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THE TICKET THICKET - SF Chronicle - Sunday, August 21, 2005
Bay Area fans pour millions of dollars each year into the coffers of
their professional teams. Lately the fortunes of some of those teams have
changed. In an occasional series, The Chronicle examines what that means for
ticket sales.
TODAY: THE RAIDERS.
There must be some way out of this mess. From the accounts of the people
in charge, though, it will be as daunting as beating Al Davis in court.
And they know from personal experience how tough that is.
What's at stake financially in the latest round of negotiations involving
the city of Oakland, Alameda County and the Raiders isn't easy to pin down
with any precision. The number $65 million has been mentioned as the next
bitter pill taxpayers will have to swallow if the remarketing of Raiders
personal seat licenses fails.
But that figure was reached a decade ago, in calculations that everybody
now agrees didn't add up in the first place. Suffice it to say that the $10
million in losses that the city and county are averaging each year on the
Coliseum complex could increase dramatically unless a way is found to turn the
Silver and Black into gold.
Some of the public officials involved seem cautiously pessimistic that a
win-win deal can be reached with the Raiders. A better bet would be a deal
that merely staunches the bleeding.
"I'm the most pessimistic person,'' said County Supervisor Gail Steele,
chair of the city-county authority that oversees the Coliseum complex. "My
glass isn't half full. It's cracked at the bottom of the cupboard. ... There's
a possibility that everything that can go wrong will go wrong. In my life
that's an ongoing scenario.''
Sitting in her office, Steele, 68, is hanging onto her daughter's black
Labrador-mix, Maya -- "I need grounding'' -- as she describes her anxiety
about the search for a solution to the Raider dilemma.
"This is hard to do,'' she said. "And I'm just not sure it's going to
happen, and I want it to happen. The city and country are extremely worried
about getting this done.''
The Oakland-Alameda County Coliseum Authority -- which consists of two
county supervisors, two city council members and four appointees -- is
wrestling with what to do with the PSLs, which are due to expire after this
season. In 1995 they cost from $250 to $4,000, depending on the seat location,
and you couldn't buy a season ticket without one.
The PSLs were supposed to pay off the $200 million in publicly financed
bonds that paid for the expansion of what is now called McAfee Coliseum, along
with a practice facility and other enticements to lure the Raiders back from
Los Angeles after 13 years.
The Raiders went along with the deal, and the announcement of their
return was greeted at least as joyously in the East Bay as a World Series
title for the A's. Unfortunately, a lot of people miscalculated how that
excitement would translate to dollars.
The officials and their highly paid consultants were convinced the 63,132-
seat stadium would be sold out with PSLs, or close to it. They were off by
about 50 percent. The break-even point was 80 percent of all seats, authority
auditor Pat O'Connell said recently. After all the multiple applications and
credit card rejections were sorted out, however, only 31,000 PSL/season
tickets were sold.
Overly optimistic assumptions extended to stadium naming rights. It was
expected that those rights would immediately bring in $1.5 million a year. The
rights weren't sold for three years, and when they were, they initially sold
for $400,000, O'Connell said.
According to Steele, judgments were colored by the excitement of the
moment -- "this passion of, as I call it, a tsunami wave.'' She admitted she
was a neophyte at the time. "There were hundreds of press out there at the
Coliseum, and I thought to myself ... I'd get shot by a Raider fan if we
didn't go through with this thing.''
A decade later, there's still a vexing conundrum: PSLs have value only to
the degree that there's a perceived scarcity of tickets, but the perceived
scarcity rests on the popularity of PSLs. And those underselling PSLs --
mere 10-year deals rather than lifetime guarantees as they are in most other
cities -- were supposed to be a key revenue source for the city and the
county. While the Raiders pocketed the ticket revenue, albeit far less than
they expected, the drain on public coffers was painful.
Today only 29,000 PSLs have been spoken for, in just under 12,000
accounts. With so few season tickets sold, sellouts have been rare. The
availability of good seats for nearly every game allowed single-game ticket
buyers to sit side-by-side with fuming season ticket-holders.
"There's really no glory at all to owning PSLs,'' said PSL holder Laura
McIntyre, 45, of Oakland. "My husband will disagree, but to me PSL stands for
Poor Stupid Loser.''
With the clock ticking on those accounts, the authority has to decide
what to do with what the 1995 agreement prescribed next: PSLs to be sold at 75
percent of the original price for the final five years of the Raiders' lease.
It was supposed to be a windfall. Unless the terms are altered, it could be
another debacle.
"The majority of PSL holders will not buy it,'' said Griz Jones, 35, a
self-styled fans advocate who helped organize a group called the 66th Mob,
named for their two-day tailgate parties on 66th Avenue near the Coliseum
before Raider home games. "It's sad, but it's the truth. If they try to push
them on us, they're going to have a bigger debt than they have now.''
The authority and the Raiders agree with Jones that the 75-percent-for-
five plan won't fly. It's how to revamp the arrangement that's the center of
the debate.
The Mob and other booster groups circulated a petition asking that the
PSLs be made lifetime, inheritable assets. They also want some ticket prices
reduced to accommodate the blue-collar workers who form the core of the
Raiders' fan base. And here's the tricky part: They want the Raiders to commit
to Oakland beyond 2010, the end of the current lease.
Davis and the Raiders, as always, are being very guarded on that score.
They're not about to play their hand until all the cards are dealt. In this
particular game, nobody even knows how many chips anybody has.
"We didn't come back to move again,'' club attorney Jeff Birren said.
