Negotiations on a new downtown stadium for the Atlanta Falcons continue behind closed doors. But one thing seems clear: Much of the cost will be passed along to fans, some of whom are already bracing for a hit.

An examination by The Atlanta Journal-Constitution of the three NFL stadiums built in the past five years shows that ticket prices jumped by an average of 26 percent in the season the stadiums opened, and that many fans paid thousands of dollars more in personal seat licenses merely for the right to buy tickets.

If the same happens here, some of the Falcons’ most ardent fans could be priced out of the games, especially those in the most marketable lower-level seats. And the ticket cost doesn’t account for the concessions and souvenir prices that also sometimes rise with a new stadium.

With a preliminary price tag of $948 million, the proposed Falcons stadium has been described by the team and the Georgia World Congress Center Authority as a public-private project that would be built with an estimated $300 million in bonds secured by hotel-motel tax proceeds. The Falcons would be on the hook for the remaining $648 million. While the team has not responded to questions about how its portion of the cost would be recouped, experts expect the answer to include stadium naming rights, luxury suite sales and higher fan costs.

While a 26-percent increase would hike the price of the average Falcons ticket to about $87, based on last year’s average of just under $69, Judy King of Smyrna is concerned that her front-row, lower-level seats on the Georgia Dome’s 20-yard line would become cost-prohibitive in the new retractable-roof stadium being negotiated by the Falcons and the GWCC Authority, a state agency.

“I’ve paid my dues to sit in those seats,” said King, 67, a Falcons season-ticket holder for 31 years.

Her tickets currently cost $129 per seat per game — she paid $13 per game when she became a season ticket-holder in 1981 — and she gasps at the thought of what equivalent seats would fetch in a new stadium.

“Oh, my God, I have no earthly idea,” she said. “Two-hundred, 250 dollars a seat?”

In addition, she is concerned that she might be required to purchase personal seat licenses, which are one-time charges for the right to buy season tickets for specific seats for a prescribed number of years. Seat licenses were a key part of the financing plans for recently built NFL stadiums in Dallas and New York.

If the Falcons sought a relatively modest license fee, King said she might pay it, albeit unhappily. “If it’s more than $500 or $1,000, I’d tell them, ‘I’m sorry, but you just lost one of your most loyal fans,’” she said.

The Falcons say no decisions have been made on seat licenses or ticket prices. The team declined to comment further for this article, contending “it’s too early to be able to answer these questions in any kind of detail.”

The questions, though, are on their customers’ minds, as demonstrated at the team’s annual invitation-only “state of the franchise” event for season-ticket holders earlier this month.

During a videotaped question-and-answer segment, a fan told team officials that a new stadium “sounds like it might translate into much higher ticket prices” and asked, “What is the organization’s commitment to keeping prices within reason?”

Falcons owner Arthur Blank initially delegated the question to team president Rich McKay, who feigned an attempt to change the subject. Then McKay said the Falcons “have done nothing that models what the price of a ticket would be in 2017,” when they hope the new stadium will open.

“Arthur has ... told us over and over again that access to the stadium [for] the fan base that we have, we have to remain committed to,” McKay said. “And we will.”

Blank added: “How the ticket prices end up, I don’t know and Rich doesn’t know. Obviously we’re fooling around with different levels of cost of construction, etc.

“The important thing ... is that we want to make sure that inside the stadium reflects the same distribution of population that we have on the outside of the stadium,” Blank said. “We want to make sure we represent all of Atlanta, not just a certain level of Atlanta. That’s going to take a tricky design, a thoughtful design, but we are committed to doing that.”

The comments seemed to suggest that if the prices of prime seats rise sharply, efforts would be made to keep other seats more affordable.

But Robert Boland, a sports management professor at New York University, said fans are “not misguided” to worry about substantial price increases in a new stadium.

He said the escalating costs of stadiums, coupled with the declining market for naming rights — in which companies pay big bucks to have their names attached to the facility — have made teams more aggressive in covering the construction costs and resulting debt with the revenue generated from tickets, license fees and suite sales. The higher prices “have killed some of the honeymoon effect of new stadiums,” Boland said.

Professional football is one of the pricier sports to attend. Last season, it cost a typical family of four $391.64 to attend a Falcons game, according to Chicago-based Team Marketing Report’s annual fan cost index. That figure includes average-priced tickets, parking, food, drinks, two programs and two caps. The Falcons’ costs were below the NFL average of $427.21 last season.

According to Team Marketing Report’s surveys, the New York Jets and New York Giants increased their average ticket prices by 32 and 26 percent, respectively, compared to a league-wide increase of 5 percent, when they moved into their shared new $1.7 billion stadium in East Rutherford, N.J., in 2010.

