Wednesday, April 8, 2009

Timbers Ticket Sales Underwhelming

Ticket sales for the inaugural Portland Timbers season in MLS do not seem to be going well. It was with much fanfare just three weeks ago that MLS announced Portland as its eighteenth expansion club. Portland’s strong fan support was one of the main reasons cited for granting Oregon’s largest city with a club. However, the famed Timbers fans don’t seem to be supporting the expansion bid with their pocketbooks as ticket sales are lagging.

Almost immediately after the March 20 expansion announcement, the Timbers began taking $50 deposits for the 2011 season tickets. The Vancouver Whitecaps expansion club announced March 18, slated to begin play in 2011 as well, accepted $50 deposits as well. Vancouver sold out its initial 5000 ticket allotment within 48 hours.

Portland’s sales have not gone as swimmingly. The Timbers front office is reluctant to release up-to-date figures, but does say that as of March 24 only 1,500 deposits had been taken by Portland—a far cry from Vancouver’s brisk sales. The team has also sold 1,000 Timbers 2009 season tickets, which also secure a 2011 season ticket deposit. The Timbers will not release more recent figures, but all told the club was 2,500 deposits short of Vancouver’s benchmark.

The organization is also aggressively marketing the 2011 season ticket deposits. Ads are appearing frequently on radio and internet noting that the first round of deposits will end April 30. Vancouver’s initial round is already closed.

Granted many fans may not be willing to fork out $50 now in a bad economy when there will likely be future opportunities to secure season tickets, this is certainly an inauspicious beginning for Merritt Paulson and the Timbers. They are already confronted with a $15 million hole in funding for the entire expansion. A recent Bloomberg News report also details the many difficulties Paulson will have in finding the additional funds. Local blogger Jack Bogdanski is also hammering the financial proposals by Paulson and the City and seems to be gaining some traction as the local daily has also cast a questioning eye towards the deal recently.

There is a long road ahead for Paulson and from the looks of it, the road could be more washboard than paved.

32 comments:

Bruce said...

Bogdanski is a certified liar. Read his blog and you'll see that his math is skewed politically as he's continuously using a figure of $130 million for his calculations. The Bonds used won't even reach half of that. Seriously. He's nuts.

One thing missing from the numbers is that EXISTING season ticket holders are also included (this is separate from the 1000 new 2009 tickets purchased). It would be great to be sold out of the first wave, but several thousand season tix sold in two weeks is still a decent number.

Jason D said...

I would think that the uncertainty surrounding the shortfall is a major factor in the slower-than-expected ticket sales.

While it's unlikely that MLS would pull out after already making the announcement, you have to wonder if people on the ground in Portland are taking a wait-and-see attitude; until work begins on PGE Park, they might not believe it's actually going to happen.

Bob said...

Your numbers are from March 24. Today is April 8. How many tickets have been sold between then and now?

It is way too premature to proclaim ticket sales to be underwhelming. It is also incorrect to think that Bogdanski has any influence in this city.

FogMachine said...

As I recall it was the opposite way around. As of march 24th they had sold:

1,000 MLS deposits

AND

1,500 NEW season tickets

I emphasize the word new because that does not include all the season tickets that already had been purchased. Many speculate that as of the 24th over 1,000 season tickets already existed.

I would say 3,500 spots reserved for MLS is pretty damn good for 4 days.. when the first game is over 2 years away.

Jack Bog said...

he's continuously using a figure of $130 million for his calculations.

Construction: $90 million.

Franchise fee: $40 million.

All of that is investment that will require a return to someone -- the Paulsons or the bondholders. Bruce the name-calling loan officer, you understand that, right?

Bruce said...

Jack Bog - Of course I understand that, ye who is so scared of the truth that he bans posters on his website that challenge his awful assumptions.

$52.5 million of that is Paulson's cash. More of it is additional private investment. It's not bonded debt. It's never going to be paid back by a tax of any sort. So it's disingenuous at best and an outright lie at worst to claim that taxpayers are on the hook for $130 million in repayments and then claim that there's no way the payments can be made. Your argument would be stronger if you used the real bond numbers and didn't kick people off of your site for disagreeing. Tickets are just one of many revenue streams for the income of the teams and for the bond repayments and to only look at that one stream is distortion. Paulson's looking to get a return on his investment. No doubt. But it's not $130 million of taxpayer financed debt.

