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What’s wrong with the Ralph? By NFL standards, plenty

NFL Commissioner Roger Goodell’s call for a new stadium for the Buffalo Bills has left many fans asking the question: What’s wrong with the Ralph?

The answer, according to sources plugged into the league’s thinking and its economics, is as harsh and unchangeable as Scott Norwood’s wide-right field goal attempt at the end of Super Bowl XXV.

In the $9 billion business known as the modern National Football League, which shares 80 percent of its revenue among its 32 teams, Ralph Wilson Stadium in Orchard Park is a loser.

Even after $130 million in renovations this year, the Ralph is not – and probably never can be – the moneymaking machine that the NFL now favors.

It’s poorly located for a team in the league’s second-smallest market, which must rely on fans from Canada and Rochester and points east in order to thrive. That’s why, sources said, several NFL team owners argue that a new stadium, preferably in downtown Buffalo, is essential to securing the team’s long-term future in the region.

What’s more, the Ralph is old – and teams can charge higher ticket prices in newer facilities. So Bills fans, who enjoyed the league’s second-lowest ticket prices last year, likely will see their bargain come to an end in a new stadium.

And finally, if not fatally, the Ralph is just a football stadium, which means it’s without many of the wallet-emptying amenities that teams now rely on to make even more money.

Those critical flaws may explain why the three known bidders for the Bills have, according to Forbes magazine, offered less than $900 million for the team – or about $100 million less than the Cleveland Browns were sold for two years ago.

New stadiums typically boost the value of a pro football team by 25 to 30 percent, said John Vrooman, a sports economist at Vanderbilt University. That, he said, explains why the NFL just won’t put up with an outdated, underperforming facility anymore.

“The stadium revolution is now coming around for the second circle, and the Bills will have to get on board in Buffalo or move to a new venue in Toronto,” Vrooman said.

Reasons to stay

Dallas Cowboys owner Jerry Jones said in May that Toronto might be a better home for the Bills because it’s a far larger market, which would help push up the league’s revenues.

But he appears to be in the minority among NFL team owners, who, knowledgeable sources said last week, largely favor keeping the Bills in Buffalo so long as the team gets a new stadium, preferably downtown, so it can make more money.

There are good reasons team owners want the Bills to remain in Buffalo, said Nellie Drew, a sports law professor at the University at Buffalo.

“Practically, it is never an easy matter to move a team,” she said. “As long as there is demonstrated interest and commitment by sufficiently financed local owners and a dedicated, passionate local fan base, leagues prefer not to move teams.”

Yet the NFL also prefers each of its teams to turn as big a profit as possible. And by some measures, the Bills are not pulling their weight in the Ralph.

In addition to ranking each team’s current value, Forbes last week estimated the amount of that value that each team derives from its stadium. By that measure, the Ralph ranked third from the bottom in the entire league. And 10 teams had stadiums that were worth more than twice as much as the Ralph.

Perhaps more importantly, gate receipts at the Ralph were the third-lowest in the league last year, Forbes reported. Only the St. Louis Rams and the Oakland Raiders pulled in less from ticket holders.

And the Cowboys, the New England Patriots and the New York Giants collected nearly twice as much ticket money as the Bills did.

That’s important not only because it leaves the Bills with less money to invest in players, but also because the league shares gate revenues, with 34 percent of them going into a visiting team pool that is divided equally among the teams.

In the age of multibillion-dollar television contracts, gate receipts now account for less than 20 percent of the NFL’s revenues, Vrooman said, down from about a third 20 years ago.

But gate receipts still matter to NFL team owners, said Jason A. Winfree, an assistant professor of economics at the University of Idaho and the author of a book chapter called “NFL Franchise Values, Locations and Stadium Economics.”

“They want a new stadium for Buffalo because it’s more money for them,” Winfree said of the team owners.

Downtown recommendation

In fact, some NFL team owners are so keen on a new venue for the Bills that they’re even recommending a site for it: downtown Buffalo.

Sources who are familiar with the thinking within the NFL said some team owners believe the Bills’ new home should be closer to Toronto and Rochester to cash in on those markets.