In 2009, the Dallas Cowboys hiked prices by an average of 31 percent when they moved into a new $1.2 billion stadium in Arlington, Texas, compared to a league-wide increase of 4 percent that year.

And in 2008, the Indianapolis Colts increased prices 14 percent, compared to the league average of 8 percent, when they moved into a new $720 million stadium that was financed with more taxpayer money than the others.

Even the increases reported by the ticket-price surveys understate the economic impact of new stadiums on some fans because the figures exclude “premium” seats, defined as seats that come with an amenity such as access to a private club or dining area.

A trend in newer stadiums — one the Falcons have underscored in talks with the GWCC — is to move some club-seating areas from their traditional locations in the middle bowl to the lower level. Just 55 percent of the Georgia Dome’s 5,740 club seats were occupied last season, according to GWCC figures. Moving some club seats closer to the field can give lower-bowl ticket-holders access to amenities, but also can force them to upgrade to premium seat prices.

The average NFL price last season for a ticket in general seating areas was $77.34, compared to the Falcons’ $68.91, while the average for a premium seat was $242.32, according to Team Marketing Report’s survey.

A new stadium could introduce Atlanta to the personal seat license, which no local pro team has tried to date. Sixteen NFL teams have sold PSLs.

According to a study prepared for the GWCC by sports management consulting firm Barrett Sports Group and obtained by The Atlanta Journal-Constitution, the Giants brought in $371 million, the Jets $293 million and the Cowboys at least $500 million from personal seat licenses. The Giants’ and Jets’ PSLs ranged from $1,000 to $25,000 per seat, depending on location, and the Cowboys’ from $2,000 to $150,000.

The study estimated the Falcons potentially could generate $100 million to $200 million from PSLs. But Boland, the NYU professor, said the team would have to tread cautiously, partly because the market’s fan loyalty is divided between pro and college football.

“You’re going into the teeth of a very divided football market in Atlanta,” he said. “While the NFL and bankers will want [the Falcons] to charge a PSL, they’re going to have to be very careful with pricing.”

Teams have taken differing approaches with PSLs. In New York, for example, the Giants charged a license fee on every seat in the stadium, while the Jets excluded upper-level seats.

An NFL program designed to help teams finance new stadiums is based on the premise that new stadiums mean more revenue. The Falcons could borrow up to $150 million from the NFL, as well as qualify for a league grant of another $50 million. Up to $100 million of the loan could be repaid over 15 years from incremental increases in the visiting-team share of revenue from the stadium.

Aside from tickets and PSLs, other revenue streams that would grow in a new stadium include sales of luxury suites, advertising and concessions, according to the Barrett study.

The New York, Dallas and Indianapolis stadium deals differed in significant ways. But what they had in common was that each generated substantial additional revenue that drove up franchise values. Similarly, the Barrett report concluded that a new stadium here likely would increase the Falcons’ value “in the $175 [million] to $225 million range” and advised the GWCC that “consideration could be given to including a profit-sharing provision if [the] team is sold within a certain period after development of a new stadium.”

In Forbes magazine’s most recent annual survey of the NFL, the Falcons were estimated to be worth $814 million, 27th in the 32-team league.

The 125-page Barrett report, dated April 19, was based on an open-air stadium, which was the focus of negotiations between the Falcons and the GWCC for more than a year, and has not been updated to reflect the change in plans, announced April 25, to a retractable-roof stadium.

For some Falcons fans, the economics are far less complex. King, the season-ticket holder who figures she has missed only three home games since 1981, just wants her tickets to remain within reach.

“Yes, I sit in a prime seat, but the people down there are your loyal fans, not your business people,” she said. “If you price us out of those tickets, then you’re going to have people sitting down there who only come for the social event.”

THE STORY SO FAR

Sept. 7, 2006: Falcons owner Arthur Blank broached the idea of a new stadium, predicting in an interview with The Atlanta Journal-Constitution that the team would have one in a decade or so. A new stadium “is not in the back of my mind; it’s in the front of my mind,” Blank said in that interview, adding that the team would spend the next few years investigating the matter.

April 13-14, 2010: The Georgia Legislature approved an extension of the existing hotel-motel tax in Fulton County through the year 2050 as a partial funding vehicle for a new or renovated stadium on Georgia World Congress Center property in downtown Atlanta.

May 18, 2010: Falcons president Rich McKay said in an interview with the AJC that the team’s preference would be an open-air stadium, rather than a renovated Georgia Dome, or a retractable-roof facility.