Jack Bog said...

No one ever said it was, Bruce old buddy.

It's $130 million of investment. Paulson and his investors will want a return on their investment, just as the bondholders will.

And the Timbers and the Beavers will never produce anything near a reasonable return on investment. A 6% return on a $130 million investment is $7.8 million a year. There's no way these bush league teams will ever turn that kind of margin over operating expenses.

I do ban people like you from my blog, for obvious reasons.

Shawn said...

Guess what Jack Bog - the franchise fee was $35m. And why can't the Timbers make a profit of $7.8 million a year? Toronto makes more than $10m and they are in year 3, Seattle will make $20m in their first year. Sure they don't pay rent but in a decade their profit will be in the $75m to $100m ranfe.

The Fan's Attic said...

The ticket sales numbers are directly from the Timbers organization. They won't give me an update and frankly I think it is because the sales are underwhelming.

Vancouver sold out of it's initial 5,000 deposits in 48 hours. Portland is still advertising its initial 5,000 three weeks later and now setting some sort of deadline.

It is clear that ticket sales are not going as well as they would have hoped. They would rather not spend the money on advertising but that is not the case.

There are probably several factors that play into this, some of which I mentioned in the post, including but not limited to the time until the season's start, the economy, and possibly disinterest.

As far as Bogdanski is concerned, yes he may not be a power player in Portland, but he has shown himself to be a person of great persistence and he bangs his drum loudly and some important people listen. Personally, I think he is a bit too much like a "Get off my lawn" guy, but he has show himself to be out front on many issues that then get picked up on a broader scale.

Jack Bog said...

The Portland Freakin' Beavers and the Portland Freakin' Timbers will never, ever produce anywhere near $7.8 million of profit above operating expenses. At any time in the lifetime of anyone who is reading this. The total ticket sales of the two of them probably will fall short of that number. Have fun, kids, but you are dreaming.

The Fan's Attic said...

Jack Bog and Bruce, how about you two talk past each other a little bit more? That will be fun.

Bruce's point is that you keep citing $130M as total cost to the city, which is incorrect. Jack's point is that there needs to be a ROI for Paulson above and beyond the repayment of the bonds.

Great...now that you guys understand each other's points, quit being internet flamers.

Bruce has a valid point and so does Jack. But, I would pose to Jack that all Paulson, et al., have to do is increase the value of the franchise, not necessarily turn an operating profit every year. If Paulson can sell his interest in the franchise, or a portion of it, for a profit, then that's all that matters.

As a matter of fact, I'm pretty sure the organization won't make a profit for the first few years as most businesses do not.

As for Bruce, don't be naive, Portland will never make any money out of this deal. It'll pay back the bonds, maybe, but it won't be a financial boon to the city. Sports teams never are, rather the common argument is that they add to the social capital of an area.

Jack Bog said...

I didn't appreciate being called a "certified liar" by some goofball loan officer who mischaracterized my writings. Otherwise, the whole Paulson deal is so stupid that it doesn't need me to make the case against it.

This is mostly about taxpayers being fleeced for the construction company owners' mafia and the unions -- just like on "The Sopranos." Delusional sports fans like "Bruce" are mere pawns in the game.

Shawn said...

So Jack, if the Portland Timbers earn $7.8m a year profit are you going to stop writing your ridiculous blog after issuing a public apology?

Jack Bog said...

That would be the safest bet I ever made. You are truly detached from reality.

Shawn said...

What do the NFL TV & Sponsorship deals pay each team? Doesn't the English Premiership get $2 billion a year from Sky for its twenty clubs? Ya $7.8m is way out of reach.

Bob said...

Have many companies have you run in your lifetime, Jack?

Finnegan said...

Jack,

You are a certified liar and I would be more than happy to point out the numerous occasions that you have lied on this issue alone on your blog. Not to mention the paranoid, racist, homophobic and sexist crap your supporters post in the comments that go untouched by yourself.

