City Council member whose district includes outmoded Qualcomm Stadium. “Unfortunately, when you’re dealing with municipalities, the goal is to serve the public. So you essentially have two entities that are at cross-purposes.”
Santa Clara’s $114 million is the exception because its civic leaders saw “a chance to get something it had no other way of getting in a city of 100,000: an NFL team,” Policy said. In truth, even that motivation might not have been enough if the city, which sits just to the west of far more populous San Jose, hadn’t been frugal to the point of penurious for decades. Or if it didn’t have public land, ideally situated, properly zoned and accessible to highways, currently generating revenue only by being rented out for police training.
With all that, Santa Clara’s dollars won’t come from a general fund that might be used to fix roads or pay teachers, but have been cobbled together from various sources, none of which require a tax increase. That’s about the only way, both the city and the 49ers acknowledge, that the project will get approved.
And that’s in fast-growth Silicon Valley, with its lofty demographics and late-model infrastructure. The more mature cities that already have big league franchises tend also to have greater social service needs, so public money for stadium construction is an even tougher sell. “When you have to lay off policemen, close parks and senior citizen centers,” Dellums said, “you have other priorities.”
Cutting spending is only one side of the equation. Dellums readily admits that Oakland hasn’t taken advantage of the revenue-generating opportunities that the city’s three big league teams might have created. An aerial map of the current Oakland coliseum/arena area in Trask’s office shows it best: blocks of warehouses in every direction, along with a smattering of homes.
Sports has been used to revitalize neighborhoods from Baltimore’s waterfront to downtown Los Angeles, but Oakland has never made the necessary investment. Someone leaving a game with $100 in his pocket ready to be spent on shopping or entertainment might give up in frustration before encountering a single restaurant, retail store, or attraction.
Trask has constructed an ambitious plan for a new stadium on the site of the existing stadium that the Raiders share with baseball’s Oakland A’s. The project would begin to reposition the site as a retail and recreation center for the East Bay and beyond. “I won’t even call it a stadium development project,” she said, “but a development project that is anchored by a stadium.”
It calls for a restaurant and even a bowling alley inside the facility that would be accessible from outside when games aren’t being played, and a hotel that uses stadium suites and boardrooms as its conference center. To help fund the project, Trask conjures up everything from possible federal stimulus money to investments from developers committed to urban renewal.
But none of that will happen unless the city and team agree to act as partners, sharing both costs and benefits. “We can’t have a discussion sitting across the table,” Trask said. “We need to sit side by side with city officials and create opportunities together.”
It’s a nice sentiment. Still, all the cooperation in the world won’t help when the economic underpinning isn’t there. Trask can propose the development, but the Raiders aren’t likely to pay for all of it, and Oakland isn’t likely to pay for any of it, except by contributing land. That’s where third-party developers become crucial.
“To get a deal done today,” said Michael Cohen, San Francisco’s director of economic development, “teams are going to have to do more than they’re traditionally accustomed to doing and the city is going to have to put something in, in some fashion. And then, even with those two pieces, you’re likely going to need a project to be part of a larger development. You can’t rely on one or two anymore. It’s going to have to be all three.”
Big ideas in L.A.
Inside a second-floor ballroom in a resort on the eastern edge of Los Angeles, an alternate reality unfolds on a video screen. A vast outdoor shopping mall and mixed-use development is thriving, including a magnificent football stadium wedged into a hillside. That the entire complex is located somewhere called City of Industry, far from the Los Angeles of “Surfin’ USA,” Spago and “Entertainment Tonight,” is immaterial. Concentric rings superimposed on a map of the area show the Westside, the San Fernando Valley, and most of Orange County within an hour’s drive. “One out of every 19 people in America” live within that range, boasts John Semcken, a project executive working with developer Ed Roski.
This is Roski’s vision for a new stadium that is supposed to — at long last — bring an NFL team back to Los Angeles, or at least Los Angeles County. It relies on a new paradigm, at least as far as funding NFL venues is concerned: a third-party developer, not the team or the municipality, doing most of the heavy lifting.
