Let's Take A Deep Breath
I was really mad yesterday.
I heard the news about the Colts ignoring the NFL's relaxed blackout rate of 85%, and I was angry.
To be clear, this rule doesn't apply to me at all. I don't live in the area, so the blackout rule wouldn't personally affect me. Although, I usually don't get the games anyway on my TV because I don't have cable, and the Colts were terrible last year.
Anyway, I was upset. I was all set to write an article titles "Nobody Wins" about how this policy was just going to hurt the fans, alienating them from the team, and ultimately hurting the team. But, after reading an article from Bob Kravitz and reading into it a little on my own, I was a little less hurt.
For once in my life, I side more with Bob Kravitz than Nate Dunlevy and Greg Cowan.
To understand why the Colts' decision makes some sense, you first must understand how the NFL's "relaxed" blackout policy really works.
The NFL's old policy was that any time a team didn't sell out a game, the game would be "blacked out" from local television stations, thereby encouraging locals to go to the games. Of course, the NFL's enforcement of this has been extremely lax, as some teams never really "sell-out" (ahem, Redskins).
With the new rule, the NFL is not merely lowering the black out rate to 85%, instead of 100%. Rather, the league is allowing each team to set their own blackout rate, in order to provide more flexibility to teams who struggle with attendance.
Sounds just peachy right? Good move all around?
Well, it does sound good. And it makes the NFL look like heroes, in that they are looking out for fans everywhere.
Unfortunately, most of us overlooked the fine print.
Under the current system, the home team takes home about 66% of the revenues from ticket sales, while the visiting team takes the other 34%. However, if a team sets their own blackout rate lower, such as at 85%, then they must share 50% of the revenue for any additional tickets sold over the 85%.
15% of the Colts' seating capacity is 9450 seats. The average price on tickets for the last year has been about $71 a piece. That is a total price of those then would be about $671,000. If the blackout rate is 100%, the Colts keep $443,000 of that. If it's 85%, they only keep $335,500 of it. It's a difference of about 108k per game, about $864,000 overall.
Now, for a team that has gotten over $200 million in revenue every year for the past four years, that really doesn't seem like that much.
However, the Colts are taking a calculated risk here. They believe that they are going to sell out every game. So, if they sell out every game, then they have no reason to have a lower blackout rate. It would just lose them money.
I can't wait to see what other teams do (they have to decide by July 15), because I'm betting that the majority of them will keep the 100% rule. The NFL is a business, and they're trying to make as much money as possible.
As for the Colts, I firmly believe that they are confident they'll sell out all eight home games. If they don't, then we can blast them. It will be an incredibly stupid error to pull this blackout rate if they have to blackout just one game. Because the fans WILL care if there is a blackout, and the Colts could have kept it from happening by having a 98% blackout rate instead of 100% (which would only cost them about $15,000 extra per game, 120k for the season). The Colts will have face massive consequences if they have to blackout a game.
But I don't think they will.
The Colts sold, on average, 102.1% of their seating capacity last season, according to Wall Street Journal, fourth highest percentage in the league. And that was to come see Curtis Painter and Dan Orlovsky.
While a lot of fans are upset, hurt, and even leaving because Peyton Manning is no longer a Colt, there are also a lot of fans who are excited about something new. The Colts had record attendance at mini-camp this year by fans, remember?
I don't think the Colts are worried too much about selling out, at least, not yet. Maybe they've calculated wrong. We all know by now that their timing was a terrible calculation on this P.R. move (seriously guys, couldn't you just wait until the rest of the league made their decisions?).
When you have guys like Robert Mathis suggesting that players buy an extra charity block of seats to give away, to make sure their stadium is full and rocking, you can either be really concerned (Holy crap. Even our players know we won't sell out), or you can be relieved (Wow. We're really going all out to make sure we don't have blackouts).
Personally, I'm going to wait and see on this one.
Would it ease fans minds if the Colts left themselves with a little blackout insurance? Yeah.
Do the Colts have a legitimate reason to leave it as it is? Yeah.
It's a bit of a gamble. If they gambled right, we'll never hear about it again. It will go under the files of "Silly things that get talked about in the NFL offseason," right next to Tim Tebow's reality TV schedule and fretting about rookie contracts.
But if they're wrong, then it will look like the Colts sacrificed their fans for a few thousand bucks.
I don't think that's what happened here. I don't think the Colts are going to have a black out.
But I never thought that Peyton would be a Bronco either.
Come September this will be a forgotten, non issue. They will sell out. The only mistake the Colts' PR folks made is not getting out in front of this. COO Pete Ward explained everything on Dan Dakich's radio show last Wed. For those of you interested in listening for yourself go to 1070thefan.com. This (non)story got blown up for the same reason any story gets blown up...to spur the audience's interest, be it T.V., radio, newspaper or internet. It must have also been a slow newsday. In a few weeks we'll all have some real football issues to discuss because training camp is thankfully nearly upon us. Go Colts!