Since this is the only forum that you actually engage substantive criticism as you ban anyone who disagrees with you and your 10 sycophants I will point out the utter folly in your argument on this blog (it's amazing someone that plays so fast and loose with facts and the truth could be a law school professor but then again Bush became President so I guess anything is possible)

Okay, if you had read the agreement as laid out to City Council last month (something tells me you have but since the facts don't jibe with your bitter, angry world you ignore them) you know that the Paulson family money has guaranteed payments on the bonds for their projected 25 year lifetime so your inane statement about Paulson and profit is completely pointless. It doesn't matter if Paulson gets 1 person or 24,000 per a game the taxpayers are protected.

Yet you persist to LIE, yes LIE, that taxpayers are on the hook here. And bizarrely, are now suddenly worried about how much money Merritt Paulson is going to make on this deal.

You also like to use a 6% number on the bonds, and the $130 million price tag (both of which you are pulling out of your you know what) but won't account for baseball attendance at the new stadium.

Finally, you have slandered and simply made up LIES about the good people who support this effort. You have, without any evidence whatsoever, slandered the 300 + people who came out to support MLS to PDX by accusing them of being paid by "union bosses and construction company owners". That sir is what I call a LIE. You are a LIAR.

Speaking of lies, why have you chosen to omit your blog from your curriculum vitae in your bid to foist your insanity on the good people of University of Montana? I would provide the search committee with a link to your borderline insane rantings but frankly any way we can rid this city of your pestilence and filth I will take.

Bruce said...

http://www.portlandonline.com/omf/index.cfm?a=231170&c=49495

There's plenty of revenue from the stadium to cover the expected debt on the spectator fund bonds ($31.6 million on both stadiums). PGE Park would generate about $1.6 million a year in ticket taxes and rent. $13.8 million would be conventional bonds, probably at 5% for 25-year payment of $968,000 per year (or Jack's 6% for 30 years - $993,000 basically the same annual cost). The rest ($17.8 mil) might be higher rate bonds, maybe at 9% for 25-years, a cost of about 1.8 million a year. So total stadium revenues into the spectator fund would need to be about $2.8 million from both stadiums - a projected need from the baseball stadium of $1.2 million in ticket tax, rent and parking. That's the end of Portland Timbers/Beavers known obligation for this debt repayment. The rest is $18.5 million of URD debt and the $15 million gap which may or may not be a URD. We can debate the usage of URDs if we wish, but that debt gets retired through a different revenue stream entirely.

I think I do share a common question with Jack, which is the status of the existing debt on PGE Park and how it is repaid going forward. It is a legitimate question that deserves an answer.

Jack Bog said...

We can debate the usage of URDs if we wish, but that debt gets retired through a different revenue stream entirely.

And what revenue is that? And how do the Paulsons and their investors get a return on their investment?

I am glad I don't own stock in the bank that you work for.

Pablo said...

Bring MLS to Miami.

Bruce said...

As The Fan's Attic provided: Paulson is probably doing what most sports owners are doing, looking for a ROI of his $47.5mil when he sells the team. Example: Howard Shultz bought the Seattle Sonics for $200 million in 2001. He sold the team for $350 million in 2006. Good or bad investment?

I am not privy to his terms with the 11.8 million of private investment that he's pursuing. If it's straight debt it could cost between $800K and $1mil per year depending on repayment terms. It might be a 30% ownership stake in the team to be realized monetarily when the franchise is sold. It might be a gift from his grandmother. But It's a good question to determine if it directly affects the operating costs.

As for URDs, you know they are paid with future property tax revenue from the URD district. Frankly, I think this is the strongest concern and argument against this plan. If those opposed to this project focused solely on the URDs and that portion of funding you might gain some traction. But there's a huge difference between the repayment mechanisms of $33.5 million in URD funding and the total expense of $125 million. To simply lump them together in that way is a real distortion.

Garrett said...

Jack Bog is a total nut. I work with one of his students. He apparently has no idea his students have 0 respect for him. Notice how he doesn't actually point out anything but false numbers he made up. Finnegan just used him as toilet paper and he didn't have anything to say about it.