“You have some successful examples of that in other sports,” said Neil Glat, the NFL’s senior vice president for corporate development. They range from the corporate-funded Nationwide Arena in Columbus to Staples Center, which developers Roski, Semcken and Phil Anschutz created in downtown Los Angeles.
The stadium’s location is almost an hour’s drive from the glamour of the Westside and more than half that from Beverly Hills, but geographic objections would seem churlish if Roski can actually get it built. And though he has no team to play there, he’s confident that he’ll get one and perhaps two as soon as construction starts, which could be as early as next year.
That’s how Staples Center happened, but there are two big differences. City of Industry isn’t downtown, so public sentiment toward revitalization — or, in this case, initial development — isn’t nearly as strong. And 2009 isn’t 1999, as foundering projects all around the state reveal. Some involve sports teams: in Sacramento, the city and the NBA’s Kings are eager to partner with someone willing to shoulder much of the financial load in return for control of the surrounding land (see story). That might have been a sweet deal once upon a time, but not now. “You can’t get anybody to do it,” said Semcken, who has had discussions with that city. “There’s too much risk.”
And while Cohen believes that the Hunters Point project will eventually succeed because of the allure of waterfront land in San Francisco, even in a down market, no developer will be required to commit until June. “And in this economy, I don’t see how any developer looks at that and says that it makes sense financially,” said one NFL executive.
Los Angeles has been a quandary for the NFL for more than a decade. Because a football stadium is only guaranteed to have events for some 10 dates a year, it doesn’t attract enough steady traffic to warrant building a shopping mall or entertainment complex on the site. That’s another big difference from Staples Center. Add land prices and development costs that remain high, and you’re left with a lopsided equation.
“Ed already has the property, which is the only way it could possibly work,” said Peter O’Malley, the former Los Angeles Dodgers owner, who once considered a deal that would have put a football stadium in Chavez Ravine beside his baseball stadium. “Even then, it’s tough to figure out a way that both sides benefit enough to get it done. Ed’s a good man, and if anyone can do it, he can. But it’s tough.”
Roski controls the 600-acre site under a long-term lease. But he knows that isn’t enough to attract speculation. “Real estate deals ain’t going to pay for stadiums anymore,” he said. “There are probably a thousand projects around America bankrupt today because they were using the income from condo sales to pay for the development. The market just isn’t there.”
He’s willing to build a stadium with minimal help, and throw in a share of the surrounding development, but only if someone will trade a percentage of an NFL franchise to him in exchange. “You’ve got to own at least part of the team,” he said. “There’s got to be incentive to go through this shit.”
Even then, the numbers only really begin to line up with two NFL teams. In fact, up and down the state, from Candlestick Point to Chula Vista, conventional wisdom has it that if spending $1 billion on a football stadium these days is a dicey proposition, spending $2 billion on two stadiums in the same part of the state is lunacy. Almost without exception, everyone involved in one of these projects agrees that the economies of scale inherent in a two-team facility outweigh the loss of geographic identity that one or both franchises would suffer.
The problem is, everyone wants the other team to come play on their site. When Trask shows off her plans for the Oakland facility, it isn’t long before she’s talking about two teams, hosting a Super Bowl, even a World Cup. “We are keeping and will keep an open mind about the possibility of a shared stadium,” she said. “But an open mind means an open mind as to the location, too. Our site is a tremendous site.” In Santa Clara, Garratt’s inch-thick document detailing the proposed stadium’s costs and benefits spends as much space on potential two-team revenue as it does on one.
With the league set against further diluting television revenue with expansion, the pool of potential teams for Los Angeles is small. “There are seven in play,” said Semcken, but several teams he names are tied up in leases. However, the Chargers show up on his and everyone else’s list. They have been trying for seven years to build a stadium at or near their current location and haven’t even managed to work a deal that would get it free land, let alone infrastructure or anything more.
The Chargers’ market is bordered on one side by the ocean, one by the desert, and one by another country, so potential growth is severely limited. Their existing stadium was built in 1967, so nobody can argue a new one isn’t needed. And as luck would have it, they began life in Los Angeles. You’d have to think they wouldn’t mind moving back.
