New stadium, big game yield promising marketing, revenue opportunities for the Patriots

By Meg Vaillancourt and Chris Reidy, Globe Staff, 01/30/2002

n unexpected trip to the Super Bowl on the eve of their move to a new stadium has created a unique marketing opportunity for the New England Patriots, sports marketing consultants said. "This is as close to a perfect-storm scenario as you're going to get," said Larry Moulter, who helped market the FleetCenter in Boston in the mid-1990s.

Since the first Super Bowl, in 1967, no team has ever appeared in the game and opened a new stadium the next season. Particularly in baseball, teams often achieve new levels of success on the field shortly after moving into a new facility, said Marc Ganis, president of Sports Corp. Ltd. of Chicago. The higher revenue from a new facility allows owners to spend more lavishly on players' salaries. On-field success rarely comes first.

Just moving into a new facility can give team revenue a big boost. Throw in a championship season, and the upside is hard to quantify, largely because the situation is so unusual, consultants said.

"We know that there are two things that drive revenue for a sports team -- winning and a new facility," said Dean Bonham of the Bonham Group of Denver, a sports consulting firm. "A revenue increase in the 25 percent range is not uncommon for a team moving into a new stadium."

The Patriots are well positioned to exploit their good fortune and the fact that they are about to move from one of the worst facilities in the league to one of the best.

Just this week, the mutual-fund giant Fidelity Investments agreed to buy the naming rights for the two "club lounges" at CMGI Field, the $375 million stadium being built by the Patriots next door to the current facility in Foxborough. Fidelity, which has no other naming deals at local professional sports venues, isn't the only one going ga-ga for the Pats, who meet the St. Louis Rams Sunday in New Orleans.

Demand for the remaining seats at CMGI Field has been brisk this week. The team offers special packages of Super Bowl tickets with the purchase of four or more club seats whenever the Pats are in the big game. When it became clear that the Patriots were a Super Bowl contender, fans began to respond.

"This week, it's really gone crazy," said Patriots executive David Pearlstein. Team merchandise such as hats, T-shirts, and uniform jerseys also has been snapped up by fans; at its Downtown Crossing store, Filene's sold out a week's worth of gear in a few hours, and more merchandise had to be reordered to arrive today, a spokeswoman for the chain said.

"Our motto for every element of CMGI Field was scarcity and value," said the team's vice chairman, Jonathan Kraft. "We wanted to limit supply and over-deliver on product -- for season ticket holders, club members, suite holders, and sponsors alike."

"We made a $375 million investment, and we need to develop a business that generates the revenues needed to support a return on that investment," Kraft said.

Unlike many other stadiums, CMGI Field was privately funded.

The Pats will recoup some of that investment simply because CMGI has more seats than Foxboro Stadium, 68,000 seats to 60,292, according to the Patriots media guide.

Foxboro had 504 luxury-suite seats and no club seats. CMGI will have 2,000 luxury-suite seats and 6,000 club seats. The season prices for a club seat range from $3,750 to $6,000. As of earlier this week, about 75 percent of club seats had been sold, Pats officials said; only seven of 80 luxury suites are still available.

The number of concessions and novelty stands will more than double. Foxboro had 117 concession stands; plans call for CMGI to have more than 350. And with six times the amount of concourse space, as well as wider aisles, it will be easier for patrons to get in and out of their seats to buy food and merchandise.

Kraft declined to discuss the team's financial information, but in 1999, the Patriots reported an operating profit of $354,000, one of the lowest in the league, on revenue of $113.5 million, according to documents filed in a lawsuit that involved the National Football League.

The documents noted that the Pats' operating profit has steadily declined from 1995, when it was $15.3 million; player costs rose substantially from 1997 to 1999.

In 1999, TV and radio stations paid the Patriots $8.6 million to broadcast games, according to court documents. In theory, a winning season should generate a larger audience and larger revenues for the Pats. That same year, the Patriots said they made $10.6 million from "advertising/parking /other," which they lumped together in the same budget line-item.

If the FleetCenter is any guide, CMGI Field should see some nice gains. Annual ad revenue from the old Boston Garden grew substantially when the Bruins and Celtics moved into the FleetCenter in 1995, from about $6 million to more than $10 million, Moulter said.

There will be fewer signs in CMGI than in Foxboro, about 30 versus about 50, but CMGI signs will be larger, and they will be deployed so that TV viewers will see them more often.

And, of course, the team now derives no income from the naming rights at Foxboro Stadium; the 15-year deal the team signed with CMGI Inc., a provider of Internet services, calls for the team to reap an average of $7.6 million a year over the life of the contract.

Neither the Pats nor Fidelity said how much the mutual-fund giant will pay to put its name on the CMGI club lounges. But consultants estimated that the naming rights will generate between $1 million and $2 million a year for the Pats. Foxboro had no club lounge. "It's a new state-of-the-art stadium, and it seemed like a good marketing opportunity," said Fidelity spokeswoman Anne Crowley.

When a new sports facility opens, all the best seats and all the best locations for marketing signage are quickly snapped up, Moulter said. What a winning record does is help a team unload its second-tier seating and less desirable spaces for placing ads.

"You can sell 100 percent of your [ad] inventory rather than 85 or 90 percent," he said.

The Patriots can also generate more revenue from themed merchandise they sell themselves at their pro shop and retail Web site. Royalties from merchandise sold elsewhere are distributed equally among all of the league's teams, said NFL spokesman Steve Alic.

Super Bowl merchandise could produce $100 million in sales, down from an all-time high of $130 million in 1997, when the Patriots played the Green Bay Packers in the big game, he said. All told, fans paid an estimated $2.9 billion for NFL-themed merchandise last year.

The Packers' national appeal, the appearance of two teams that hadn't been in the final game for quite a while, and a two-week window between the semifinal conference games and the Super Bowl helped make 1997 such a good year, Alic said. In 2002, there is only a one-week break between the conference championship games and the Super Bowl.

At the start of the season, the Patriots ranked 19th among NFL teams in terms of merchandise sold, Alic said. At the end of the season, they ranked 9th among the league's 32 teams and could move higher.

About the only thing working against the Pats at this point is a recession that has shrunk corporate marketing budgets that sometimes pay for luxury suites and in-stadium advertising. Of course, by the time CMGI Field opens next season, the recession could be history.

"All the chips are falling into place for this team," Alic said. "It's almost as if things are pre ordained from above."

Meg Vaillancourt can be reached at vaillancourt@globe.com; Chris Reidy, at reidy@globe.com.