The St. Louis Rams, Edward Jones Dome, and the High Cost of the NFL on American Cities.

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This is the Edward Jones Dome. Not too shabby? It was finished in 1995 after the Los Angeles Rams became St. Lunatics. That’s 16 years ago, give or take. It cost a cool $280 million to build back in ‘95 and has undergone two renovations since including a $30 million dollar redo back in 2010 that added LED video screens, premium seating and a new locker room for the Rams. The Rams used their new digs to win a whopping two games this year. But hey, the locker rooms are nice.


Why are we talking about the Edward Jones Dome? Ownership in St. Lou along with the league are dangling the Rams as a possible relocation candidate unless the Rams get a new stadium. The city signed a dumb deal, as cities will often do, that says if the dome doesn’t generate more revenue than three quarters of the rest of the league, the Rams can get out of their lease in 2014. The owner by the way is a guy named Stan. Stan did well for himself by marrying the daughter of a guy named Bud Walton who started a little mom and pop called Wal-Mart. Stan is worth an estimated 3.2 billion with a “B.” His wife is worth more.


Now since the Edwards Jones Dome was built, new stadiums have gone up in Washington, Baltimore, Tampa, Cleveland, Cincinnati, Pittsburgh, Tennessee, Denver, Houston, New England, Detroit, Seattle, Philly, Arizona, Indy, Dallas, and New York. Each designed to pick the pockets of anyone who enters the turnstiles. Even with the renovations the stadium world has gotten way more competitive, making a top 25% finish for the Ed (St. Louis if you aren’t calling it that you should) difficult to say the least.


The league just announced that the Rams will play a home game in London for the next three years. By the way the first year the opponent for the Rams will be the Pats. I’m sure a home date with Tom Brady wouldn’t have been much of a draw. The end game here is one of three options and none would be pretty especially for Ram fans and their tax base. First, the London Rams might debut. Second, the Rams may finally go home to a new stadium in Los Angeles. The league wants not one, but two teams in LA to make the stadium worthwhile. Lastly, St. Louis may pony up for a new Ed or at least a renovated one for the former greatest show on turf.


Now some folks argue that St. Louis should demand a better product on the field before anyone in the Arch City writes a check. That’s neat and all but what really has to end is the hold up game between sports franchises and cities. In Houston we experienced that first hand when Bud Adams took the Luv Ya Blue Oilers to Tennessee. The product on the field shouldn’t matter to the issues off it, especially taxpayer cost. Bear in mind Houston/Harris County still owes $40 million on the 8th Wonder of the World that now sits dwarfed by the new NFL team’s new stadium.


We could talk about what it costs a family of four to attend a game and the escalating prices of tickets, parking, a hot dog, a souvenir hat, etc but the bottom line is in reality the NFL doesn’t really depend on you attending the game. The lifeblood is television revenue, naming rights, season tickets, suite sales, and seat licenses. (I used to have season tickets to A&M football games until A&M started requiring a mandatory donation [WTF?] to the 12th Man Foundation that essentially served as a seat license, anyone who’s watched A&M football for the past decade admires the stones of the athletic department to ask for that with a straight face) Once the ticket is bought you can show up or not, the fiddler’s been paid.


What ownership in St. Louis want is a revenue generating hot spot, i.e. lots and lots of suites, exclusive areas, clubs and of course a bigger cut of the concessions and parking. The Ed has 124 suites and 6,500 premiere club level seats. That’s not going to cut it in today’s NFL. Reliant Stadium has 187 suites and over 8,000 premium club seats. Cowboy Stadium, aka JerryLand, the Death Star, the Prairie Turd, is a moneymaking monolith that includes some 300 suites and 15,000 club seats. Want a season ticket to the New Giants Stadium (where the Jets play too) a seat license will run you somewhere between $1,000 and $20,000 bucks. That fee gives you the right to pay anywhere from $120 to $700 for a ticket. The league has made somewhere over $900 million in license revenue since 1993.


But tickets and seat licenses are drop in the bucket. According to that Harvard economists, tickets, concessions, and parking only make up about 40% of revenue. The BIG-ticket items are media rights. In ’07 the league brought in $3.74 billion dollars in TV revenue. That number for the time being only goes up. By comparison the NBA brought in $3.9 billion total 2009.  The league knows butts on couches not butts in the mezzanine butter their bread; attendance has actually decreased the last three years.  Every spectator sport in America is dealing with the same problem. Fans increasingly would rather stay home than fight traffic, long lines, unruly fans, high concession prices, and the inconvenience of watching one game instead of seven.  HD TV has a lot to do with plus the beer is cheaper and you can invite friends without shelling out $400.  


All this has led NFL teams to try and “improve fan experience” at the game. In other words they know you, the fan, increasingly would rather stay home, so they need to make your time spent at the stadium as mind blowingly awesome as possible. So, who pays for the mind blowing? Well you and I do. Here’s the best analogy I can come up with: It’s like you’re on the city council and a restaurant chain shows up and asks you to subsidize the building of their new location. They want free land, they want tax breaks, and they want YOU the city to pony up and chip in to pay for construction. Then, once it’s done they want every dollar they make off of appetizers, desserts, the bar, everything. They’ll also want you to pay for additional enhancements to keep up with that other restaurant across town.  Then eventually if you turn them down for a new deep freeze they threaten to leave town. Not exactly realistic unless you are an NFL franchise because they have the monopoly on America’s Game and you don’t want to be the councilman, mayor, or city manager that is on watch when a team up and leaves town.  


So what do you do? St. Louis has apparently decided to bite the bullet and try to make the improvements necessary to bring the stadium into first tier status. They’ve proposed another $124 million dollar renovation. Great news, so what does that get you? You’ll get a Jerryland sized scoreboard, natural lighting from newly installed windows, 1,500 clubs seat and club lounges, a 50,000 square foot adjacent building lovingly referred to as “Geek Suite” and new tailgating areas. City officials appear confident this will vault the Ed into tier one status. The proposal calls for the Rams to chip in roughly 52% of the bill and the tax base to dig in for the other $60 million. Great, assuming the Rams go for it, $124 million buys you another 10 years. Then guess what, you’d better still be top tier or the money pit gets hungry again.  


What if you’re the next city on the chopping block? (I’m looking at you Minnesota, San Diego, Oakland, and Jacksonville) First off don’t agree to an easy out in a lease agreement. Apparently the Rams were shocked the city of St. Louis agreed. According to Neil deMause, co-author of Field of Schemes: How the Great Stadium Swindle Turns Public Money into Private Profit, "That state-of-the-art clause the Rams have, they were just throwing stuff in there and they were amazed when St. Louis actually went for it.” Secondly, ask the billionaire to chip in a fair share. That way when ownership asks for parking and concession revenue they can actually point to a contribution. The league is also taking steps to help by setting up a stadium fund that will give teams another, non-public, source of stadium funds. Lastly, this ain’t really about football. The product on the field will wax and wane, but debt lasts forever. Or at least it seems.


If you want to know more about publically financed stadiums check out fieldofschemes.com in they have a ton of updates on stadium deals as well as a great resource page full of economic impact studies.

Posted on March 28, 2012 and filed under Sports.