Feb. 22, 2011: The Georgia World Congress Center Authority, a state agency that oversees the Dome, agreed to enter formal negotiations with the Falcons on a $700 million open-air stadium. The idea was that the new stadium would be home to the Falcons and other outdoor events, while the Dome would continue to operate for events that required an indoor facility.

April 25, 2012: After more than a year of negotiations, the Falcons and the GWCC Authority officially abandoned the idea of an open-air stadium that would operate in tandem with the Dome, concluding that the financial and logistical challenges of two stadiums were too great. Instead, the parties said they had shifted their focus to trying to negotiate a deal on a retractable-roof stadium that would cost close to $1 billion and host indoor and outdoor events. The plan calls for continuing to use the Georgia Dome while a stadium is built nearby, then tearing down the Dome after the new facility opens.

What’s next: Negotiations continue between the Falcons and the GWCC Authority on terms of a possible deal. If a deal is reached, the Falcons hope to begin construction in 2014 and to begin playing in the new stadium in 2017.

COSTS OF BEING A FAN

The four teams that play in the NFL’s three newest stadiums — the Jets, Giants, Cowboys and Colts — last season ranked among the league’s seven most expensive teams in cost of attendance, according to Team Marketing Report’s annual survey:

Rank Team Average ticket* Fan Cost Index**

1. New York Jets $120.85 $628.90

2. Dallas Cowboys $110.20 $613.80

3. New England Patriots $117.84 $597.26

4. New York Giants $111.69 $592.26

5. Chicago Bears $101.55 $557.18

6. Baltimore Ravens $86.92 $486.19

7. Indianapolis Colts $85.34 $452.34

20. Atlanta Falcons $68.91 $391.64

NFL average $77.34 $427.21

*Does not include “premium” seats, defined as those that come with at least one added amenity (such as access to club areas).

** “Fan Cost Index” is a calculation of the cost for a family of four to attend a game, buying four average-priced tickets, two small draft beers, four small soft drinks, four hot dogs, parking for one car, two game programs and two caps.

PUBLIC-PRIVATE

A breakdown of the public and private sectors’ contributions to the construction costs of the three newest NFL stadiums:

Stadium location Team(s) Cost Public Private

East Rutherford, N.J. Giants, Jets $1.7 billion 0% 100%

Arlington, Tex. Cowboys $1.2 billion 30% 70%

Indianapolis Colts $720 million 86% 14%

Source: 2010 report by Barrett Sports Group for the Georgia World Congress Center Authority.

Note: Based on the latest cost estimate of $948 million for the proposed Falcons stadium, and based on the GWCC’s estimate that the hotel-motel tax would cover about $300 million and the rest would be the responsibility of the Falcons and the NFL, the breakdown for a new stadium would be 32 percent public funding and 68 percent private. However, all figures are preliminary, a deal remains under negotiation and some experts expect the cost to rise beyond $1 billion.

(source AJC.,com)

The Falcons declined HBO’s offer to appear on the popular show Hard Knocks, the team confirmed on Saturday.

As of late Thursday, the team was still considering the offer. Thomas Dimitroff, the team’s general manager, spoke about the offer on Thursday and stated that team needed to emphasis winning in order to improve their brand nationally.

The Falcons’ desire for an open-air stadium “presents a number of complex issues” that are still being sorted out, the head of the Georgia World Congress Center Authority said Wednesday.

The GWCC Authority, the state agency that operates the Georgia Dome, is 14 months into negotiations with the Falcons about a possible new downtown stadium that would be built with a combination of public and private funds.

Speaking at a breakfast event held by the Atlanta chapter of the American Institute of Architects at Ansley Golf Club, and in an interview afterward, GWCC Authority executive director Frank Poe detailed the challenges in finding a stadium solution.

He noted that while the Falcons want to play outdoors, other events that the state and city have no intention of sacrificing — the SEC football championship game, the Chick-fil-A Kickoff game, the Chick-fil-A Bowl and college basketball’s Final Four — “are not going to play outdoors.”

That leads to two options: a dual-stadium setup where the Georgia Dome and a nearby open-air facility would operate in tandem, or a single retractable-roof stadium that accommodates indoor and outdoor events.

Both models remain on the table and both have their own challenges, said Poe, who declined to predict which ultimately will be chosen.

In a dual-stadium model, a deal with the Falcons would need to be structured to ensure the Dome’s long-term viability, Poe said. Among issues that would have to be addressed are whether the open-air stadium could compete with the Dome for scheduling non-Falcons events and whether events could be held simultaneously at both facilities.

“Our [GWCC] campus already is very active, and oh, by the way, we’ve got a major arena [Philips] right across the street,” Poe said. “So when you start trying to peel back the layers of the onion associated with how you make two stadiums work together, the complexity elevates substantially.”

