The team is a mediocre 7-7 and has lost five of its last six games. Sunday’s loss at Cincinnati greatly diminishes any last hopes for a playoff berth.
And that is the stadium’s fault.
If such an argument is not being made already, it will be soon among owners who field losing teams in the National Football League’s emerging financial structure.
Therein lies the most simple explanation in this complicated debate over the Chicago Bears and their ongoing search for a home. It is broadly called “stadium economics,” but it comes down to signing top players and winning football games.
Without revenue from a lucrative stadium and lease, the argument goes, franchises will not have enough money to field competitive squads. The teams with bad stadium deals, in other words, will lose to the teams with good stadium deals.
As a rhetorical war heats up between Chicago officials and Bears officials, however, it is becoming more difficult to understand the real issue. Both sides are attempting to spin the public, trying to win sympathy by manipulating certain points.
Mayor Richard Daley charged last week that the team is demanding a guarantee of $25 million in annual stadium revenue, with taxpayers responsible for making up shortfalls. Club executives deny asking for guarantees in case of gaps, but acknowledge shooting for a deal they believe ultimately will yield that amount.
Bears President Michael McCaskey wants a profitable and winning team, both for himself and for the fans. He needs money to accomplish those goals, he says, money that is not currently forthcoming at Soldier Field.
That is why he is considering a move to Gary, or insisting on major renovations at Soldier Field. Either option would significantly increase his income, and thus the amount he could spend on players.
“It’s a competitive reaction,” Max Muhleman, president of Muhleman Marketing in North Carolina, said of the Bears saga. “He has to compete with the people in his league who are pulling away from him in terms of stadium-generated revenues.”
The Cleveland Browns and the Houston Oilers are moving to Baltimore and Nashville, respectively, for the same reason. The St. Louis Rams and the Oakland Raiders relocated recently, and more clubs are expected to explore the possibility soon.
Money does not guarantee championships, but it helps. That could be especially true now that teams have figured out how to circumvent the league’s salary cap, by giving top players huge signing bonuses of upfront cash.
And now that some teams have taken advantage of the loophole, others clearly want to follow suit. Here’s what’s happening, why it’s happening now in football, and why it’s not likely to end soon:
In the NFL, all 30 teams share revenue from television contracts and from gate receipts. That accounts for the majority of total revenue, about $69 million per team annually.
But the individual franchises do not have to share income from several stadium-related businesses, parking and concessions and advertising, or from luxury boxes–if they control those revenue streams. Income from suites and club seats, plus the other sources of non-shared revenue, can run into the tens of millions of dollars.
Teams that control and maximize these sources of non-shared revenue can spend more money on top players. McCaskey wants the Bears to be among those teams.
“What has happened is that as stadium economics have grown, all of a sudden the difference between financial success and failure lies with our stadium deal,” said William Clay Ford Jr., vice chairman of the Detroit Lions. “This has all developed really quickly and it’s had a real snowball effect.
“Every time one team gets a better deal, it puts those of us who don’t have those revenues further behind the parade,” said Ford, whose team is trying to negotiate a better lease at the Silverdome.
Financial World magazine estimates the Bears earned about $6 million in non-shared stadium revenues last year. The team would like that figure to rise to at least $25 million, officials said.
That would make Chicago one of the top NFL teams in stadium revenues. In 1994, according to Financial World, the Bears were tied for eighth.
The Dallas Cowboys led all clubs with $37.3 million in stadium revenues, followed by the Miami Dolphins at $15.4 million. With recent moves and new stadiums, however, those figures are likely to grow outdated very quickly.
The Rams and the Raiders are expected to be among the top teams, along with the expansion Carolina Panthers and Jacksonville Jaguars. Baltimore and Nashville also will come in at the high end.
The key is in the lease agreement. The Rams will keep virtually all stadium revenues, while the Browns will play rent-free.
At Soldier Field, the Bears keep 80 percent of revenue from 116 luxury suites, and little else. The Chicago Park District, which owns the stadium, keeps all revenue from advertising and parking and concessions–plus 12 percent of all ticket sales as rent.
Mayor Richard Daley’s offer to spend $156 million on Soldier Field renovations includes 64 more luxury suites and thousands of club seats. After negotiating the details and modifications in the lease, city officials expect to increase McCaskey’s take by at least $7 million.
The proposed stadium in Indiana would be much more lucrative, but neither team officials nor local leaders are offering hard numbers yet. After a deal is set, some experts believe that it likely would be worth more than $20 million to the Bears in non-shared stadium revenues.
The NFL, unlike other professional leagues, is struggling with this problem of stadium finances primarily because of football’s nature. With only eight home games per year, team owners almost have to depend on local governments for help in building stadiums.
The handful of football games can’t pay for an expensive stadium on their own, and such outdoor centers generally are inappropriate for many other events. Public subsidies thus become necessary, especially because a football stadium costs much more than a basketball arena.
“If you build a United Center and you have basketball and hockey and other events, you more easily catalyze a partnership that makes economic sense,” said National Basketball Association Commissioner David Stern. “It’s easier to build a stadium where we are.”
Indeed, only a few football stadiums are privately owned. Many more arenas are financed that way in basketball and hockey, with baseball filling a middle ground.
And while NFL officials admit that the franchise movement is an unforeseen consequence of league rules, the trend apparently will continue unabated. In essence, it has gone too far to stop.
Eight NFL teams already have crossed the $20 million threshold in non-shared stadium revenue, experts say: Dallas, Miami, St. Louis, Houston, Carolina, Jacksonville, Houston-Nashville and Cleveland-Baltimore. And because the league requires a bloc of 23 teams to vote in favor of changing the financial structure, those eight could make modification impossible.
“I don’t know if you can close the barn door after the horse is out,” said Detroit’s Ford. “I don’t know if the people who have these revenues are going to want to share them. I doubt very much that they will.”
