Warning Sign?

by Ryan

Ralph Wilson isn’t a popular figure in the Buffalo area these days. In fact, I’m pretty sure I wished death upon him a few months ago. However, it’s hard to say he is wrong about the financial stability of small market teams, especially when you see a story like this, which I’m totally going to quote.

After a 13-3 regular season, two home playoff games and a final bow from Brett Favre, the Green Bay Packers figured to have a pretty good year from a financial perspective.

And they did—but it wasn’t the moneymaking blockbuster some might have expected, a development that reinforced Packers executives’ long-term concerns about the financial health of the NFL.

The Packers took in about $241 million in operating revenue for the 2007-08 fiscal year that ended March 31, about 10 percent more than the previous year. But thanks to a significant rise in player costs, the team’s total operating profit fell more than 37 percent to $21.4 million.

Yikes, that’s not a whole lot of money when you consider how big those TV deals are. When you consider that they sell out every seat for every game and have one of the most popular jerseys ever, it’s hard to say that’s a fantastic year for the Pack.

When you consider just how popular Favre’s Packers are, you would think they are the premiere small market team in the league, with the highest revenue out of those small market teams. What then does that mean for the Bills’ figures, which aren’t published and never will be?

The Bills have lower ticket prices, lower merchandise sales, and have even more concerns with regards to viability. (Read: Toronto) In a league that measures its “profits” in the billions, what does a number below $21.4 million mean when staying power is in question.

NFL owners recently said they are paying $4.5 billion to players this year, just under 60 percent of their total revenues.

Wow, that sounds like a pre-lockout NHL figure if you ask me.

If you can remember back to the pre-lockout days, there was an NHL funded study that said a small market team would need to reach the second round of the postseason to have a profitable year. Consider those numbers, then think about the fact that Green Bay hosted the NFC Championship Game a few months ago and still came away unsatisfied with their profit margin.

Not every team gets one win away from the Super Bowl, and very few have the selling power Green Bay does. Only a few sell out preseason games, let alone pack a house for scrimmages like Green Bay does. They are in a unique situation in the NFL because they are the only ticket in town while having a national following. If they can’t make a small market situation work within the current system, what does that mean for a team like the Bills?

Under NFL rules, teams share equally any national revenue that comes into the league through television contracts and other sources, but can keep local revenue.

And by making a significant purchase of land near the stadium last year, the Packers are putting together long-term plans to draw more local revenue. The land could eventually be developed into retail stores or entertainment venues.

If that is the possible answer in Green Bay, can that situation work in Buffalo? A few months ago I joked about a condo being built next to the Ralph, but maybe that isn’t as far fetched as I made it sound. If the team is to have any staying power in the area, perhaps a new stadium downtown with the surrounding area developed by the team is the answer. That would equal exclusive profits for the team, and who wouldn’t want to live in a townhouse that keeps a football team in town?

At this juncture it’s a crazy idea at an uneasy time in the franchise’s history. However, everyone thought Ralph was crazy when he whined for years about the plight of a small market franchise. “Suddenly” the league has shunned the current CBA, and the Bills are playing games in Skydome. If there was ever a time for crazy ideas not involving Money driving the team bus, now’s the time.

3 Comments

  1. DCThrowback

    Where have you gone, Wellington Mara?

    The new breed of big market owners (Jones, Snyder and Kraft), despite sending $1Bn in transfer payments to smaller market owners (over the life of the CBA, I think), know that is a drop in the bucket when it spread out over the league, especially with rising player costs. Small market teams lose big time when the salary cap jumps 10-12% a year.

    Wilson was right on the CBA issue and was pillored for it at the time. He should now be remembered for being the canary in the coal mine.

    If you were hoping to get owner support for keeping the Bills in Buffalo after Wilson passes, you know those large market owners would prefer another big ticket city like Toronto over another Jacksonville, Cincy, Minny or Oakland.

    As much as people were rooting for Wilson to die, we must now root for him to live forever. What a conundrum.

  2. Ryan

    Conundrum is an excellent way to put it. One of the reasons I don’t post about the Bills enough is that I don’t know what to make of it at times…

  3. Selling Power

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