Bucs' Blackout Fallout

An exciting Bucs opener came and went without most football fans in Tampa Bay realizing what happened. The game was blacked out, even though some insiders speculated the team needed to sell just a few thousand more seats to reach the new 85% threshhold necessary to televise home games.

As I've written before, the NFL's "concessions" to fans were no real concessions at all. And on Saturday, Tampa Tribune columnist Joe Henderson echoed the sentiments, writing "If I were (the Bucs), I would have done whatever was necessary to put this game on local TV....The Bucs continue to grope in the dark, and it's tough to care about something you can't see."

Many fans apparently felt the same way, writing numerous letters to the editor criticizing the league and the team.

One fan claimed "to me, the Bucs don't exist" while another wrote "(i)f the Glazers wish to forgo the exposure of televised games by not buying the difference between 71 percent and 85 percent of the sale of non-premium seats, then they may have to deal with a shrinking fan base."

The next two weeks, fans can watch the Bucs play on the road, but unless Tampa Bay reels off consecutive wins against the Giants and the Cowboys, they're going to have an awful tough time selling Week 4 at home against the Redskins.

"Filling the Stadium isn't Nearly as Critical for Teams as it Used to Be"

There are two teams in Tampa Bay right now that are only halfway through their stadium contracts, yet they cannot fill the stands if their lives depended on it.

However, while the Tampa Bay Rays are rumored every other month to be jumping to a new city, there has been no such talk (yet) for the Tampa Bay Buccaneers. Why?

WTSP's Adam Freeman poses that question and arrives at this possible answer:

USF Associate Professor of Sports Management Dr. Mike Mondello says filling the stadium isn't nearly as critical for teams as it used to be.
...
"The NFL is in such a great position with their national TV that teams andorganizations, it's almost gravy what they make at the gate," Mondello explained.

And while it's easy to point to the NFL's $9 billion annual revenue figure as evidence, don't forget MLB was turning $7 billion a year before signing a new multi-billion dollar TV deal.

So if the Bucs prove that you don't need to sell tickets to be profitable and MLB is turning record revenues, why are the Rays hinting at relocation while the Bucs aren't?

It's a simple lesson in leverage.

Rays Named "Smartest Spenders" in Sports

This should come as no surprise to Rays fans, but the franchise was named the Businessweek "smartest spender in sports" across MLB, the NBA, the NFL, and the NHL.

Bloomberg's press release follows:

Bloomberg Businessweek’s second annual ranking of the smartest spenders in sports is online now at businessweek.com and in the magazine on newsstands Friday, August 31, 2012. The ranking determines how well the 122 franchises in the NFL, NBA, NHL, and MLB spend their money. Bloomberg Businessweek reporter Ira Boudway compiled the list using regular and post-season records, and publicly available payroll data, to calculate how much teams spent per win over the last five seasons. (For baseball, he also included the first half of the current season.) Every team was then compared against league average to see how well they turn wages into wins, producing a total score called the “efficiency index.” The lower the index the
better.

MLB’s Tampa Bay Rays came in at #1 with an efficiency index of -1.82, followed by #2 MLB’s Texas Rangers; #3 NHL’s Detroit Red Wings; #4 NBA’s Los Angeles Lakers; #5 NBA’s Boston Celtics; #6 NHL’s Pittsburgh Penguins; #7 NFL’s New England Patriots; #8 NFL’s Green Bay Packers; #9 NFL’s New York Giants; and #10 NHL’s Boston Bruins. Dead last on the ranking is NFL’s St. Louis Rams, coming in at #122 with an efficiency index of 4.07. Joining the Rams in the bottom 10 least efficient spenders are #121 NBA’s Minnesota Timberwolves; #120 MLB’s New York Mets; #119 New York Islanders; #118 NHL’s Toronto Maple Leafs; #117 MLB’s Chicago Cubs; #116 NBA’s New York Knicks; #115 NBA’s Brooklyn Nets; #114 NHL’s Winnipeg Jets; and #113 MLB’s Seattle Mariners.

