Topic of the day 7/3: Small markets and NFL economics

[Hatszel]

I don't disagree with you but 6 million of that is greater Toronto and I don't believe they give a **** about the Bills.

If the Bills win they will.

[BuffaloBill]

First, where have any of the owners implied that small markets do not work in the NFL?

 

The owners are clearly putting pressure on the Bills for a new stadium all in the interest of revenue. Additionally, it is no secret that they continue to allow, if not push, to have teams in larger markets with LA being prime among them. Also, white indirect has there been any owner, other than Pegula who voted with $1.3B, who stood up to say the Bills should remain in Buffalo?

 

 

Second, "small market" teams are doing just fine in the NFL--the smallest market, GB, is in the top 10 in revenue--more than Miami, Pittsburgh, NO, Atlanta, Oakland, SD, etc....

 

GB is an excellent example of a team that has been successful in a small market. A key to their success is that they, like the Bills, have regionalized. Don't forget that Chicago and its burbs sit in that region. Chicago represents both a rival city and a friendly city to GB due to proximity.

 

GB also has broad appeal among fans who do not live in the region. Go to any sports bar playing multiple games on a Sunday and inevitably there is a large contingent of GB fans. They have built a very loyal fan base.

 

Third, the teams that experienced the highest increase in valuation are not the largest market teams...they include Detroit, Jax, Cincy, Green bay.

 

Care to explain yourself here because your point is not evident. Forbes, right or wrong is the media outlet with the most notarieity in NFL valuations. For 2015 your named cities:

 

Detroit: 30 out of 32

Jax: 27 out of 32

Cincy: 29 out of 32

GB: 10 out of 32

 

Setting aside GB of the other three that you mention how did they increase in value outside of the fact that Pegula pushed them with his stunning number paid for the Bills? Did any of them have a major uptick in revenue or TV viewership?

 

Maybe a more meaningful measure is that according to Forbes the Bills were at the bottom of the third quartile in operating income in 2015. A true stretch but comparative goal might be to get to GB's level of operating income which interestingly would put them squarely at the middle of the league. This would be a big step because it would require a 50% increase in operating income.

 

Fourth, there is nothing unique about the NFL's "antitrust exemption" nor is there anything "historic" in the way it seeks to get public funding for public stadiums (see the shameless fiasco the Braves have perpetrated on the taxpayers in Georgia).

 

How many businesses, especially privately held ones, get anti-trust exemption without heavy regulation?

 

The "current NFL economic model" ensures that all teams make money. Having fewer teams would bring the NFL less money for the owners. How would losing the smaller market teams benefit anyone in the NFL?

Nobody suggested smaller market teams should be lost.

[ALF]

The owners have to put limits on salaries like the rookie signing one did.

 

Player salaries keep pushing the need for more revenue. Until that is under control a new stadium would be too far of a reach for Buffalo. JMO

[BuffaloBill]

The owners have to put limits on salaries like the rookie signing one did.

 

Player salaries keep pushing the need for more revenue. Until that is under control a new stadium would be too far of a reach for Buffalo. JMO

I agree to a point, the players and the idea the NFL funded stadium builds should be included in the revenue sharing model. This is a double edged sword for small market teams though.

[BarleyNY]

The owners have to put limits on salaries like the rookie signing one did.

 

Player salaries keep pushing the need for more revenue. Until that is under control a new stadium would be too far of a reach for Buffalo. JMO

That is totally incorrect. The owners do have limits on salaries in the form of a hard salary cap, which they negotiated a great deal on in the last CBA. That cap is based on a percentage of revenues. If that percentage was lower then the owners would simply take more profit home. They'd still be after every dollar they could get from the public. That wouldn't change one bit.

[ALF]

At what amount of money will the owners and players be satisfied ? Greed ? New stadiums cost a fortune today.

 

St Louis could not compete with LA and so on.

 

If they ever change the revenue sharing formula to stop subsidising small markets ?