Honestly, I don't know why any owner would choose to take the 85% rule. Hell, I don't even know why they created it. Essentially they're saying that in order to waive a blackout, you have to *pay* the other owners money. This is not Irsay's fault. This is the NFL telling teams that if they want to waive the blackout, they will be punished for it. So how does it benefit the owners at all? I assume that the owners all consented to this rule, I just don't understand why.
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I just want to say how cool it is to read both intelligent articles, and intelligent posts on the articles. Get tired of people blasting each other and calling each other names solely because there's a difference of opinion.
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Thank you for saying what needed to be said.
If people are going to be mad, DON'T be mad at your team or owner for not lowering the blackout percentage. DO be mad at the league for being sleazy (albeit crafty, and very smart) business men by passing the blame for blackouts to the individual franchises.
The Colts did a terrible job with the release of this story tho, I do agree with that.
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The thing is, for the last 10+ years they haven't had to be good at public relations. They had Peyton F. Manning. They could have stood out front of Lucas Oil and literally spit into the face of every man, woman and child entering the stadium, and they all would have been happy for it because they knew they were going to be witnessing the GOAT make football history. Now, on the heels of a 2-14 season, and after putting lots of fan favorites on the curb like yesterday's garbage, the PR staff needs to be more careful in how they make decisions and release information. I can't decide if it is arrogance or ignorance, but they definitely screwed the pooch on this one.
"The Colts sold, on average, 102.1% of their seating capacity last season, according to Wall Street Journal, fourth highest percentage in the league. And that was to come see Curtis Painter and Dan Orlovsky."
I wonder how much of that 102.1% (isn't there only 100%?) was prior to the start of the season, though.
@LovinBlue Probably a lot of it. Back then we all though Peyton would be ready by mid-September at the latest.
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Just a note. To avoid a blackout, the Colts must sell out their general bowl seating, not necessarily every seat in the entire stadium (i.e. luxury boxes don't count towards a sell out).
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"While a lot of fans are upset, hurt, and even leaving because Peyton Manning is no longer a Colt, there are also a lot of fans who are excited about something new. The Colts had record attendance at mini-camp this year by fans, remember?"
I agree with the first part of this sentence. I'm not sold on the second line. Irsay cut bait with a *seemingly healthy Manning. If 18 starts racking up wins and touchdowns, while Colts fans aren't able to watch his replacement grow then Irsay's going to have a problem on his hands.
Count me as one of those fans who are still trying to get over the loss of Peyton. I understand the decision, I even think its defensible, but I don't love it. Personally, I think the Colts need all the goodwill they can get from the community right now.
I'm 100% with Nate on this one.
@MitchIsaacs We were going to have to watch his replacement grow at some point. This was the best bullet the Colts would have likely ever had to replace him.
The team was completely capped out, old and injured in key places. Saturday was on his last legs. Brackett and Bullitt couldn't stay on the field. Diem was/is done. There was no one reliable in the backfield and Garcon was out the door before the off season even started with his salary requirements. The Colts would have been rebuilding with or without Manning. I, for one, am actually glad that he doesn't have to suffer through 8-8 seasons with what would have been the Colts roster had he returned. What that have benefitted him? Would that have benefitted *us*?
Sure, the Luck pick could have yielded a slew of high draft picks. They'd have had an extra second this year and an extra first in each of the next two. Even *if* each of those guys turned in to impacts players, they'd still never have matured as a unit with enough time for Manning to make another real run. The team was going to be in cap hell for the rest of Manning's contract. Manning would have ridden out the last years of his career more like Marino than like Elway. Is that what we would have wanted?
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I am not a season ticket holder. Never have been. We are a single income family, and we don't have room in our budget for 2+ tickets to 10 games (2 of them meaningless) plus parking, refreshments and the obligatory trip through the pro-shop.
That doesn't mean that we don't support the team. We buy merchandise AND we pay for that new stadium.
So... according to the Colts brass I'm not a "Paying Customer"?
@kc6624 "AND we pay for that new stadium."
This part will be the killer. Did the front office not notice that Indiana just tossed out their six-term incumbent Senator to nominate a strongly anti-tax candidate? It was on the news and stuff.
Not trying to tie sports to politics, just stressing the point that it's not wise to ask people to pay more taxes and then snub the taxpayers, especially in a bum economy.
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woah. Just saw the line about you siding with Kravitz over me (or Nate).
I've said a lot of nice things about you over the past 2 weeks.