For this year’s ranking, bonuses were added for the victories that matter most: wins above .500, playoff wins, and championships. The scale counts regular season wins once, with a half-win bonus for every win over .500. Playoff wins count for 10 percent of a season; championships for half a season. In their Super Bowl winning season in 2011, for instance, the New York Giants got credit for 9 regular season wins, plus a .5 game bonus for their ninth win—the one that put them above .500. Their 4 playoff wins earned them 6.4 more wins. And the Super Bowl victory 8 more, for total of 23.9 “weighted” wins. At businessweek.com, the rankings are interactive as readers can adjust the weights with their own values, and see how the rankings change. They can also sort the rankings by league.

NOTABLE FINDINGS:
Baseball: Top MLB team is the Tampa Bay Rays (#1); Least efficient is the New York Mets (#120)
Basketball: Top NBA team is the LA Lakers (#4); Least efficient is the Minnesota Timberwolves (#121)
Football: Top NFL team is the New England Patriots (#7); Least efficient is the St. Louis Rams (#122)
Hockey: Top NHL team is the Detroit Red Wings (#3); Least efficient is the New York Islanders(#119)

Boston: The Celtics, Patriots, and Bruins make the top 10, but the Red Sox come in at #70

New York Area: The #9 New York Giants and #14 New Jersey Devils are in the top 15, while the New York Rangers are at #45, New York Jets are at #54, and the New York Yankees are at #98, with the #115 Brooklyn Nets, #116 New York Knicks, #119 New York Islanders, and #120 New York Mets all in the bottom 10

Los Angeles: The City of Angels also has a wide spread, with the Lakers at #4, the Kings at #37, the Anaheim Ducks at #65, the Dodgers at #79, the Clippers at #86, and the Angels at #90

For Tampa Bay fans keeping score at home, the Buccaneers came in just above average at No. 59, while the Lightning were just below average at No. 76.

Odds & Ends: Bucs Blackouts & Glazers' Bucks

On Tuesday, the Tampa Sports Authority unanimously rejected the Bucs' bid to keep $12 million in unused tax funds from going back to local governments. The board ruled the team, which was promised the money for a practice complex back in 1996, lost its right to the funds by not claiming it for 16 years. The Bucs didn't like the decision, but it's a small - and rare - victory for taxpayers over a sports team.

Meanwhile, the Glazers aren't exactly hurting for money after their Manchester United IPO raised something like $200 million without giving up any real voting stake in the club. In fact, they may not mind having billionare George Soros buy up a huge chunk of the stock - with his other Tampa connections, they'll have no trouble talking business at the next Harbour Island barbeque.

Finally, all of the Bucs' preseason blackouts reinforce the point that the league's new 85% blackout threshold was no concession at all. The NFL still sends the message that it would rather make fans buy tickets to see their favorite teams than allow them to watch on TV for free. All the 85% rule does is acknowledge there isn't quite the demand for tickets there used to be.

And team owners, who could always lower the price of tickets, are sending a similar message that they'd rather sell 40,000 tickets at $40/each than 60,000 tickets at $20/each. No concession at all.

Odds & Ends: Dollars & Cents

It's belated, but a tip of the hat to the Glazer family for embracing the NFL's new 85% blackout threshhold. As I wrote before, it was hardly a concession to the fans from the league, but the Glazers made the right choice in making it as easy as possible for their games to be televised, instead of opting for a higher threshhold that might have encouraged a few more fans to buy tickets.

Meanwhile, the family's other team, Manchester United, remains the world's most valuable franchise at $2.23 billion, according to Forbes. Ho-hum. It makes the Bucs' sinking value (now $981 million) an easy pill to swallow.

As for the $12 million Hillsborough County wants back from the Bucs, you won't find any Glazer sympathizers in Daniel Ruth's family.

In baseball-land, the Yankees are the sport's most valuable team ($1.85 billion) and Derek Jeter is one of its richest stars. Which produces little surprise when his new Tampa home is valued at $12.3 million, nearly twice as much as any other home in the city.

Finally, one addition to the Stadium Subsidy post from Tuesday: the Cubbies are getting closer and closer to a little action too. Here's an update, free of opinion (well, my opinion at least).

NFL Blackout Fallout, Day 2

In watching and reading the local & national news reports on the NFL's new blackout policy, the reactions were predictably upbeat. Even though the facts weren't always spot-on.

As I wrote yesterday, the NFL isn't making any real concessions since it is still threatening fans with blackouts if they don't buy enough tickets; they've merely admitted the high thresholds may be unrealistic in modern-day medium-markets.