"But we have to be in a circumstance that allows us to compete economically
within the league.''
Asked if he was concerned the Raiders would get another black eye in
public opinion unless the PSL fiasco were rectified, Birren said, "Not just a
black eye, it's an economical black hole. We see teams that make $10 million
to $40 million more a year than we do saying they need a new stadium to
compete. There we are fighting for our lives.''
Despite being the top NFL team in merchandise sales for many years and
still being among the leaders, the Raiders "have a huge shortfall,'' Birren
said. (Such profits are split among all the NFL teams, while some other
revenue sources, like stadium luxury boxes are not.)
"We're at the bottom (of the NFL) in revenues, probably $70 million
behind the Broncos annually, $100 million behind the Redskins,'' Birren said.
"Yet, we're working in good faith with the representatives of the city and
county trying to explore ways for both sides to improve their situations.''
It irks the Raiders that the $20 million combined losses that the city
and county have endured each year are attributed to the Raider deal.
"That $20 million figure that is bandied about covers their expenses for
the entire (Coliseum) complex,'' Birren said, "and yet is fallaciously laid at
our feet.''
Steele stresses that she's working closely with Raiders chief executive
Amy Trask in an effort to change "the culture that has gone on for 10 years,
of hostility and not listening to each other.''
Not to mention the lawsuit that public officials filed against the
Raiders in 1997 because they feared Davis wanted out of the deal. Or the
subsequent suit the Raiders filed, claiming that Coliseum officials, in the
negotiations to bring the team back, had exaggerated the number of tickets
sold in advance. The club won a $34.2 million judgment in 2003, but that
verdict is on appeal.
No other sports team has established its willingness to sue as resolutely
as the Raiders have. But Steele said she isn't bothered by their litigiousness.
"Our house ain't too clean either,'' she said.
The Raiders "don't like feeling that they caused all our problems, and
they didn't,'' she said. "We all had a share with the decision that went wrong.
They feel that the press always makes them the bad guys. They're not the bad
guys. We did what we did. We did it with good faith. I don't think our people
tried to screw anybody. We miscalculated. ... We botched it.''
One of the biggest mistakes by public officials was setting the prices of
PSLs and season tickets after only a cursory marketing analysis. Another
mistake was insisting that their own people, the understaffed Oakland Football
Marketing Association, handle the team's marketing and ticket sales, a one-of-
a-kind arrangement in the NFL.
Oakland City Council President and authority member Ignacio De La Fuente
said the Raiders "probably'' should have sold their own tickets, "but both
sides agreed to the deal.'' The Raiders respond that city/county officials
initially made any move against the proposed marketing scheme a deal-breaker.
Whether it could be changed now isn't clear.
"The difference between the public sector and the private sector
sometimes is that people see 'dumb politicians' moves,' " De La Fuente said.
"The fact is, in the private sector, business deals don't work out a thousand
times a day. You just don't hear about it.''
What if the PSLs were guaranteed to last as long as the Raiders play in
Oakland? Some fans told The Chronicle they might be inclined to renew them
next year in that case. Some said they'd be more tempted if the price of the
new PSLs was a half or a third of the original price rather than 75 percent.
But authority member Sherman Balch said, "I don't care what you price
them at, you're going to have trouble selling them. If somebody can come in
and buy a game ticket and sit next to somebody who had paid a lot of money
(for a PSL), something's wrong.''
Other suggestions to reward PSL holders include reduced or preferred
parking, a one-time seat upgrade, greater interaction with the team, and
souvenir giveaways.
Zennie Abraham, a former Oakland mayoral aide, has suggested dumping the
PSLs altogether and putting a surcharge on Raiders tickets and a lesser one on
other events at the Coliseum and Arena, including A's and Warriors games. Said
De La Fuente, "I don't listen to his ideas.''
The A's and Warriors have expressed their distaste for a surcharge, and
the Raiders point out that there is already a city/county surcharge on their
season tickets, a $75 annual charge that is euphemistically called a
"maintenance fee.''
According to Balch, a marketing survey is under consideration to see
whether PSLs will work. "Within the next 60 days, we have to come up with a
comprehensive plan,'' he said.
By delaying the decision, however, the authority and the Raiders have
squandered the momentum that was gained this offseason by the acquisition of
wide receiver Randy Moss and running back LaMont Jordan. If the Raiders have
another rocky season, the remarketing plan will be that much harder to sell.
"It is an enormous risk,'' Steele conceded. "We are playing with fire. ...
"If this were a labor contract, everybody would lock the door, and you
wouldn't come out until you had a deal. Maybe that's not a bad idea.''
Silver and blackout
Since the Raiders moved back to Oakland in 1995, 53 of their 80 home
games have been blacked out locally. An NFL game is blacked out unless it is
sold out at least 72 hours before the kickoff. Here are the top five NFL teams
in blackouts over the past decade.
1. Cardinals 71
2. Raiders 53
3. Falcons 48
4. Saints 43
5. Seahawks 40.
Source: NFL
Raiders tickets by the numbers
63,132 -- football capacity of McAfee Coliseum
29,000 -- approximate number of season tickets and personal seat
licenses sold for this season
34,000 -- approximate number of seats available to fans buying single-
game tickets without having to buy PSLs
6,000 -- approximate number of club seats at Coliseum
3,000 -- approximate number of club seats sold for Raider games
77-83 -- Raiders' regular-season record since returning to Oakland in
1995
3 -- number of winning seasons since 1995.
Source: Joint Powers Authority
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