Standstill in San Diego
Mark Fabiani doesn’t need to be convinced of the potential of the Los Angeles market. A former deputy mayor of that city during Tom Bradley’s administration, he also served as the deputy communications director for Al Gore’s presidential campaign in 2000; his fundraising connections in the Southland proved invaluable. Since 2002, he has been working for the Chargers (who moved south in 1961 after playing their initial season at the Los Angeles Coliseum), negotiating with San Diego and surrounding towns for a new stadium.
Now Fabiani sits overlooking the Pacific Ocean, eating a fish filet at La Jolla’s iconic La Valencia hotel and acknowledging that, for all the effort, he hasn’t gotten far. “Our timing has been horrible,” he said. A real estate play that includes a stadium doesn’t work these days — not in a hemmed-in, midsized market. “Our window for that was 2003, 2004, 2005, and it didn’t happen,” he said.
The city, which doesn’t make enough on Chargers rent with the current lease arrangement at Qualcomm Stadium to even cover its debt service on the last stadium renovation, hasn’t offered anything more substantial than its best wishes. “We never thought from Day One,” Fabiani said, “that we’d get any public money.”
“People aren’t looking at all the options,” counters councilmember Frye. She mentions the Chargers somehow partnering with San Diego State, which would add five or six annual dates to a facility that otherwise might only be booked for a dozen, and considering the construction of an entire sports complex that would include recreational facilities, a venue for soccer and track events, even jazz concerts. The greater the potential benefits of a new facility, Frye believes, the more advocates it would have.
“You bring in some private development, you bring in some municipal development, you bring in some of the sports teams,” Frye said. “I think there’s a way, if people are really committed to making something work, that it can be done.”
So far, though, she hasn’t gained a bit of traction, not with an intransigent city nor a skeptical Chargers ownership, which — like most other NFL teams — would prefer a football-only venue. “You can pull a rabbit out of a hat in terms of an economic development tied to the stadium, and it would have to be a rabbit out of a hat,” Fabiani said. “Or you can look at a bigger market.”
That seems to point to Los Angeles. But even if Chargers owner Alex Spanos would be disposed to give up a chunk of the team to take a flyer on a mixed-use development, it’s hard to see how that would make sense for him economically. On the other hand, while self-funding a stadium in San Diego wouldn’t work for the Chargers, doing the same as entree to Los Angeles actually might, if Roski gives them the land. What’s in that arrangement for Roski? His development now has an anchor tenant, and he hasn’t had to conjure up $900 million to build a stadium. Equally important, he could retain the rights to bring in a second team if one becomes available. “And believe me,” said someone close to the negotiations, “as soon as the stadium becomes a reality and one team starts playing there, other teams will be lined up at the door to get in.”
It’s all conjecture. But such machinations, compromises, Plan Bs and idiosyncratic thinking are likely what stadium deals will need to get done in California — if they get done at all. Perhaps surprisingly, almost nobody involved with any of these projects is willing to consider the idea of stadium construction in America’s most populous state — home to 15 franchises in the four major North American leagues plus MLS — simply grinding to a halt.
“California has always been, and will continue to be, the land of creativity and opportunity,” Trask said. “I believe that California will find a way to solve its stadium issues, and that the solutions will be exciting.”
Added Roski: “There’ll always be idiots like me who are willing to spend time and millions of dollars to figure out how to do something.”
Eventually, one of those somethings might even work.
Bruce Schoenfeld is a writer in Colorado.
Since the NFL relaxed its restrictions this summer on the ways NFL clubs can align themselves with lotteries, 17 deals between teams and state lotteries have been reached for instant game, scratch-off tickets.
More than $18 million in cash has been distributed to winners since the Seattle Seahawks were the first to put a game in play, July 21, in Washington.
Each agreement includes two prize elements. Instant cash prizes start at $5 and can be as much as $1 million for Washington Redskins, New England Patriots and Baltimore Ravens-themed tickets. The Massachusetts State Lottery awarded two of its 10 available $1 million prizes in the first week of its Patriots-themed game.