And since the Bucs haven't yet said they'd go with the 85% option (because it might cost them money), it certainly is a bit a early for fans to rejoice. But that won't stop media outlets from celebrating!

Last night, FOX 13 in Tampa reported that "Team owners passed a rule that will let games be broadcast, even if just 85 percent of the tickets have been sold." Of course, it failed to mention "if the team chooses the 85% option." But then FOX piled it on:

"If that rule had been in place last year, not one Buccaneer game would have been blacked out."

Not true. As the Tampa Tribune correctly reported, "five of the seven games would have been televised in the Tampa market, with only the home opener on Sept. 11 against Detroit and Sept. 25 against Atlanta (blacked out)." Again, if the Bucs set their threshold to 85%.

To its credit, FOX 13 acknowledged the rules are basically irrelevant in today's modern TV era where the league makes $3 billion annually from the networks. But hopefully the positive reaction is enough to convince the teams and NFL that it's a good idea to make games as easy to watch for their local fans.

NFL Loosens Blackout Policy, But What's Concession to Fans?

The Wall Street Journal reports that the NFL will loosen its blackout policy to include games that are only 85% sold:

Team owners have passed a resolution that starting this season will allow for local broadcasts of NFL games even when as few as 85% of tickets are sold. Under the new rule, each team has more flexibility to establish its own seat-sales benchmark as long as it is 85% or higher. To discourage teams from setting easy benchmarks, teams will be forced to share more of the revenue when they exceed it.

The league acknowledges that HD televisions are one of many reasons why fans would rather watch a game at home than at the stadium. And loosening the rule (amid political pressure) appears to make the concession to fans that they shouldn't have to buy expensive tickets if they want to see their team.

Except fans still need to buy tickets if they want their games televised - just not as many tickets as before. If the NFL was really serious about making games available to fans, they'd eliminate the blackout rule altogether. And allow/encourage teams to give away unused tickets to youth groups instead of having to "buy" them.

But without any blackout threat, fans might really be more likely to watch games from home instead of from $77 seats. This way, the NFL hopes to get the best of both worlds: ever-growing television revenues as well as ever-growing ticket revenues.

At least they're reportedly ready to make other improvements too, including instant replays for fans and wireless internet in the stadium.

NFL Passed on Nixon's Blackout Offer

Interesting read on the topic of NFL blackouts:

WASHINGTON – The NFL, which is trying to maintain its TV blackout of home games that don't sell out, missed an opportunity 40 years ago to preserve an even more restrictive policy when it rebuffed an effort by President Richard Nixon to lift the hometown blackout just for playoff games.

On a previously unreported tape recording, now in the National Archives, Nixon told his attorney general to offer the league a deal: Allow playoff games to be televised in the hometown city, and the president would block any legislation requiring regular-season home games to be televised as well. At the time, the NFL blacked out all home games, whether they were sellouts or not.

The president was a serious fan and in the early 1970s, he shared the anger of Washington residents who couldn't watch Redskins games on TV, former aides recalled. The Redskins routinely sold out and the NFL blackout policy left no way for Washington fans without tickets to watch home games. In October 1972, Nixon's Justice Department had even told Congress it was time for some modification of the blackout policy "in the public interest."

Continue reading here.

Forbes: Glazers 8th-Worst NFL Owners

The lastest Forbes list dissing Malcom Glazer & fam names them the 8th-worst owners in the NFL. The list "looked at teams’ change in franchise value and win percentages (including a bump for playoff and Super Bowl victories) over the last five years. Each factor accounts for half of their rank."

Forbes cites the Bucs' pedestrian 2% increase in franchise value since 2006 and just 44% winning percentage over that time.

Report: Glazers to Spend Millions on Stadium

Malcom Glazer & family certainly have their critics among Bucs fans, but it appears they're hoping to win some people over by kicking back millions of dollars to the community.

Just not the Tampa Bay community.

Reports out of New Orleans indicate the Glazers will join Saints owner Tom Benson in chipping in for a new stadium for the Tulane Green Wave. Of course, the Glazers should have some extra dough around - they didn't have to pay a dime for Raymond James Stadium.

Then again, realize Tulane U's difficult position - it's not like it can threaten to move to a new city if it doesn't get a new stadium.

Stadium Irony Can Be So Ironic

If you wonder why the Tampa Bay region is so hesitant to build a taxpayer-funded stadium for the Rays, you only need to read this article from the Cincinnati Enquirer or this summary from Field of Schemes.

