Discussion about the fair share of Jaguars Economics

[BridgeTroll]

I think I disagree regarding your minor league point.  If this is true then virtually every employer in the US is paying for a subsidized minor league.  If you want to view a college education (including sports education) as the minor league... then it applies to everyone... not just the NFL.

[Non-RedNeck Westsider]

This too rosy a depiction. The NFL keeps up its quality product - and the pricetag - by operating a total monopoly over professional football. If cities want any professional football, they must court the NFL on the NFL's own terms. And it's not as if some other group of millionaires could just start their own competing league; whenever another league has become a threat in the past, the NFL has fought them tooth and nail, either to the point that they fold or the NFL buys them out.

When they were just starting out the two main leagues, the NFL and the AFL, made a business decision to merge - it was highly contested and neither leauge really wanted it, but the general sentiment was they could expand together more profitably than separately - what an understatement.  In the US, the NFL is king and there isn't any competition to take the crown away.  The NFL has no problem with other leagues operating - CFL, AFL, EuroLeague, UFL and even the now defunct XFL - they don't compete with the NFL, they don't take talent away from the NFL, they only reinforce the simple fact that for kids coming up, it's NFL or bust.

Additionally, unlike other sports like baseball and hockey, and soccer and rugby in other countries, the NFL doesn't even operate a minor league; its "minor league" is college football, which is also heavily subsidized by the schools and even taxpayers

The damage that football players do to their bodies from highschool on is too extreme to really maintain a minor league.  That's why the NFL has no problems with all of the other football leagues.   The contracts for players in the NFL are set-up on a pay-me-know system.  They get huge signing bonuses and decent yearly pay.  They are also unguaranteed.  It's truly a what-have-you-done-for-me-lately mentality, and that's the way the business is set up.  You're not on the hook for all 5-6 years of their contract, so why would you need a place to stash a player if he's not performing up to the pro-level?  You don't.   You cut him.

Baseball is sort of an odd-duck the way it operates.  Sure, players get signing bonuses, but not nearly in the amount of the NFL guys.  Once signed (typically 3-5 years, the same as the NFL), they report to their minor league affiliate and may never make the bigs, but the payday in baseball is arbitration, and they're not eligible until they've had 3 years of service (2 if they're in the top 20% or so of their position) - that's when the A-Rod money starts to come - if they've proven themselves.  It's a good plan for someone that you're going to be on the hook for $30M over 4 years whether they play or not.  That's why you don't get too many Jamarcus Russell / Ryan Leaf types in baseball. 

As I say, I do think the NFL has been a great quality of life buy for Jacksonville and lots of other places. I want us to do what it takes to make the Jags a permanent, competitive franchise in this old football town. But if things continue on this path, pro football may end up being played exclusively in billion dollar, mostly taxpayer funded stadiums in the country's largest cities.

I think that you're mostly right on this point, but the business model of the NFL doesn't support it.  There's revenue sharing among the teams for a few reasons - it levels the playing field and gives the league parity.  Sure they want LA tv money, but they're not going to sacrifice alienating a part of the country to do it - that's why it's on the cities to decide whether they want a team badly enough.  I keep hearing the word, 'subsidy' thrown around with regard to the NFL stadiums.  In all honest I think a better word would be ransom.  The NFL doesn't need the city's money to operate.  Period. 

But we agree that it's a QOL issue, and these cities and counties realize that they're a lot better off with the NFL than without - so they pay the NFL the king's ransom they demand.

[fieldafm]

Do you really think that the NFL can afford to give up the money from local governments?

In reality they cannot.

No business could give up 75% of its revenues and survive.

I started to make a long post about this.. but then I erased most of it b/c it's clear you haven't studied the issue in earnest or possibly just have a pre-concieved notion of the subject that allows you to bend your opinions to match your thesis.

About 65% of an NFL team's revenue stream comes from their tv contract, not local government. 

Plus, you haven't even bothered to research(admittedly) how much the city actually receives from its contracts with the various concessions and parking vendors, bed tax, surcharge on ticket sales... nor take into account the revenue brought in from the GBA(which includes FL/GA), various LiveNation events at the stadium and private functions through HomeField Events... all a result of the stadium being there. 

That's not even to discuss the macro issues of the team's payroll(in a town that is starving for high paying jobs-they have a payroll that is almost twice the size of my company and our 2100 high-wage jobs), out of town guests who all spend money in town, businesses that make money from the Jaguars(there are a TON) etc.

[jandar]

The advertising the city got Monday night was worth millions alone.
A 30 second spot on Monday Night Football is a couple of hundred thousand dollars.
Jacksonville had a 3.5 hour advertisement.

The whole region benefits. Many Ravens fans went to St Augustine, Amelia, Jax Beach, etc. They spend money as well, talk about the city (good or bad) with their friends. Businesses see Jacksonville as a NFL city and this can help influence moves and growths.

Jandar, Im willing to play along here.

