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New Gophers’ stadium and Target Field raise a big question: Is Minnesota’s sports industry sustainable?

Can all of our pro teams and high-profile university programs survive amid the growing sports glut and clutter?

New Gophers' stadium and Target Field raise a big question: Is Minnesota's sports industry sustainable?
MinnPost illustration by Hugh Bennewitz

The University of Minnesota band will play, and the $288.5 million TCF Bank Stadium will host its first game Saturday.

The grass will grow, and the $545 million Target Field will take Twins baseball outdoors next April.

The legislative gavel will bang, and the effort for a new, nearly $1 billion Vikings stadium — the so-called “Metrodome Next” — will crank up next session.

The ball will bounce, and the lowly Timberwolves will attempt, somehow, to sell tickets at the aging Minneapolis-owned Target Center.

The puck will drop, and the Wild, for the first time since their birth in 2000, will struggle to maintain their nine-year-long sellout streak at the $170 million Xcel Energy Center.

Did we mention the University of Minnesota men’s and women’s basketball teams, both with loyal cores of ticket-buying and corporate-sponsoring clients? Or the Lynx pro women’s basketball franchise, forever reinventing its marketing strategy but annually failing? Or the Minnesota Thunder soccer and St. Paul Saints minor-league baseball teams, both with visions of new stadiums on their wish lists, but both buried by a lack of coverage in the strapped, understaffed and disinterested local newspapers?

As Air Force jets perform a breathtaking flyover Saturday to mark the opening of the new Gophers outdoor stadium, they will be best suited to see from their bird’s-eye vantage a Twin Cities sports market stretched beyond its capacity — “saturated,” as Timberwolves President Chris Wright describes it. And this increasingly competitive Minnesota sports glut comes at a time when the local and national sports industry is dealing with the financial wallop from the down economy.

TCF Stadium
Courtesy of the University of Minnesota
The Gophers’ TCF Bank Stadium makes its formal debut Saturday.

The Twin Cities sports market is about to be pushed by an increased inventory of luxury seats and more high-end ticket prices even as corporate sponsors reduce their marketing dollars and shake in their boots from the so-called post-AIG effect; that is, the fear that employees and customers will become outraged as moguls pay $150,000 for a stadium suite even as they are laying off workers.

The more Minnesota stadiums’ capacity grows — a total of more than 90,000 seats and 90 luxury suites in the two new stadiums — the more the market is pressed. TCF Bank Stadium and Target Field each have smaller seating capacities than the Metrodome, but both demand huge corporate support with their naming rights, signs and premium seating. That’s even as the Metrodome with its 100 suites remains home to the Vikings (for now). While Minnesota is blessed with a solid collection of Fortune 500 companies, most large firms have cut back on sports-related marketing locally and nationally or been leveled by the recession.

Good indicator: The NBA Wolves actually reduced prices for this coming season and even offered season ticket-holders a full refund if they lost their jobs this year. Still, a courtside seat at Target Center costs $1,550 per game.

The most telling barometer could be the NHL Wild, which has had a decade-long honeymoon in a marvelous arena with a cult following that still deeply feels the pain of the North Stars’ abrupt departure. As with corporate season ticket holders for other teams in the market, the Wild’s are scaling back, often from six to four tickets or from four to two. The Wild opted not to raise ticket price for this season; the top ticket per game goes for $86. Suite holders have face financial challenges, too.

Best (worst) example: Denny Hecker’s Xcel Energy Center suite needs a buyer.

Xcel Energy Center
MinnPost photo by Raoul Benavides
Xcel Energy Center, the home of the Wild, also has been the site of major concerts and political events, including the Republican National Convention and presidential candidate Barack Obama’s nomination victory celebration.

TCF stadium falls short
Even the attractive TCF Bank Stadium, which is center stage this week, hasn’t delivered as promised; about half of the indoor club seats are unsold, as are nearly a quarter of the luxury suites, according to a recent Associated Press report.

The Twins’ have sold 47 of their 54 suites, according to recent reports, and there is legitimate excitement about baseball moving outdoors again. But can they sell out 81 games with about 11,000 tickets costing $29 and more per game?

To talk with team executives, much of the pressure on the market is caused by the downturn in the economy. Teams nationally are being affected. The NFL, the nation’s most prosperous and popular league, could face TV blackouts in as many as a dozen markets this season, according to a recent report in Sports Business Journal, the national trade weekly.

Is this the new normal? Will customers who have cut back on their season tickets or corporations who have trimmed their marketing dollars come back in the fold, if and when the economy bounces back?

