What Jerry Jones, & the NFL, Can Learn from Detroit

>> 2.11.2011

Michigan Central Station, Detroit MI

This is the Michigan Central Station. It’s familiar to Detroiters as the avatar of the city’s decline. Any national “Woe is Detroit” story has to be accompanied by an image of this beautiful, awful edifice.  Designed by the same firm that penned New York’s Grand Central Terminal, the Beaux-Arts Classical visage of this 18-story monolith contains a message for the NFL.

The MCS was built to accommodate a large volume of rail traffic, part of a grand vision to unite the station and the Michigan Central Railway Tunnel to Canada along the main Detroit-Chicago railway line. The 18-story tower was to provide office space for the future businesses sure to spring up around the new transportation hub.

That’s right, the city’s new main train depot was not in the heart of the city. Situated along the main line, as opposed to the branch that ran through downtown, passengers got to and from the station via intercity trains and shuttles, at least until 1938. Unfortunately, thanks to the Great Depression, that development never really came—and the original designers hadn’t planned on people driving there, so there was no passenger parking lot.

After World War II, the automotive revolution that fueled the growth of the Motor City sapped the MCS of much of its relevance. At various points throughout the fifties, sixties and seventies, the station was put up for sale, partially shut down, sold off, partially re-opened, shut down, and sold off again, until 1988, when the last Amtrak train rolled out of Michigan Central Station. It cost fifteen million dollars to build in 1913. It was put up for sale (with no takers) for five million in 1961, and eventually changed hands several times for undisclosed sums in the 80s and 90s, with rumored prices as low as $80,000.

Now it sits empty. Now looters have stripped it of wiring and fixtures. Now it’s a quietly decaying monument to a bygone era of unbridled growth and fantastic excess: too far gone to revive, far too beautiful to tear down, and far too ugly to let stand.

“Unbridled growth” and “fantastic excess” are apt descriptions of the state of the NFL. While America’s economic belt has been slowly tightening for several years, the NFL’s revenues have exploded. In a time when cable and satellite offer hundreds of viewing options, and America has never split its TV focus so wildly, the NFL’s ratings continue to smash records. Attendance has been flat at nearly the maximum possible numbers; even the Lions sold out all but one of their home games.

The NFL and NFLPA scheduled two negotiating sessions this week, and the first one went so poorly that the second one was cancelled. The rumored dividing point was the most basic one, the one that started it all: how to divide all the money that the NFL earns. The owners already receive the first billion of revenue off the top, to cover expenses.  The owners want to increase that by 18%, to cover anticipated capital investments in the game that will bring in more revenue. What capital investments—designed to bring in revenue—could require that much money?

Cowboys-Stadium-Innovative-Stadium-by-HKS-in-Dallas-United-States-4This is Cowboys Stadium. This $1.1 billion-dollar edifice sits on a 140-acre site a 45 minute drive from downtown Dallas. Its 300 luxury suites, along with its concessions stands, bars, and restaurants—not to mention auxiliary attractions like a football-inspired art gallery—provide huge streams of revenue that have little to do with watching a live football game. In fact, “live” might not be the best way to watch a football game inside Cowboys Stadium: there are 2,900 TVs scattered throughout the dome, plus the infamous titan that hangs over the field, a sixty-yard HD monitor able to display a blue whale at a 1:1 scale.

Nicknamed “Jerryworld” after the Cowboys’ owner, Jerry Jones, this stadium marks the endpoint of one stadium-building craze, and perhaps the beginning of another. In the mid-90s, teams explored the brave new salary-cap world, and realized that unshared revenue like luxury suites and concessions not only didn’t have to be shared with other owners, it didn’t have to be shared with the players! This kicked off almost two decades of teams building new stadiums filled with luxury suites and swank accommodations. Teams, for the most part, took advantage of easy credit and/or public financing. Jones used $325 million worth of public funds, secured $625 million of credit—and received a $150 million loan from the NFL.

That's the money the owners are looking to keep from the players: nearly a billion dollars a year to help build the Vikings’ Zygiworld, the Bills’ Ralphworld, and many others. Even the Panthers, a team whose stadium is was built in 1996, are already talking about building another one. Over the next ten-to-twenty years, most NFL cities will feel the pressure to either build a similar monuments to unbridled growth and fantastic excess—or risk their teams’ Ownerworld being built in another town.

The problem is, it’s not sustainable. Sally Jenkins of the Washington Post wrote, brilliantly, that Super Bowl XLV’s rough edges hint at the fault lines running through the “billionization” of the NFL:

It's not clear what the pain threshold of the average NFL fan is: Thirty-two owners digging relentlessly in our pockets haven't found the bottom yet. But the NFL would be advised to recognize that it's getting close. Those folks who found themselves without seats? Many were among the league's most loyal paying customers, season ticket holders. Yet they were treated like afterthoughts, awarded half-built, jerry-rigged seats, folding chairs on auxiliary platforms. Which begs the question of what the "NFL fan experience" really means anymore.

The NFL’s surge in popularity has granted it great profits in the face of an economic downturn—but that downturn is real. Municipalities are out of stadium-building funds; free stadiums, like the one Hamilton County built the Bengals, don’t come with sixty-yard TVs. The credit bubble has burst; loans are much tougher to secure—and imagine how big Jerry’s mortgage payments must be on his borrowed $725 million! Roger Goodell said it himself, in his email to fans:

“Economic conditions, however, have changed dramatically inside and outside the NFL since 2006 when we negotiated the last CBA. A 10 percent unemployment rate hurts us all. Fans have limited budgets and rightly want the most for their money. I get it.”

If Jerryworld is the template for new stadiums going forward, I don’t think he does. He—and the owners—need to learn a lesson from Michigan Central Station. It cost about  $335 million in today’s dollars—almost exactly the same amount the city of Arlington paid for Jerryworld. If the CBA is not extended, that massive revenue pie owners and players are fighting over will shrink. Even with the public thirst for football, the Cowboys pushed the envelope. If that thirst is quenched by other sports during a needless lockout, they’ll be unable to fill Jerryworld, or Zygiworld, or Stephenworld once play begins again.

America’s cities can’t afford to drain their public coffers again. Americans can’t afford to blow their personal budgets on even-more-expensive tickets, parking, and concessions. America—for our entertainment, and for the thousands, maybe millions whose livelihood depends directly or indirectly on professional sports—needs the NFL to keep chugging along.


6 comments:

telemakhos,  February 11, 2011 at 4:36 PM  

so the owners want more money off the top to cover the costs of their stadiums, which are designed to take even more money off the top?

HSOMGF February 11, 2011 at 4:37 PM  

Excellent post. I couldn't agree more.

Ty February 11, 2011 at 4:44 PM  

Telemakhos--

Yup, you got it! Brilliant, eh?

Peace
Ty

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