I meant all of them. :P
Well Kyle, how do feel about the Colts' representative saying that the decision was made because protecting the interests of the Colts' paying customers is the first priority? Liars!!!!
Also it's worth noting that the 200 million in revenue doesn't mean anything if we don't know what the actual profit numbers are. If the Colts organizations costs are at 199 million and revenue is at 200 million, profit is only 1 million. Just a point
I actually agree with you, I just wanted to concede that the numbers won't look like all that much to most people.
Irsay is still worth $1.4 billion with the Colts as his primary source of wealth, according to Forbes. Yet he cried poverty during negotiations for the new stadium and again with the rest of the owners during the lockout. If he needs the money so badly he can open his books and prove it.
just because he is "worth" $1.4 billion doesnt mean he HAS $1.4 billion, it means all of his assets (Colts franchise, Home, etc) are worth that much. If the value of the franchise goes up, that does not put cash in Irsay's pocket. it just makes his net worth go up, because he could sell his asset for x amount of dollars.
@DustinAdams @jhotka @squirrel That's what I'm thinking. Irsay or a TV station will buy them up.
@jhotka @squirrel Can we agree though, Irsay can afford to have gone with the 100% level but pretty much said what Mathis said? It would be cheaper for Irsay to buy the last 2% of the tix 3 days prior to a game that is gonna be blacked out and send them to military families or charities. That is a different kind of PR.
I'm doubly un-impacted by the blackout rule as a season ticket holder & a fan living outside of the blackout zone. I don't even necessarily think the Colts are making a bad business decision. What has me angry is how poorly they communicated this information to fans.
This is just 1 in a long string of incidents where the Colts have bungled a PR incident. All off season long they have gone from embarrassment to embarrassment. It makes me angry because there are only 2 reasons for this 1) they are so arrogant that they don't think fan emotion is important or 2) they are so dumb as to not hire competent professionals in this area.
Either way it doesn't make me hopeful for the future of the franchise, and as a season ticket holder it makes me rethink my position on renewing tickets. If I were actually paying them taxes to support them, I'd be furious.
@kasey_junk I'm in the exact same boat as kasey_junk. I'm out of state and a season ticket holder. But I disagree on the message.
I'm not really sure there is a good way to communicate this. They waived the 85% blackout option. That's really it. They could have added that it would have cost them money to accept it, but would that have made fans any less indignant? Maybe they announced or waived it too soon, but I think that anyone who understands the rule would realize that it doesn't really matter.
They're still likely to sell out most, if not all of their games. If that happens and there's no blackouts, we'll all have long forgotten about this by week 8. If they don't sell out, then people might be upset, but neither the timing, nor the delivery of the message would have changed that, would it?
@kasey_junk In hindsight, the way they announced it actually helped ticket sales. Maybe they did do something right.
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@kasey_junk I don't think it is arrogance, but more immaturity and unflexibility in the face of change. The Colts haven't had to deal with these problems since probably 2002. They aren't used to fighting and clawing to sell out games, to winning over fans or just keeping them. I think that through this mantra of the "New Era" Irsay and the rest of the pr machine thought that a lot more fans would be more understanding and forgiving of the direction they chose to take. They were wrong.
At the end of the day, if the team wins, or at least loses in a way that is still exciting, the Colts will be fine with selling tickets. But right now, the Colts are trying to spin their ideas to a fanbase that the Colts brass seems to think is on the same page as themselves, which seems to not be the case.
As for this whole situation, I don't know why you go public with this at all. I do understand that it is a calculated risk that will probably pay off, it makes sense. That said, it is a pr nightmare. The Colts come across as implicitly threatening their fans, holding out their right to view the games, dangling it like a carrot, demanding money in return. It doesn't look good.
@kasey_junk Completely agree. The way it was handled was just incompetent. Should have just waited, although there were apparently 3x as many calls today about tickets.
You're saying that it's only a bad move if they fail to sell out? I don't buy that. Compared to setting the number at 98% it's empirically a bad move because they're risking massive fan ire over a relatively measly $120k. The value of simply not holding on to the old, hated league rule of 100% is very significant, especially in a year when the team's future is so uncertain, the economy is so shaky, etc.
And then the compounded the mistake with drivel like, “While we value all of our fans, our first priority is to protect the investment of paying customers.”
Derp.
Jesus, everybody knows that you care more about the stadium fans but you're not supposed to actually SAY it. Especially when your stadium is still being funded with extra taxes, fans in the metro area will be quick to point out that they ARE paying whether they want to or not. You fail PR 101 forever, Colts.
@squirrel Because fans won't care about it unless there's a blackout. Not 99% of them anyway. At least, they wouldn't if the Colts had handled it properly.
