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It wasn't that long ago when owning an NFL franchise was nearly a no-risk venture. Revenue sharing, a salary cap and the most lucrative television contract in professional sports made it virtually impossible to go wrong from a business standpoint. Even if the team floundered, your bank account did not.
But the recent recession ushered in a new set of realities. For the first time in a decade, eight NFL teams saw their overall value decline, according to annual rankings compiled by Forbes magazine. League-wide, ticket sales are down nearly 10 percent. The NFL said this week that it expects that at least 25 games, and possibly as many as 50, will be blacked out on local television this season. Yet despite the uncertainty, the Baltimore Ravens are one of the teams on a steady path of growth and what they hope is long-term prosperity.
The Ravens were ranked as the 11th-most-valuable NFL franchise by Forbes at $1.079 billion, up 2 percent from the previous year. The team has sold out its 2009 home games, bringing its consecutive regular-season sellout streak to 112 games, dating to the birth of the franchise. Despite playing in one of the league's smallest media markets - 26th of 32 teams - and having virtually no national following, the Ravens had an estimated $240 million of revenue last year, better than 21 teams, according to Forbes.
Although Ravens president Dick Cass concedes it has been a struggle to renew the leases on the corporate suites inside M&T Bank Stadium in this economy, sponsorship dollars have actually increased by about 1 percent, a fairly impressive figure considering unemployment just hit a 26-year high.
"It's a challenging time, there is no doubt about that," said Cass, entering his sixth year as president of the Ravens. "We've been extremely fortunate. I think we have very loyal fans, we're coming off a good year, and we have high hopes for this year. That makes a big difference. Our season-ticket renewal rate is 99 percent, or higher. I think that indicates to us that people made a big sacrifice to hold onto their season tickets and keep coming to games, and I think that's a big tribute to our team and the place we've come to hold in this city."
It's still no cheap outing to attend a Ravens game. Even without factoring in parking ($25) and food, the average Ravens ticket costs $77, slightly above the league average. But to purchase that ticket at face value, you almost have to own a personal seat license, since 96 percent of all tickets sold are season tickets, and the ones that aren't sell out within minutes of going on sale. The average value of a Ravens PSL fell slightly this year, but the cost to buy one is still somewhere between $2,000 and $25,000, depending on the market and where they are in the stadium.
"I think the PSLs have helped us, because they've increased in value substantially since they were first issued," Cass said. "If you're a fan and you cannot afford to hold onto your season tickets any longer, what you do is sell your PSL. It's a little like the housing market. If you've got to sell your house in this market, you're going to get a little less than you would have the year before. But there is still a market. There is still value there. They have enough value that someone is willing to buy them."
That's hardly the case in cities like Detroit, San Diego, Oakland and Jacksonville, which all anticipate television blackouts this season. Already, 17,000 Jaguars season ticket holders declined to renew from a year ago. The team's average ticket price is tied with the Cleveland Browns for the lowest in the NFL at $55.
The Vikings still have around 6,000 season tickets available, even though the signing of Brett Favre sparked a run of 3,200 season-ticket sales, according to the Minneapolis Star-Tribune. The Vikings haven't sold out any of their games, and still have more than 1,000 tickets available to each one. The Cincinnati Bengals have had 44 consecutive sellouts, but that is in jeopardy this year. One of their preseason games was already blacked out.
"I think generally the NFL made a mistake during expansion," said John Moag, former head of the Maryland Stadium Authority, who negotiated the Ravens move from Cleveland after Baltimore was denied a team during the expansion process. "I think they misread growth potential of the Jacksonville market. I think Baltimore got over its NFL separation with the Colts rather quickly when this team came to town. There is no question it is a very strong brand in the NFL, and it's even stronger here in the Baltimore area. People are loath to give up their tickets. Whether we like it or not, it ranks up there with religion for some people."
Alice Edwards, a school bus contractor from Forest Hill, could have pocketed a tidy profit when she sold her two club-level PSLs, doubling her initial $5,000 investment. But Edwards couldn't leave the Ravens behind. So she applied the profits toward buying four new seats in a better section. "My sons and I are die-hard Ravens fans," she said.
