A little math for the grist

[nobody]

So the Pats make 3.7 million per home game (91 * 68k *.6) and the Bills make 1.6 million per home game (37 * 74k * .6). So for the season the Pats make 17 million more for their home games then the Bills (assuming 8 sellouts).

[MadBuffaloDisease]

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.

Uh Kelly, you DO know that the Bills only play ONE game against the Pats in a given year, right? So your example only HOLDS for 1 game a year. There is an over 2-fold discrepancy in ticket revenue over the course of a season.

[Kelly the Dog]

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.

663576[/snapback]

It is just as true that Ralph doesn't care about Daniel Snyder. They are both looking out for themselves. That is nothing new. The new breed of owners has both helped Ralph enormously and threatened his existance. That is what people seem unable or unwilling to get their arms around. They look at the new breed as wholly bad and greedy and their not. They are greedy, that's for sure.

 

The deal was rammed through because it needed to be rammed through. There was a deadline and it's a good thing for Buffalo to have that deal in place, at least in the main items. The devil in the details is what is being hammered out now but that isn't all that of a surprise.

[Orton's Arm]

It is just as true that Ralph doesn't care about Daniel Snyder. They are both looking out for themselves.

If the only person Ralph cared about was himself, the Bills would have moved years ago. We owe the man some respect for keeping the Bills here since the beginning. While people like BackinDaDay may have something to say about Ralph in general, it's important we all stand behind him right now, in this particular battle.

[Kelly the Dog]

So the Pats make 3.7 million per home game (91 * 68k *.6) and the Bills make 1.6 million per home game (37 * 74k * .6).  So for the season the Pats make 17 million more for their home games then the Bills (assuming 8 sellouts).

663591[/snapback]

Yep, they make 17 million more a season. They also have well over that in debt on that stadium. The Bills have very little. I am not AT ALL implying that the Bills make as much money as the Patriots, it's not even close. According to Forbes, the Pats took in 50 million more than the Bills, but they only made 14 million more than the Bills. It would be alarming, if, say, the Bills broke even and the Pats made 14 million. That would seem to give them a huge advantage signing free agents (even though they are notorious for NOT spending too much). But when the Pats are making 50 million and the Bills are making 36 million (again, according to Forbes) the Bills can compete fairly. They just don't make as many millions. And that was BEFORE the TV revenues jumped 43% since the last one.

 

I am pointing out that the Bills make a significant amount in ticket sales too because the NFL allows them to take in 40% of the visiting gate. And there is only a 660,000K difference in the two Pats games, which if it wasn't put in this perspective, I doubt most Bills fans would have thought it was that close.

[Kelly the Dog]

If the only person Ralph cared about was himself, the Bills would have moved years ago.  We owe the man some respect for keeping the Bills here since the beginning.  While people like BackinDaDay may have something to say about Ralph in general, it's important we all stand behind him right now, in this particular battle.

663614[/snapback]

Looking out for themselves meant looking out for their teams and not caring whether the other teams' owner has expenses he doesn't have, or partly responsible for a large portion of Ralph's wealth.

[JCBoston]

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. 

663244[/snapback]

 

Right on.

 

My seat in the Paul Maguire Club is about $1000 per year. The same seat in Gillette Stadium is $3,600 this year. Not only is it more expensive, the Patriots require a 10 year committment, of which 50 percent must be paid in advance.

 

How many seats would be sold in OP under the same purchase agreement? Probably close to zero, IMO.

[dave mcbride]

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]

 

i may be wrong, but isn't the *cheapest* ticket at the ralph $37 (lowest in the league) and the *average* price for a NE home game $91?

[bluv]

So what they are not making as much profit as the other man; they are still making NOT losing money. The ability to sign players (etc. salary cap) should be fair and level; the amount of profit they gain doesn't have to be even. As long as RW is making substantionally more than he is pending then this complaining makes him seem like a whiner just because he can't compete as far as profits with the big boys. To me it seems like a ploy to justify either raising prices or moving the Bills in the upcoming years once the stadium rights run out as they would paint some gloomy picture how they are losing money when really they just aren't making as much as the other guy and blah, blah, blah while really the under the table focus would be on making more profit in another market. To those who would defend them; remember if it were a player crying this same tactic while being paid handsomely but not as much as the next, most would call him a whiner or a cry-baby! But while similar, at least a player can judge his salary by a player with stats. An owner is guaranteed to make a profit just by having a NFL team and based on spending power will be on a almost balanced competitive level as far as paying salries go. If he wants to make more profits its up to the product he puts out and what his customers are willing to pay.