The second-chance prizes offered by most state lotteries include game tickets, autographed merchandise and stadium tours. A New York Jets fan will get to be “team owner for a day,” which will include traveling to an away game on a private jet, courtesy of the New Jersey Lottery. The Ravens and Redskins are giving away two premium club seats for 20 years, while Patriots fans could win season tickets for life.
Terms of most deals have not been made available by teams or lottery commissions, but each calls for the state to pay a licensing fee to the club for the rights to use team marks on the lottery ticket, and an agreement to purchase the second-chance prizes.
The Texas Lottery, for example, will pay the Dallas Cowboys a licensing fee of approximately $1.15 million, and will purchase up to $3.05 million worth of second-chance prizes. The Houston Texans could earn up to $1.45 million through the same two avenues.
The Business Journal in Milwaukee, a sister publication to SportsBusiness Journal, reported that the Green Bay Packers will be paid $467,000 in their lottery partnership with the state of Wisconsin.
Maryland’s Ravens-themed game began Aug. 10 and has already paid out nearly $2 million. The state paid the Ravens $1 million for the rights to put the team’s marks on the scratch-off, and to purchase the various prizes, which include season tickets for 20 years.
“Oh my God, it is unbelievable. It is the most successful $5 ticket we’ve ever had,” said Buddy Roogow, director of the Maryland State Lottery. “We can’t keep it in stock.” The commission printed 4 million tickets, but as is customary with new games, sent a limited amount to each of its 4,000-plus retail outlets to gauge interest by site. It is now sending overnight shipments daily.
State lottery officials in Pennsylvania and Massachusetts say the NFL team game card is already one of, if not the, most successful instant game launch in their respective commission histories.
As a 13-year NBA veteran, Kevin Johnson appreciates the value a professional sports team adds to a city.
As the first-term mayor of Sacramento, he also understands the budgetary realities that make public funding of a new sports facility nearly impossible, at least in today’s economic climate.
But as the chief executive of a city trying to keep its lone big league franchise — the NBA’s Kings — from leaving town, Johnson appears to have come no closer to reconciling those notions than anyone else.
He has vowed to meet with the Maloof family, the Kings’ owners, at least once a month until a new arena deal is made. “I realize that without a plan, if I sit on my hands, the Sacramento Kings will move elsewhere,” he said.
Johnson acknowledges that plans for a private/public mixed-use project have stalled. “Sacramento is probably the case study for this,” he said. “We were looking for a master developer to come in and do 350 acres of city-owned land. But because the economy is so challenged, so strained, no developer wants to come in and potentially wait many years for a return.”
Unlike many big-city mayors, who haven’t seen pro sports from the other side, Johnson doesn’t expect the team to fully fund its own facility. “There aren’t many owners who can do that,” he said. And he acknowledges that the current facility, which dates to 1988, needs to be replaced.
“I have to do a much better job — and we, as a city, have to do a much better job — of educating the public of the benefits of having an NBA franchise in the city, and the loss if the franchise were to leave,” Johnson said.
That doesn’t translate into ready money — but it’s a start. “The era of new facilities in California is not over,” he said. “We’ll find ways to continue to be competitive.”