Marc Ganis, the president of Sports Corp Limited, a Chicago-based sports marketing firm, said that even though the Ravens are a relatively young franchise, the history of professional football in the city - especially when combined with the team's recent success - has fostered an intense loyalty.
"When the Colts were successful there, football was very popular," Ganis said. "That kind of thing continues for generations. It's extremely hard to create something where it never existed. But if you lose that kind of following where it did exist, it's not as hard to get it back."
Cass said the Ravens have tried to look for additional sources of revenue for the team, and booking more nonfootball events at M&T Bank Stadium is one avenue.
Earlier this year, the Ravens played host to an international soccer match between Chelsea and AC Milan that sold 72,000 tickets, and the team is hopeful it can host a similar match next summer. The NCAA Lacrosse Final Four will also be played at M&T Bank Stadium in 2010 and 2011, and the team has expressed interest in hosting a World Cup match if the United States is awarded the competition in 2018. Because the state owns the stadium, the team splits the profits from those events with the Maryland Stadium Authority after taking 10 percent as a management fee.
"Some of those events, we don't make a lot of money," Cass said. "But we do them partly as payback, because we're a state-owned facility and there are a lot of ancillary benefits to the city like hotel rooms, and partly because we get on a list of stadiums that can do big events and put on a good event."
The Ravens do draw a small amount of revenue from local merchandise sales and Ravens-themed Maryland Lottery tickets, but the amount of money they bring in is fairly small compared with the revenue generated from ticket sales, suites leases and corporate sponsorships.
But the team's primary focus is to continue to grow its local fan base. The team plans to install high-definition screens inside the stadium for the 2010 season, which should cost between $8 million and $9 million, but Cass feels it's a necessary expense.
"We're competing against people's high-definition televisions at home," Cass said. "You have to make it worthwhile for the fans to come to the stadium."
Baltimore Sun reporter Jeff Barker contributed to this article
Four tickets: Between $385 and $400, minimum
Off-site parking: $25
Concessions: $50 to $60 (four hot dogs, two sodas, two beers)
Merchandise: $50 to $250
But the recent recession ushered in a new set of realities. For the first time in a decade, eight NFL teams saw their overall value decline, according to annual rankings compiled by Forbes magazine. League-wide, ticket sales are down nearly 10 percent. The NFL said this week that it expects that at least 25 games, and possibly as many as 50, will be blacked out on local television this season. Yet despite the uncertainty, the Baltimore Ravens are one of the teams on a steady path of growth and what they hope is long-term prosperity.
The Ravens were ranked as the 11th-most-valuable NFL franchise by Forbes at $1.079 billion, up 2 percent from the previous year. The team has sold out its 2009 home games, bringing its consecutive regular-season sellout streak to 112 games, dating to the birth of the franchise. Despite playing in one of the league's smallest media markets - 26th of 32 teams - and having virtually no national following, the Ravens had an estimated $240 million of revenue last year, better than 21 teams, according to Forbes.
Although Ravens president Dick Cass concedes it has been a struggle to renew the leases on the corporate suites inside M&T Bank Stadium in this economy, sponsorship dollars have actually increased by about 1 percent, a fairly impressive figure considering unemployment just hit a 26-year high.
"It's a challenging time, there is no doubt about that," said Cass, entering his sixth year as president of the Ravens. "We've been extremely fortunate. I think we have very loyal fans, we're coming off a good year, and we have high hopes for this year. That makes a big difference. Our season-ticket renewal rate is 99 percent, or higher. I think that indicates to us that people made a big sacrifice to hold onto their season tickets and keep coming to games, and I think that's a big tribute to our team and the place we've come to hold in this city."
It's still no cheap outing to attend a Ravens game. Even without factoring in parking ($25) and food, the average Ravens ticket costs $77, slightly above the league average. But to purchase that ticket at face value, you almost have to own a personal seat license, since 96 percent of all tickets sold are season tickets, and the ones that aren't sell out within minutes of going on sale. The average value of a Ravens PSL fell slightly this year, but the cost to buy one is still somewhere between $2,000 and $25,000, depending on the market and where they are in the stadium.