[Kelly the Dog]

i may be wrong, but isn't the *cheapest* ticket at the ralph $37 (lowest in the league) and the *average* price for a NE home game $91?

663644[/snapback]

According to this, the average ticket price for the Bills is $39.37 and the Pats is $90.89

 

http://www.teammarketing.com/fci.cfm?page=fci_nfl_05.cfm

[Kelly the Dog]

Right on.

 

My seat in the Paul Maguire Club is about $1000 per year.  The same seat in Gillette Stadium is $3,600 this year.  Not only is it more expensive, the Patriots require a 10 year committment, of which 50 percent must be paid in advance. 

 

How many seats would be sold in OP under the same purchase agreement?  Probably close to zero, IMO.

663637[/snapback]

Again, according to Forbes, which is a pretty reliable source and has no agenda, the Pats "made" 50.5 million in profit and the Bills "made" 36.1 million: "Earnings before interest, taxes, depreciation and amortization."

[socalfan]

I think the math is correct, ......

The Pats made $4,867,200

The Bills made $4,206,800

.........

663177[/snapback]

 

 

.............

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

663362[/snapback]

 

 

Again, according to Forbes, which is a pretty reliable source and has no agenda, the Pats "made" 50.5 million in profit and the Bills "made" 36.1 million: "Earnings before interest, taxes, depreciation and amortization."

663659[/snapback]

 

According to the Forbes article that is being used in this thread:

 

1) The numbers in Forbes are for the 2004 season, they are being published in 2005. The numbers are not for last season.

 

2) Gate Receipts for the 32 teams according to the Forbes article ran from 24mil to 79mil. These numbers include club seating. The Bills had 35mil and the Pats had 66mil.

 

3) Revenues ran from 153mil to 287mil. The Bills had 173mil the Pats 236mil

 

4) Operating margins(before tax, amortization, depreciation, interest expense, interest revenue, and tax) ran 5% to 27%. The Bills operating margin was 21% and the Pats operating margin was also 21% There were 14 teams with operating margins below the league average of 17.2%. These were the teams that were having a more difficult time during the 2004 season according to Forbes. In the 2004 season the Bills were a well managed business. Oakland running at a 5% rate was the lowest.

 

5) Player costs(salary, benefits and bonuses) as a percentage of revenues ran from 35% to 66%. Buffalo players account for 55% of revenue and the Pats players account for 39% of revenue. By the way, if Ralph is cheap, then 18 owners are cheaper.

 

6) In 2004 San Francisco, Dallas and Cincinnati player costs(salary, benefits, bonuses) were below the 2004 cap. All other teams were above the cap.

 

7) Debt as a percentage of operating income ran from 96% to 2025%. For some teams debt is out of control. The Bills 196% the Pats 597%. It would take the Bills two years to pay off all debt under 2004 conditions; it would take the Pats 6 years under the same conditions. The Vikes on the other hand would take 20 years. The average for the league was 510%.

 

The Forbes article DOES NOT LIST

1) profit ...... Forbes list operating revenue = ebitda - http://www.fool.com/Specials/2002/02071600sp.htm

http://www.fool.com/portfolios/rulemaker/2...maker010906.htm

2) taxes

3) interest expense and interest revenue

4) amortization and depreciation.

[Kelly the Dog]

According to the Forbes article that is being used in this thread:

 

1)  The numbers in Forbes are for the 2004 season, they are being published in 2005.  The numbers are not for last season.

 

2) Gate Receipts for the 32 teams according to the Forbes article ran from 24mil to 79mil.  These numbers include club seating.  The Bills had 35mil and the Pats had 66mil.

 

3)  Revenues ran from 153mil to 287mil.  The Bills had 173mil the Pats 236mil

 

4) Operating margins(before tax, amortization, depreciation, interest expense, interest revenue, and tax)  ran 5% to 27%.  The Bills operating margin was 21% and the Pats operating margin was also 21%  There were 14 teams with operating margins below the league average of 17.2%.  These were the teams that were having a more difficult time during the 2004 season according to Forbes.  In the 2004 season the Bills were a well managed business.  Oakland running at a 5% rate was the lowest.

