That may be true, but that doesn't mean they are losing money. Consider this quote from an Eagle-Tribune article by Tim Bresnahan about the HDC:
As I stated before, I refuse to believe that the Kraft's are cutting costs left and right just so that they can make more money. IMO, they are most likely cutting costs to lower their losses on the Revs. Back in 1997, during the Rev's strongest attendance numbers, there was rumors that the Kraft's broke even or maybe even made a little money on the Revs. Those days are long gone now. Andy
it would be pointless to build a stadium anytime soon, even if Kraft wanted to build a soccer-only one. he just put $350 million [am i close?] into Gillette and im sure hes not going to spend any more anytime soon on a soccer team. i just wish either Hunt or Phil owned the Revs, then everything would be easier for everybody - the team, the fans, the management, [the stadium]
I understand your point, Andy. All I'm saying is that you can't fund a $350 million stadium if it is only going to be open 10 days a year. Kraft needs the Revs, and the revenue he gets from parking, concessions, etc. on those extra dates.
I agree with you about this in general. Of course the whole theory goes to hell if the Revs cost more to run than they bring in from from parking, concessions, etc. At their current attendance levels, you can see that all of these revenue streams drop while the costs stay the same or go higher. Makes good sense averaging 20k a game. May not make as much sense at 14k (or less) a game. Andy
I don't know what it costs to operate the stadium, but when they sold the CCC game, I believe it was suggested that the cost was $25K per event. Parking alone, it takes less than 1,700 cars at $15 each to cover that cost. There's a break-even point somewhere (again, why they sold the CCC game) but, IMHO, it's less than 14K.
I rather doubt that the break-even at Gillette is $25,000. I recall Brian O saying that it cost them $30-40,000 just to open the gates of the old place. I think the $25,000 was what the Revs could get from LDA, which covered the extra training time in Costa Rica. If that was not an option, it would have cost the Revs a hell of a lot more, whether it was using Gillette, or renting out another place like Lockhart. Andy's theory that a 20,000 average attendance might be a break-even point, but if you aren't willing to put yourself in a position where you can draw 20,000 (even if you have to factor in the marketing/advertising costs to make it 20,500), what's the point? Tom
I also don't understand why he is concentrating on only the stadium when it is the other costs of running a team that are creating the majority of the losses. Opening the stadium is just one of many costs that have to be absorbed with minimal revenue in take. No way in hell do the Kraft's make money running an MLS franchise on under 14k. If they did, we would have investors flooding MLS to get a piece of the pie. I again am wondering if you are confusing the cost of opening a stadium with the cost of running a franchise (front office staff, coaching staff salary, marketing costs, local tv and radio time buys, league wide cash calls, players salaries etc etc etc) Andy
Ok, back to the days of floating bonds for revenue to fund projects. The Frisco Texas project is being by strong tax structure, yes, but creative funding is not out-of-the-question when you include varied income streams such as commercial real estate. Yes, there are problems with finding "the right spot" for such a venture, but Frisco didn't happen overnight (it was actually in the workings WHILE McKinney was being scrutinized), so if you get proactive legislators, real estate investors and a good ownership (... ugh, almost choked there...) to properly represent the "MLS" side, this *could* happen... ... and don't forget, HSG is only responsible for 10 mil and they are in control of all revenues. Sweet.
I am concentrating on the stadium side because that is what makes the difference. Now that the Galaxy are out of the Rose Bowl and into a facility they own, they will finally turn a profit this year! Kraft own's the stadium, so he makes money every time he opens it to a reasonable size crowd (again, the break-even point for "reasonable size" is only known to those inside the organization). Most MLS teams (or would-be investors) don't have the advantage of owning the stadium.
You do understand that this is because they are 1) getting significant revenue from the luxury boxes and 2) probably going to average over 20k right? Kraft makes no money from the luxury boxes based on the Revs (those are all sold based on the Pats not on the Revs), and our attendance won't be anywhere near 20k. Again, you can't make money in MLS with small crowds even if you own the stadium and control all of the revenue. Of course it does but ONLY when a significant amount of fans show up. 20k at Crew stadium will bring Hunt significantly more revenue than 20k at the Swamp. Lower that 20k to 10k and both are losers in the bean counting world. Andy
At the current attendance rate of 12,000/ match, he's losing lots of money. (Avg Ticket $20 X 12,000 = $240,000) If he was making a penny each year on soccer, MLS would have 20 teams and a line of potential owners. Consider this - Club Seat for Patriots average $4,200/seat each year. There are 6000 Club seats, which I was told are now sold out (10 years contract) Yes, that's $25,200,000 per year. Kraft makes much, much, more per year on this small group of seat owners than the entire Revs fan base. (Remember consessions, club member meetings, lunches, special events, etc. etc.) And we all ask why he's a football man????
