Small Market Rountable: Relocation, the NFL, and you!

Rumors of Jacksonville's Demise are greatly exaggerated!

Welcome to the first topic of the SB Nation Small Market Roundtable.

For the next several weeks the bloggers of some of the smallest market teams will discuss on their respective sites the various issues and intrigues. We encourage you to engage with the issue in the comments!

With that said, we'll be discussing the dreaded "R-Word".

RELOCATION

We've seen all the reports of the imminent movement of Jacksonville to Los Angeles. Of course, we've also seen the failure of Los Angeles to commit to the costs of accepting a NFL franchise.

There are a multitude of factors at play when considering the issues of Jacksonville and relocation. Each are quite complicated and tie directly in with other pressing issues, leaving a very muddy picture as to the long term future of the team and the city.

Some basic facts to consider. Jacksonville is the 22nt most valuble sports franchise in the "world" (See Here) valued at 688 Million Dollars. The Jaguars are owned by Wayne Weaver.

1.: Attendence: Nothing locks a team in like selling out.

2.: Growth: Is the city expanding or retracting?

3. : Costs: Can the city sustain the rising costs of an NFL Franchise?

I'm going to attempt to break down all of these in regards to Jacksonville's situation and hopefully lead to the conclusion that the team is secure and that the talks of relocation are just idle chit chat.

Attendence: This quote , while attributed to The LA Times, is reflective of opinion outside of Duval County:

"They have to cover 9,700 seats a game just to avoid blackouts," he said. "There's no prospect of growth in Jacksonville that's going to change that.... Having a team in Jacksonville and no team in L.A. is a joke."

It's a fair point, we do cover 9,700 seats but for a reason that's appearantly too complicated for the mainstream media to understand. You see, the Jacksonville Municipal Stadium is filled to capacity twice a season for the Florida-Georgia game (the Worlds Largest Outdoor Cocktail Party) and the Gator Bowl. These events, particularly the Cocktail Party, led the City of Jacksonville to determine that the design of Jacksonville Municipal Stadium had to accept up to 84,000 attendees. Filling 84,000 seats twice a year for two very special college games is no problem. Unfortunatly, putting what was the 5th largest stadium in what is the de facto smallest market in the NFL is foolish. Expecting the Jaguars to fill out 84,000 seats, even when ultra-successful, is unrealistic. The stadium had to be downsized during the NFL season, otherwise every game would be blacked out.

This problem was in the back of the mind of Owner Wayne Weaver when he established the team in Jacksonville. When my parents bought our season tickets for the inaugural season, we had to buy them in four year packages. For the team to be awarded, every ticket had to be sold. So the team had a sure fire 84,000 seats sold out for the first four years. The 1998-1999 Jaguars were the tops of the league in record and our attendance matched. It wasn't till the slide started in 2001 that the inevitiable issues of stadium size and blackouts began to rear their ugly head.

Here are the Jags attendance records since 2001.

Year GMS Total AVG PCT PCT Rnk WIN LOSS
2001 8 555.464 69.433 94.1 24/32 6 10
2002 8 450.216 56.277 76.3 31/32 6 10
2003 8 428.072 53.509 72.5 31/32 5 11
2004 8 555.464 69.433 94.1 25/32 9 7
2005 8 525.519 65.689 89 29/32 12 4
2006 8 534.866 66.858 90.6 31/32 8 8













The first thing you conclude is that even with the lowered attendance (67,000), we're still not selling out consistently enough to ensure a future, though in all fairness, attendance numbers are meaningless without considering the ticket sales. The League, allegedly, is OK with this approach. At his state of the league speech in 2005, Former Commish Paul Tagliabue said:

"I think everyone realizes the stadium was somewhat oversized in terms of capacity because of the goal of having it big enough so that you could play a Super Bowl here, having it big enough so that you could play the Florida-Georgia game here, having it big enough so you could play college bowls here... "So what Wayne is doing in terms of reducing the capacity at the margin is intelligent and will bring it much closer to what our average capacity is for new stadiums."
As long as the tickets are sold, the team is secure. 2006 was a great year for that because no games were blacked out and Wayne Weaver did not have to resort to buying the extra tickets himself to give the broadcast to the city.

In fact, it's quite frank. Vic Ketchman puts it in black and white terms:

If the Jaguars can fill their stadium, they will remain in Jacksonville. If they fail to fill the stadium, the team could become vulnerable to relocation.

And, of course, this is where things get even more complicated. I'm sure all of you folks who watch their teams play in Jacksonville see all the empty seats. Particularly close ups of the sidelines behind the teams benches. (I wish I had a picture) . What you're seeing is not an absence of devotion to the team by the regular folks, rather you are seeing the failure of the team to effectively market and sell the high dollar seats to the high dollar business groups that typically fill out "club seats" in other markets. Jaguars Chief Financial Officer Bill Prescott makes it clear:

"Yes. I think we'll fill up the general bowl. It's the club seats. That's our key local revenue source. That's our key thing locally," Prescott said of ticket revenue. "In particular, it's the club seats and the club seats we've always struggled with."

