Ronin Posted May 30, 2014 Posted May 30, 2014 Here's an excellent piece about new sports stadiums, particularly NFL stadiums. http://usatoday30.usatoday.com/money/economy/story/2012-02-04/cnbc-super-bowl-suites/52948968/1 Some key excerpts: "Luxury suites have been growing in importance since the 1990s and are an essential part of any new stadium being built," says Emily Sparvero, assistant professor at the Sports Industry Research Center at Temple University. "In fact, most new stadiums are built not because they are physically obsolete, but they are financially obsolete," adds Sparvero. In the past 20 years, 75% of American sports teams have either built or remodeled their venues, with luxury suite additions being a major reason for the construction and renovation. ------- Whether it's the NBA, NHL or Major League Baseball, suites now account for anywhere between 5% and 20% of total team revenue, according to the latest statistics. What started out as a status symbol has evolved into a necessity. "With greater payroll expenses from player free agency, owners have to find ways to raise more revenue," says Mark Conrad, an associate professor at Fordham University's school of business. "Luxury boxes provide a constant flow, no matter how good or bad the team is playing. The payment is already made and it's part of the revenue generated by the facility." The money can be huge. While the number of suites varies — the new Yankee Stadium has 68 while Dallas Cowboys Stadium has 300 — any given suite can sell from $224,000 to more than $900,000 per year. ------- As for who's buying the suites, it's a matter of money, as well. "Corporations and high net-worth individuals are purchasing suites," says Chad Estis, president of Legends, the premium ticket sales company that handles teams such as the Cowboys and Yankees. ------- "The danger in chasing corporate dollars is that they tend to evaporate during down financial times," DeGaris argues. ------- These are not factors that favor the team staying in Buffalo. There is a little bit of hope at the bottom of the piece, but still, these things are relative. i.e., what can an owner get in another location that he can't get "here." Buffalo doesn't rank well in that regard and of the criteria listed above, Buffalo by nature is in "down economic times" due to its geographical circumstances. I just threw this out there because some keep mentioning individual ticket sales, which really don't matter in the grand scheme of things nearly as much. Also, ... "Fan loyalty is always based on team performance rather than a sense of being disadvantaged because of luxury suites," Ordine says. If the team's performance doesn't improve, we already know that tix sales suffer. fwiw
thebandit27 Posted May 30, 2014 Posted May 30, 2014 I don't see corporate sales as a huge barrier to the team being here...there are a large number of companies that would want in...and I believe a lot of the Toronto series was geared toward getting Canadian corporate dollars in addition to catering to the Southern Ontario fan base.
Ronin Posted May 30, 2014 Author Posted May 30, 2014 (edited) Here's another good piece encompassing more on the topic from around the same time: Why the NFL Stadium Experience Is Dying While the NFL stadium experience is evolving under the guise of getting bigger and better, the average fan is getting priced out of the equation entirely. The once pleasantly rowdy atmosphere that defined stadium life has been overrun with a more refined and indifferent corporate culture. Further, alternatives to the stadium experience have grown more enticing. Here are four reasons the game-day experience has changed. The Rise of Luxury Suites Though stadium suites were initially invented to make the nosebleed section more attractive, luxury boxes are now one of the driving sources of revenue for NFL teams. CNBC.com notes that annual suite prices can stretch anywhere from $80,000 per box (the lowest price you'll pay at Indianapolis' Lucas Oil Stadium) to more than $900,000. You don't even need to do the math to understand that in many cases, suite owners are paying multiple times the price of a regular ticket for each seat in their luxury box. It's unsurprising then that luxury suites are taking over. According to the executive director of the Association of Luxury Suite Directors per The Business of Sports by Brad R. Humphreys and Dennis R. Howard, "'Ten years ago, only about 3% of the seating in stadiums and arenas was designated as premium and club seating. Now that figure is approaching 20%.'” Corporations are a major consumer of luxury seating, using sports events as opportunities to impress potential clients and close business deals. But though corporations are more loyal with their wallets, they lack devotion with their hearts—and it's taking a toll on the NFL stadium experience. Game day is becoming more stuffy and corporate with the focus shifting from football. The NFL is about top-shelf liquor and market banter to CEOs who spend Sundays sheltered in their boxes where only a compelling third-and-inches-on-the-goal-line scenario may avert attention away from Blackberry screens. The Personal Seat License Personal seat licenses (PSLs) have created another hurdle of affordability that's pricing the average football fan out of the stands. A PSL essentially guarantees the rights to a particular seat in a stadium, and owning one is a prerequisite for buying season tickets at almost half of NFL stadiums. Personal seat licenses were invented so that teams could quickly generate capital for