Cowboys May Generate Extra $90M In Revenue From New Stadium
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New Stadium May Make Cowboys Top
Revenue Producer In NFL |
The Cowboys "could boost their annual revenue by at least a third -- $90[M] and probably more -- in their new stadium this season," according to an analysis cited by Gary Jacobson of the DALLAS MORNING NEWS. The boost in revenue, "propelled largely by premium-priced club seats and suites, would probably make the Cowboys the top revenue producer in the NFL at more than $360[M] and, possibly, the most profitable franchise, too." The "real revenue magic, year after year, is in the 15,000 club seats that didn't exist at Texas Stadium and in the 300 suites, which can hold an additional 12,000 or so fans." The new suites "cost $100,000 to $500,000 a year on long-term leases," generating an estimated $80M in annual revenue, and "more than 270 of the suites have been leased." Meanwhile, Jacobson notes teams "do not share revenue generated by local sponsorships, concessions, merchandise and parking" and "less than a third of the Cowboys' estimated increase this season will come from these categories." Gains in food, beverage and merchandise areas "could be especially steep if the team averages 80,000 fans, which would be about 25[%] above last year." Experts said that the "novelty effect of what arguably will be the grandest sports facility in the world could benefit" Cowboys Owner Jerry Jones "over a shorter term." But it is "clear that uncertainty about the economy is cause for caution." The Cowboys "aren't talking much about the finances of their billion-dollar baby," and the "last official update on ticket sales -- 85[%] of reserved seats sold -- was months ago."
Methodology: The $90M figure was derived from studying the team's "previous financial performance, its new seating price structure, the impact of new stadiums on other NFL teams" and interviews with sports business experts. The estimate assumes the Cowboys "will be able to attract an average of close to 80,000 for the eight regular-season home games this year, more than the base capacity of 73,000." It also assumes the Cowboys' "split of league-shared revenue will not decline appreciably" and there will not be a "significant number of defaults among ticket holders who financed their" PSLs from the team. The $90M also assumes that even in a "poor economy, Jones will be able to approach the same rate of gains made" by Patriots Owner Robert Kraft and Eagles Owner Jeffrey Lurie after they opened their new stadiums earlier this decade (DALLAS MORNING NEWS, 6/4).
PAYMENT PLAN: An analysis by the DALLAS MORNING NEWS reveals Jones "owes less than" $425M on the new stadium. Jones recently said that the final cost for the stadium "will be about" $1.15B. That means Jones has paid about $376M of the stadium's cost during construction "through ongoing cash flow and other sources" (DALLAS MORNING NEWS, 6/4).
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