— Bruce Schoenfeld
Team New offseason ticketing initiatives Comments Arizona Cardinals Modest price increases in lower bowl seats; value meals of $7 for kids and $9.75 for adults; individual tickets to Packers and Vikings games available only with purchase of two other designated games (including a preseason contest). Getting to the Super Bowl has its advantage as witnessed by the price increase and additional ticket requirements for high-profile games, but in recession-wracked Phoenix, the team still introduced three value meals for kids and one for adults. Atlanta Falcons Froze or reduced prices on two-thirds of seats, increased the remainder slightly; added four-person customer service team for season-ticket holders; season-ticket holders meeting with owner, head coach and GM; new six-month payment plan. Even coming off a surprising playoff run behind rookie QB Matt Ryan, the team must work hard in the fickle Atlanta market. Baltimore Ravens No new initiatives. Coming off an AFC Championship appearance, the team was one of the few in the league to raise prices, and still enjoyed a 99 percent renewal clip. Buffalo Bills Froze ticket prices; free one-game parking pass for season-ticket renewals ($20 value); free car wash for online renewals; thank you cards for renewals including a 50th-season commemorative bumper sticker; teleconference for season-ticket holders with players. The Bills will have their third-best season for season tickets this year, around 54,000, fueled by some of the lowest prices in the NFL and the Terrell Owens signing. Carolina Panthers Froze ticket prices; offered two-game packages for the first time, selling 5,300 such plans. Most Panthers tickets are spoken for by PSL owners, so much of the teams offseason focus was on sponsorship and suite sales. Chicago Bears Froze ticket prices; thank you e-mails and videos to season-ticket holders; season tickets delivered to 20 customers personally by mascot and players; decal sent to all season-ticket holders; five season-ticket holders will be given pregame field passes per game; accepted credit cards for the first time. The team describes these moves as the natural evolution of its customer service efforts and not a reaction to the economy. Season-ticket renewals at 99 percent attest to that. Cincinnati Bengals Froze ticket prices; deferred seat-license payments; season-ticket holder conference call with head coach and draft picks; new club-seat contracts reduced from the standard three years to two; digital billboards used in marketing. For a club known as a laggard in pushing sales, the economy has finally moved the Bengals into action, but continuing to sell out still is not a certainty. Cleveland Browns Froze ticket prices; season-ticket holders who paid by certain dates were entered into contests for varying levels of prizes dependent on how early they paid, ranging from a Super Bowl trip to free parking. If even the Browns, one of the top draws in pro sports, feel the need to offer something extra to draw in renewals, then the economy really is an issue. Dallas Cowboys The only team with a new stadium opening this year has been selling the venue for several years; the team says it has done little differently in response to the economy. While there has been some outcry in Dallas over ticket prices, the team remains one of the countrys top draws. Denver Broncos Froze ticket prices; sold out months before the season; extended payment plans for season-ticket holders who requested them. The Broncos have no issues selling out, though club seats and suites have moved slower this offseason than in past years. Detroit Lions* Generally froze ticket prices; first and so far only NFL team to offer an all-you-can-eat option, which is available to 5,500 season-ticket holders; season-ticket renewals offered $500-$1,000 discounts on Ford cars and given VIP cards entitling them to 20 percent off merchandise at Ford Field; two town hall meetings with season-ticket holders, and one with suite and club-seat holders; last 10 rows of upper deck in end zones named the Roar Zone and priced at $30 per game, 25 percent less than last year; reduced club-seat prices; season-ticket holders entitled to 20 percent off a suite. When statewide unemployment is at 15 percent and the team went 0-16 the season before, creativity is the name of the game. Green Bay Packers Froze ticket prices for the second year in a row. If the Packers had trouble moving tickets, the league would be in some serious trouble. Houston Texans The team could only cite sending cheerleaders to local malls more than in years past as a difference this offseason. The Texans, a leader in sales since coming into the league in 2002, raised ticket prices in the offseason. Indianapolis Colts For group tickets of 100 or more for preseason games, each fan received a free pass to a water theme park; preseason ticket stubs also give the holder free entry into the NCAA Hall of Champions; froze ticket prices other than for 1,600 seats, which were increased from $44 to $54. The team is sold out for the regular season in its second year in its