Why the Bills Play in Toronto

The Year is 1975. Rich Stadium, so named for the $250,000 deal that would win the naming rights for 25 years, is pretty new. For what it’s worth, Enron was born, exploded in value, got the naming rights to a stadium, and collapsed in disgrace (along with Accounting firm Arthur Andersen) in about the same span. The “Electric Company” Bills, who would feature 2 Hall of Famers and several Bills’ Wall of Famers, were at full capacity. For that matter, the French Connection Sabres were tearing up the NHL. Things in Buffalo, a blue collar, hard-working gritty city with a loyal, ingrained fan base that stretched from Rochester in the east to Fredonia in the south, to Ft. Erie just west of Buffalo, seemed to be good. Unfortunately, it is also the beginning of the end of such an era of good feeling.

1975 also marks the beginning of the end of modern heavy manufacturing as the nation’s prime sector of employment. From 1975, and continuing through 2013, manufacturing dropped from approximately 35% of the US labor pool to less than 10%. In the same period, health care and education have increased to 35% of the labor force (1). Though factories in the rust belt cities of Cleveland, Pittsburgh, and Buffalo had begun their slow exodus in the 1960s, it is in the years of 1975-1994 that Buffalo will experience the earthquakes that come with tectonic shifts in the global economy. This isn’t to neither lay blame on politicians, nor find fault with any one party nor one idea. Sometimes, global shifts in the economy can’t be seen or foreseen, but they are most certainly deeply felt. In 1986, Buffalo Steel turned off its blast furnaces forever. That same year, Jim Kelly came to town and out of the USFL. He lifted the Bills’ fans’ spirits, but not even his Yellow Jacketed future could raise a changing economy by itself.

In 1975, football tickets then were less than the current cost of 2 beers at the stadium. Now, they are over $50 on average, and that is quite a lot for an average family of four in Buffalo. The average cost, including parking, seats, 4 hot dogs, 4 beers (or hot cocoas, weather depending),  some other munchies, and a foam finger or two, plus gas (and tolls – in some cases) can exceed $300 per visit (2). The median income in Buffalo’s Metro area is approximately $42,500, though for manufacturing wages, the median is $35,660 and for the food service industry $20,920 (3). When you think about it, the cost of a ticket is 1% of the annual income of the traditional “blue collar” Buffalonian. If we look at numbers, Buffalo currently has approximately 35,000 people engaged in manufacturing and related occupations (4). In 1975, the number was more than that, and the wages paid were significantly higher on a relative basis. Buffalo was a city of over 350,000 then, now 261,000. In other words, many of Buffalo’s traditional fan base loyalists have shrunk or spread to the rest of the nation. One need only see the 2006 Carolina Hurricanes vs. Buffalo Sabres NHL Eastern Conference finals to see the great number of well-educated expatriate Buffalonians now living in the Research triangle of North Carolina.

It is only in recent years that Buffalo has begun to “right the ship”, focusing on the growing sectors of medicine, education and research.
It is only in recent years that Buffalo has begun to “right the ship”, focusing on the growing sectors of medicine, education and research.

It is only in recent years that Buffalo has begun to “right the ship”, focusing on the growing sectors of medicine, education and research, as opposed to the declining manufacturing and construction base. However, this newer base of educated, sometimes non-native people may not have the tradition nor even the knowledge of how much the Bills have meant to Buffalo. This has resulted in one difficult reality for the proud area: Buffalo is now the 2nd smallest city in the NFL (after Green Bay) and even with Rochester and its surrounding environment, there’s still only approximately 2 Million people over both cities’ metro areas, inclusive of Ft. Erie and Fredonia/Dunkirk. Contrast that with the over 20 million people in the metro New York area, and now you begin to understand the plight of Bills Nation: there simply aren’t enough people with enough wealth to make the large sum of money needed to make a team profitable for the long term.

I mean no disrespect to Buffalo nor Rochester. I lived the first 24 years of my life there and I’m proud to be from there. However, the emphasis of Buffalo as the “blue collar, steel city” may have contributed to its own downfall. By imagining itself to be a builder, it may have lost a great deal of its ability to innovate, and that is a shame, for Buffalo is not a city of just luddites. It does have growing and dynamic vibrancy in some portions, and that will, I believe, help it to come back. However, that comeback will be a long time in the making.