"I think the PSLs have helped us, because they've increased in value substantially since they were first issued," Cass said. "If you're a fan and you cannot afford to hold onto your season tickets any longer, what you do is sell your PSL. It's a little like the housing market. If you've got to sell your house in this market, you're going to get a little less than you would have the year before. But there is still a market. There is still value there. They have enough value that someone is willing to buy them."
That's hardly the case in cities like Detroit, San Diego, Oakland and Jacksonville, which all anticipate television blackouts this season. Already, 17,000 Jaguars season ticket holders declined to renew from a year ago. The team's average ticket price is tied with the Cleveland Browns for the lowest in the NFL at $55.
The Vikings still have around 6,000 season tickets available, even though the signing of Brett Favre sparked a run of 3,200 season-ticket sales, according to the Minneapolis Star-Tribune. The Vikings haven't sold out any of their games, and still have more than 1,000 tickets available to each one. The Cincinnati Bengals have had 44 consecutive sellouts, but that is in jeopardy this year. One of their preseason games was already blacked out.
"I think generally the NFL made a mistake during expansion," said John Moag, former head of the Maryland Stadium Authority, who negotiated the Ravens move from Cleveland after Baltimore was denied a team during the expansion process. "I think they misread growth potential of the Jacksonville market. I think Baltimore got over its NFL separation with the Colts rather quickly when this team came to town. There is no question it is a very strong brand in the NFL, and it's even stronger here in the Baltimore area. People are loath to give up their tickets. Whether we like it or not, it ranks up there with religion for some people."
Alice Edwards, a school bus contractor from Forest Hill, could have pocketed a tidy profit when she sold her two club-level PSLs, doubling her initial $5,000 investment. But Edwards couldn't leave the Ravens behind. So she applied the profits toward buying four new seats in a better section. "My sons and I are die-hard Ravens fans," she said.
Marc Ganis, the president of Sports Corp Limited, a Chicago-based sports marketing firm, said that even though the Ravens are a relatively young franchise, the history of professional football in the city - especially when combined with the team's recent success - has fostered an intense loyalty.
"When the Colts were successful there, football was very popular," Ganis said. "That kind of thing continues for generations. It's extremely hard to create something where it never existed. But if you lose that kind of following where it did exist, it's not as hard to get it back."
Cass said the Ravens have tried to look for additional sources of revenue for the team, and booking more nonfootball events at M&T Bank Stadium is one avenue.
Earlier this year, the Ravens played host to an international soccer match between Chelsea and AC Milan that sold 72,000 tickets, and the team is hopeful it can host a similar match next summer. The NCAA Lacrosse Final Four will also be played at M&T Bank Stadium in 2010 and 2011, and the team has expressed interest in hosting a World Cup match if the United States is awarded the competition in 2018. Because the state owns the stadium, the team splits the profits from those events with the Maryland Stadium Authority after taking 10 percent as a management fee.
"Some of those events, we don't make a lot of money," Cass said. "But we do them partly as payback, because we're a state-owned facility and there are a lot of ancillary benefits to the city like hotel rooms, and partly because we get on a list of stadiums that can do big events and put on a good event."
The Ravens do draw a small amount of revenue from local merchandise sales and Ravens-themed Maryland Lottery tickets, but the amount of money they bring in is fairly small compared with the revenue generated from ticket sales, suites leases and corporate sponsorships.
But the team's primary focus is to continue to grow its local fan base. The team plans to install high-definition screens inside the stadium for the 2010 season, which should cost between $8 million and $9 million, but Cass feels it's a necessary expense.
"We're competing against people's high-definition televisions at home," Cass said. "You have to make it worthwhile for the fans to come to the stadium."
Baltimore Sun reporter Jeff Barker contributed to this article
Game day expense
Estimated cost for family of four to attend a Ravens game:Four tickets: Between $385 and $400, minimum
Off-site parking: $25
Concessions: $50 to $60 (four hot dogs, two sodas, two beers)
Merchandise: $50 to $250
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Try $35 for Ravens Lot A!
christhegman@hotmail.com (09/10/2009, 8:13 AM )