 

5) Player costs(salary, benefits and bonuses) as a percentage of revenues ran from 35% to 66%.  Buffalo players account for 55% of revenue and the Pats players account for 39% of revenue.  By the way, if Ralph is cheap, then 18 owners are cheaper.

 

6)  In 2004 San Francisco, Dallas and Cincinnati player costs(salary, benefits, bonuses) were below the 2004 cap.  All other teams were above the cap.

 

7) Debt as a percentage of operating income  ran from 96% to 2025%.  For some teams debt is out of control.  The Bills 196% the Pats 597%. It would take the Bills two years to pay off all debt under 2004 conditions; it would take the Pats 6 years under the same conditions.  The Vikes on the other hand would take 20 years.  The average for the league was 510%.

 

8) Apart from player costs and debt payments(including stadium payments), the cost of doing business(coaches salaries, marketing, advertising, management and support personel salaries) as a percentage of revenues ran from 34% to 65%.  The Bills were at 45% the Pats at 65%.  Generally business try to keep these numbers down.  The Pats aren't doing as well as the Bills.  The league average was 47%.

 

The Forbes article DOES NOT LIST

1) profit ......  Forbes list operating revenue = ebitda - http://www.fool.com/Specials/2002/02071600sp.htm

http://www.fool.com/portfolios/rulemaker/2...maker010906.htm

2) taxes

3) interest expense and interest revenue

4) amortization and depreciation.

663701[/snapback]

1. You're right. I see the figures are from 2004. I would bet the Bills figures are very much like 2005 since the income and expenditures are pretty much the same (salary cap went up a bit, TV money was the same of the last year of a deal, they sold out virtually all of their games, there wasn't any unforeseen huge expenditures, their debt is amongst the lowest in the league.

2] Gates receipts for the Bills home games was the same. I wasn't arguing that the Bills took in as much as the Pats. The Pats took in 17 million more over the season but have a higher debt, as you explained above.

3] I acknowledge that the Pats took in 50 more million than the Bills, and yet the difference in their operating income figures, also discussed below, was only 14 million. And it was a matter of how many millions they are making more than us, not the Bills being a non-money making operation.

5] The Bills seem to have a good number here, in the middle of the league.

6] This was one thing I didn't quite understand. I assume it it is monies that need to be paid out to players like in insurance and stuff like that which is above and beyond salaries. It seemed to be about 15-20 million more than the cap for 2004. Still it was counted in all the profit numbers as real costs deducted from revenues so it is not as if this is money that wasn't accounted for in the figures.

7] As stated, the Bills debt is amongst the lowest in the league and will stay that way or be even better as long as Ralph is around. It's yet to be seen what kind of debt a new owner would be faced with, but it's a real concern. This is one of the figures however that makes the Bills situation much, much better than the Patriots. Even if they are making 50 million more, they have a huge debt payment and we don't.

8] Again, the Bills do well here, too, a little below the league average and way less than the Pats, moneywise and percentage wise.

9] As far as the profits go, I could be missing some things but reading that article you posted doesn't dissuade me much from the figures Forbes posted. Again, the Bills don't have a lot of debt problems. I wasn't too worried about accounting problems which infalte their earnings (they try to make it seem like they're NOT making the money. Their money they pay out is pretty fixed. Perhaps someone with a serious financial background or understanding could explain why this Bills operating income would be much less than it appears to be. I just don't see it.

[socalfan]

6] This was one thing I didn't quite understand. I assume it it is monies that need to be paid out to players like in insurance and stuff like that which is above and beyond salaries. It seemed to be about 15-20 million more than the cap for 2004. Still it was counted in all the profit numbers as real costs deducted from revenues so it is not as if this is money that wasn't accounted for in the figures.

9] As far as the profits go, I could be missing some things but reading that article you posted doesn't dissuade me much from the figures Forbes posted. Again, the Bills don't have a lot of debt problems. I wasn't too worried about accounting problems which infalte their earnings (they try to make it seem like they're NOT making the money. Their money they pay out is pretty fixed. Perhaps someone with a serious financial background or understanding could explain why this Bills operating income would be much less than it appears to be. I just don't see it.

663864[/snapback]

 

Point 6 is pretty interesting. I've read that the players have 401K plans, and the owners match either 100% or 200%...can't remember which it was and I can't find the article. But the other point that I find interesting here is that it is about 20-25% of the CAP....and no one ever talks about it. So for this year, if that figure remains so..the player costs are closer to 120mil than they are to 100mil.