Fringe, the fox television show, regularly features Jacksonville as part of its storyline.  Should we mail JJ Abrams a 200 million dollar check?

http://en.wikipedia.org/wiki/Fringe_(TV_series)

http://en.wikipedia.org/wiki/Jacksonville_(Fringe)

I'll play along even more.
I don't care for Fringe, not my type of show, so who cares if he wants money or not, same with other movie producers.

The stadium is used by more than the Jaguars. The original 121 million could be broken down like this:
10 home games by the Jaguars, 1 FLA/GA game, 1 Gator Bowl Game. Just that alone means that of the 121 million, 100 million went to the Jaguars.
Take into consideration all of the other things, Monster truck shows, (1 almost every year since the new stadium was built as well as other things.

So lets take this formula: 10 home games, 1 monster truck, 1 gator bowl game, 1 FLA/GA game, 2 misc events per year (another college game or concert).  That comes out to 80 million for the Jaguars, or 8 million a year over 10 years. Concessions and parking are paid 50% to the city, so the city makes some money back, so figure around 4-5 million a year for the first ten years the Jaguars were in existence.

Wow, thats expensive let me tell you.
How much is spent annually on Libraries that most people don't use, or on the Skyway which isn't used?

[Tacachale]

This too rosy a depiction. The NFL keeps up its quality product - and the pricetag - by operating a total monopoly over professional football. If cities want any professional football, they must court the NFL on the NFL's own terms. And it's not as if some other group of millionaires could just start their own competing league; whenever another league has become a threat in the past, the NFL has fought them tooth and nail, either to the point that they fold or the NFL buys them out.

When they were just starting out the two main leagues, the NFL and the AFL, made a business decision to merge - it was highly contested and neither leauge really wanted it, but the general sentiment was they could expand together more profitably than separately - what an understatement.  In the US, the NFL is king and there isn't any competition to take the crown away.  The NFL has no problem with other leagues operating - CFL, AFL, EuroLeague, UFL and even the now defunct XFL - they don't compete with the NFL, they don't take talent away from the NFL, they only reinforce the simple fact that for kids coming up, it's NFL or bust.

The NFL doesn't mind leagues that don't really compete with it, but it absolutely does fight to maintain its monopoly any time another league becomes a threat. This happened with the AAFC in the 1940s, the AFL in the 60s, and the USFL in the 1980s. With the AFL, NFL owners actively tried to buy out AFL owners, and the league expanded into prospective AFL markets to shut them out. In the end the leagues merged largely on the NFL's terms. With the USFL, they were taken to court and actually lost an anti-trust suit, but were only fined $3 and their competition had to fold. As such they can run up the costs.

Clearly this isn't just an NFL issue; all the Big 4 leagues are like this. But unlike baseball and hockey, which operate/partner with minor leagues, which in turn base teams in cities that don't have major league teams, the NFL uses the college football system for its developmental pool. This was what my comment about "minor leagues" was in regards to. I absolutely do not mean that a college education is "minor league" for life.

Do you really think that the NFL can afford to give up the money from local governments?

In reality they cannot.

No business could give up 75% of its revenues and survive.

I started to make a long post about this.. but then I erased most of it b/c it's clear you haven't studied the issue in earnest or possibly just have a pre-concieved notion of the subject that allows you to bend your opinions to match your thesis.

About 65% of an NFL team's revenue stream comes from their tv contract, not local government. 

Plus, you haven't even bothered to research(admittedly) how much the city actually receives from its contracts with the various concessions and parking vendors, bed tax, surcharge on ticket sales... nor take into account the revenue brought in from the GBA(which includes FL/GA), various LiveNation events at the stadium and private functions through HomeField Events... all a result of the stadium being there. 

That's not even to discuss the macro issues of the team's payroll(in a town that is starving for high paying jobs-they have a payroll that is almost twice the size of my company and our 2100 high-wage jobs), out of town guests who all spend money in town, businesses that make money from the Jaguars(there are a TON) etc.

This is a good point. As opposed to other things the city could spend money on, the Jaguars (and the stadium) also directly and indirectly stimulate economic activity that can mitigate the great cost to the taxpayer. I tend to doubt it exceeds the costs by a whole lot, but that's where the quality of life benefit comes in. Especially for a mid-sized, up and coming city trying to find its identity like Jacksonville, it's hard to imagine another quality of life investment that could do so much for so many.

[jandar]

Well then again Jandar, it was your argument that it was worth a couple of million bucks partially because of the media exposure.  If we are being even in our considerations, then wouldnt JJ Abrams, the creator of Fringe be entitled to some money as well?
The city comes close to breaking even every year on the Jags. The few million it costs broken into years like I did is offset by concessions and parking.

And all of those events that you mentioned were hosted in Jacksonville before the Jaguars, without the expensive remodeling.

If JJ Abrams actually filmed in Jacksonville and requested some funding from the city, Im sure they would help.

The Gator Bowl was about to be relegated to a lower tier due to the stadium, and the FLA/GA game was about to be cancelled due to the condition of the old Gator Bowl. Many alumni from both schools wanted it moved back to home schools.

[Non-RedNeck Westsider]

BTW... if you want to buy a piece of the Pack they will be selling "worthless" stock again next year to add around 10,000 seats, a new video and sound system.