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A sports sponsorship symposium set for New York later this month includes a kickoff roundtable with some of the industry’s leading marketers. The title: “The Recalibration of Sports Sponsorships and Event Marketing.” Apparently, those in the know are preparing for a structural change in the way corporations back sports properties.

Minnesota’s issues
But there is more for Minnesotans to be concerned about than the national economy’s impact on local teams. There is the changing face of sports leagues themselves and, most importantly, the inescapable wealth — or lack of same — of the Twin Cities market.

Last week, Dallas Cowboys owner Jerry Jones criticized some NFL owners’ attitude toward the languishing stadium effort for the Vikings.

Jones leads a group of owners who believe the longtime “socialism” of the league — in which a franchise in tiny Green Bay gets the same shared revenue as the behemoth New York Jets and Giants — should be scrapped.

“Right now, we are subsidizing this [Twin Cities] market,” Jones told reporters at the Dome. “It’s unthinkable to think that you’ve got the market you got here — 3.5 million people — and have teams like Kansas City and Green Bay subsidizing the market. That’s going to stop. That’s on its way out.”

Jones, of course, has a new $1.15 billion stadium, with more than $300 million in public subsidies. He’s got a lot of bills to pay.  Jones said he won’t take resources “away from the Cowboys so that I can help the Vikings.”

But even if the Vikings get a new stadium — and we have many miles to walk, issues to resolve, dollars to find, priorities to address and political leaders to engage before then — can this community support it and all the other facilities in town?

Vikings stadium concept
Ellerbe Becket
Here is one of several concept designs for a new Vikings stadium.

Vikings officials believe the answer is yes; the team remains popular. The one-game-a-week nature of the NFL reduces a fan’s costs. This is a Vikings town, what with about 58,000 season tickets sold for the 2009 season. Still, there is concern about the glut of luxury suites and corporate dollars needed to support yet another new facility in the market.

Before the opening of TCF Bank Stadium this week, there existed about 220 suites and 3,900 club seats in the Metrodome and the two multi-purpose arenas, Target Center and Xcel Energy Center.

With the opening of the Gophers’ football stadium and Twins ballpark, there will be about 310 suites and more than 8,200 club seats. Prices for the suites in town range from $45,000 a year at TCF Bank Stadium to about $200,000 for a super suite at the new Target Field.

If the Dome were to die and Vikings were to get the stadium they want, they’d add 7,500 club seats and would boost the total suite inventory in town to at least 320. As a sign of the times and an indication of the market, when the Vikings began thinking about a new stadium a decade ago, there was talk of as many as 150 suites; now they’ve scaled that back to about 115 suites, or just about 15 more than the Metrodome has.

Let’s say this Twin Cities market has 320 suites at a conservative average of $100,000. That’s $32 million a year from Minnesota corporations. Every year. Forever. Can this community do it? Which sports franchise will flounder?

That doesn’t count continuing naming rights fees, signage and sponsorship deals. That doesn’t count ticket sales? Is it sustainable?

Target Field and Target Center
Courtesy of the Minnesota Twins
The Minnesota Twins’ Target Field, with real grass now in place, is nearing completion for its April debut. Adjacent to it is Target Center, with its new “green” roof.

Community economic shortfall
Three years ago, researcher G. Scott Thomas of American City Business Journals and bizjournals.com analyzed sports markets and concluded that the Twin Cities are as stretched as any market in the nation.

In his 2006 calculations, a community needed about $196 billion in regional personal income to support one NFL team, one Major League Baseball team, one NHL team and one NBA team. The Twin Cities, based on 2006 data from the U.S. Bureau of Economic Analysis, had total personal income of its residents of about $171 billion.

So, in his view, the Twin Cities market was already at minus-$25 billion for existing teams. We didn’t have the capacity to support them fully.

The Twin Cities remain the second-smallest metro area with all four major league teams. Only Denver’s metro area is smaller, but its NBA and NHL teams share an arena, so two facilities aren’t competing for suite and premium-seating sales. The Target Center-Xcel Energy Center competition places special stress on corporate dollars for sporting events, as well as forcing self-defeating lowball bids as the arenas try to outdo each other in attracting major touring entertainment shows, such as superstar rock concerts.

So, we’ve got two new stadiums poised to open. One about to be debated. Did we mention that Target Center will turn 20 next year and is among the older arenas in the NBA? The city of Minneapolis and AEG, the international firm that manages the building, have been examining ways to upgrade the outdated arena. How much will that cost? Who will pay for that?

As the band plays and the jets fly over Saturday, let’s cheer while we can, before we get down to the sober community business of trying to sustain local franchises and afford a sports industry under stress.

Jay Weiner can be reached at jweiner [at] minnpost [dot] com.