He was asked by an architect in the audience about a one-stadium approach of massively renovating the Dome and installing a retractable roof.

Poe did not rule that out, but he said such an undertaking could close the Dome for two years, forcing Falcons games and other events to temporary homes and costing both the team and the GWCC “a big number” in lost revenue.

As for building a retractable-roof stadium, rather than an open-air stadium, on the nearby site, Poe said: “We’ve always been open that if it needs to be a retractable roof, let’s consider that. We try to keep all of our options on the table, recognizing that sooner rather than later we’re going to have to narrow them.”

He elaborated on the narrowing process: “Is it one or two [stadiums]? And [what’s] the location and the cost? And then you start getting into sort of the structure of the deal.”

The Falcons have stated a preference for an open-air stadium, but have not ruled out other options.

“I know [the Falcons] are working aggressively to get to a point where they can come back and say, ‘This is the path we want to be on,’” Poe said.

He declined to discuss a timetable for a deal, in part because he’s not sure his would be the same as the Falcons’.

The Georgia Legislature two years ago agreed to extend Atlanta’s hotel-motel occupancy tax from 2020 to 2050 as a funding mechanism for a new or renovated stadium on GWCC property. Poe said the hotel-motel tax “is the only source of public revenue” to support a stadium project.

“Assume for purposes of discussion that is about a $300 million contribution,” he said, adding that a 2011 study put the cost of an open-air stadium at $700 million. “Who makes up the balance? Well, the team makes up the balance.”

He said NFL teams are “a hot commodity from a financing perspective” and their future revenues are “extremely bankable.”

(source Atlanta Journal Constitution)

Atlanta Mayor Kasim Reed says he doesn’t view removal of funds for a College Football Hall of Fame from a proposed state budget as any barometer of state Capitol enthusiasm for a new, publicly financed stadium for the Atlanta Falcons.

“I don’t take any message from it at all,” Reed said. “I know that the governor is committed to the stadium effort, that the Falcons are committed to it, and my message is real clear. We’re going to honor our commitment to be completely supportive to building a stadium. And that’s where I am.”

The mayor spoke about the a new Falcons stadium at the tail end of an interview about voter approval for a renewal of an essential sewer sales tax.

Reed says there’s still much negotiation to be done – and that he’s not likely to be deeply involved in those talks:

”The other parties can go on and work on their part of the equation. I’m only speaking for me, and what I have responsibility for, and that is the city’s contribution through our hotel/motel sales tax. [We] are going to completely support [owner] Arthur Blank and the Atlanta Falcons.

“Now, are there moving pieces? I’m not playing a significant role in those conversations. The governor and the Falcons are in conversations – and the Georgia World Congress Center.

Among the reasons Reed cited for pursuing a new stadium, and why he is emphasizing his support:

”I believe we will be awarded a Super Bowl, and I think we have the best owner in America….

“No city that has engaged in a game of chicken with an NFL team has emerged from it well. If you look at San Francisco, for goodness’ sake, the San Franscisco 49ers stadium is now going to be in Santa Clara. Santa Claire is not Gwinnett. I rode it. It’s an hour and 15 minutes away from the city of San Francisco. “

A 75-minute trip? That is Gwinnett at rush-hour. But you take his point.

By the way, a spokesman for Nathan Deal says the governor isn’t directly involved in talks with Blank, but has been kept apprised of the situation through the GWCC authority.

Updated at 12:55 p.m.: My AJC colleague Jeff Schultz, on the sports side of this equation, says that when he equates a new stadium with a Super Bowl berth, Kasim Reed isn’t making a promise that can’t be kept:

Cities with new stadiums in NFL almost always get Super Bowls. It’s dangled as perk/carrot for local governments to approve taxes to build shining towers with martini bars that NFL likes. So this isn’t unusual. Among cities that have been awarded Super Bowls because of new stadiums: Houston; Detroit; Phoenix (Glendale), Dallas (Arlington), Indianapolis.

Super Bowl week is more of a vacation/party week for owners/sponsors/celebs than a sports event, so they want nice weather (Los Angeles, San Diego, Miami, Tampa, New Orleans). Owners swore off Atlanta after ice storm last time it was here. (They lucked out with weather in Indy this year.) The Atlanta Sports Council used to regularly bid for Super Bowls but they knew it was a lost cause so they don’t even try anymore. But a new stadium would change that.

On a related note, I covered a Super Bowl in Minnesota once. The Metrodome was about 10-years old at the time I think. The game was awarded mostly as a reward to Vikings’ long time owners. But it was miserable. Nobody ever went outside. Everybody walked everywhere in those downtown pedestrian tubes. It was like living in a Habitrail.

(source Atlanta Journal Constitution)