The reason, they say, is that while Buffalo may be bouncing back now, it remains the league’s second-smallest market, ahead of only the Green Bay Packers.

It didn’t always used to be that way. When the Bills joined the new eight-team American Football League in 1960, the NFL had 13 teams and Buffalo was, according to the Census Bureau, the 16th-largest metropolitan area in the country.

Five decades of economic decline later, metro Buffalo ranks 50th, with a population of 1.13 million that’s actually smaller than it was when the Bills were formed.

That fact already plays a key role in the marketing of the Bills, who say they now get nearly 20 percent of their home-field crowds from Canada and who hold their training camp near Rochester.

NFL experts say the team’s outreach can’t stop there.

“The Bills are going to have to brush up as close as they can to those other markets” to maximize their fan base as well as their revenue, said Brian M. Mills, an assistant professor of sports management at the University of Florida.

A downtown Buffalo stadium would, on game days, likely be at least a half-hour closer than Ralph Wilson Stadium in Orchard Park for fans traveling to see the Bills from Canada. And Mills, who has studied cross-border traffic on Bills game days, said the easier commute to a downtown stadium could make the team more appealing not just to the average Canadian fan, but to Canadian companies who might want to buy luxury suites.

“The Bills have to look to Toronto,” Mills said. “That’s where the money is.”

Knowledgeable sources within the NFL, while not commenting directly on the possibility of a new Bills stadium, said that many factors, such as tradition and the desires of the team owner and fans, go into the selection of a stadium site. Those sources also said league officials – who have said that massive stadium renovations usually don’t work well – would let a team know if a site was fatally flawed in some way.

No local official is calling the Ralph fatally flawed, but Rep. Brian Higgins, D-Buffalo, said he was not surprised that some people within the NFL favor a downtown Buffalo stadium.

“I think a Buffalo stadium would be optimal in terms of the Bills’ identity, accessibility and a lot of other things,” said Higgins, who stressed that stadium discussions are still premature, given that the estate of Bills founder Ralph C. Wilson Jr. is still negotiating the team’s sale.

Paying for stadium

A downtown stadium would be optimal, too, toward reaching the NFL’s goal of boosting the Bills’ revenues.

Like it or not, you – the team’s fans, and even Western New Yorkers who think football is no more important than foosball – would likely have to pay for it. You’ll likely pay for part of the construction costs, as well as much higher ticket prices.

“Soon Jerry Jones and the parade of other ‘egalitarian’ owners will show up in Buffalo just like they did in Minneapolis and Indy and other mid-markets to encourage public support (read public spending) for a new venue,” said Vrooman, the Vanderbilt professor who has compiled data on stadium financing throughout the NFL.

The public has borne about 62 percent of the costs of a typical NFL stadium in the last 20 years, according to Vrooman’s figures. And the cost of the new stadiums built in the past decade range from $455 million for the Arizona Cardinals’ University of Phoenix Stadium in 2006 to $1.2 billion for Levi’s Stadium, the San Francisco 49ers’ brand-new facility in Santa Clara, Calif.

Figures like that have led Erie County Executive Mark C. Poloncarz to talk tough about the NFL’s demands.

“If we’re going to have to build a new stadium, I want to see something that really proves we need a new stadium,” Poloncarz told The Buffalo News earlier this month. “I’m not going to cut libraries, I’m not going to cut parks, I’m not going to cut Child Protective Services to give more money to the multibillionaires who run professional football.”

Gov. Andrew M. Cuomo has also expressed concerns about the costs of a new stadium, but those concerns appear to be running up against a wall of support within the NFL for a new facility.

Sources said Sen. Charles E. Schumer, D-N.Y., has called a number of team owners and held a lengthy meeting with Goodell recently, and he has reached out to other league officials and interested parties to push for keeping the Bills in Buffalo. And while Schumer, the owners and Goodell have explored a variety of options to help keep the Bills in Buffalo for the long term, many owners have indicated that a new stadium is probably the best option.

Experts in the economics of the NFL say that’s because new stadiums inevitably produce more money – starting with higher ticket prices.

For example, last year in aging Candlestick Park, the 49ers charged an average of $86 a ticket. This year, in their new stadium, the cheapest seat goes for $110.