The 60,000 passball fans who show up 8 weekends a year don't mind the facility because it's geared toward those with a 10 minute attention span (all the concessions, TVs etc). A soccer match requires one to be seated for 45 minutes at a stretch, therefore the pre- and post- game experience is what matters in tems of concessions, and that's better served offsite (pubs before and after). Even if we got 60,000 per Revs match it wouldn't be a pleasant experience because it's still out in the middle of nowhere in Foxborough.
I believe that the "ownership deal" for the luxury boxes is seperate and does not include any tickets to events other than the Patsies I know that when my friend "opened" his luxury box for a Rev game last year- it cost him around $1200. This did not include any of the food or drinks- which of course can only be ordered from the stadium food service. Jon
You are correct. Both Club seats and Luxury Boxes are Patriot only events. In fact, you have to pay for anything extra. You do get first rights on concert tickets, Revs matches, etc. They did allow seat/ box owners to attend 2-3 Revs matches last year at no charge. If I recall, it was a "invite as many friends/ family as you wish offering." The sad thing is that there was less than 100 people who took advantage. I was at one match and it was a few fans, a few players families, and a lot of emply seats. These are 2 totally different type of fans. On group is big, fat, grubby, and drunk, and the other is a highly intelligent group with a fine appreciation of "football".
Just this year, the Revs have CONSOLIDATED the operations of the Pats and Revs. Anyone expecting them to now (or ever) SPLIT the teams into seperate stadiums is deluding themselves. Also, the talk about an attendance figure as a break-even point is meaningless w/o discussing average ticket price, average parking price and average concession profit. They could probably average 20K by dropping prices and charging $5 for parking, but that might not improve the bottom line. For right or wrong, the management seems to be on a higher price/lower volume strategy right now. As for SSS, it's a little too soon to declare it a huge success, now that LA has sold out ONE game. I absolutely agree that have owner-owned and controlled stadiums is the best way to go, but I'm still not convinced the "medium-sized" is. They won't be opening the "upper bowl" at the Depot! Revs mgmt could make a shift any time to a low-price, high volume strategy - LA and Columbus (and Dallas and Chicago) don't have that option. I also think there are warning signs about marketing solely to the suburban, middle-class ("soccer-mom") crowd, as the Revs seem to be doing. One need only look at WUSA to see how fickle that market is. But that's a different thread...
What Would We Do If We Were Bob Kraft? At least we've had some interesting posts during the bye week. I think we should all ask ourselves: What Would We Do If We Were Bob Kraft? Given his lack of "full comitment to MLS soccer" I think he'll bail at season's end. MLS isn't a part-time commitment, and owners like Kraft don't help the league growth. So if I'm Kraft, I open up the stadium to several concerts and fill up up with 65,000 bodies on Friday and Saturday nights. It's really a pretty easy business decision; Continue to lose money on the Revs, or make more with 2-3 concerts and zero cost associated with players salaries, marketing, insurance, etc., etc. If he showed full commitment and efforts were there, I'd think differently, but I think Kraft soccer is dead after 2003.
You are deluding yourself if you think that lowering prices will suddenly grow the audiance to a level that the upper deck would be needed. That is besides the point. Some of the evidence is already in place that refutes your belief. CCS stadium broke even last year according to multiple reports and HDC has already gone on record saying they will turn a slight profit this year thanx in part to the luxury box revenue. Now compare those two stadiums to the only other two owner-controlled stadiums in the league, KC and NE, neither of which is turning a profit right now (although as stated earlier, the Revs were rumored to have broken even back in 1997). Andy
I disagree. I think the Krafts do want soccer but they have not been able to figure out a way to secure 5-7 big time games a year from the fed with out also supporting an MLS side. I firmly believe that the Kraft's have leveraged their MLS support to get more international games and would drop MLS in a heartbeat would they still get the same selection of games they are accustomed to. Andy
Kraft Anniversery Speaking of the Krafts anniversery party at Gillette. Did anyone see the news flash on that? Kraft spents x-thousands of dollars to have Elton John come play at the stadium for his wife, family, friends, empoyees, etc. Save the extravagance and money to have kept all the people you have let go over the past year. That would have paid for some salaries and more people marketing and selling tickets for the team.
They get these matches by default, just like the Womens World Cup. FIFA wants a East Coast site and the Meadowlands said "no", so Gillette it was. I think MLS is "throwing a bone" to Kraft because they know he's not fully supportive and a trying to keep him around as an owner.
When Kraft planned the new stadium, his vision was for a facility that would be used 365 days a year. Since the Pats only play 10 home games, and there is no way to fill the rest of the year with concerts (especially with the Tweeter Center one town over) I gotta think the Revs were a part of that vision. The field was made wider in the new stadium to accomodate soccer, not football. Consolidating with the football operations was a cost cutting move, but one he copied from Lamar Hunt and the Wizards/Chiefs. KC went through growing pains the first year, but seem to be making it work now. I just don't see Kraft bailing on his plan only 2 years in.
Bailing on cost cutting measures "I just don't see Kraft bailing on his plan only 2 years in." Why not. He bailed on Todd Smith within two years.
Re: Bailing on cost cutting measures He bailed on CT and left Governor Rowland standing at the alter.