A little math for the grist

[Kelly the Dog]

I think the math is correct, but I just did some figuring to see how much more money the Pats were taking in versus the Bills.

 

The Pats have the highest ticket prices in the league at $91 a ticket. They have 68,000 seats. The Bills have the lowest at $37 a ticket. We have 74,000. They both sold out the stadiums for the games last year, but you know how much the Pats took in more than the Bills in those two games?

 

$660,000

 

The Pats made $4,867,200

The Bills made $4,206,800

 

Granted we all know about the luxury boxes and parking and concessions et al. But I think it's easy to forget that the league still shares the ticket receipts and it's not as big a discrepancy as we may believe.

[K-9]

I think the math is correct, but I just did some figuring to see how much more money the Pats were taking in versus the Bills.

 

The Pats have the highest ticket prices in the league at $91 a ticket. They have 68,000 seats. The Bills have the lowest at $37 a ticket. We have 74,000. They both sold out the stadiums for the games last year, but you know how much the Pats took in more than the Bills in those two games?

 

$660,000

 

The Pats made $4,867,200

The Bills made $4,206,800

 

Granted we all know about the luxury boxes and parking and concessions et al. But I think it's easy to forget that the league still shares the ticket receipts and it's not as big a discrepancy as we may believe.

663177[/snapback]

 

You keep missing the bigger picture as do many others: The Pats spend roughly 40% of their revenues on player salaries; the Bills a whopping 70%. If you can't see the competitive imbalance in that you're blind. That's the entire issue in a nutshell. This isn't saying Ralph isn't making a profit, he is. But it will be CONSIDERABLY smaller this year and as time goes on. And the qualifiers will make it worse. Yeah, we don't know what they are yet, but Ralph has a better idea than anyone else at this point. He knows what he's talking about.

 

Ticket prices are just the tip of the iceberg.

 

GO BILLS!!!

[Kelly the Dog]

You keep missing the bigger picture as do many others: The Pats spend roughly 40% of their revenues on player salaries; the Bills a whopping 70%. If you can't see the competitive imbalance in that you're blind. That's the entire issue in a nutshell. This isn't saying Ralph isn't making a profit, he is. But it will be CONSIDERABLY smaller this year and as time goes on. And the qualifiers will make it worse. Yeah, we don't know what they are yet, but Ralph has a better idea than anyone else at this point. He knows what he's talking about.

 

Ticket prices are just the tip of the iceberg.

 

GO BILLS!!!

663194[/snapback]

Um... the Bills spent approximately 85 million in player salaries last year. Their revenues were 173 million according to Forbes. That's 70%?

 

And it's not going to be considerable smaller this year, it's going to be substantially bigger. The salary cap went up about 17 milllion and the TV money went up much more than that, about 31 million per team. So we're starting with 14 or so extra million this year counting the rise in the cap.

[K-9]

Um... the Bills spent approximately 85 million in player salaries last year. Their revenues were 173 million according to Forbes. That's 70%?

 

And it's not going to be considerable smaller this year, it's going to be substantially bigger. The salary cap went up about 17 milllion and the TV money went up much more than that, about 31 million per team. So we're starting with 14 or so extra million this year counting the rise in the cap.

663198[/snapback]

 

Thanks for the clarification. I've read that 70/40 figure in several articles the past few weeks. But Forbes is usually reliable. Why then the discrepancy in reports? Perhaps it's 70/40 vs. ALL operating expenses and not just player salaries? I'll have to re-read those articles. Thanks again.

 

GO BILLS!!!

[Kelly the Dog]

Thanks for the clarification. I've read that 70/40 figure in several articles the past few weeks. But Forbes is usually reliable. Why then the discrepancy in reports? Perhaps it's 70/40 vs. ALL operating expenses and not just player salaries? I'll have to re-read those articles. Thanks again.

 

GO BILLS!!!

663202[/snapback]

The numbers are fuzzy and I doubt anyone has the true numbers except the Bills and the NFL. Forbes is probably fairly accurate but then you have to figure in a lot of other factors, including taxes and facilities and travel and administrative costs. Forbes had the Bills making 30+ million in profit last year. IMO it may have been slightly less than that. But one thing is for sure. If the Bills are complaining about money and publicly say they made 10 million in profit. You could BET 10 million that it is significantly more than that.