The Cincinnati region faces a huge shortfall on the bonds for its two riverfront stadiums:

The deficit in the fund that pays for Paul Brown Stadium and Great American Ball Park could be as much as $14 million next year, grows to $46 million in 2013 and eventually could cumulatively reach $480 million if nothing is done.

That leaves Hamilton County (Ohio) with few options, like the bleak situation Orlando faced when building Amway Arena.

Field of Schemes author Neil deMause writes that Orlando "scrapped a planned performing arts center and cut back on police, fire, and road services to fill funding shortfalls on the Magic's new arena."

He's also interviewed in the Enquirer article:

Hamilton County commissioners, through negotiations, public pressure or lawsuits, keep trying to force the Bengals and Reds to cut new deals. But that rarely works, deMause said.

"The teams say, 'You made a deal and if you got the short end of the stick, that's not our problem,'" he said.

The irony, of course, is the opposite seems to be true when franchises make bad deals.

Rays principal owner Stu Sternberg has admitted he overestimated the willingness of fans to drive to St. Petersburg when he bought the team in 2006. But despite 16 years left on a 30-year deal at The Trop, he's made it clear he expects a new ballpark built if Tampa Bay expects to keep the Rays in town.

Privately-Funded Stadium Failing; City Considers Bailout

Think you can build a stadium these days with only private funds? So did the owner of the Columbus Blue Jackets, but then he went broke...and the city is now considering a bailout.

As I've written before, of the dozens of baseball, basketball, and hockey venues built in the last 49 years, just one was successfully built without public support - AT&T Park - and even the Giants admit they caught "lightning in a bottle" with their timing.

Even in the NFL, where owners' revenues dwarf those of their pro sports bretheren, just one stadium was built without public dollars: Gilette Stadium in New England, where corporations are tripping over themselves to sponsor a piece of the Patriots.

Column Says Rays Right Not to Price Tickets Dynamicly

David Simmons from The Biz of Baseball writes that dynamic ticket prices, one of my big stories to watch in 2011, is a great idea for most teams...just not the Rays:

"The loss of season-ticket holders has forced teams to begin the use of dynamic pricing. Teams, like the concert industry, are challenged to make the same amount of revenue of their ticketing inventory by selling fewer tickets."

Read more here.

Tampa Bay's Front Offices Keeping Busy

Aside from the craziness that surrounds a Lightning playoff run and the tough decisions that come with a battle for first in the AL East, the front offices of Tampa Bay's pro teams are quite busy with a number of non-personnel moves.

First, with the NFL lockout extending into the summer, the Buccaneers announced a four-day furlough for all front-office employees. The team says more are possible if the lockout extends into the fall, but this could actually work out quite well for employees. If the season gets underway in September (as many experts expect), the employees will be reiumbursed for the furlough, meaning four extra vacation days. Additionally, the Bucs say the move helps avoid layoffs.

And the Rays quietly made another committment to the region, giving the Tampa Bay Partnership free ad space on the left field wall at The Trop. The private group, which the Rays are paid members of, promotes business development across Tampa Bay. While the team has been criticized for its lack of marketing around the region in recent years (possibly tied to attendance efforts?), this shows they're still activly courting business partnerships and plan on remaining in the region in the long-term.

Unique Stadium-Funding Idea: Tax the Players!

Not sure why free agents would want to play for a team where they'd be taxed an extra 5 percent to help pay for the stadium, but as Field of Schemes explains, the idea - along with a tax on memorabilia - would be an interesting way to finance a new Minnesota Vikings stadium:

The vast majority of the state money (more than two-thirds) would come from a sports memorabilia tax, with a 5% income tax surcharge on Vikings player salaries a distant second; taxes on luxury suite rentals and satellite TV services would amount to not much more than rounding errors. Also, since all sports memorabilia would be subject to the tax surcharge, this means that this "user fee" would be hitting Twins and Wild fans even if they had no interest in football.

I don't know how well that will go over in Minnesota - let alone more conservative places (tax-fearing Florida) - but it's unlikely the players would have much say in the matter. Since the state would be doing the taxing rather than the owners, the surcharge would likely be enforceable.

