by Bradley Parsons
Staff Writer
Jaguars officials are hoping for more wins and more fans in 2005, but to field a consistently competitive team, the franchise will have to tap new revenue streams, according to team general counsel Paul Vance, and that will require concessions from both the City and the National Football League.
The team’s ongoing negotiations with the City over advertising and sponsorship revenue have received plenty of attention. But just as important to the team’s continued financial viability is a restructured collective bargaining agreement, said Vance, following a Monday speech at the Jacksonville Rotary Club. Changes must be made, he said, to keep small market teams competitive.
The question raised by owners in markets like Jacksonville, Pittsburgh and Buffalo, is how to compete against large-market teams that earn millions annually through brisk sales of premium tickets and lucrative sponsorship deals.
Vance figures those alternative revenue streams have driven up collective team revenue by about $100 million. The problem is, the players see that money too, and they want their share.
The NFL’s current collective bargaining agreement allocates 65 percent of team revenue to the players. That figure, divided among the 32 teams, essentially accounts for a team’s salary cap. The increased revenue flowing in from the large markets has driven that share up by $64 million, about $2 million per team, said Vance.
But markets like Jacksonville and Pittsburgh, although they benefit from some revenue sharing, don’t make enough money from those increasingly important revenue streams to keep up with growth in the cap, said Vance.
“It’s not a given that small-market clubs, even with increased revenue sharing, will be able to spend up to the cap,” he said.
The situation has prompted Jaguars owner Wayne Weaver, with the help of Pittsburgh Steelers owner Dan Rooney and Buffalo Bills owner Ralph Wilson to press the small-market team’s case in negotiations leading up to the NFL’s next collective bargaining agreement. The current deal expires in 2008.
By then, the alternative revenue streams will likely be earning an even bigger chunk of the NFL’s team revenues. When the Jaguars first entered the league in 1995, game tickets and television — the traditional revenue streams — accounted for 92 percent of team revenues with luxury boxes and sponsorship dollars making up the rest. In 2005, the alternative revenues now make up 20 percent of team revenues.
In 1995 the Jaguars were considered an innovator in finding new revenue. Alltel Stadium boasted 10,000 club seats when it opened. But now difficulty in selling those seats is one of the team’s primary complaints. Weaver has said the slow sales are a function of doing business in a small market.
The team has continued to develop new revenue streams. The Bud Zone restaurant and bar sponsored by Budweiser and the Pepsi Plaza outside the stadium have helped boost the team’s advertising and concessions revenue, said Vance. But he said the team’s competitive future in Jacksonville ultimately depends on the outcome of negotiations with the league and the City and the willingness of fans to buy tickets.
“We need the support of fans and the City to keep a competitive NFL team in Jacksonville,” said Vance.