[Bill from NYC]

The numbers are fuzzy and I doubt anyone has the true numbers except the Bills and the NFL. Forbes is probably fairly accurate but then you have to figure in a lot of other factors, including taxes and facilities and travel and administrative costs. Forbes had the Bills making 30+ million in profit last year. IMO it may have been slightly less than that. But one thing is for sure. If the Bills are complaining about money and publicly say they made 10 million in profit. You could BET 10 million that it is significantly more than that.

663208[/snapback]

 

Good work KTD.

 

This however tells me that Ralph could have made a run at Hutchinson, no?

[bbfan54]

It is not just ticket sales, parking, concessions. It is also all the team merchandize, sponsorship deals, stadium naming rights (which Wilson won't sell), and other streams of revenue.

[ajzepp]

It is not just ticket sales, parking, concessions.  It is also all the team merchandize, sponsorship deals, stadium naming rights (which Wilson won't sell), and other streams of revenue.

663237[/snapback]

 

That's where I think someone like Golisano will really make a difference. The guy took a little tiny company and turned into a successful corporation. I don't know all that he's done with the Sabres, but I know they're having the most successful season in franchise history. Golisano just gets things done.....if Ralph can get the Bills into Tommy G's hands, I truly believe we'll be fine. All these articles and discussions about the Bills leaving are probably good in that they get the issue addressed, but dang.....my stomach can't take much more of this, lol. Every time log on here lately it's like a mini anxiety attack!

[Lurker]

Granted we all know about the luxury boxes and parking and concessions et al. But I think it's easy to forget that the league still shares the ticket receipts and it's not as big a discrepancy as we may believe.

663177[/snapback]

 

Asked and answered your own math question.

 

The suite revenue and side endorsement deals--which are not shared--is where the discrepency between teams is taking place. And both of those revenue streams are based on the size of the corporate community in a given market. Kraft has a big corporate market to pick clean and Ralph doesn't.

 

Ticket, concessions and parking revenue aren't the issue, as evidenced by the fact the Bills were very revenue competitive before the wave of new stadiums in big markets began to play out.

[ATBNG]

I think the math is correct, but I just did some figuring to see how much more money the Pats were taking in versus the Bills.

 

The Pats have the highest ticket prices in the league at $91 a ticket. They have 68,000 seats. The Bills have the lowest at $37 a ticket. We have 74,000. They both sold out the stadiums for the games last year, but you know how much the Pats took in more than the Bills in those two games?

 

$660,000

 

The Pats made $4,867,200

The Bills made $4,206,800

 

Granted we all know about the luxury boxes and parking and concessions et al. But I think it's easy to forget that the league still shares the ticket receipts and it's not as big a discrepancy as we may believe.

663177[/snapback]

 

How is the final profit calculated Kelly? It doesn't seem close to right based on the numbers given. If the Pats charge an average of $91 for 10 games at 68K, it seems like they should be taking in around 62 million in a season. The Bills at 37 x 10 x 74K would be taking in around 28 million per year.

[Kelly the Dog]

How is the final profit calculated Kelly? It doesn't seem close to right based on the numbers given. If the Pats charge an average of $91 for 10 games at 68K, it seems like they should be taking in around 62 million in a season. The Bills at 37 x 10 x 74K would be taking in around 28 million per year.

663322[/snapback]

Because the NFL gives 60% of the home teams ticket sales to the home team and 40% to the visiting team to keep things more fair. So the Bills get 40% of the ticket sales of the game in New England, and the Pats get 40% of the sales for the game in Buffalo. That isn't changing in the new agreement.

[Dibs]

Could someone clarify for me if I have the wrong end of the stick?

 

As I understand,

revenue generated from luxury boxes, parking, certain advertising & naming deals and sponsorships(plus more) are not pooled for shared revenue,

but are used to calculate the salary cap.

 

This means when Snyder gets an extra kabillion for his stadium deals, the cap goes up but no extra money goes to the other owners,

thus Wilson has to pay more to the players without more revenue coming in.

 

The fear is that as time progresses, the larger markets will push the cap up more & more making a higher & higher percent of running costs for lower revenue markets.

 

I know there are lots of other aspects but is this basically it?

[Kelly the Dog]

Asked and answered your own math question. 

 

The suite revenue and side endorsement deals--which are not shared--is where the discrepency between teams is taking place.  And both of those revenue streams are based on the size of the corporate community in a given market.  Kraft has a big corporate market to pick clean and Ralph doesn't. 

 

Ticket, concessions and parking revenue aren't the issue, as evidenced by the fact the Bills were very revenue competitive before the wave of new stadiums in big markets began to play out.