projects like building new stadiums. As you can imagine, PSLs are expensive. The Sports Business Daily reports that the right to buy season tickets at Cowboys Stadium could set you back $150,000, and prices are not relenting. At Heinz Field, the cost of seat licenses has increased, on average, by 736.35 percent from the stadium's inaugural football game in 2001 through November 2011. So while average NFL fans struggle to navigate a sputtering economy, the economic elite are driving the cost of watching live football higher than the nosebleed section. Gimmicks Teams have also started packing their stadiums with revenue-generating gimmicks that detract from the traditional game-day experience. Buff guys slinging Bud Light are rivaled by sleek bars reminiscent of upscale Manhattan nightclubs. Chicken-fingers-and-fries stands are now matched with full-blown restaurants. These features allow stadiums to mark up concession prices higher than their already astronomical rates, burning a deeper hole in fan wallets. HDTV High-definition television emerged almost in tandem with skyrocketing ticket prices, and it has provided an affordable alternative to live football. To some, the living room viewing experience is superior to the stadium. HD provides a crystal-clear picture of the action, and DVR allows control over instant replay. In contrast, the stadium experience often involves squinting down at the field from cloud level and repeating, "Wait, what just happened?" Further, stadium traffic is a nightmare and fans can easily spend more time in the parking lot than they spend in the actual stadium (tailgates excluded, of course). With technology facilitating a comprehensive home-viewing experience, stadium-going is simply becoming less enticing by comparison. I don't see corporate sales as a huge barrier to the team being here...there are a large number of companies that would want in...and I believe a lot of the Toronto series was geared toward getting Canadian corporate dollars in addition to catering to the Southern Ontario fan base. Sounds like more of an opinion rather than fact, the facts of which speak otherwise. Did you even bother to read the piece? How could you have so quickly? This is a fact of modern era pro sports. The NHL and NBA have largely been ruined by it all, the NFL is not far behind. MLB I would argue too, but there are so many games that the prices aren't as high. I much prefer the "old way," like many here do, but unfortunately that's not how it works. I'd be fine with an "old time" traditional stadium and just having a team here. Granted, it'd be nice if the people running the team knew what they were doing. Edited May 30, 2014 by TaskersGhost
PromoTheRobot Posted May 30, 2014 Posted May 30, 2014 (edited) I don't see corporate sales as a huge barrier to the team being here...there are a large number of companies that would want in...and I believe a lot of the Toronto series was geared toward getting Canadian corporate dollars in addition to catering to the Southern Ontario fan base. It's worth noting that Canada, unlike the USA, does not allow tax deductions for luxury suites. So any rich Canadian or Canadian corporation buying a suite, in Buffalo or Toronto, is footing the entire bill. In the USA companies write off such purchases, so in effect we subsidize millionaire playpens. Edited May 30, 2014 by PromoTheRobot
bananathumb Posted May 30, 2014 Posted May 30, 2014 Nice post on the new NFL (and other sports) experience. It is somewhat difficult seeing Buffalo, NY becoming tony enough for what owners want. Will there be a dress code to get in?
yungmack Posted May 30, 2014 Posted May 30, 2014 It's worth noting that Canada, unlike the USA, does not allow tax deductions for luxury suites. So any rich Canadian or Canadian corporation buying a suite, in Buffalo or Toronto, is footing the entire bill. In the USA companies write off such purchases, so in effect we subsidize millionaire playpens. That subsidy business can't be right because I keep hearing from Republicans that we have a socialist government that over burdens the Job Creating entrepreneurs with onerous taxes.
RuntheDamnBall Posted May 30, 2014 Posted May 30, 2014 At some point the bubble of courting "luxury" dollars in the sports world and the real estate world is going to collapse. I don't know how anyone thinks it's a sustainable model. But we're here and we're along for the ride. The one thing I imagine we can be sure of is that taxpayers will be left holding the bag when the market corrects itself.
BillnutinHouston Posted May 30, 2014 Posted May 30, 2014 That subsidy business can't be right because I keep hearing from Republicans that we have a socialist government that over burdens the Job Creating entrepreneurs with onerous taxes. Is it possible that we have subsidies and onerous taxes at the same time? If so, might that have something to do with our two-party system where both parties take turns being in power?
Mr. WEO Posted May 30, 2014 Posted May 30, 2014 I don't see corporate sales as a huge barrier to the team being here...there are a large number of companies that would want in...and I believe a lot of the Toronto series was geared toward getting Canadian corporate dollars in addition to catering to the Southern Ontario fan base. How successful was that after 5-6 years? And where are these corporations now who could be purchasing more expensive future luxury boxes? Are they all waiting for a new stadium to jump in?
Kellyto83TD Posted May 30, 2014 Posted May 30, 2014 Bottom line I can't see WNY Economy supporting that.
