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.
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.