663244[/snapback]

They are still pretty revenue competitive. Last year they finished 22 of 32 with 173 million, and remarkably, they finished 14th highest of 32 in operating income.

 

http://www.forbes.com/lists/2005/30/301765.html

[Olaf Fub]

I noticed this the other day. Kind of the same point, the gap between the Bills are other teams isn't as large as people are making it out to be.

 

One ticket to one game in the M&T suite at the Ralph is $285.

 

M&T Bank Club-Buffalo Bills

 

The Bills don't list the price for the other premium seating, I guess it's in the "If you got to ask you can't afford it" catagory.

 

I'm all in favor of Ralph putting politcal pressure on league. I think he's doing the right thing for himself and for Buffalo. I hope he gets the best deal possible for the Bills in the new CBA.

 

I also think the big market club have an advantage over the Bills. But I think all this "the Bills are moving" talk has reached the level of hysteria.

[Orton's Arm]

Because the NFL gives 60% of the home teams ticket sales to the home team and 40% to the visiting team to keep things more fair. So the Bills get 40% of the ticket sales of the game in New England, and the Pats get 40% of the sales for the game in Buffalo. That isn't changing in the new agreement.

663330[/snapback]

Fair enough. So for their eight home games, the Bills are making significantly less money than the Patriots are for their eight home games. Financially, it's an advantage for the Bills to travel to Foxboro, and a disadvantage for the Patriots to travel to Buffalo. But assuming the seven other road games from the two teams are about the same, it stands to reason the Bills are making significantly less money on ticket sales than are the Patriots.

[Pyrite Gal]

Fair enough.  So for their eight home games, the Bills are making significantly less money than the Patriots are for their eight home games.  Financially, it's an advantage for the Bills to travel to Foxboro, and a disadvantage for the Patriots to travel to Buffalo.  But assuming the seven other road games from the two teams are about the same, it stands to reason the Bills are making significantly less money on ticket sales than are the Patriots.

663374[/snapback]

 

But certainly the press reports (certainly not a totally accurate figure in general and dreadfully wrong in many cases so please check them with multiple sources if you wish to swear by them, but even though they are inaccurate they are the best figures we have unfortunately) that one of the hallmarks of being a Bills fan is that they do in fact charge the lowest ticket prices in the league. Thus, when you make an assumption that that in the seven other road game with the Bills that the the prices are about the same you may well be wrong,

 

As best as I can tell, Ralph is correct to worry about whether a franchise owned by a future owner will be relatively econmically viable is a real concern (the key phrase here is relatively because again as best as I can tell a Bills team under a new owner without the benefit of the $ transfer from teams in high revenue market will still be profitable, just ore relarively as profitable as the Bills would be in a higher revenue market).

 

However, the reason the Bills will be relatively less viable is that any new owner (including a super rich one) would not be able to and woukld be economically dumb to buy the team from Ralph's heirs without taking out massive loans- even Tom Golisano does not have $600-750 million under his mattress to buy the Bills and will have to take out huge loans to do this,

 

Any new owner of the Bills would not only lose the $10-15 million a year in revenue sharing but will also have expanded costs for the team in debt service. While it seems quite farfetched from the numbers I have seen to claim the Bills will lose money while Ralph is still alive.

 

When Ralph dies there will be a large enough tax on his massive estate it is hard to imagine how his heirs pay this cost without selling the team (they will still make out like bandits financially so its hard to feel sorry for them getting a bunch of cash for not working hard at all or contributing anything to society) and also the new owner will bear far more substantial costs than Ralph who has no debt service for purchasing the team whatsoever.

 

Nevertheless, the strange thing here is that it would seem that Ralph could still take unilateral action if he so chose to greatly reduce the tax hit on his heair by substantially loweing the value of the team by contractually constraining it from being able to move.

 

I think Kelly F&B has the right cut on this geneally in terms of the finances and what appears to be going on here is that Ralph is in essence crying wolf to force a great deal for the Bills. Again as best as i can tell I support Ralph completely if this is what he is doing as it will benefit me greatly as a Bills fan to keep the team here by NYS taxpayers ponying up some corporate welfare for the Bills and in return they contractually bound to Buffalo.

 

Further, if this extortion effort by Ralph results in greater profits for the Bills and them being contractually bound here by the state getting the cheaper loans it can get than the private sector to build a new stadium in Buffalo, my home city would also benefit from this corporate welfare payment.

