How Much are the Steelers Worth? Forbes Ranks Team 14th, But Other Financial Indicators Less Promising

You love the Pittsburgh Steelers are you won’t be reading this. But how much are they worth to you? Again, if you’re reading this the answer is almost certainly “priceless.”

• Moving from the philosophical to the practical the question of how much they are worth takes on new meaning.

NFL franchises, save for the Green Bay Packers, are not public entities.

• That means that they need not open their books to anyone. 

Still, given that the National Football League is multibillion dollar enterprise, there will be no shortage of those who attempt to translate hypothetical value into dollars.

How Much Are the Pittsburgh Steelers Worth?

If memory serves (and if not the book is 6,000 miles away), Ed Bouchette’s 1993 book Dawn of a New Steel Age pegged the Steelers value at around 200-220 million.

My how things have changed, as Forbes recently pegged the value of the Steelers at 1.118 million dollars. This estimation puts the Steelers at at 14th just over the middle of the NFL pack in terms of market value, which is good considering that the Steelers are located in a modest market that is aging if not shrinking.

• Should Steelers Nation Care?

Steelers fans care fare more about completion percentages, rushing averages, Ben Roethlisberger and Troy Polamalu's health, and how few points and yards the defense gives up.

And so it should be.

• But its nice to know that our beloved team is nestled comfortably in the NFL’s value bell curve. 

It’s also important to keep in mind that these “values” mean little in football terms and are really only relevant should the team be put up for sale or if they should seek to borrow money. And no one in Steelers Nation wants to see the Rooney’s sell the team, and the last decade has taught us about what too much debt can do.

Looking deeper into the numbers, however, there are some caution flags that Steelers management, if not Steelers Nation itself should be wary of.

Theoretical market value means nothing in terms of competitiveness. Overall financial health is another question. On that measure, the Steelers are not quite as well off. Consider:

• The Steelers saw their value increase only 2% - which ranked 28th
• The Steelers debt burden came in at 18% which ranks them 13th in the league – this is one measure where lower is better

Of course the real importance or measure of debt is in your ability to pay it – a $500,000 mortgage is very different for a couple with a combined income of $175,000 per year to a single income family making $80,000 a year.

In terms of revenue, the Steelers made $266 million, ranking them only 20th in the league.

• The Baltimore Ravens, in contrast ranked 10th, raking in 292 million. 

Revenue is nice but that number is only the tally of how many dollars you bring in before you pay your bills. When you look at that number, the Steelers are slightly better at 18th in the NFL with 28.2 million in net income for 2012.

• Both the Ravens and Bengals ranked above the Steelers.

Looking Ahead at the Steelers Financial Future

Given some of these later numbers, it is easy to see why the team not only wants to expand Heinz Field but would like the city of Pittsburgh to pay for it. (Note, Steel Curtain Rising is on record saying that the Steelers should pick up the tab for Heinz Field expansion.)

While the Steelers overall performance is in line with, and in some cases better, than teams from comparable markets, they are also being out performed in every category by the Green Bay Packers.

• And their placement among the pecking order is by no means assured.

The Minnesota Vikings are set to get a new stadium which will enhance their value/revenue. The NFL desperately wants a team in Los Angeles, which will likely boost the value of the Raiders or Chargers or which ever team moves there.

These future developments don’t mean that the Steelers can’t and won’t have the financial health to compete the in the short and medium term future, but as a family owned franchise they’re going to need to make some wise decisions.

Thanks for visiting. Click here to check out the rest of Steel Curtain Rising. Or... Follow @SteelCurtainRis

Read More

Allegheny Judge says Steelers Failed to Prove Seat-Expansion Meets Requirements in Heinz Field Lease

Ask Steelers fans, and they'll tell you how expensive seats have become at Heinz Field in recent years. Now, thanks to a ruling by an Allegheny County Judge, the Steelers themselves may soon have that same opinion.

On Wednesday, Common Please Judge James Jones ruled against the Steelers and their bid for funding for a 3000 seat expansion to the south end zone of Heinz Field. Judge Jones said the Steelers failed to prove that such an expansion could be classified as a capital improvement under the team's Heinz Field lease.

The Steelers were seeking two-thirds of the cost from Pittsburgh-Allegheny County Sports & Exhibition Authority, the stadium's owner.

Here is a excerpt from the Pittsburgh Post Gazette, further explaining Jones' ruling:

Under that criteria,  the  team must show: that a similar addition or modification has been installed in at least half of all National Football League stadiums with at least 25 percent of the cost covered by federal, state, or local governments; that the change is "reasonably necessary" to maintain the team's relative economic position in the NFL with regard to stadium revenue and expenses; and that it is "reasonably necessary" to prevent Heinz Field facilities and amenities from becoming "materially outdated" compared with other stadiums built between 1999 and 2004.