 

Point 9....what can I say. If you cannot standardize the depreciation method for all teams (stadiums, equipment, etc can be depreciated) then you cannot compare them properly. Taxes when net revenues are over 1mil are 35%. So most of these teams would be hit at that rate...except for some of them which really don't look too healthy...like Oakland.

[Kelly the Dog]

Point 6 is pretty interesting.  I've read that the players have 401K plans, and the owners match either 100% or 200%...can't remember which it was and I can't find the article.  But the other point that I find interesting here is that it is about 20-25% of the CAP....and no one ever talks about it.  So for this year, if that figure remains so..the player costs are closer to 120mil than they are to 100mil.

 

Point 9....what can I say.  If you cannot standardize the depreciation method for all teams (stadiums, equipment, etc can be depreciated) then you cannot compare them properly.    Taxes when net revenues are over 1mil are 35%.  So most of these teams would be hit at that rate...except for some of them which really don't look too healthy...like Oakland.

663930[/snapback]

I said it before and I will say it again to you, if the Bills are crying poverty and their financial guy comes out in public and claims that they made only 10 million in profit, you can bet every ranch in sight it is more than that, and probably substantially more than that. And then to claim that this year they were going to lose that much money when the TV revenues went up tens of millions per year to each club and 43% OVERALL from the last contracts (and there is still money yet to come in from that I just read), and before any other revenue is counted, without any other higher costs except the salary cap (which the TV payout is larger than), is just fraudulent, IMO.

[stuckincincy]

I said it before and I will say it again to you, if the Bills are crying poverty and their financial guy comes out in public and claims that they made only 10 million in profit, you can bet every ranch in sight it is more than that, and probably substantially more than that. And then to claim that this year they were going to lose that much money when the TV revenues went up tens of millions per year to each club and 43% OVERALL from the last contracts (and there is still money yet to come in from that I just read), and before any other revenue is counted, without any other higher costs except the salary cap (which the TV payout is larger than), is just fraudulent, IMO.

663944[/snapback]

 

What's fraudulant is a free place of business for a private entity. But you accused me of not being a fan a few days ago, right? IMO.

[Kelly the Dog]

But you accused me of not being a fan a few days ago, right? IMO.

663950[/snapback]

Nope. I implied that you liked certain things about the NFL that politicians helped to foster even though you implied you don't want politicians anywhere near the NFL.

[socalfan]

Some conclusions...For the 2004 season, Wilson was not cheap when it came to the players, 18 teams paid out less of their operating revenues to players. The Bills controlled their non-player expenses well compared to ALL other teams except the Bengals. The Bills carry some debt, but the debt of 28 other teams consumes more of their revenue than the Bills. The gate receipts account for a smaller percentage of revenues for the Bills than for 25 other teams.

 

The Forbes article DOES NOT LIST OR CALCULATE

- profit

- taxes

- interest expense and interest revenue

- amortization and depreciation.

 

Forbes list operating revenue = ebitda

- http://www.fool.com/Specials/2002/02071600sp.htm

- http://www.fool.com/portfolios/rulemaker/2...maker010906.htm

 

 

 

Team....................Operating.......Debt %........ Player Cost.....Other Cost......Gate Receipts

........................Margin(4).......of Rev(3)......% of Rev(6).....% of Rev(8).....% of Rev(7)

Arizona Cardinals...... 11% ............ 53% .......... 61% ........... 28% ........... 16%

Atlanta Falcons........ 16% ........... 164% .......... 58% ........... 26% ........... 23%

Baltimore Ravens....... 17% ........... 144% .......... 53% ........... 30% ........... 23%

Buffalo Bills.......... 21% ............ 41% .......... 55% ........... 24% ........... 20%

Carolina Panthers...... 12% ............ 63% .......... 53% ........... 35% ........... 22%

Chicago Bears.......... 21% ............ 99% .......... 53% ........... 26% ........... 26%

Cincinnati Bengals..... 27% ............ 59% .......... 49% ........... 24% ........... 22%

Cleveland Browns....... 20% ............ 48% .......... 51% ........... 29% ........... 21%

Dallas Cowboys......... 24% ............ 87% .......... 35% ........... 41% ........... 13%

