COMMISSIONER TAGLIABUE INTERVIEW

JOSH PETER - NEW ORLEANS TIMES-PICAYUNE 4/19/99

 

Q: Prior to the ticket increase, the Saints sat down with several media outlets and outlined their economic concerns because of the small market. I just wanted to get your thoughts on the viability of the city and the concerns of New Orleans in the NFL?

A: It begins with the fact that it is a small market. I think it is one of the three smallest markets we have in the league along with Jacksonville and Buffalo. In a small market you need to have strong business community support and it has to be on a regional basis. Otherwise you’re going to end up in the bottom of the league in terms of your ability to compete and your ability to collect revenues and live with the CBA and get the kind of players you need to compete.

In the Saints’ situation, the other thing is that their ticket sales revenues are close to the bottom of the league and I think that has to be a two-way street. They have to win, but they also have to get the support of the business community on ticket sales and they have to regionalize on ticket sales otherwise the economics of their ticket sales are not going to be very good.

Q: Is it accurate to characterize your feeling about this as concern? Are they serious concerns or mild concerns?

A: We are concerned. They are one of the lowest-revenue teams in the league. They sold out only twice last year and their ticket revenues are down at the bottom, either second or third from the bottom.

Q: Are there other cities facing similar situations or facing similar challenges?

A: Any small market faces a similar challenge. In Buffalo, the business community has recognized the challenge and they just had a campaign where the business community committed over $10 million a year in pre-sold club seats and suites. It was done through a very strong business community initiative that included not only Buffalo but Corning and Rochester and other cities on a regional basis. Kansas City is another team that has to reach across a broad geographic base in order to get the kind of support and attendance that they have. In the current economics of the league, it’s another big thing where the salary cap drives teams to spend against the league average revenue and if you’re below the average by a significant amount then you’re going to have financial concerns.

Q: I met with Greg Suit and he mentioned a meeting you had with Governor Foster and Mr. Benson last year. What was the reason for the meeting and what was discussed?

A: It was to focus on the Saints’ needs, focus on the need for statewide support, and support has to come from parts of the state well beyond New Orleans, and for business community support. We met with the Mayor and had a similar conversation. We went over some of the same economics that they probably went over with you last week where the Saints have been slipping steadily in the last decade in terms of where they stand on revenue and where they stand relative to the other teams in terms of whether they can compete under the salary cap.

Q: What kind of response did you get from Governor Foster and the Mayor?

A: I’d rather have them speak for themselves. They appreciated the meeting and said the information presented was new to them and did not paint a bright picture and everyone would have to work together and try to address it on a long-term basis.

Q: Are you looking for signals that the Governor and Mayor are looking to jump on board and help with this process?

A: I think that is a question you have to direct to Mr. Benson and not to me.

Q: Why?

A: Because he owns the franchise and he is heading up the effort to put together business community support.

Q: Were the meetings held at your request or did Mr. Benson ask for your assistance?

A: Mr. Benson asked me to join him to just give a league perspective on where the Saints were relative to some of the other teams, but the meetings were arranged by him.

Q: Are there serious risks that New Orleans could lose this franchise?

A: I don’t think that’s even part of the conversation as far as I’m concerned. The conversation focuses on the need to regionalize the support for the team and the need for the business community to support the team in the ways that have been done in other markets such as Buffalo, Kansas City and Green Bay. Our objective is to keep teams where they are and to tap into a broad-based market.

We think teams provide tremendous value to the fans and business community and when that effort has been made people have responded to it in a very positive way. They recognize the extraordinary value of an NFL franchise to a community, both the intangible values and the tangible economic benefits. It’s a major business to have in a community. The Saints bring into Louisiana TV revenues that come from the league’s national and international contracts, which are a real boost to the economy of the state of Louisiana. Those revenues would never get into the state in terms of mainstream economics if the Saints were not there.

Those are the types of considerations people need to be focusing on and then trying to deal with what can be done to support the team. We share our TV revenue equally so that as we go forward under these TV contracts, the Saints will be bringing into the economy of Louisiana millions of dollars of TV revenue that is generated in other parts of the United States but they get poured into Louisiana because of our equal sharing of TV. No other sports league shares TV revenue that way and no other league provides that kind of economic benefit through a franchise.

Q: Did Mr. Wilson in Buffalo ask for your help or did you initiate contact with some of the things they needed to address?

A: Mr. Wilson and his staff took the initiative and worked with the business community and produced a very successful campaign.

Q: Based on that, this is not something the league is initiating but it is the cities who are facing these crises coming to you for support?

A: That’s basically correct. It is the responsibility of the team to address its needs in its market and the league will support it whatever way we can in terms of understanding and trying to get people to understand the economics of the league and especially the economics of the small-market teams.

Q: Have you looked at the Forbes report on the economic state of NFL teams?

A: No, I have not looked at it.

Q: That research suggests, based on 1997 figures, that the Saints ranked 12th in the league in revenue. This suggests, at least in my mind, a profitable venture in terms of a small market.

A: It seems to me those numbers are nonsensical. That’s wrong because the Saints are in the lowest third of the league in terms of revenue in 1997. So that’s way off base.

Q: Do you know what the dollar figure is between the top third and the bottom third? The study suggests about $4 million.

A: That’s ridiculous. The difference between the top third and bottom third in 1997 was in the neighborhood of $25 million. The high revenue teams approached nearly $100 million and the lower third is about $25 million less on average.

Q: The study also suggests that the Saints were the 4th most profitable team in the league in 1997. Is that accurate?

A: I think it is totally erroneous. It would be more accurate to say they were in the bottom 25 percent.

Q: Do your figures show they are making money?

A: Marginally.

Q: But their profitability has slipped significantly?

A: Yes. That’s not the real issue. The real issue is the ability of the team to compete under the CBA because the CBA sets the salary cap on the basis of average revenues. If the team has revenues that are substantially below average then it will eventually have a negative impact on whether you are going to live within the terms of the CBA.

Q: With the new ticket increase, one concern among readers is that they may have priced out the blue-collar fan?

A: Ticket prices are something I really can’t comment on because the league does not get involved in ticket prices. The Saints’ ticket sales are one of the lowest two or three in the league. Pricing policies are something we don’t get involved in.

Q: Doesn’t that go to the heart of who you retain as a fan. Do you have concerns that some of the fans are being priced out of the building?

A: The league in general has the highest attendance in its history. I don’t think there is any indication around the league that we are turning off fans or groups of fans. Again, I am not going to comment on ticket prices. We don’t get involved in how ticket prices are responsive to a community. All I know is that the Saints’ ticket sales are at the bottom of the league so they are going to have to do something that gets fans to the stands. That strongly depends upon regionalizing a team and adding population to the market area you are trying to service and then getting the business community to support the team in a way that employers can make tickets available to employees. Things like that in a lot of smaller-market communities have helped to stabilize the franchise and to get tickets into the hands of blue-collar fans.

Q: For those who are in a panic that this is the beginning of the end, would you like to sooth those minds?

A: I don’t think it’s the beginning of the end. I think it’s the beginning of the beginning. We are trying to get something done. We are not trying to end anything. We are trying to get something done that other communities similarly situated have demonstrated can be done. As far as I’m concerned it’s the beginning of the beginning. Every positive effort has to be made in order to make the team successful.

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