Seven Pro Teams on the Brink of Collapse
Read more: Seven Pro Teams on the Brink of Collapse - 24/7 Wall St. http://247wallst.com/2011/11/08/seven-pro-teams-on-the-brink-of-collapse/#ixzz1d7p4gp76
After years of failing to sell tickets, even at $25 a piece for all you can eat season tickets, I'm not really surprised. Although, if they can continue to improve and be a playoff contender every year, they will be fine.
They focus on the drop in attendance from 10 years ago to today, which ceteris paribus would be a good idea. But, uh:
If they did, Ford Field would have been built to seat 80,000. When the Redskins moved from RFK (55,000 seats) to FedEx (90,000+), they had a years long waiting list for season tickets. They've won a total of one playoff game since they moved there, but they always sell out.
So it made sense for the Lions to downsize. They only averaged about 60k back in the Silverdome, even with Barry. And they still have plenty of seats available for other games this year with a good team.
Basically they have a local monopoly on the most popular sport in America. More product does not necesarilly equal more revenue. You want to price your product to maximize the difference between total cost and total revenue which will almost always be higher than where supply meets demand.
I had season tickets on the goal line 20 rows from the field in the dome for $35 a ticket. The family fun zone is now $40 a ticket.
To be on the verge of financial collapse, you'd have to think the Ford family is hurting for dough. I don't know that $8 mil a year is going to break them. And it takes the only 10 year window where things were so horribly mismanaged that even Lions fans had to step away. But even then, other than 0-16...how many games were really blacked out? They sold enough to "give away" the rest to circumvent the rule. And now that they're even modestly good, and don't look like they're in any way headed back to Millen-like teams (even if they're no guarantee to be Super Bowl bound any time soon), they're going to sell out consistently. There hasn't been a sniff of last minute ticket sales this year. An average Lions NFL team is enough to sell out every year. That's just the fanbase. So while they list a number of teams in horrid markets and/or with no following, and broke owners, the Lions don't really fit with any of those teams. They just took earning trends over the last decade and plugged them in.
The article reads like a guy who is just guessing. He thinks Detroit is a good guess because they've sucked so badly for the last decade. But "on the brink of financial collapse"? No way, no how. The Ford family has deep pockets, it goes without saying that even if the Lions are losing a few million dollars a year, it doesn't have a huge effect on their money. Also, Ford Field has failed to sell out less than 10 times for lions games, if I'm not mistaken. So maybe they lost a bit of money during a few horrendous years, but besides that it's been consistent sellouts.
Ford family has their networth from Ford stock, which was below $1.75 during 2008 and now consistently trades between $9-12. They are not, and will not be hurting for cash anytime soon.
Is that a shoddily written report. The Detroit Lions are no closer to being on the verge of financial collapse as Mark D'antonio is on the verge of being a classy individual.
An NFL franchise is a medium to print money. I doubt the writer of the story took into consdieration all the various revenue streams for an NFL team. In fact most teams can be profitable without selling a single ticket. The only area where the Lions are not maximizing revenue is in the sale of Club seats and Suites. The purchase of those is directly coorelated to winning.
the Ford family?
What I think is going on is that the writer is combingin Ford's recent struggles in selling cars with the Lions recent ineptitude. Loss of market share plus loss of a bunch of games equals "on the verge of financial collapse".
Ford was the only one that didn't take any government money, and their stock, sales, and market share have been on the upswing. So even by that standard it's kind of an ignorant article.
I should have mentioned that currently Ford is doing just fine, but that was not the case a few years ago when they had to take out loans to stay afloat. Ford was in trouble financially. There is no doubting that.
I hear that Lions jerseys are selling like hotcakes in Ohio. Never in a million years I would have thought that.
That article offered zero insight. What's even worse is that that website looks like it was designed in 2005. Super credible sources!
this article got some people to read it which was its purpose. Never mind facts and such.
so assuming the Lions continue to get better, sales of merchandise should go way up. That will make a big difference. Top NFL franchises sell tons more stuff than the Lions. Most of that is because we've sucked for so long. I was just down in the Dallas area, and there is Cowboy merchandise EVERYWHERE. I'm talking huge displays in most grocery stores even. Here you can go up to the U.P. or even northern L.P. and find more Packer stuff than Lions. If the Lions continue to win and they do a better job with marketing, they'll probably be making money vs. losing it.
Here's their reasoning on Detroit:
As they explain at the top of the article, their metrics are based on W/L and recent attendance trends. What it doesn't show is the Lions surviving for 20 years before being just as bad, and the substantial uptick in this year's attendance and projected value. Their metrics can tell you Detroit is declining in population, but not that the population of metro Detroit will spend four times as much on sports as the average American. It also doesn't show the Fords, who are backed from losses by Ford Motor Company and takes at face value the reported operating losses that purposely leave out things like licensing sales to avoid paying Detroit city taxes on profits from Ndamukong Suh jerseys.
Also they're wrong about the Silverdome to Ford Field being a money-saving thing. It was a major investment that is paying off in much higher parking fees, downtown cachet, a far better football environment, a Superbowl, and a better fan atmosphere that encourages greater purchasing of concessions and Lions gear, etc. The Pontiac location was far, far less expensive but their metric of using seating to calculate that expense is severely flawed.
The Lions are nowhere near financial collapse and it's irresponsible reporting to suggest otherwise. This does not seem like a very trustworthy news source. In fact, I think I'll read more and hedge against whatever they're buying.
The Lions had the worst decade long stretch of any pro football team ever and they only lost 8 million last year. With the profit sharing plan that the NFL uses, the HUGE TV contract that they get, and the new CBA, it will be very difficult for ANY NFL team to collapse financially.
A team might lose money, like Jacksonville, or not live up to the financial windfall that most NFL teams enjoy, but the NFL does not "eat their own" like MLB and other sports.
This is complete fabrication. NFL teams get enough money from the TV contracts alone to keep franchises afloat. The Lions are just fine, and if they aren't, WCF can use part of the billion it will fetch on the open market to buy his own nursing home for one occupant: him.
Did this guy even actually think about what he was saying before he wrote this article? What a terrible article.