Denver Broncos......... 24% ............ 99% .......... 44% ........... 32% ........... 27%

Detroit Lions........... 8% ........... 164% .......... 59% ........... 33% ........... 24%

Green Bay Packers...... 19% ............ 18% .......... 51% ........... 30% ........... 21%

Houston Texans......... 19% ........... 198% .......... 53% ........... 28% ........... 20%

Indianapolis Colts..... 10% ............ 95% .......... 64% ........... 26% ........... 20%

Jacksonville Jaguars... 20% ............ 74% .......... 51% ........... 28% ........... 21%

Kansas City Chiefs..... 17% ............ 67% .......... 55% ........... 28% ........... 24%

Miami Dolphins.......... 8% ........... 104% .......... 57% ........... 34% ........... 24%

Minnesota Vikings...... 10% ........... 193% .......... 66% ........... 25% ........... 21%

New England Patriots... 21% ........... 128% .......... 39% ........... 40% ........... 28%

New Orleans Saints..... 24% ............ 70% .......... 51% ........... 25% ........... 18%

New York Giants........ 15% ............ 37% .......... 55% ........... 29% ........... 25%

New York Jets........... 7% ............ 60% .......... 63% ........... 30% ........... 25%

Oakland Raiders......... 5% ............ 32% .......... 56% ........... 40% ........... 18%

Philadelphia Eagles.... 11% ........... 154% .......... 56% ........... 33% ........... 24%

Pittsburgh Steelers.... 20% ............ 54% .......... 51% ........... 29% ........... 22%

San Diego Chargers..... 20% ............ 62% .......... 55% ........... 25% ........... 22%

San Francisco 49ers.... 25% ............ 57% .......... 46% ........... 29% ........... 21%

Seattle Seahawks........ 8% ............ 63% .......... 60% ........... 33% ........... 20%

St Louis Rams.......... 23% ............ 56% .......... 52% ........... 25% ........... 22%

Tampa Bay Buccaneers... 23% ............ 72% .......... 50% ........... 27% ........... 25%

Tennessee Titans....... 19% ............ 68% .......... 51% ........... 31% ........... 21%

Washington Redskins.... 19% ............ 84% .......... 46% ........... 35% ........... 28%

NFL Averages........... 17% ............ 88% .......... 53% ........... 30% ........... 22%

 

 

Revenues and operating income are for 2004 season.

3Includes stadium debt.

4Earnings before interest, taxes, depreciation and amortization.

6Includes benefits and bonuses.

7Includes club seats.

8Excludes taxes, interest payments, amortization and depreciation. Includes non-player salaries, new equipment, etc.

 

[Orton's Arm]

7] As stated, the Bills debt is amongst the lowest in the league and will stay that way or be even better as long as Ralph is around. It's yet to be seen what kind of debt a new owner would be faced with, but it's a real concern. This is one of the figures however that makes the Bills situation much, much better than the Patriots. Even if they are making 50 million more, they have a huge debt payment and we don't.

I'm not going to disagree with anything in the above quote. That said, I'll point out that a lot of times it makes sense to ignore debt payments when looking at operating success. Why?

 

Let's say that Bill and Steve each buy professional sports teams for $100 million. Bill pays the entire $100 million out of pocket, but Steve needs to borrow $50 million from bankers. Since Steve put up only half as much cash as Bill, it makes sense that Steve should be getting only half as much in the way of profits. Bankers put up the other half of the money for Steve's team, so they collect some of the profits in the form of interest payments. On an absolute basis, Bill should be earning more money than Steve, because Bill's investment is twice as big.

[Olaf Fub]

The Forbes article DOES NOT LIST OR CALCULATE

- profit

- taxes

- interest expense and interest revenue

- amortization and depreciation.

 

Forbes list operating revenue = ebitda

     

Revenues and operating income are for 2004 season.   

3Includes stadium debt.   

4Earnings before interest, taxes, depreciation and amortization.   

6Includes benefits and bonuses.   

7Includes club seats.   

8Excludes taxes, interest payments, amortization and depreciation.  Includes non-player salaries, new equipment, etc.   

 

[/size][/font]

664005[/snapback]

 

The operating income that Forbes lists is a pretty good indicator of how profitable the Bills are. The depreciation/amortization has no effect on cash flow and would just be used to reduce the tax liability. They have one of the lowest amounts of debt in the league, so interest wouldn't be that big a deal.