new stadium, so the focus was on the preseason, which sold more slowly in the down economy. Jacksonville Jaguars Froze ticket prices; created roughly a dozen ticket packages, double that of a typical year; selling groups of four or more tickets that include a free meal; referral program gives season-ticket holders a chance to win sideline passes. The Jaguars are the poster child for ticket sales problems; despite these efforts, the team has already said it is unlikely to sell out any game. Kansas City Chiefs Extended final payment date; offered a branded credit card for fans who needed to finance that last payment; added 3,000 more $250 season tickets, bringing the number to 5,000; a mixture of ticket price freezes, increases and decreases. The team began in the middle of last season to add cheaper tickets and value concession items, and expects to be sold out. Miami Dolphins Lowered seat prices on a few thousand season tickets in the upper deck by up to 30 percent; directed a personalized video e-mail campaign at individual ticket prospects that helped generate 8,000 new season-ticket holders; extended payment plans for season-ticket holders. The Dolphins, under new owner Stephen Ross, have been busy adding glitz to the team to attract fans, so hard-core ticketing initiatives revolved largely around a viral marketing campaign, which has helped increase season-tickets sales from 46,000 last year to the low 50,000 range this season. Minnesota Vikings Froze ticket prices; payment plan that allows season-ticket holders to make monthly, or even weekly, payments; season-ticket conference calls with head coach and executives; invited season-ticket holders to a state-of-the-Vikings town hall event. The team, in its outdated stadium, struggled before the economy cratered so the clubs task of selling tickets had been tough. Even with Brett Favre, a season sellout is not a certainty. New England Patriots Froze ticket prices. The teams season-ticket renewal rate was a bit down from past years, at 95 percent compared to 98 percent, but with Tom Brady coming back and the teams history of success, moving tickets has not been a problem. New Orleans Saints Froze ticket prices; sent handwritten thank-you notes to each of the 17,000 season-ticket holder accounts; started the selling before last season ended. The Saints have sold out again, reflecting lower-than-average prices, a good team and a new stadium deal that shows the team is staying in town for the foreseeable future. New York Giants Froze ticket prices; added season-ticket holder staff to communicate better with fans; conference call with quarterback and GM drew 6,000 fans. Most of the teams offseason efforts were designed toward moving into the new stadium in 2010. The team was long ago sold out of season tickets for 2009. New York Jets Froze ticket prices; first marketing campaign to move season tickets; recorded call from new head coach Rex Ryan to all season-ticket holders; pre-draft conference call with GM with premium-seat holders; half-season ticket; viral marketing campaign. Because of the economy, and season-ticket holders who left because of costs involved with seats in the new stadium opening in 2010, the Jets had a few thousand more tickets than usual available, but fully expect to sell out. Oakland Raiders* Froze ticket prices; season-ticket holders receive 3 to 6 percent of the price of a season ticket for a referral; expanded rewards programs that allow season-ticket holders to earn points for food and merchandise; more value-added tickets that include food; youth groups buying tickets get discounts to other venues such as museums and the zoo; game-day travel discount for ticket holders taking Amtrak from Sacramento. The Raiders have often battled to sell out, and have underperformed on the field, so the team has a blizzard of initiatives. Philadelphia Eagles No new initiatives. The team raised ticket prices 5 percent on 80 percent of its seats, renewing them at a 99 percent clip, and sold out its handful of individual game tickets in 10 minutes. Pittsburgh Steelers Froze ticket prices. Winning a Super Bowl and being the Steelers has its advantages, even in a severe recession. San Diego Chargers Instituted a longer payment plan; expanded the family seating section, thereby lowering prices on 1,000 seats to $48 a game from $63 (all other prices were frozen); held a stadium meeting for past season-ticket holders who did not renew; created two five-game packages; sent 50th anniversary decal to season-ticket holders. The Chargers play in an outdated stadium and have struggled in recent years to sell out some games, so the team is moving aggressively to ensure every seat is sold this season. San Francisco 49ers Froze ticket prices; upgraded restaurants and added a hall of fame; hosted first state-of-the team address with head coach, owner and front office executives. The Niners are long removed from the glory years, a double whammy given their creaky, outmoded stadium. While the team hopes to cut a deal to build a stadium in Santa Clara, the earliest a transaction could occur would be next