I meant 'worthless' as they don't gain value or pay dividends.  I'm sure that most Packers fans would kick me out of their house, albeit in a really nice way and probably with a to-go plate, if I called their framed stock certificate 'worthless'.

And here it comes next week:

GREEN BAY, Wis. (AP)â€"The Green Bay Packers’ stock sale may begin as early as next week.

In a letter published on the Utah Department of Commerce’s website, a law firm representing the Packers has requested feedback from state regulators on a proposed stock sale that would begin “on or around” Nov. 15. According to the document, shares may be sold online and will be more expensive than in past salesâ€"perhaps $250 each.

The Packers, the NFL’s only publicly owned team, have been planning what would be their fifth stock sale. This one would raise funds for renovations at Lambeau Field. There are 112,205 shareholders who own approximately 4.75 million shares. Shares include voting rights, but their value won’t appreciate and there are no dividends.

A team spokesman says the Packers continue to prepare for a potential stock sale and are not able to discuss specifics. It is unclear how many states the team has contacted.

The letter was reported by Bloomberg News earlier Tuesday.

[Non-RedNeck Westsider]

The problem here is that we are all paying for a benefit that cannot be quantified, or even defined. 

On a dollars and cents basis, we are losing money on the Jags, so someone tell me -

If nobody watches our games and if downtown is dark during game time, what's in it for those of us who don't go to the games?

We may not ever be able to quantify the benefit of having a sports team here, but some cities are going to be in a better position to justify having pro-sports in their towns....

Miami May Lose $200M From NBA Lockout
Tuesday, November 15, 2011 7:41 amWritten by: Ben Maller\0020 1973 351

LeBron James might disappear in the fourth quarter of playoff games, but should the NBA regular season vanish, a big chunk of the South Florida economy may go up in smoke.

Economists tell CBS Miami that South Florida may suffer $200 million in losses if there is no pro basketball this year. Need an example of the shortfall? CBS reports parking near the American Airlines Arena is now going for three bucks.

And the lockout will do major damage to other cities, too.

In Cleveland, WOIO reports up to 35 percent of downtown restaurants' annual revenue comes from NBA games.

Portland says no Blazers games translates to a $59 million hit, Oklahoma City claims it will lose $60 million if Kevin Durant doesn't play, and Tony Parker's Spurs are worth an astonishing $90 million to the businesses of San Antonio.

Though Miami will feel it the worst, some believe the whole reason for the lockout itself is the Heat's ability to add James and Chris Bosh last year during free agency. Small market owners want to make sure that never happens again.

Of course, it's not just local cities that will need a major league stimulus plan. Bloomberg reports that Tuesday is the day pro basketball players were supposed to get their first paychecks of the 2011-12 NBA season. With

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the games on hold, the NBA's players are missing out on an average game check of $425,000.

As a whole, the National Basketball Association has an annual revenue of about $4.3 billion, with more than $1.1 billion of that figure coming from gate receipts last season.

http://www.thepostgame.com/blog/dish/201111/south-floridas-eye-popping-economic-hoops-losses

[Dashing Dan]

Cities like Memphis have a lot of their own money tied up in NBA teams.  At least for this year, that money appears to have been wasted.

[Tacachale]

^They're also talking about losing revenue generated by sports teams after they've spent tons money on getting the teams in the first place. And they never stop paying. No matter how expensive and "state of the art" your stadium or arena is one year, it's considered outmoded within a few decades. And the taxpayers better cough up the dough for a new one, or the team will move. The NBA is even worse about that than the other leagues.

[mtraininjax]

I don't care to discuss the MLB, NBA or NHL, they don't apply to Jax, so why bother? The economics of the Jags are more than the number of games in the stadium or the number of monster truck jams or concerts at the stadium, the question to ask yourself is, if the Jags were not here, who would pick up the charitable slack? 14 million a year in charity to the local community from Wayne and Delores Weaver. Delores Weaver put up 8 million of her OWN money, not Wayne's, to buy the school in Riverside and fix it up.

Terrence Knighton was seen with Tyson Alu Alu on Tuesday night giving out dinners to 500 needy families, something Knighton wanted to do in his new city ( he is not from Jax) as a way of saying thanks and giving back. Who provides for the families in his stead otherwise? The charitable foundations ranging from Toni Boselli to former head coach, and current Giants Coach, Tom Coughlin and his Jay Fund. Who picks up the slack if all of this was somewhere else? Jax has a great thing going with the Jags, love the team or hate them year to year, they are good for Jacksonville and our community benefits in more ways than you can imagine, other than direct costs.

Since we are talking about sports facilities... the Baseball grounds appear to have been built solely for the Suns.  Worth it?  What about the Arena?

Baseball Grounds have been used for ACC baseball championships and you can use the stadium for other activities as well, just last month part of it was opened for the Zac Brown Band concert and concessions were sold from it before the show. The Arena is home to close to 20 high school graduations, as well as baton twirling competitions and the annual circus. A concert is put on there from time to time, but SMG manages both facilities for the City and is responsible for booking events.