View Full Version : No Super payoff expected for Pittsburgh Steelers or owner Dan Rooney

02-09-2009, 06:51 PM
No Super payoff expected for Pittsburgh Steelers or owner Dan Rooney

Alan Robinson, THE ASSOCIATED PRESS Alan Robinson, The Associated Press 55 mins ago

PITTSBURGH - The latest Lombardi Trophy added to the Pittsburgh Steelers' overflowing display case makes them the most successful NFL franchise in the modern era.

But even a record sixth Super Bowl title probably won't make the team more money.

It also is unlikely to increase owner Dan Rooney's net worth. Or make the Hall of Fame owner look all the wiser for completing a buyout of some of his brothers' shares of the 76-year-old franchise only weeks before the playoffs began.

Several sports economists said winning a Super Bowl does little or nothing for a franchise's bottom line during the best of economic times, much less during what may be the United States' worst financial crisis since the Great Depression.

"There is no evidence that winning a Super Bowl has an impact on franchise value," said Dennis Coates, an economics professor at the University of Maryland-Baltimore County and the president of the North American Association of Sports Economists.

The Steelers have sold out all home games since 1972. The team is not planning a dramatic increase in ticket prices and is unlikely to greatly increase corporate sponsorships during brutal economic times.

Their Super Bowl payoff may be limited to being known as the NFL franchise envied by all others.

"The theory of valuing an asset would suggest that a franchise's value is determined by fundamentals like current and future demand for tickets to games, team-branded merchandise and broadcast rights fees," Coates said in an e-mail. "Since Heinz Field sells out, the attendance demand aspect is likely to be small.

"Merchandise and broadcast rights are shared by the NFL, so the Steelers would see only a small share of those (1/32nd)."

Teams that play in the Super Bowl typically find the myriad costs to appear in the game exceed what they receive in compensation from the NFL. Despite the Steelers' coast-to-coast following, their location in a relatively small market means they generate tens of millions of dollars less in corporate sponsorships than the bigger-market teams like the Cowboys and Redskins.

Winning an NBA title can boost franchise value, according to sports economist David Berri, but he says there is no such payoff in the NFL, where every team except the Lions, Browns, Texans, Jaguars and Saints has played in at least one Super Bowl.

"About half of all (NBA) teams don't win a title and I know winning a title can impact a team's gate revenue for years," said Berri, an associate professor of applied economics at Southern Utah University who co-authored a 2006 book about the relationship between payrolls and winning. "Plus, in the NBA, teams keep their gate revenue.

"In the NFL, though, it is a very different story. NFL teams share gate revenue, and other revenue as well, plus the Steelers had already won five titles before last week," Berri said in an e-mail.

Another Super Bowl victory adds to their prestige, but the Steelers were recognized as one of the best-run franchises in pro sports before winning their second NFL title in four seasons.

Winning titles also can increase what unsigned players command on the open market, making it difficult to stay under the salary cap - another worry since 2010 may be an uncapped year unless a new labour deal is reached.

The Steelers, as were all NFL teams, already were concerned about a possible decline in revenues even before they rallied in the last minute to beat Arizona 27-23 in Tampa on Feb. 1.

According to Sports Business Journal, contracts for about 50 per cent of all club sponsorship revenues expire within the next 18 months. The NFL doesn't have a national radio rights agreement for next season, and nearly all the league's corporate sponsorships end during the next three years. Among those ending next month are deals with FedEx, Home Depot, IBM and State Farm, the publication reported.

That's enough to create worry among any NFL owner, even a family that has controlled the Steelers since their founding in 1933.

The Steelers won their latest Super Bowl despite the potential distraction created by Rooney's buyout of all or part of the shares held by his four brothers. Each of the five brothers inherited a 16 per cent stake when founder Art Rooney Sr. died in 1988, with the other 20 per cent held by another Pittsburgh family.

After months of family wrangling and negotiating, Dan Rooney and son Art Rooney II, the team president, will borrow $250 million and bring in additional investors to complete the deal. They will buy out all the shares of brothers Tim and Pat Rooney, who run the family's race track business, and part of the shares owned by brothers Art. Jr. and John Rooney.

The restructuring was agreed upon in November, approved by NFL owners in December and is scheduled to be completed by March 31.

Dan Rooney and his son are adding at least three others investors: the Paul family of Pittsburgh, which owns specialty steel maker Ampco-Pittsburgh; James Haslam III, the president of truck stop operator Pilot Travel Centers; and film company chairman Thomas Tull. Additional investors may be added before the closing date.

While Forbes Magazine recently estimated the Steelers' worth at US$1.01 billion, the Rooney transaction is valued at $800 million. The Rooney brothers probably could have made more money by selling the team to an outside investor, such as Wall Street billionaire Stanley Druckenmiller, but NFL commissioner Roger Goodell told them in August that the league was intent on keeping one of its showcase franchises in the family.

After the Super Bowl, wide receiver Hines Ward broke down in tears while talking about how the players cherished winning another Super Bowl for owners they described as being more like friends than bosses.

"It was a difficult year at times, but it all worked out splendidly, and we're thrilled," Dan Rooney said.

tony hipchest
02-09-2009, 06:59 PM
The team is not planning a dramatic increase in ticket prices and is unlikely to greatly increase corporate sponsorships during brutal economic times.

on the flipside is robert kraft, who already had one of the highest revenue generating franchises, raising ticket prices 33% after last season.

02-09-2009, 07:24 PM
You should see the prices for Jerry World.

02-09-2009, 07:48 PM
Jerry's world is going to be ridiculous. Jerry is going to make Kraft look like a saint....

02-10-2009, 09:34 AM
Somebody has to pay for that big TV at Jerry World :chuckle: