Crain's Detroit Business

September 24, 2011

by Bill Shea

Ticket sales, sponsorships rise with Lions' potential

The Detroit Lions' foremost investments -- quarterback Matthew Stafford and defensive tackle Ndamukong Suh -- emerged unscathed from an undefeated preseason.

Keeping them healthy -- Stafford, especially, because he's played in just 13 games over two seasons because of shoulder and knee injuries -- was as much a goal as winning. So mission accomplished thus far in 2011.

Stafford and Suh are the faces of a National Football League franchise that goes into the 2011 season bearing an unfamiliar but welcome burden: high expectations.

A cadre of talented young players who have shown flashes of brilliance -- including winning the final four games of 2010 and an eye-popping manhandling of the vaunted New England Patriots starters two weeks ago -- and a front office and coaching staff that have earned praise from the national media have translated into an improving financial picture for the Lions.

"We are pleased with where we are in all of our key business metrics," team President Tom Lewand said. "We're seeing double-digit growth in almost every area to date."

That includes suite sales and corporate sponsorship investment, but Lewand declined to discuss specifics. He did say the team added Quicken Loans as a corporate sponsor this year and expanded current deals with McDonald's and Meijer.

Season ticket sales -- a key metric of a team's popularity with fans -- are doing better than 2010, which in turn were up over the previous year, Lewand said.

"We are trending significantly higher," he said. Neither the team nor league discloses season ticket sales information.

Industry insiders are optimistic about the Lions' future, as well.

"If the team gets off to a fast start, and with the marketability of many of its young stars, I would not be surprised to see some new promotions/sponsorship arise as the season progresses," said Eric Wright, vice president of research and development for Ann Arbor-based Joyce Julius & Associates Inc., which specializes in measuring the impact of sponsorships across all forms of media.

"Playing winning football over a season or two would mean increased sponsorship rates when those multiyear deals go into negotiations."

Winning football has been something of a mythological aspiration for Detroit. The team is 39-121 since its last winning season (9-7) in 2000.

The nadir was the NFL's first 0-16 season in 2008, and the team has crept back with two wins in 2009 and six last year, while being competitive in almost every game.

"Winning -- that's the ultimate instrument to strengthen your brand," Lewand said.

This season's attempt at winning begins at 1 p.m. Sunday in Tampa Bay. Detroit opens its home season at Ford Field at 1 p.m. Sept. 18 against the Kansas City Chiefs.

Win or lose, it's revenue

Winning attracts more fans to games, and more fans mean more revenue. But under the NFL's financial structure, the financial penalty for losing is much milder than in other sports.

NFL teams generally operate on a strong financial base because of revenue sharing that provides each team roughly $100 million from several sources: television, Internet and licensing and club seat revenue, all split equally among the 32 teams.

Teams also generate local revenue they keep -- merchandise, concession and parking sales from the stadiums, and preseason game TV and radio deals.

The Lions need that local money in part because they have a $350 million debt load on the $500 million construction of Ford Field, which opened in 2002, according to Forbes.

And $100 million in revenue sharing won't cover the team payroll, which is expected to be near the league's $120.3 million salary cap this season.

The Lions have seen an uptick in fans buying tickets, fueled by optimism.

Detroit ranked 29th out of 32 teams in attendance last season. The team drew 450,286 for its eight home games, for an average of 56,285 per game, which is 87.3 percent of Ford Field's capacity. The boost of 6,891 fans per game was nearly a 14 percent increase over 2009, which was the second largest year-over-year growth in the NFL after the Jacksonville Jaguars...