Economists say that’s just a simple matter of a tighter supply and greater demand. Many new NFL stadiums have fewer seats than the Ralph, which seats 73,079, and yet demand to see the games increases with the hype and excitement surrounding a new stadium.

So if a new stadium is built, the team’s average ticket price is not likely to remain at $58, second-lowest in the NFL, more costly than only the Cleveland Browns last year.

“Usually it goes up a lot for the really nice seats,” said Winfree, the sports economist at the University of Idaho.

Cash cows and weddings

Higher ticket prices are just part of the formula that turns new NFL stadiums into cash cows.

Increasingly, teams are focusing less on the box office and more on “venue revenues”: naming rights, other sponsorships, luxury suites, colossal concessions areas and the like. Vrooman said that’s because venue revenues, unlike gate revenues, are not shared with the rest of the league. That means still more money to invest in players, as well as bigger profits.

What’s more, many venue revenues are, unlike standard ticket sales, contractually guaranteed for the long term.

“The contractually obligated venue revenue is more certain and risk-free than traditional gate revenue,” Vrooman said. “So the owners are trading the maybe for the sure.”

For proof, just look at the 49ers. Levi’s agreed to pay the team $220 million over 20 years for the naming rights on the team’s new stadium, which offers 165 luxury suites, compared with 121 at Ralph Wilson Stadium.

And that’s just the start of what Levi’s Stadium has to offer and what the Ralph doesn’t.

Fans in Santa Clara can visit a new 49ers Museum – for an admission charge of $15 for an adult and $10 for a child.

Whether it’s game day or not, they can dine at a new Bourbon Steak and Pub restaurant, where they can enjoy a $18 Wagyu beef hot dog. (Less exotic hot dogs, which are not made from weirdly named Japanese cattle, can be had for a mere $6.25.)

Or they can rent out upward of 110,000 square feet of event space, none of it covered by grass, for weddings, parties, anything.

In fact, Mindy Freeman and Jon McGrath, longtime sweethearts and 49ers fans who grew up in Sacramento, will tie the knot at Levi’s Stadium today, before the team’s pre-season game with the San Diego Chargers.

“We’re going to get married in the suite,” Freeman said on the stadium website. “I’m still not sure how we want to do it – we may want to have the field in the background, but the lighting might be too bright. Then we’ll head over to Michael Mina’s Tailgate, where they have a section reserved for us to celebrate. Then we’ll come back to the suite for the game and have dessert and drinks in there.”

Obviously, going to a 49ers game is no longer just about going to a 49ers game. The team, like every other NFL team in a new venue, has devised countless ways for fans to spend time – and more importantly, money – before and after games, and even on the 352 to 355 days a year when the 49ers aren’t playing there

And while a new Bills stadium might not be as lavish as the 49ers’ new palace, Larry Quinn, the former president of the Buffalo Sabres, said it could be a showcase for the fast-growing HarborCenter/Crossroads area.

He envisions the day when trains carrying Bills fans could arrive at a newly renovated DL&W Terminal at the foot of Main Street. Ferries filled with fans could arrive there, too, and enjoy brunch at a nearby restaurant before walking to a new Bills stadium built somewhere on what’s now underutilized land to the east.

“I think it has tremendous potential,” Quinn said of a football stadium, possibly combined with a new convention center, at the burgeoning south end of downtown. “We’re talking about a really integrated entertainment property. It isn’t just about football. It’s about what that part of downtown is going to look like for the next 30 years.”

Of course, Quinn’s vision would not make everyone happy.

Susan Gemmett, president of the Bills Backers of Rochester, surveyed members of her group about the possibility of a downtown Buffalo stadium and got a mixed response.

“While some think the prospects of a new stadium in downtown would be exciting and make us comparable with other NFL cities, others still like the friendly confines of the Ralph in Orchard Park,” she said. “They believe that a downtown stadium would be restrictive in travel options and especially restrictive to tailgating.”

But Quinn urged Bills fans to look beyond the parking lot and toward the future.

Told that some NFL owners favor a downtown stadium, Quinn said: “I think they’re right. ... It has to be a place that will reach out beyond Buffalo, and it has to be a total experience.”


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