For many teams, having a partial home crowd isn’t worth it
The NFL has decide to not to use a one-size-fits-all approach to 2020 attendance, allowing any teams that may host fans consistent with state and local regulations to do so. From a business perspective, is it worth it to have a limited collection of fans?
PFT has spoken to a league source with extensive knowledge of NFL game-day stadium finances, and the answer is that, for many teams, the extra money earned doesn’t justify the trouble.
Assuming a crowd of 15,000 fans and an average ticket price of $70, that becomes gross game-day ticket revenue of $1.05 million. A third of that goes to the league, to be distributed to all franchises as the visiting teams’ share. So that leaves $700,000 in gross ticket revenue for the home team. The net revenue from parking, food, beverages, and merchandise is, in a normal year, roughly $13 per person. That’s another $195,000, if 15,000 fans are present.
The cost of operating the stadium, and given social-distancing requirements the full stadium (upper and lower levels) must be opened, is roughly $300,000. That puts the per-game net revenue at roughly $600,000 per game.
So that’s $4.8 million in total net revenues for a full slate of eight home games. After taxes, that’s roughly $2.4 million in extra money for ownership. For the entire year.
Again, is it worth it? Per the source, some teams don’t think it is. But some teams are still doing it because: (1) the state and local government allows them to do it; and (2) a segment of their fan base badly wants to attend the games. Basically, it becomes a customer-relations device, in those places where the government has not prohibited the team from hosting fans. (Some teams, frankly, aren’t lobbying their state and local governments to permit fans to attend games with a high degree of passion and zeal.)
Further complicating matters is the league’s duty to the NFL Players Association to maximize revenues. With the NFLPA now roughly equal partners with the league, missed opportunities to make money in 2020 will drive down the salary cap in 2021. And there’s no reason for the union to agree to let the owners consciously pass on what amounts to, from the players’ perspective, money for nothing.
So even though the league has created a potential competitive imbalance as part of the broader business objectives, it’s more about placating fans and the union than it is about stuffing more millions into the owner’s bank account. In the grand scheme of things, an extra $2.4 million in after-tax dollars for a full season of football with 15,000 fans present simply isn’t worth the trouble. The relationship with fans and the union is, for the teams that are trudging ahead with plans for limited capacity, the primary driving force for most if not all of the teams that will try to proceed with a limited complement of paying customers.