Team Marketing Blog: Apr 15, 2005

In Mar 2005, blog sites were a relatively new thing, and Team Marketing Report staff wanted to give one a shot. Over the next several months, TMR’s associate editor at the time, Jon Greenberg, posted numerous stories and other sports business thoughts as the “Team Marketing Blog.” We have saved all of them and re-posting each of those individually for your reading enjoyment. Please note that many links no longer work.

Below is the entry from Apr 15, 2005…

Inside the Ownership files: New York Football Giants

TMR’s 2004 Inside the Ownership of Pro Football is currently available in PDF format. While we update the IO annually, or at least we plan to now that the publication is up and running after a long hiatus, we thought this site would be a good place to update team entries periodically. Or at the very least, provide links to new information that deals with IO topics.

The N.Y. Giants, occasional scourge of the NFC East, are getting ready to finalize their eventual departure from their long-time home at the Meadowlands for brand-new digs just across the parking lot.

The deal isn’t actually signed yet, but it looks like a slam dunk. Or to use football vernacular, a slam dunk through the goalposts.

While the Giants’ current stadium, also home to the J-E-T-S and the M-E-T-R-O-S-T-A-R-S (just doesn’t have the same ring) was built for about $78 million in 1976, the new one will cost about, say, 10 times more. The current tab is $750 million. But with honest New Jersey guys building this, I’m sure the estimates won’t go up…

The Giants plan to move in “mid-2009,” according to a story in the Bergen County Record. That leaves them plenty of time, “to do some digging, to see what’s under there – or who’s under there,” owner John Mara quipped in the Record, referring to the legend that former Teamster Jimmy Hoffa is buried somewhere on the stadium grounds.

The Giants are currently valued at $692 million, according to Forbes‘ NFL study, found here: http://www.forbes.com/sport/2004/09/01/04nfland.html

In a sign of the times, or the Giants’ long-time deal with the state of New Jersey, they are the 20th most valuable franchise in the NFL, below such relative toddlers as Carolina (12th at $760 million) and Tennessee (15th at $736). The difference? A new stadium of course.

A new Jersey stadium should skyrocket the team into the upper third of the league in value, which is where New York’s pre-eminent team, and one of the NFL founding franchises, should be.

Check out some details, including a nifty chart, here (no registration required): http://www.bergenrecord.com

The (mostly) privately-funded stadium will be roomier, with more luxury suites (Obviously. I want to find the owner or team who wants less luxury seating.) as well as acres of premium and club seating.

Once this deal is final, the Giants will gain more control over their revenues, as opposed to their previous deal with the New Jersey Sports and Exposition Authority. The New York Times breaks it down like this:

The Giants will own and manage the stadium, while paying the state $5 million a year in rent for the land and giving it $1.3 million annually in payments in lieu of taxes. The state will pay the $125 million in existing debt on the current stadium, and the infrastructure costs for the new stadium, estimated at $30 million.

More details from the Record:

  • No PSLs. Yet. — “Our present financing plans do not call for PSLs,” John Mara told the media. “We would like to be able to finance this thing without them, but now we’re up to $750 million in costs, and every time I hear it, it makes me shudder.”
  • The deal’s not final. Yet. — The memorandum of understanding signed Thursday by the Giants and the state is expected to be approved by the sports authority board Tuesday, but the Giants still will have additional details to work out.

Chief among them is figuring out how to coexist with the $1.3 billion Xanadu entertainment and retail project that has been under construction for several weeks at the Continental Arena site.

The Giants, family-owned since Tim Mara bought them in 1925 for $500, are enamored with what the Packers did in renovating Lambeau Field, bottling up that gushy “family” vibe…and making some money off it.

Now the Giants plan to join the trend by utilizing 75 acres for the new stadium, a Giants Hall of Fame, a large steakhouse-style restaurant, endless aisles of Giants knicknacks in a team store and possibly a private 50-room conference center. The current facility, slightly southwest of the likely new site, takes up a mere 27 acres.

Of course the local pols, specifically the acting Governor Richard Codey, who has cajoled this deal while his predecessor did not, have to make this sound like it’s the best deal since Manhattan was bought for a some baubles and a sack of rocks:

But Codey produced a report by UBS Financial Services that he said demonstrated the new deal was “as good or better” for taxpayers than the current scenario, in large part due to the additional tax revenues raised by the more lucrative facility. The report concluded that the $700 million or more to be spent by the Giants, compared with up to $30 million from the state for infrastructure improvements, “represents the largest disparity of private-to-public initial capital investment for any existing stadium within the entire NFL.”

Of course, that’s not entirely true. But it’s not too far off either.

The rest of the story from the Gray Lady (registration is required): http://www.nytimes.com/2005/04/15/nyregion/15giants.html?

But Andrew Zimbalist, an economist at Smith College who has written extensively on public spending on sports franchises, said Mr. Codey was “blatantly incorrect” in calling the stadium deal the best in the league for taxpayers.

Mr. Zimbalist noted that the New England Patriots and Washington Redskins play in stadiums built entirely with their owners’ money, and he said that the Patriots are reimbursing the state for its $71 million in infrastructure costs.

Still, Mr. Zimbalist said the New Jersey deal was, among NFL stadiums, “very close to the top end of taxpayer advantage, or lack of disadvantage,” since the average public subsidy for an NFL stadium is 60 percent.

A better deal for the state, Mr. Zimbalist said, would be losing the team altogether. But Mr. Codey made it clear from the day he took office in November that that was not an option. And after negotiations collapsed last month, Mr. Codey worked to revive them.

The Giants could have a familiar tenant, as the Times notes the Jets could stay in Jersey now, instead of moving to a hotly contested site in Manhattan, the other teams at the sports complex are planning to leave, the New Jersey Devils hockey team for a new arena in Newark, the New Jersey Nets for a new arena in Brooklyn and the MetroStars soccer team to a planned stadium in Harrison, N.J.

In short, expect a new Giants stadium in the Swamp just about the time the next Sopranos season begins. More details as they come…

-Jon

Currently Founding Editor/Columnist at The Athletic Chicago. Jon was with TMR from 2003-15, including Executive Editor 2008-15.