year. St. Louis Rams* Froze ticket prices; offered a payment plan; sold three-game packages. For a team that went 5-27 the last two years and had three blackouts last year, ticketing initiatives have been relatively tame. Seattle Seahawks Froze ticket prices. Many of the fan outreach initiatives other teams are employing, the Seahawks have done for years. The team says it will be sold out every game this year and had a more than 90 percent season-ticket renewal rate in the offseason. Tampa Bay Buccaneers Froze ticket prices; season-ticket holders now can do one-year contracts instead of the 10 years previously required; payment plans for tickets; partial packages for the first time; half-price tickets in certain sections for kids under 16. The Bucs have been seen by some as being in a cost-cutting mode, perhaps due to their owners debt tied to his ownership of Manchester United. So even though sellouts have not been a problem, the team is aggressively moving to keep fans happy. Tennessee Titans No new initiatives. Individual game tickets sold out in hours, so the Titans are one of the fortunate few in the NFL to whistle by the economy and increase prices modestly. Washington Redskins More leniency on extending payment plans. One of the top sellers in the NFL, the Redskins did little new in the offseason. For the fourth consecutive season, the team did not raise ticket prices. * Team had blackout(s) in 2008
Kansas City Chiefs fans struggling with ticket payments can finance them on a team-issued credit card. Got a dirty windshield? Buffalo Bills boosters renewing season tickets online enjoy a free car wash. Ford Field, home of the Detroit Lions, claims the NFL’s first all-you-can-eat section. Jacksonville Jaguars supporters choose between a dozen ticket packages. The Oakland Raiders even subsidize the train to the game.
NFL teams, confronting the worst economy many have ever faced, unveiled a rush of new ticket sales initiatives this offseason that just 12 months ago would have been unthinkable in the country’s most popular sport.
According to a SportsBusiness Journal survey of the NFL’s 32 teams (see chart, page 25), only three — the Baltimore Ravens, Philadelphia Eagles and Tennessee Titans — did not try a new sales push or freeze ticket prices this offseason.
Giveaways, food discounts, flexible payment plans, once the domain of other sports burdened by longer seasons and less popular games, are now seeping into the NFL, whose regular season kicks off Thursday.
“In St. Louis, the days of rolling out the football and expecting to sell out are done, and maybe across the NFL as well,” said Kevin Demoff, the chief operating officer of the St. Louis Rams, which had two games blacked out last season and are struggling to sell out this season. “We are more aggressively pushing single-games seats. It is difficult for us in this economy. Coming off a 2-14 season, it is a double whammy. We have shaken off all the people who were tangential followers.”
Teams failing to sell out within 72 hours of kickoff cannot televise the contest locally, a big hit for sponsors expecting that exposure, not to mention the loss to fans. Last year, blackouts afflicted only nine out of 256 games, but the percentage is sure to rise this season after the league informed owners last month that nearly two out of every five teams were struggling to sell out.
The NFL will never mimic the minor leagues with their well-worn staple of corny sales gimmickry, or even for that matter the NBA, MLB or NHL, whose teams have five to 10 times the number of home games to sell. But football is clearly moving away from its plain-vanilla sales culture.
The most popular response to the recession has been freezing or cutting ticket prices, with 22 NFL teams taking that measure, while another five largely kept prices flat but with some increases elsewhere in their stadiums. Only four teams — the Titans, Eagles, Ravens and Houston Texans — raised ticket prices across the board. The Dallas Cowboys opened a new stadium this year, so price comparisons are not relevant, in part because the club has been selling 2009 for several years.
Other popular approaches to the poor economy are group-ticket packages and flexible payments. Even teams like the Washington Redskins and Denver Broncos, which sold out easily, said they were more flexible with late payments.
“You have to understand the pain the consumer is going through outweighs whatever cash-flow issues you have from time to time,” said Joe Ellis, the Broncos’ chief operating officer.
The Minnesota Vikings and New Orleans Saints hired eLayaway, which manages payments, to allow fans to pay in increments as brief as weekly. Historically, teams require either lump-sum payments, or allowed two installments. The Chicago Bears became the final team this offseason to accept credit cards. “That got a voluminous response,” said George McCaskey, the club’s senior director of ticket operations.
Eight teams this offseason, for the first time in their history, staged town hall meetings or conference calls for season-ticket holders with coaches and executives.
“We are doing a variety of outreach initiatives where season-ticket holders feel a more passionate connection,” explained Mark Wilf, president of the Vikings, which held its state of the Vikings meeting at Minneapolis’ Municipal Theatre.
With every fan precious, no detail is too minor. At an Atlanta Falcons town hall meeting, a fan asked team owner Arthur Blank why the cannons that shoot T-shirts into the crowd can’t reach the Georgia Dome’s upper deck. So the team hired 16 game-day workers to throw out T-shirts in the upper deck.
On Feb. 18, 1,800 people went to a San Francisco 49ers town hall gathering featuring head coach Mike Singletary and Chief Operating Officer Andy Dolich. In another move, the team opened to fans an ESPN filming of a show featuring Jerry Rice, and 2,000 fans attended.
“For many years, as you know, the major marketing program here was to display another Super Bowl trophy,” Dolich said. Now, Dolich has added a 10-person ticket service group, which includes an office at Candlestick Park, and spearheaded renovations to the team’s stadium, including a hall of fame wing.
Another factor driving the teams is central oversight from the league, which created a team services group two years ago. Team executives in charge of tickets have met twice since last November to share best practices information.
“There has been a renewed emphasis in the last 12 to 18 months,” said Neil Glat, an NFL senior vice president who oversees team services. “I don’t know if it is the economy or just how the business is evolving.”
Part of what the teams are trying to accomplish, he added, is to move the business relationship with fans from one tied just to games into a 12-month-a-year endeavor.
Nevertheless, while NFL clubs are certainly trying more than ever, some still have not fully embraced the new world. Take food, for example. Packaging food with tickets is an obvious lure to penny-pinching fans.
“Tickets plus food is a very attractive package if you will in the current economic climate,” said Amy Trask, chief executive of the Raiders, which for the first time this season sold value tickets and created a program so season-ticket holders could earn points toward awards, including free food.
However, only three other teams surveyed by SportsBusiness Journal — the Arizona Cardinals, Lions and Jaguars — offered food discounts. Only six teams reported giving away free items to season-ticket holders for the first time this offseason. The Cleveland Browns employed a contest to give away prizes for renewing season-ticket accounts, while the Miami Dolphins are giving hand-held TV devices to their club-seat holders.
Just three teams — the New York Giants, Atlanta Falcons and Vikings — added customer service groups this offseason (the 49ers created their division at the start of the 2008 season). Other clubs beefed up fan communications through e-mail, social media and marketing.
Some teams are responding with multigame packages. Many teams traditionally sold only season tickets, with limited inventory available for individual games. But even the New York Jets, surprisingly struggling to sell out, offered a half-season package for the first time, and just two weeks ago launched a viral video campaign to move remaining tickets. The video includes a contest whose winner will run out with the team before the Oct. 18 home game against the Bills.
The Jaguars doubled to a dozen the number of ticket packages they sell, though apparently to little avail as the club said all of its home games will endure blackouts. And the Cincinnati Bengals offered a four-game package, and brought back their two-game package, last sold in 2005.
“The four-game package does not seem to be getting a lot of traction; it is still a lot of money for people,” said Andrew Brown, the Bengals’ manager of ticket sales. “Other sports have had a lot more flexibility in discounting tickets and being more creative. Our teams are being forced to get into that now.”
Some executives worry the discounting and hyperaggressive selling hurts revenue.
“When focusing on blackouts, you are shorting yourself on revenues,” said the Rams’ Demoff. “If you are looking at group sales, you are not looking at the highest level of tickets. Some teams are discussing whether you should sell a group package of 1,000 at a group price, knowing it may hurt your revenue number.”
That is not just because individually those seats prorated are worth more, but to avoid a blackout, teams must sell these seats but do not have to move all the premium ones. Because club seats and suites do not count toward blackouts, Demoff argued teams scrambling to ensure local TV coverage focus sales pushes on low-end inventory at the expense of pricier ducats.
“Maybe this is the year,” Demoff concluded, “people don’t pay to avoid blackouts.”