Thanks for visiting. Click here to check out the rest of Steel Curtain Rising. Or... Follow @SteelCurtainRis

Read More

Expanding Heinz Field is a Good Idea. And One the Steelers Should Pay For....

“Paul Brown is a millionaire and needs a 200 million dollar stadium to do his job and the city is going to pay for it. I make 15 thousand a year and need a pick up to do my job, but the city isn’t going to buy me a pickup….” Brother Bob Johns, Society of Mary, - 1996 in Cincinnati, Ohio

Bob Johns was a throwback, a man who joined a religious order out of high school and never looked back. He was a “worker brother” a craftsman skilled in plumbing, masonry, carpentry and just about any kind of home repair. Br. Bob worked with reckless abandon. He well into his 60’s when I knew him, yet as a “go to the gym 3 times a week” 24 year old I could barely keep up with him.

Bob was also from Pittsburgh. He wore a black and gold Steelers winter hat, much like the one I wore to school in 1st and 2nd grade after Super Bowl XIII and Super Bowl XIV. He looked and sounded like one of my grandfathers. And while his sarcastic wit could get taxing at times, Br. Bob did come up with gems of wisdom like the one above.

All of which brings us to the subject of this post.

The Pittsburgh Steelers vs. the Pittsburgh-Allegany County Sports Exhibition Authority

The Pittsburgh Steelers would like to expand Heinz Field to the tune of 3,000 more seats in the south end of the stadium.

Their logic if flawless – more seats = more tickets = more concessions = more money.

• But there’s a catch.

The Steelers want the SEA to pay for it.

Not surprisingly, SEA is decidedly unenthusiastic about picking up the estimated 40 million dollar tab for the expansion.

• So the two sides are resolving it fashionably – they’re taking the case to court. 

As with any dispute, the devil hides in the details. The Steelers are fighting with the SEA over whether or not the Heinz Field Expansion counts as a capital improvement under the terms of their current lease.

You can read about the details from the Post-Gazette here. Not being a lawyer, it’s hard to say who is right in legal terms. However, if you use Br. Bob’s more mundane measures, the issue becomes much more clear.

Steelers Should Pay for Heinz Field Expansion

It’s hard to dispute Br. Bob’s point. Why should cities buy millionaires (or billionaires) the tools they need to do their job there are so many unmet health, housing, education and infrastructure needs.

• In plain English, the Steelers need to foot the bill for the Heinz Field expansion.

Before proceeding, allow me to admit to some hypocrisy. I supported the use of public funds to build Heinz Field.

Heinz Field was a capital investment well beyond the Rooney’s means and the Steelers could not remain competitive in Three Rivers Stadium. The Steelers essentially rented Three Rivers from the Pirates and the revenue arrangement favored the Pirates by a lopsided margin.

True to their word, the Rooneys reinvested the newly money newly from Heinz Field into the roster, and Steelers Nation enjoyed victories in Super Bowl XL and Super Bowl XLIII and appeared in Super Bowl XLV as a result.

The same principle must apply to Heinz Field expansion – Western Pennsylvania provided the Steelers with the platform they needed to be economically viable, but it’s up to the Steelers to sustain that viability.

If they need the extra seating revenue that badly then why not make the investment themselves? Given the Steelers stable ticket buying base, there should be little mystery into how long it will take them to see a return on investment.

And to put the 40 million dollar figure into perspective, the Steelers have paid Willie Colon:

• a restricted free agent tender of about 2.5 million in 2010
• a six million dollar signing bonus in 2011
• average salaries of 4.6 million dollars in 2011 and 2012

That’s approximately 13.1 million over paid to a single player who played in 13 games over 3 years. The math couldn't be simpler. That's 1 million dollars per game.

Steel Curtain Rising likes Willie Colon (when healthy.)

• Losing Colon may have hurt the Steelers more than Ben Roethlisberger’s injuries.

But if the Steelers can afford to pay Colon 1 million dollars per game, then they afford to invest 40 million dollars that they’ll recoup soon enough.

And, more to the point, I am sure Western PA’s police departments, fire engine squads, and schools could certain benefit from an injection of 40 million dollars.

Art Rooney II needs to get over himself on this one, and invest in his own facility.

Thanks for visiting. Click here to check out the rest of Steel Curtain Rising. Or... Follow @SteelCurtainRis

Read More