Edited July 5, 2016 by ALF

[BarleyNY]

I agree to a point, the players and the idea the NFL funded stadium builds should be included in the revenue sharing model. This is a double edged sword for small market teams though.

It'd be nice if the teams and players had to fully fund their own stadiums, but they know they don't have to. The NFL let everyone know the consequences when they let the Browns move. Now Oakland is about to lose the Raiders a second time. If it can happen to those teams, it can happen anywhere. The jump in public assistance for stadiums in the wake of the Browns move was substantial and led us to where we are today. If you want an NFL team in your city, it's going to cost you. It's just the way it is. People in Buffalo need to face reality on the subject.

Edited July 5, 2016 by BarleyNY

[Mr. WEO]

The owners are clearly putting pressure on the Bills for a new stadium all in the interest of revenue. Additionally, it is no secret that they continue to allow, if not push, to have teams in larger markets with LA being prime among them. Also, white indirect has there been any owner, other than Pegula who voted with $1.3B, who stood up to say the Bills should remain in Buffalo?

 

Bob Kraft and Roger Goodell

 

GB is an excellent example of a team that has been successful in a small market. A key to their success is that they, like the Bills, have regionalized. Don't forget that Chicago and its burbs sit in that region. Chicago represents both a rival city and a friendly city to GB due to proximity.

 

GB also has broad appeal among fans who do not live in the region. Go to any sports bar playing multiple games on a Sunday and inevitably there is a large contingent of GB fans. They have built a very loyal fan base.

 

Care to explain yourself here because your point is not evident. Forbes, right or wrong is the media outlet with the most notarieity in NFL valuations. For 2015 your named cities:

 

Detroit: 30 out of 32

Jax: 27 out of 32

Cincy: 29 out of 32

GB: 10 out of 32

 

Setting aside GB of the other three that you mention how did they increase in value outside of the fact that Pegula pushed them with his stunning number paid for the Bills? Did any of them have a major uptick in revenue or TV viewership?

 

That is exactly why they increased in value. It doesn't matter what their revenue is or their TV appeal, thus, the small markets still have huge value. That is the point....

Maybe a more meaningful measure is that according to Forbes the Bills were at the bottom of the third quartile in operating income in 2015. A true stretch but comparative goal might be to get to GB's level of operating income which interestingly would put them squarely at the middle of the league. This would be a big step because it would require a 50% increase in operating income.

 

 

How many businesses, especially privately held ones, get anti-trust exemption without heavy regulation?

 

 

Well, you don't really have to think past Major League Baseball, do you? It's the only meaningful comparison in this discussion. Nothing unique about the NFL in pro sports in this country.

 

Nobody suggested smaller market teams should be lost.

 

You said that the NFL considers the small market teams not compatible with it's "current economic model". You also said that they are pushing smaller market teams into larger markets (they aren't--Kroenke was dying to make that move for a very long time. The fact that NO other team moved to LA for decades disproves your point.

[BuffaloBill]

 

The owners are clearly putting pressure on the Bills for a new stadium all in the interest of revenue. Additionally, it is no secret that they continue to allow, if not push, to have teams in larger markets with LA being prime among them. Also, white indirect has there been any owner, other than Pegula who voted with $1.3B, who stood up to say the Bills should remain in Buffalo?

 

Bob Kraft and Roger Goodell

GB is an excellent example of a team that has been successful in a small market. A key to their success is that they, like the Bills, have regionalized. Don't forget that Chicago and its burbs sit in that region. Chicago represents both a rival city and a friendly city to GB due to proximity.

GB also has broad appeal among fans who do not live in the region. Go to any sports bar playing multiple games on a Sunday and inevitably there is a large contingent of GB fans. They have built a very loyal fan base.

Care to explain yourself here because your point is not evident. Forbes, right or wrong is the media outlet with the most notarieity in NFL valuations. For 2015 your named cities:

Detroit: 30 out of 32

Jax: 27 out of 32

Cincy: 29 out of 32

GB: 10 out of 32

Setting aside GB of the other three that you mention how did they increase in value outside of the fact that Pegula pushed them with his stunning number paid for the Bills? Did any of them have a major uptick in revenue or TV viewership?

