In the NFL, an owner and his team don’t profit directly from hosting a Super Bowl. The league takes over the stadium rent-free and treats the host the same as every other club. All 32 teams share equally from the sale of tickets, concessions and merchandise.
“There is really no direct benefit,” said Bill Prescott, chief financial officer of the Jacksonville Jaguars, who hosted the 2005 game. Other recent hosts say the same.
But Jerry Jones will be an exception.
Because of his ownership stakes in the concessions company that operates at Cowboys Stadium, and dozens of Papa John’s stores in North Texas, the Dallas Cowboys owner benefits from every food and beverage item sold at the stadium and every pizza ordered from his Papa John’s stores by fans converging on the area.
In addition, the Super Bowl will produce nearly $10 million in ticket and parking taxes dedicated to paying off a portion of stadium debt that Jones guarantees.
In a news conference this week, Jones talked about the game lifting “all boats” economically in the region. As one of the most innovative owners in the NFL, he just happens to have more boats.
Cowboys spokesman Brett Daniels acknowledged the owner’s private business connections with this game but said, “You really host a Super Bowl for the region, prestige and global exposure, not for the money.”
Indeed, hosting the game can cost an owner money. Super Bowl preparations have tied up Cowboys Stadium since mid-January, Daniels said, precluding other possible revenue-generating events during that time.
Long term, the biggest potential payoff for the Cowboys owner could come if his stadium — and, therefore, Legends Hospitality Management, the stadium’s concessionaire — is picked to host the Super Bowl on a regular basis.
“Having that sort of revenue and profit boost every four to five years increases the value of the company significantly,” said Mike Rawlings, chief executive of Legends.
Jones owns about a third of Legends, giving him a large interest in the company’s market value and profits, including from the Super Bowl.
Rawlings expects Super Sunday sales of food and beverages at the stadium to approach $5 million or more. Proceeds will be divided between the NFL and Legends. During the regular season, Legends splits revenue with the Cowboys.
Rawlings wouldn’t reveal that split, but typical agreements can give teams 35 percent to 50 percent of revenue, depending upon the category of item sold.
The concessions company was founded two years ago in partnership with the Steinbrenner family, owner of the New York Yankees, two investment firms and the Jones family.
Legends’ annual revenue is at least $150 million, Rawlings said. If the company continues its rapid growth, the enterprise has the potential to be worth several hundred million dollars, based on a comparison with a competitor, Centerplate, which was once publicly held.
Asked in a brief interview after his news conference if he agreed with The Dallas Morning News’ analysis of the potential valuation for Legends, Jones said, “Yes.”
For regular-season games, Legends also handles merchandise sales at Cowboys Stadium. But the NFL brings in a separate company for the Super Bowl.
On the pizza front, Papa John’s International expects a super boost from the Super Bowl, nationally and in North Texas, said John Schnatter, the company’s founder, chairman and co-chief executive.
The Jones family owns a 49 percent stake in 75 Texas Papa John’s stores, primarily in North Texas. Papa John’s, a sponsor of the Cowboys and the NFL, owns 51 percent. Nationwide, Papa John’s has 2,875 stores.
“I think we’ll have a record week in Dallas,” Schnatter said, boosted by out-of-town fans here for the game.
Super Sunday is one of the biggest days for pizza in America. Schnatter predicted his company would sell 1 million pizzas nationwide on Sunday, up from 900,000 a year ago. He estimated, roughly, that Jones’ stores would sell about 26,000 pizzas. Most of those would be sold even if the game weren’t played in North Texas.
Papa John’s declined to say how much revenue those numbers would produce. But multiplying by $10 (the special price for any large Papa John’s pizza in the days leading up to the game) offers at least a ballpark idea of possible revenues: a quarter of a million dollars for Jones’ stores and $10 million companywide.
Schnatter said Jones and the Cowboys have been good business partners. “I wish I had 30 more Jerry Joneses, frankly,” Schnatter said. “I couldn’t find a better partner.”
Jones acquired his stake in the Papa John’s stores in mid-2004, when they were losing money. “We’re talking about going from millions and millions of dollars negative to millions and millions of dollars positive,” Schnatter said of Jones’ stores, declining to be more specific. “He’s by far the most talented businessman I’ve ever met.”
Arlington contributed $325 million to the cost of Cowboys Stadium, funded primarily through an increase in the local sales tax. An additional $148 million of the original stadium debt involved bonds issued by Arlington and backed by Jones.
That obligation has two dedicated funding sources: a 10 percent ticket tax on stadium events and a $3-per-vehicle parking tax that produces minimal revenue.
The NFL estimates that the ticket tax for the game will total about $9.5 million, said Bill Lively, president and chief executive of the North Texas Super Bowl Host Committee. According to the committee’s agreement with the league, the NFL pays the tax to the city, and the committee reimburses the NFL. It’s the host committee’s single largest expense.
The ticket tax ultimately benefits Jones by paying down a debt that he guarantees.
Indirect benefits for the host owner and team go beyond prestige and exposure. Even though the NFL gets all the revenue, the extra tickets that the host receives can benefit current ticket holders and be used as marketing incentives for season ticket and suite renewals.
The Jaguars, according to Prescott, the team’s CFO, were able to increase renewal rates because of Jacksonville’s Super Bowl.
As host, the Cowboys receive 5 percent of Super Bowl game tickets. The two participating teams each receive 17.5 percent of the tickets, the 29 other teams each receive 1.2 percent and the NFL gets 25.2 percent.
Also, every suite holder at Cowboys Stadium is entitled to buy his or her full allotment of tickets, half in a suite (not necessarily their own), half elsewhere in the stadium. These tickets come out of the NFL’s allocation.
“The Super Bowl enhances value for everybody,” Jones said, and makes the stadium more attractive for events in the future.
Last year, less than three weeks before the Super Bowl, Sun Life became the naming rights sponsor for the Miami Dolphins’ stadium. Some think hosting the game helped the timing of that deal, which directly benefited the Dolphins.
That won’t happen this year for Cowboys Stadium. But New York Giants co-owner John Mara has said that hosting a Super Bowl could help his new stadium attract a named sponsor.
New Meadowlands Stadium, shared with the Jets, hosts the 2014 game. Still, Mara said last year after the site announcement: “You do not make any money hosting the Super Bowl. You are lucky if you break even.”
He could take some tips from Jerry.
Courtesy: GARY JACOBSON | DMN