Ok, we've established that performance and attendance are connected and significant. We've established that teams that sell out don't move. In addition, we know that it's the expensive seats that we're struggling with that raise the income and pay the bills. So what are the prospects for the Jacksonville Market expanding to fill this economic hole?

Growth: Would you believe it if I told you that Fidel Castro and the Jacksonville Jaguars are connected? When the regime in Cuba eventually falls and the "next phase" of US/Cuba relations begins, Jacksonville will be the 2nd largest deep water port to Havana, second only to the Port of Miami. Jacksonville instantly will be a hub of imports and exports, as well as tourism to Cuba, and will see a massive period of investment and growth. The "Cruise Ship" scheme to bring them into Jacksonville to supplement hotel space in the City was also an experiment to see if the city could sustain, supply, and maintain the large ships in the mouth of the St. Johns. The city is obviously banking a lot of it's future on the changing of international relations. I could expand upon this further, but it might be something for a more specific post (or I should start an International Relations blog). Anyhow, I'm unable to access my academic sources that address this issue right this second, so I'm going to ask you to trust me on the Cuba/Jacksonville thing.

As a market, housing construction is huge, and not effected by the "bubble" plaguing housing prices nationwide. Unemployment is 2.3%, lower than the national average, and the average income has risen from 32,000 per year to 42,000 per year over the last several years. The market itself is growing, but I'll admit that it's not nearly fast enough to compete with the growing costs of an NFL Franchise. But that's the real problem, it's not the Jacksonville Market, they've got a deal with the city that protects the team, it's the skyrocketing costs of the NFL that could doom the city.

Costs: I come from an academic background. I know the importance of sources and citing in making any sort of effective argument. For the purposes here, I'm going to have to ask you to trust me on some of my points as I've not found the exact information that verifies exactly what I'm saying. I know that all my credibility just went out the window, so whatever.

Most fans are aware of the rapidly rising costs of maintaining a competitive roster. For example, the 2007 salary cap was 102 million, in 2008 the cap will be 116 million. The players get 60% of revenues, as teams make more money, the cap rises at the same rate. Later in this small market series we'll discuss the role of massive stadiums in the raising of revenues, so I won't mention the imminent arrival of a Dallas and New York stadium that will push up the salary cap to an eventual 200 million yearly, which just happens to be more than the yearly revenues of many many teams at this point.

Ok, what's the point

If the League doesn't agree on some sort of revenue sharing agreement that protects the interests of the small market teams, there will be a point in the future where they cannot afford to spend the entire salary cap. When this happens, the teams will not be able to financially compete with player retention, free agent acquiring, and eventually start to lose significant money just to stay competitive. At this point, the NFL turns into MLB, and Dallas, Washington, and New York take over the league.

It is at this juncture that we sit. Jacksonville can support their team without a doubt until 2011, when the top end stadiums come online and costs increase. The CBA "expires" in 2012, but the last two years are voidable, so 2010 is the big year. If the league can resolve some sort of "leaguethink" where they channel Pete Rozelle and preserve the competive nature of the league by allowing profits to be shared throughout the teams, I presume all will be well. If the status quo of selfishness, despite it's "free market" undertones, blocks realistic revenue sharing, the profitable and successful era of the NFL ends.

Back to relocation.

When the costs of supporting an NFL team in Jacksonville rise so high that the team is no longer profitable, the team will move to a larger market that can sustain the costs. While Los Angeles might not have the stadium, the interest, or the money to take an NFL team, there will be some ownership group out there willing to try and force one. Wayne Weaver is not a young man, by any means. He's a smart businessperson and will make whatever decisions protect his investment and his future. He's the biggest advocate for revenue sharing of the 32 owners and knows that the future of the Jaguars in Jacksonville are directly tied into the addressing of this huge issue.

Ok, I've looked at a whole lot of issues here in this far too lengthy post. Let's recap what the big questions are as we begin to discuss the issues of relocation.

1.: Is revenue sharing an acceptable answer to protecting small market teams? Furthermore, in the 2000's, is "leaguethink" still relevant?

2.: Why should teams like Dallas, Washington, and New York (both) contribute a dime toward teams they are competing with? Do they have a serious interest in keeping parity in this hyper-competitive media market?

3: Should the Players be taking in over 60% of team revenues? Is this current CBA causing potentially massive contract issues, given that it's raised the cap so much that mid level players (Deon Grant, Wes Welker, etc) get Pro Bowler type contracts?

Obviously I've left a whole lot out and there are dozens of things I've forgotten, but I hope this starts out an important conversation about the issues of relocation. I look forward to continuing this discussion in the comments.

-Chris

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