 

 

That is exactly why they increased in value. It doesn't matter what their revenue is or their TV appeal, thus, the small markets still have huge value. That is the point....

 

Maybe a more meaningful measure is that according to Forbes the Bills were at the bottom of the third quartile in operating income in 2015. A true stretch but comparative goal might be to get to GB's level of operating income which interestingly would put them squarely at the middle of the league. This would be a big step because it would require a 50% increase in operating income.

How many businesses, especially privately held ones, get anti-trust exemption without heavy regulation?

 

 

Well, you don't really have to think past Major League Baseball, do you? It's the only meaningful comparison in this discussion. Nothing unique about the NFL in pro sports in this country.

 

 

Nobody suggested smaller market teams should be lost.

 

You said that the NFL considers the small market teams not compatible with it's "current economic model". You also said that they are pushing smaller market teams into larger markets (they aren't--Kroenke was dying to make that move for a very long time. The fact that NO other team moved to LA for decades disproves your point.

 

 

Go back and read the original post I asked if small market teams are viable in the NFL economic model. I did not state that they weren't.

 

However, to your point re: LA. There were two teams there and neither stayed. It could easily be argued this is for a multitude of reasons. Now, one I'd coming back. Both circumstances could simply be because the NFL owners have largely seduced themselves into believing there must be a team(s) in LA given its population. It is more likely that once again the NFL plays chicken with cities over the stadium issue. There is no hidden threat, the NFL says to cities "build us a stadium or else we leave."

 

Yes, the NFL and owners are throwing in more money and do not depend entirely on cities to front stadium money but don't mistake this for a backing off of their threat.

 

To me what is lost in all of this is the connection between the game, the teams, the players and the average Joe (or Jane) fan. In some places the league has priced game attendance out of the reach of n average fan. Maybe this does not matter as average fans prefer to consume the game on devices. However, in the ever constant push for money when will this evolve to a pay per view (or pay for access) model that makes it hard for all who want to to enjoy the connection with their team?

[machine gun kelly]

First, where have any of the owners implied that small markets do not work in the NFL?

 

Second, "small market" teams are doing just fine in the NFL--the smallest market, GB, is in the top 10 in revenue--more than Miami, Pittsburgh, NO, Atlanta, Oakland, SD, etc....

 

Third, the teams that experienced the highest increase in valuation are not the largest market teams...they include Detroit, Jax, Cincy, Green bay.

 

Fourth, there is nothing unique about the NFL's "antitrust exemption" nor is there anything "historic" in the way it seeks to get public funding for public stadiums (see the shameless fiasco the Braves have perpetrated on the taxpayers in Georgia).

 

The "current NFL economic model" ensures that all teams make money. Having fewer teams would bring the NFL less money for the owners. How would losing the smaller market teams benefit anyone in the NFL?

Weo we are agreeing way too much. I'm getting scared. Just kidding.

 

Excellent post, and there was some very good interviews on Green Bay's recent publication of revenue on NFLR. You can probably find it on their on demand segment. Green Bay's philosophy is somewhat driven by trying to create a war chest 10 years in advance prepping for the impending challenge of either updating Lambau again, or possibly having to build a new stadium. Given they are the only publicly owned team, they have a long term financial plan ensuring they do not lose their status ain't NFL owners was the exact comment.

 

Green Bay's not going anywhere nor is the Bills. That concern is over and the Pegulas are taking a slow measured approach to a stadium solution 6-8 years from now. I'm not in the slightest bit worried about the Bills viability long term in Buffalo. It's really just a matter of do they revamp OP again for les money, or build something new downtown. As much as a downtown stadium sounds logical, they aren't dumb. With 7-8000 extra general seats in OP as opposed to a typical 65000 seat stadium and a winning product, can outweigh less boxes due to the lack of corporate support.

