- The Washington Times - Wednesday, October 17, 2001

The Washington Redskins can't win, rarely score and are a near-nightly source of jokes for Jay Leno and David Letterman.
Economically, however, the Redskins are thriving. The franchise is about as close to bulletproof as any American company, impervious to recession, war, fan malaise and even Marty Schottenheimer.
The Redskins dropped to a National Football League-worst 0-5 after a dismal 9-7 loss to the Dallas Cowboys on Monday. The franchise's financial numbers are considerably brighter.
The Redskins are firmly on track this season to become the first NFL team to generate more than $200 million in annual revenue, despite their record, the worst economic conditions in the United States in a decade and the upheaval caused by the Sept. 11 attacks. The Redskins' earning power produces about $87 million in yearly operating income, and they double the revenue of some NFL teams. Among U.S. sports teams, only baseball's New York Yankees generate more revenue than the Redskins.
The Redskins have a potent combination of revenue producers: the NFL's largest stadium in FedEx Field, the league's highest average ticket price and largest club seat section, a waiting list of more than 60,000 for season tickets, and a loyal corporate community that purchases luxury suites and stadium signs. Add to that the NFL's long-standing policy of sharing all TV and merchandising revenues, and the Redskins have a lock-solid recipe for economic security. Forbes Magazine reflected as much last month when it estimated the franchise value to be $796 million, the highest in American sports.
To be sure, the Redskins' on-field struggles have had an impact: A less-than-capacity crowd of 76,573 witnessed the Sept. 30 home opener against the Kansas City Chiefs, and the game program was not as full with advertising as usual. But a few no-shows, lost hot dog sales and missing program ads vastly pale in comparison to all of the other channels of revenue. And the tickets sold for less than face value in EBay auctions don't matter to the Redskins; they received full price for the seats months ago.
"Remarkably, sporting businesses are probably some of the better businesses to own in a recession," Redskins owner Dan Snyder said during a recent appearance at the National Press Club. "Our business is just of a different type."
Snyder has no plans to sell the franchise and stadium he bought 29 months ago for a record $800 million. But even in this depressed climate, there is little doubt within the sports industry that he could get at least $1 billion if he did sell.
"It's just hard to think of the NFL really taking a step back because of what's going on right now," said Chicago sports consultant Marc Ganis, who frequently works with NFL teams. "The games are still an event, and the NFL is still far and away the dominant player in sports."
The NFL's gargantuan TV contract will pay each of the league's 31 teams more than $65 million this season. But another key difference between football and other major league sports is the annual nature of its sales operations. All major league teams sell season tickets and luxury seats on a yearly or multiyear basis. The same is true for local broadcasting contracts and team sponsorship. But only football is not heavily dependent on walk-up ticket sales or midyear sponsorship deals to fill out what couldn't be sold in the offseason.
In the Redskins' case, all 86,484 seats for each game are sold, and nearly every available inch of FedEx Field is covered with corporate advertising and will be for years. The Redskins' $50 million radio contract with WJFK-FM lasts through 2005, and the $205 million stadium naming-rights deal with FedEx Corp. extends through 2026.
"We're fully season ticket based and multiyear based on the sales side," Redskins spokesman Karl Swanson said. "Everything here is basically sold out. Whether the fans continue to come this season in full numbers is clearly dependent on the team's performance. But generally speaking, we have a lot of security."
That security, however, can be a double-edged sword. Thanks to the move to the privately held FedEx Field and Snyder's salesmanship, the Redskins have nearly tripled revenues since 1996, the team's last season at District-owned RFK Stadium. But if the economy and team continue to falter, Snyder will have far less ability to raise ticket and sponsorship prices when rare opportunities do arise.
"I don't really see their value or revenues going down, but based on what's happening to and around them, I don't see it necessarily going up either," Forbes' Michael Ozanian said.
Snyder and his troops have a motivation to keep pressing stronger than any enraged Redskin fan: creditors. Snyder and his partners, who include business colleague Fred Drasner and Snyder's sister Michele and father Gerald, took out more than $500 million in debt to purchase the Redskins and FedEx Field. The debt service amounts to annual payments of about $50 million, eating up much of what is left after expenses and taxes are paid.
The Redskins, along with numerous other NFL teams, are awaiting the results of a lengthy internal review of league financing rules. NFL officials worry that franchise values have grown beyond the ability of many owners to comfortably pay their debt, and the revised rules should provide a clearer framework of what is permissible. Once that review is done, Snyder will use his hefty revenues to refinance his debt and lower the yearly obligations.

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