Oh and Jack...revenue is very mixed. For your information there are lots of revenue streams in sports. You can't be so naive to believe it costs $3.00 for a 22 ounce soda can you? Money is made through a lot of different angles including the team gaining in value over the years.

You can keep ranting Jack. Its sort of funny reading your inane blithering arguments about how the MLS is going to fail. You could literally take the exact things you're saying right now and replace them with the same arguments people made in the 70s against the NBA. I wonder how those folks that argued against the NBA in the 70s feel now?

Bob said...

Why would Failed Journalist Jack be interested in examining both sides of an argument and learning the facts? The secret is that Failed Journalist Jack could care less about the stuff he posts on his blog. If he truly cared about stopping MLS from coming to Portland wouldn't he have shown up and testified against it? Wouldn't he have organized an opposition to stop it? Wouldn't he have interviewed some of the actors involved? Wouldn't he have done the wee bit of research about the league? Wouldn't he have done something other than post untruths on a blog that City Hall folks laugh at?

When was the last time you saw Failed Journalist Jack at a City Council meeting? Or a neighborhood association meeting? Or campaigning for candidates? Or engaging people with differing views in an honest discussion about serious issues?

Never

For Failed Journalist Jack none of this is about making Portland a better community. This is simply an online game to distract him from a mundane job at a 70-something ranked law school.

Garrett said...

@Bob

Right on. Bogdoucheski is really nothing more than a joke to everyone but his sycophants. All 18 of them.

drgogol said...

Every time I come across the 'thinking' of Chairman Bog I am amazed that a man of such intellectual, moral and personal vacuity is employed as a teacher of anything anywhere. What a charlatan. I pity the women, children and students in his life.

The Fan's Attic said...

With all due respect Garrett, Mr. Bogdanski is a five-time recipient of LC Law School professor of the year award, selected by the students.

drgogol said...

That tells me more about the quality of L&C law students than anything I might have learned elsewhere.

Google the terms "Jack Bogdanski" "Sarah Palin" and "pregnancy" and then tell me how superlative this joker's mind is.

Andrew said...

Clearly all the students who voted for him were paid off by Construction Unions...

Stan said...

-----
The Fan's Attic said...

As far as Bogdanski is concerned, yes he may not be a power player in Portland, but he has shown himself to be a person of great persistence and he bangs his drum loudly and some important people listen.

Personally, I think he is a bit too much like a "Get off my lawn" guy, but he has show himself to be out front on many issues that then get picked up on a broader scale.
--------

You have just, in so many words, actually called him an irrational blowhard, and cited the worst possible reason to listen to the guy--the belief that others might be. An Emperor's New Clothes phenomenon if I've ever heard one.

His belief that you have to make a 6% return on the franchise fee (what, is he forced to give the franchise away at the end?) clearly comes from nowhere but the dark corners of his own frightening mind, a view I'd rather have been spared.

I think others only do him favors by calling him a "liar"--a liar has the decent respect for the truth, purely as an opponent of it, to cover it up. This fella is just too arrogant to bother with truth in the first place.

The anatomy of a blowhard is to half-ass the research, still believing that your 2 minutes of investigating the issue is worth more than the weeks others have spent doing it. It's too lazy find out all the facts, but also too arrogant to acknowledge that publicly.

People flock to blowhards because they crave two things in life--simplicity and conflict, and blowhards deliver both. . . at the expense of seriousness and truth.

Tom A said...

"I do ban people like you from my blog, for obvious reasons."

...you're a pompous ass?

Garrett said...

@TheFansAttic

You said, "With all due respect Garrett, Mr. Bogdanski is a five-time recipient of LC Law School professor of the year award, selected by the students."

Tell that to his student currently sitting next to me. He would beg to differ. Just cause Bogdanski is kind of funny while teaching a class doesn't mean he's an intelligent policy maker or understands anything beyond his narrow reach.

When I was in college there was a professor who made fun of Bill Clinton and Al Gore relentlessly. I thought it was hilarious. Two years later he was making Bush jokes... it doesn't mean he was some sort of policy making genius...he was just funny.

Bob said...

Paulson on the radio a couple nights ago said "5000 MLS season ticket equivilants sold thus far without any marketing". He said they would go full-on marketing once the deal is done done.