 

Personally with the massive parking opportunities and good infrastructure with road systems, I'd rather keep the Ralph and keep modernizing it. There is a lot aesthetically that can be done in the future, and more revenue opportunities with concessions. They can also creat concessions outside with access to sports restaurants etc. adjacent to the stadium. For anyone complaining of traffic post game, go to places that have real traffic. Buffalo fans are very pampered in terms of traffic. It is much worse in other larger cities.

[Punching Bag]

Why do i find this so irritating?

Manipulating the market via heavy weight players. ala Kraft and Jones.

I am a simple Man.With simple needs, like Buffalo Bills football each year.

 

I hope Pegula kicks one or both those basterds in the nards.

 

Is this undue pressure happening now that Ralph is gone? And those senile old gluttons think a chink in the armour is ripe for prodding ?

 

Just let us have our Buffalo Bills and STFU.

 

 

Exactly. The Bills, Chiefs, Packers and Browns are all small market teams that are doing well financially. Also, it is not as if there is another 10 Los Angeles waiting to get a team. The next set of big cities that covet an NFL team are not much bigger for them to get their purported financial windfall....That is why this will all be just a LOT of talk to keep the public of these small cities always at Ransom. When the Bills dared to be acquired and moved, no one came forward. These small market teams (will) remain where they belong; right back where they have made history.

 

There is a reason why Buffalo Bills still have a team and it was not bought/moved - The old "senile" coot of an owner made it very expensive to move. Now it up to the new owners to keep it there and I think they will.

 

 

 

If the Bills moved to Sacramento or Austin or one of the other bigger MSAs, would the NFL really benefit? Would the attendance be as good? TV viewership? Merchandise sales? And how much would a move damage the 'good will' of the NFL?

 

I'd rather NFL expand and put a few more teams in Texass -- San Antonio, Austin, etc. See how much Jerry likes bites of his market taken from him. He did not want a team in Houston.

[machine gun kelly]

Lastly, looking at US Census MSA data, the only real gaps when you add the Buffalo and Rochester MSA areas not including Southern Ontario, is Vegas and San Antonio. San Antonio is drawn to both Dallas and Houston, so it makes sense for Mark Davis to focus on Vegas.

 

I'm sorry for Oakland fans living in Oakland that could lose them again, but the city is not supporting the team, Davis is not even close to the top half of NFL owners wealth, and is a highly lucrative option for him. Given they have such a vast amount of tax dollars they can tap into by tourists just like San Diego, the actual residents of these cities is minimal to build lavish stadiums. NYS has supported the Bills twice with upgrades in tough economies, and we have one of the wealthiest owners in the league.

There is a reason why Buffalo Bills still have a team and it was not bought/moved - The old "senile" coot of an owner made it very expensive to move. Now it up to the new owners to keep it there and I think they will.

 

 

 

 

I'd rather NFL expand and put a few more teams in Texass -- San Antonio, Austin, etc. See how much Jerry likes bites of his market taken from him. He did not want a team in Houston.

I can see in their 15 year plan focusing more on Toronto. Montreal, Vancouver, and Mexico City. These are highly populated high income areas (Canada, but Mexico City has enough wealth to support an NFL team) that they can target with greater marketing efforts. There is always the CFL competition, but enough Canadians are avid NFL fans, it could happen. The proximity is very close from a logistical standpoint.

 

I can also see the NFL trying to establish an entire division in Europe. They would have to target four cities that could support the teams, and 6 game sa year could be spent in Europe. It may sound crazy, but an additional 8 markets and creating one more division in the AFC and the NFC is how the NFL can drastically increase revenues for the league.

[Punching Bag]

Lastly, looking at US Census MSA data, the only real gaps when you add the Buffalo and Rochester MSA areas not including Southern Ontario, is Vegas and San Antonio. San Antonio is drawn to both Dallas and Houston, so it makes sense for Mark Davis to focus on Vegas.

 

Last time I looked there is a gap - St Louis, #20 on list - which is being deserted by Rams and will be used as leverage against cities believing that NFL should pay for new stadiums.