October 9, 2000

Bucs, Glazers ride rising tide of revenue
Stadium, wins drive franchise value skyward

By Pete Williams
Correspondent

John Joyce pays $350 per game for his pair of Tampa Bay Buccaneer club seats at Raymond James Stadium. Joyce, a 51-year-old Tampa businessman does not mind the cost, although he sometimes looks back fondly at when he paid much less for tickets at Tampa Stadium.

Until the Buccaneers began their current resurgence during their final season at the old “Sombrero” in 1997, Joyce and an informal group of fans known as the “Ten Dollar Club” routinely purchased tickets from resellers outside the stadium for well below face value.

“We never paid more than ten bucks to get in,” Joyce says. “But we knew it wouldn’t last. I guess you could say it’s payback time.”

That payback has been a gold mine for Bucs owner Malcolm Glazer.

Glazer, who bought team for a then-NFL record $192 million from the estate of Hugh Culverhouse in 1995, has enjoyed a huge return on his investment – 177 percent, by the latest estimate. Forbes magazine recently valued the Buccaneers at $532 million, fourth in the NFL, with an estimated operating income of $40.2 million in 1999 on $132.9 million in revenue. In last month’s annual ranking of the Forbes 400, Malcolm Glazer appeared at No.398, with a net worth of $725 million.

The financial turnaround has coincided with one of the more unlikely on-field resurgences in sports. Before Glazer’s purchase, the team had just two winning seasons in its 19-year history and none since 1981. Culverhouse’s tight-fisted ways and team management miscues produced the most laughable franchise in the league.

But these days, the Buccaneers rank among the elite in sports, both on the field and off, and the cost of attending a Bucs game has followed suit. Last month, Team Marketing Report rated the Buccaneers as the third most expensive game-day experience ($340.97) for a family of four in the NFL, trailing only the Washington Redskins and Tennessee Titans. TMR rated the Buccaneers’ average ticket price of $67.49 as the highest in the league.

That figure might seem even pricier when adjusted for the economics of the Tampa Bay area, which with its low salaries and high percentage of retirees ranks among the lowest in per capita income in professional sports. A study published earlier this year in Sports Business Journal revealed that the Buccaneers have the most expensive ticket cost in the NFL compared to local income.

The Tampa Bay community has foot the bill in other ways. Under threats of the team moving, it contributed $168.5 million bill for the new 66,000-seat stadium, which opened in 1998 and will host Super Bowl XXXV in January. Although season ticket holders did not have to purchase personal seat licenses, they were required to make “charter seat deposits,” equivalent to one-year’s ticket costs, that are refunded over 10 years provided tickets are renewed.

The Buccaneers have one of the more attractive leases in the NFL. The club pays $3.5 million a year to the Tampa Sports Authority, mostly for rent, and pockets most everything else. The team also receives the first $2 million in net revenues from parking and concessions at other stadium events.

Still, team officials bristle at the suggestion that they enjoy more advantages than other league franchises.

Joel Glazer, one of team owner Malcolm Glazer’s three sons who run the day-to-day operations of the team as executive vice presidents, said the team’s prices and lease arrangement are not out of line with the rest of the NFL. The team’s average ticket price, he says, is skewed by the 12,000 pricey club seats and does not represent the thousands of seats in the $23-$45 range. The team ultimately contributed millions to the stadium, including the $3 million charge to build the signature pirate ship behind the north end zone. The seat deposits are less of a burden than PSLs in other facilities. And payroll has soared in recent seasons, from $49.2 million to $66.9 million.

“There are always going to be things to criticize,” Glazer says. “But you have to look at what the bottom-line end result is and it’s a successful franchise.”

If Buccaneer fans are paying more to have the NFL than their counterparts in other cities, they don’t seem to mind, even if ticket prices have been raised four times in five years. In July, the club began a waiting list for season tickets, capping a remarkable financial turnaround for a franchise that played to just 56 percent capacity as recently as 1996.

“Like a lot of people around here, I’m a football addict and the Glazers know that,” says season ticket holder Wally Cox, 34. “This is not New York or San Francisco. We all have our breaking points of what we can afford, but most of us haven’t reached that point yet.”

Some Tampa residents remain bitter over the controversial community investment tax that was passed by Hillsborough County voters by a 53 percent to 47 percent margin in 1996. That funded not only the stadium but also the $12 million practice facility that will be constructed after the Super Bowl. Had the referendum failed, the Glazers most likely would have taken the Buccaneers elsewhere.

“It’s been tough for some people to get past the stadium battle,” said general manager Rich McKay. “Winning helps and so will having the Super Bowl. But the fact is there have been tremendous benefits, both tangible and intangible.”

Many a sports team has tried to time an on-field turnaround with a move into a new stadium, but the Buccaneers were able to pull it off. In 1997, Tony Dungy guided a young team into the playoffs in his second season as head coach. After losing the NFC championship to the St. Louis Rams in January, the Buccaneers have a chance this season of becoming the first team to play at home for the Super Bowl.

Before moving into the new stadium, the team replaced its winking Buccaneer logo and orange uniforms. The new skull and sabres logo and red and pewter color scheme have helped the Bucs become one of the NFL’s top merchandise sellers.

Seemingly overnight, the value of the franchise skyrocketed. Glazer, whose diverse business holdings include investments in restaurants, food services equipment, health care, banking real estate, and stocks, apparently was ready to sell the team last winter in an effort to make a run at buying the New York Jets, according to The New York Times.

Not so, say team officials. Says Joel Glazer, “Too much time, energy, effort and passion and gone on here to walk away from it.”

Still, it’s difficult to imagine the Buccaneers ever looking more valuable from a cash-flow standpoint. While the club ranks fourth in total revenues according to the Forbes ranking, its payroll is just 14 th-highest in the league according to the NFL Players Association.

Although the Buccaneers have 195 packed luxury suites and a season ticket waiting list, that could change should the team falter. Before the team’s success in ’97, there was concern that there would be enough fans and well-heeled companies willing to fill the suites and club seats.

“As long as you’re competitive and a playoff-contending team, it’s not an issue,” McKay said. “In bigger cities, you have more corporations with more dollars to commit to the entertainment side that are going to hang in for the long run. In a market like ours, the margin is a little less.”

Just ask the Tampa Bay Devil Rays or the Tampa Bay Lightning, both of which have struggled at the box office along with in the standings. Although they play in the 13 th largest media market, with 2.3 million residents, they rank among the worst draws in their respective leagues in part because of the low per capita income and relatively modest corporate presence.

Both franchises can take some consolation in the resurgence of the Buccaneers, who spent two decades as the NFL’s version of the Devil Rays/Lightning. Now the Bucs’ recent success has inspired thousands of its fans to fasten logo flags to their cars, even during the offseason. The acquisition of Keyshawn Johnson from New York has raised both the profile and the expectations of the team. And in perhaps the surest sign that the national bandwagon is forming, Spike Lee showed up on the team’s sidelines during its season opener at New England.

All of which makes the high cost of attending games acceptable – for now. “I wonder what will happen when things go south,” says Joyce, the club seat holder. “But right now, it’s a pretty good value.”

© Copyright 2000 Street & Smith’s SportsBusiness Journal