[Orton's Arm]

As best as I can tell, Ralph is correct to worry about whether a franchise owned by a future owner will be relatively econmically viable is a real concern

663396[/snapback]

There are two things I'd like to address in your post. The first is revenue sharing for the games. The point I was making originally was that the teams the Bills travel to for their road games probably are similar in terms of ticket revenues to the teams the Patriots travel to for their road games. So the Bills and the Patriots would have roughly similar revenues from their road games, while the Bills would earn significantly less money for their home games than the Patriots earn for theirs. Overall, this means less ticket revenue for the Bills than the Patriots.

 

You say Ralph may be crying wolf. But elsewhere you point out how burdensome it would be for any new owner to buy the Bills. Let's say you took out $400 in debt to buy the Bills at $600 million. Now you're paying interest on $400 million. Now let's say that despite that, you can still make a very small profit in Buffalo if all goes well--say $1 million a year. This profit would enable you to pay off 1/400th of the debt each year. Now let's say Los Angeles comes calling with a deal that would increase your after-tax profits by $19 million a year. So you'd be making $10 million a year in LA, enough to pay down 1/20th of the debt each year. How many business owners could resist this temptation? This is largely what Ralph is worried about, and why he feels the Bills might not be in Buffalo forever.

 

But can you or Kelly the fair and balanced dog guarantee the Bills' new owner that he or she will make a profit at all? No, especially not with the salary cap increasing in response to all the local revenue big city teams are able to generate.

[Sisyphean Bills]

But can you or Kelly the fair and balanced dog guarantee the Bills' new owner that he or she will make a profit at all?  No, especially not with the salary cap increasing in response to all the local revenue big city teams are able to generate.

663520[/snapback]

 

The other thing that seems poorly understood is that while the salaray cap is tied to the gross revenue (revenue != profit), the other revenue stream slush fund that is supposed to keep the competitive balance is, at best, highly confused and, at worst, is under the complete control of the larger market franchise owners. Where did all the posters praising Gene Upshaw and Paul Tagliabue go? Do they still think it is great for the sport for teams to face operating with a deficit spending plan with their fingers crossed that the Dan Snyders will kick in some token cash to keep them out of too much red? For that matter, where did Paul Tagliabue go? Elvis sure left the building with a sonic boom and before the blood had dried.

[Kelly the Dog]

The other thing that seems poorly understood is that while the salaray cap is tied to the gross revenue (revenue != profit), the other revenue stream slush fund that is supposed to keep the competitive balance is, at best, highly confused and, at worst, is under the complete control of the larger market franchise owners.  Where did all the posters praising Gene Upshaw and Paul Tagliabue go?  Do they still think it is great for the sport for teams to face operating with a deficit spending plan with their fingers crossed that the Dan Snyders will kick in some token cash to keep them out of too much red?  For that matter, where did Paul Tagliabue go?  Elvis sure left the building with a sonic boom and before the blood had dried.

663551[/snapback]

What Ralph is doing is right because the qualifiers and the revenue sharing plan is not finalized. He is protecting himself and the team and the future owners from loopholes or ill-conceived plans. Nothing has been determined and official in those qualifiers. That is what he is doing now. So it is just as wrong to say that the new owners have put poison pills in the agreement as it is to say there is nothing for him to be worried about. The thing is being worked on and negotiated and is yet to be determined. Ralph is probably going to get it a lot more to his liking by his public stances. Crying wolf over losing money, however, IMO hurts him more than it helps him.

[Sisyphean Bills]

What Ralph is doing is right because the qualifiers and the revenue sharing plan is not finalized. He is protecting himself and the team and the future owners from loopholes or ill-conceived plans. Nothing has been determined and official in those qualifiers. That is what he is doing now. So it is just as wrong to say that the new owners have put poison pills in the agreement as it is to say there is nothing for him to be worried about. The thing is being worked on and negotiated and is yet to be determined. Ralph is probably going to get it a lot more to his liking but his public stances. Crying wolf over losing money, however, IMO hurts him more than it helps him.

663561[/snapback]

 

Yeah.

 

So, I have to side with Ralph here at least somewhat. Going to the press and having the story flipped upside down and so on probably wasn't the best possible move, but he does have a point that voting "yes" to something that isn't finalized and could go in any random direction -- and this laregly to protect Paul Tagliabue's image and under the pressure of the NFLPA which was pushing this resolution hard because a huge glut of veterans were about to be shown the door, IMHO -- wasn't good business either. As Mara put it, the NFL is only as strong as its weakest links. The Dan Snyders of the world don't understand or care about the larger picture.