Mr. WEO Posted May 30, 2014 Posted May 30, 2014 (edited) Sounds like more of an opinion rather than fact, the facts of which speak otherwise. Did you even bother to read the piece? How could you have so quickly? . Most of that article is more opinion than fact. True luxury box seats are up to 20%. That means the overwhelming majority of seats are not, so it's hard to see how "corporate" these games have become based on that stat alone. Exactly how does this guy quantify "stuffy" and "corporate" and lack of "heart"? Also, PSL's are fan investments that are free to be sold by fans for profit. Nothing wrong with that. Plus, the secondary market (where many season ticket/PSL holders pedal their seats) makes tickets very easily available in every NFL town for every game--sometimes for less than face value. All this histrionic moaning about "corporate" ruination of NFL games is bogus. As the article has pointed out, the NFL has made it much more atractive to sit at home and live it up all day Sunday (and Thursday night). Edited May 30, 2014 by Mr. WEO
TheFunPolice Posted May 30, 2014 Posted May 30, 2014 Does anyone else feel the momentum shifting away from the idea of "don't worry, there is NO WAY this team leaves here?" lately?
thebandit27 Posted May 30, 2014 Posted May 30, 2014 Sounds like more of an opinion rather than fact, the facts of which speak otherwise. Did you even bother to read the piece? How could you have so quickly? This is a fact of modern era pro sports. The NHL and NBA have largely been ruined by it all, the NFL is not far behind. MLB I would argue too, but there are so many games that the prices aren't as high. I much prefer the "old way," like many here do, but unfortunately that's not how it works. I'd be fine with an "old time" traditional stadium and just having a team here. Granted, it'd be nice if the people running the team knew what they were doing. The article says nothing of the viability of a team in Buffalo, nor does it speak to any issue remotely related to corporate money in the area, so I'm not sure why you'd claim that "the facts speak otherwise" in response to my statement. Also, the article doesn't touch on PSLs, which can easily contribute a great deal of money to a new stadium. How successful was that after 5-6 years? And where are these corporations now who could be purchasing more expensive future luxury boxes? Are they all waiting for a new stadium to jump in? Since I'm not aware of a list of who's currently purchasing suites at the Ralph, I can't say. As for companies in the area with money, is it your opinion that they won't spend it at the stadium, or that there simply aren't any here?
TheFunPolice Posted May 30, 2014 Posted May 30, 2014 these numbers are getting astronomical... I just cannot see this team staying here long-term but I hope I'm wrong. NFL teams almost never just go on the market in a bidding war. They are almost always sold in an agreement between two parties.
Mr. WEO Posted May 30, 2014 Posted May 30, 2014 The article says nothing of the viability of a team in Buffalo, nor does it speak to any issue remotely related to corporate money in the area, so I'm not sure why you'd claim that "the facts speak otherwise" in response to my statement. Also, the article doesn't touch on PSLs, which can easily contribute a great deal of money to a new stadium. Since I'm not aware of a list of who's currently purchasing suites at the Ralph, I can't say. As for companies in the area with money, is it your opinion that they won't spend it at the stadium, or that there simply aren't any here? It's my impression that the luxury suites at the Ralph are hard to fully sell. It's likely because there is not a density of corporations who would pay for this luxury in Buffalo (and they haven't come over from Canada, despite all of the "regionalization"). So the answer to your question is "both".
RuntheDamnBall Posted May 30, 2014 Posted May 30, 2014 It's my impression that the luxury suites at the Ralph are hard to fully sell. It's likely because there is not a density of corporations who would pay for this luxury in Buffalo (and they haven't come over from Canada, despite all of the "regionalization"). So the answer to your question is "both". I think that you're right, here. But I'm also going to guess that going forward it is only going to get harder to sell them, period.
thebandit27 Posted May 30, 2014 Posted May 30, 2014 It's my impression that the luxury suites at the Ralph are hard to fully sell. It's likely because there is not a density of corporations who would pay for this luxury in Buffalo (and they haven't come over from Canada, despite all of the "regionalization"). So the answer to your question is "both". Obviously it's difficult to project what may or may not be do-able luxury-box-wise with a new stadium...my guess (and that's all i can offer at this point) is that (a) they would be able to sell more with a newer venue, and (b) the difficulty in selling them could/would be mitigated partially with PSLs. Don't know either for a fact though.
yungmack Posted May 30, 2014 Posted May 30, 2014 Is it possible that we have subsidies and onerous taxes at the same time? If so, might that have something to do with our two-party system where both parties take turns being in power? No. Or at least not for the priviliged few. Like these oppressed and downtrodden folks: http://www.salon.com/2014/05/30/10_disgustingly_rich_companies_that_will_do_anything_to_avoid_paying_taxes_partner/?source=newsletter
26CornerBlitz Posted May 30, 2014 Posted May 30, 2014 @breakground Does a new stadium pay for the #Bills? http://www.sportingn...tadium … via @sportingnews
YoloinOhio Posted May 30, 2014 Posted May 30, 2014 Mike Rodak @mikerodak 59s In our ESPN poll (http://es.pn/1k8mdZ0 ), 51% say they would consider Bills PSLs based on cost. 33% say "no" entirely.
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