Toronto is the biggest city within 250 miles of Buffalo.
Toronto is the biggest city within 250 miles of Buffalo.

This leaves the current bleak reality: The Bills need Toronto. Why? Toronto is the biggest city within 250 miles of Buffalo. Without going into too much dense economic detail, there’s a concept called gravity modeling. In physics, the greatest gravity is held by the object with the greatest mass. In economics, the greatest potential wealth generation is held by the largest cities. There’s lots of terms that I could bandy about that would make anyone look smart (or obnoxiously boorish) at a party, but Buffalo is, economically speaking, a suburban extension of Toronto. It is closer to, and has more interconnection with, Toronto than any large city on the planet. It shares more in common with Fort Erie, St. Catherines, and Hamilton than it does with Albany, Poughkeepsie, or Yonkers, despite being within the same state and nation as the latter three. Buffalo is, ultimately, far more a creature of its geography than anyone would want to admit, and it’s that geography that may well save the Bills for future generations.

Toronto and its environs are more than 5 million people alone. They have a number of loves, especially hockey, but also their CFL team, the Argonauts, a very successful franchise. There’s also the Blue Jays (who were winning World Series about the same time the Bills were winning AFC Championships – and have had similar success to the Bills in the years since) and the Raptors, who once had Chris Bosh on their team. In addition, Toronto has an outstanding theater district, jazz clubs and other night life, and the Eaton Center can serve as incredible retail therapy for one’s spouse after you’ve said something stupid. There are also numerous large corporations, a large movie and entertainment production economy, and numerous other industrial production sectors. You can purchase anything you want in Toronto. Toronto is what an economic geographer calls a “first rank city”. Buffalo, and Rochester, are second rank – populous and with a solid economic core, but not all goods and services are offered. Please don’t confuse the economic term “second rank” with the pejorative “second rate.” It is simply a reference to the nature of the size and economic strength of a core city.

Now, before one gets the idea that no second-rank cities can sustain a team, or be competitive, you can look at Green Bay, Kansas City, or Baltimore as teams where the market isn’t huge. Those teams have generally had a large degree of success over the years, Kansas City’s recent struggles aside. The hard cap in the NFL has prevented a baseball-like he-who-spends-most-wins mentality, and has also helped small-market-range teams sign major free agents, such as Green Bay getting Reggie White, or the Bills signing Mario Williams. However, in order to provide the annual cash-in-hand money, most teams are doing one (or more) of three things: personal seat licenses, jacking the price of everything from tickets to parking to foam fingers to cheap beer, or taking on large amount of public or private debt. As a fan, I find personal seat licenses to be noxious – they run counter to the spirit, I feel, of buying a ticket and enjoying the game. The NFL is a game to be enjoyed by everyone, regardless of income or credit card limit, and personal seat licenses reserve the game for the landed gentry. Ticket prices are split 60/40, with the visiting team getting 40% of the gate (5). Concessions are important to a stadium’s internal revenue. They are not split with the league, and as a captive market, expect them to be expensive at the stadium. Finally, of course, there’s the large amounts of debt – sometimes highly publicly financed – that has been taken on by some franchise owners to provide palatial stadiums. I also find this to be an impending large issue: first, highly indebted owners will tend to price the game highly to recoup cash and retire the debt, secondly, public finances are already strained. The public being on the hook for any portion of a losing team’s debt will be viewed considerably negatively in these difficult economic times.

There are some who might argue that no stadium should ever receive any public support, others would argue that the positive externalities (economic speak for “jobs and other happy stuff we get from stadia”) make just about any deal worth supporting. I feel that the public needs to do a real Return on Investment analysis, complete with some guarantees to protect the public in terms of revenue return, and refinancing terms during good markets to always favor the public’s broad interest, should always be included in any public financing deal. If you’ve been following the recent drama over the Miami Marlins’ publicly financed stadium disaster, you know of which I speak.

The Bills have not done any of these “revenue raisers” to a usurious rate. The stadium is not extensively publicly financed, by today’s standards, though there has been some commitment of public funds to its renovation. The Bills have kept ticket prices amongst the lowest in the NFL. While concessions are expensive, they are less so than many other NFL stadiums. The Bills do have luxury boxes and other exclusive arrangements, but those are necessary in today’s environment. Thankfully, there are not yet personal seat licenses and I hope there never will be at the Ralph. It runs counter not only to what I feel is the spirit of the NFL, but also counter to the fiber of Western New York.

