Financial Analysis of Jacksonville

by River City Rage on Sep 28, 2006 3:26 PM EDT in News Comment 9 comments

Read this

I'm going to have extensive commentary on this later on today, but this is something to read and take very seriously.

-Chris

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When I asked about this in 5 Questions...

...I was basing my question on the original print version of the article than indicated the Jags were losing $200,000 per year on tarped-over seats, which I thought was low, but took at face value.

The online version you have linked up to has a correction, and it's $200,000 per game the Jags lose.

Is it just not feasible for Weaver to lower prices?

=====The Curly R: A Redskins Blog=====

by thatguyben on Sep 29, 2006 11:09 AM EDT reply actions 0 recs

I don't think the demand is there

They just can't fill 77k (or whatever) seats. Or, at the very least, in order to fill those seats they would have to lower prices to such a level as to make it non-profitable to do so.

I think the most important development here is to sell out the stadium so that people get to actually watch the games. It will generate interest in the locals who will in turn buy up more tickets. NFL teams should have wait lists for their season tickets, and Jacksonville just figured out a way to do so.

Also it is a growing area with a very young demographic. These kids will grow up Jags fans and will become season ticket holders (and have children of their own). This is a smart move by the Jags. Those seats will be filled when the city of Jacksonville can actually support them.

by Skin Patrol on Sep 29, 2006 11:12 AM EDT up reply actions 0 recs

Chris made a good point that the tarps come off...

...for the Gator Bowl, so the stadium is not overbuilt. It's just a bummer that this has to happen. I hate the blackout rule, but it does encourage attendance, so I guess the best option is to reduce the number of seats.

This is another difference between the markets: Washington has no real heritage of college football (sorry, Terps don't count), and Florida is all about college football.

=====The Curly R: A Redskins Blog=====

by thatguyben on Sep 29, 2006 11:32 AM EDT up reply actions 0 recs

Yea I should have clarified

Jacksonville the city cannot support a professional team. The region surrounding Jacksonville can support College Football (and I believe this is why the stadium was overbuilt in the first place in accordance with NCAA rules regulating the size of stadiums, I don't know). But keep in mind that Florida has three professional football teams: Bucs, Dolphins, and Jacksonville. The professional team has less regional pull than a college team in games not against the Dolphins or Bucs which happens to be pretty much their entire schedule.

by Skin Patrol on Sep 29, 2006 11:36 AM EDT up reply actions 0 recs

AAARGG!!

I did not mean that Jacksonville cannot support a football team, it clearly cannot. Jacksonville cannot support 77k seats for a pro team.

by Skin Patrol on Sep 29, 2006 11:44 AM EDT up reply actions 0 recs

SP, would you like some salt with that foot?

Skin Patrol on the Jaguars:

"Well, they clearly can't support a team"

"Wait, what I meant was not not support a team, just not support a pro football team"

"No, no, no I meant not not not support a pro team, just not one in Jacksonville"

"Doh, I meant they can support it, just not sell enough tickets for the team to survive"

"No, wait, what I meant to say was downsizing the stadium is a good thing"

"Not because they can't sell tickets, but because they can. Just not enough"

"Oh f!@#k it! You know what I meant"

This might be the closest thing I've seen to bulletin board material for bloggers.

=====The Curly R: A Redskins Blog=====

by thatguyben on Sep 29, 2006 12:04 PM EDT up reply actions 0 recs

Let me make myself absolutely clear:

The problem in Jacksonville is that the stadium is overbuilt to support the market. There is a demand for College Football in that region large enough to fill 73k seats. There is a demand for Pro Football large enough to fill 67k seats and, hopefully, more later down the road. This is precisely why they've covered seats.

The reason that the demand for College Football is different and higher than the demand for Pro Football in that region is because the Jaguars compete regionally with 2 other Professional teams that happen never or rarely play the Jaguars.

I should never have used language such as "Support the team" because it isn't descriptive. Jacksonville can support a pro team. The above post from me says "they clearly cannot" but should read "they clearly can" (as evidenced by the fact that they have for the past 10 someodd years.

However, the supply of seats at the stadium was higher than the demand for them, hence why they never sold out and blackouts resulted. This is not my opinion, this is simply how I describe a situation where seats remain empty and unsold.

To counteract this, the owner covered seats to limit the supply in order to sell out the stands and bring the game back to television in the region.

None of this should be surprising since Jacksonville is currently the 3rd smallest market of any pro football team. Buffalo and Green Bay are smaller, but Green Bay pulls regionally from Milwaukee and throughout Wisconsin. Buffalo? Who knows.

Jacksonville, as a pro team, competes with the Dolphins and the Bucs.

Factor in that AllTell stadium is the 8th largest in the nation, and it isn't surprising that supply has exceeded demand.

Does that make more sense?

by Skin Patrol on Sep 29, 2006 12:43 PM EDT up reply actions 0 recs

Yes it does to me

Just giving you a hard time SP :)

My question to Chris and in general is one of supply and demand. The Post calculated $200,000 per game lost to the Jaguars certainly based on some average or median Jaguars ticket price, which is somewhat misleading, since Weaver can't get 'full price' for those missing seats. So it's only lost revenue if he were able to sell those seats at the prevailing price.

Not to get too wonky, the law of supply and demand tells us there should be a ticket price formula that maximizes sales to full capacity and yields the same revenue as the higher prices and 9100 unused seats. However, there may be non-purely economic factors, like the possibility that if Weaver were to drop prices to that point, he would be too far out of line with other ticket prices in the league, or that if a long waiting list developed that he would have difficulty raising the prices drastically.

It's no different than The Danny in Washington. With a waiting list 35,000 strong, he theoretically could simply raise prices until he finds the spot where there is only one stadium full of people willing to pay that price. However, the negative attention from this price hike would not be worth the additional revenue in the long term.

Just sayin

=====The Curly R: A Redskins Blog=====

by thatguyben on Sep 29, 2006 1:10 PM EDT up reply actions 0 recs