Florida Lawmaker Tries Blocking Stadium Funding Again

State Sen. Mike Bennett (R-Bradenton), one of the world's biggest opponents of stadium subsidies, is at it again. Bennett re-filed legislation today to prevent public financing of sports stadiums without voter approval.

I remember covering a similar bill he filed in 2009, but it never made it out of committee. He took it as a hint not to file again in 2010.

But hope springs anew for Bennett in 2011, the era of anti-tax sentiments. He's been taking aim at an effort in Miami to renovate Sun Life Stadium with public dollars and hasn't been shy in the past about the need for private businesses to build their own stadiums.

In 2005, when the "Tea Party" was nothing more than a line in a history book, Bennett told the Sports Business Daily, "if you can afford to pay somebody $53 million to throw a baseball 90 feet, you can afford your own damn stadium. I believe you should support your business and I’ll support mine. Nobody ever gave me a handout. What kind of deal is that?”

He updated his comments in 2011, saying, "If you can pay someone $52 million to play the game of baseball, certainly you can build your own stadium with your own money.”

Lawsuit Sheds Light on Agent's Relationships with College Kids

Just received a press release from a law firm in Tampa suing national securities firm Oppenheimer & co. The suit alleges that investors were defrauded out of money intended for college football players after they declared themselves eligible for the NFL draft:

The complex scenario generally worked as follows. Investor monies were raised for the purpose of creating and funding an investment used to fund the temporary needs of young NFL recruits during the period of time immediately following their departure from college football and prior to their entry into the NFL draft. This is a period of time wherein sports agents aggressively recruit top NFL future talent to support their extremely lucrative businesses. Having monies available to lend to these recruits is a very powerful recruiting tool for sports agents. Monies were thus raised by Oppenheimer’s New York City office through (a financial advisor in New York) to fund the loans to these young recruits which were guaranteed by the players, the sports agencies, and others.

The suit claims, however, that the monies were funnelled elsewhere, defrauding investors.

The athletes indirectly involved in the suit include Steelers' WR Emmanuel Sanders (just ays before the Super Bowl), Broncos CB Perrish Cox, Cardinals LB Daryl Washington, Jets CB Brian Jackson, and Raiders DE Lamarr Houston.

Bucs Lower Season Tickets 20 Percent

According to the front page of the Bucs' website today, 2011 season tickets will cost fans 20 percent less than they did in 2010, a season in which the Bucs couldn't sell out a single game.

"Our organization has spent a lot of time listening to our fans at this time when our team is thriving and our economy is not. As a result, we are now offering several pricing changes in response to our community’s needs,” Buccaneers Co-Chairman Joel Glazer said in a press release.

Adult tickets now start at $35 per game, with youth tickets starting at $17.50. Parking and concessions have also been discounted for season ticket-holders.

However, don't expect to go to Buccaneers.com for any other information...at last check, the landing page contained just two links: one to chat with a ticket rep live and one to buy tickets on Ticketmaster.

January Potpourri

It's been real quiet on the Rays' stadium front, but a few interesting links to kick off the 2011 sports business season:

Roy Peter Clark, the vice president of the Poynter Institute, which owns the St. Petersburg Times, penned a column saying the Rays' attendance woes have nothing to do with the stadium, using the Bucs' attendance problems as evidence.

Meanwhile, Times business writer Robert Trigaux details the many legal problems Tampa Bay's teams and players have to endure.

Finally, internet sensations continue to want their 30 seconds of fame on Super Bowl Sunday. Word is Groupon tried to buy an in-game ad but acted too late and had to settle for a spot in the pre-game show. Should be interesting to see what they come up with.

Biggest Sports Business Stories of 2011?

It won't take much to predict the biggest sports business stories of 2011.

In Tampa Bay, it will be the lack of progress in the Rays' stadium saga. While Tampa business leaders are beginning the process of studying stadium financing, the economy and lack of traditional funds will continue the stalemate - and frustrations.

For the best updates on the Stadium Saga, I encourage you to follow Shadow of the Stadium on Facebook or it's updates on Twitter.

Nationally, the NFL's ongoing labor negotiations will be the multi-billion-dollar soap opera no American will be able to ignore. Will the owners lock out the players on March 1? Will there be a season in 2011? If there is, will it have 18 games?

I recommend following Maury Brown from the Business of Sports Network for the answers. His September primer on the dispute is a must-read.

Should be a fun year in the Shadow of the Stadium.