Rochester is a large market which will naturally serve the Bills for years.
Rochester is a large market which will naturally serve the Bills for years.

This leaves the real problem: the Bills need some degree of revenue earning that is beyond their local market’s total potential. First, of course, the Bills reached out to Rochester. Rochester has always been a part of the Bills media market, and many Rochesterians have made the trip since the Bills began play in 1960. However, in the past 20 years, with active merchandising and the moving of camp to suburban Rochester’s St. John Fisher College, the Bills have been making an aggressive play for not just television viewers (split revenue) but for gear, tickets, and concessions, which the team keeps more of. Rochester is a large (~800,000 persons in the metro area) market which will naturally serve the Bills for years.

For the past several years, as the team’s fortunes on the field have declined, many home games have not sold out towards the end of the season. In concert with limited revenue streams from the shrinking local market economy, Buffalo had little choice but to look to its 3rd natural market: southern Ontario. Canadian NFL fans have long come across the border to see NFL teams such as Buffalo, Detroit, New England and Seattle. However, no NFL team is as close to a border location as Buffalo, other than Detroit. And certainly no NFL team is as close to a major Canadian city as Buffalo is, all of 90 Miles – Vancouver is 140 miles from Seattle; Detroit is over 200 miles from Toronto.

This leaves the Bills with a difficult choice: increase local revenues from a hard-pressed, poorer, and highly taxed population, or find alternative revenues from wealthier areas. The choice was to access the Toronto market, and its nearer cities: Hamilton and St. Catharines. Currently, of the approximately 73,000 fans, 15,000 or 20.5% come from Canada (6). Throw in the 10,000 or so from the Rochester area, and the picture becomes clear: The Bills may play in Buffalo, but they are 2 nation, many-area, regional team.

I’m not asking Bills fans to like the series in Toronto. I’m not trying to say that I don’t wish things were like they were back 20 years ago, when the Bills set NFL attendance records and were stocked with Hall of Famers. I’m asking Bills fans to recognize that the business of the NFL has changed. This isn’t Roger Goodell’s fault. This isn’t Ralph Wilson’s fault. This isn’t even Bryan Cox’s fault, much as we all hate him for giving us the finger. It may be Rob Johnson’s fault, but I blame him for everything. If the Bills are going to survive, and thrive, long term, and still keep costs affordable for the average middle-class western NY resident, it must develop revenue streams that allow it to have a competitive cash flow so that big spender / debtor teams (this means you, Dan Snyder) can’t simply fold the tent on the Bills and relocate them due to pure lack of revenue. Currently, the best market to access is the closest wealthy market. It gets back to that whole gravity model concept: if you want to attract cash from a wealthy area, find the one nearest you and appeal to its wealthy basis. The Rogers Centre is part of that wealthy base. In order to get at said wealth, the second-rank city must offer something of value, a good or service. In the case of the Bills, it’s one game a year. Not just an exhibition game, but a full-fledged regular season game. Buffalo fans should ask themselves: if not Toronto, how to make up the revenue that comes from those games? I’ve yet to hear a serious proposal that takes into account revenue and fan base. If anyone out there has a serious proposal, I’d be all ears. Until then, Toronto will remain an annual part of the Bills’ present and future.

Sources
(1) US Department of Labor, Current Employment Survey
(2) Forbes.com valuation of Buffalo Bills franchise
(3) US Department of Labor, Occupational Employment Survey
(4) US Department of Labor, Current Employment Survey
(5) NFL.com
(6) YNN.com Buffalo site

About Rich Quodomine

Rich Quodomine is a writer for the Bills Mafia Blog and a bunch of other publications. He is the founder of his own firm, LocalPoint Technologies & Consulting, Ltd. . He’s from Rochester originally, is a two-time SUNY Buffalo Graduate, and currently resides in Cobourg, ON, Canada. He is the proud Dad of two boys, ages 14 and 13. Feel free to follow him @RDQ_Geography, but be warned: in addition to Buffalo sports ranting, you’ll find lots of material on mass transit, geography, and the occasional traffic and weather reports. Thank you for reading.