Guest Column: Joe McGrath – Want to Get Rich? Let’s Buy The New York Jets

Editor’s Note: Mr. McGrath has long and storied history in the management of professional sports franchises, most notably as the general manager of the Charlestown Chiefs of the now-defunct Federal League.

Mel Kiper made an entire career off saying “The New York Jets have no idea what the draft is all about.” Well, I’m about to make another declarative statement about that franchise, and hopefully I can make a shitload of money off it as well.

The New York Jets franchise is pathetic, and there’s no goddamn excuse for it.

That’s why I want you to help me buy the New York Jets. We could make come serious cash on this. Here’s how.

At least for now, the National Football League is the most popular sports league in this country, despite what that cock-tard Roger Goodell is doing to it. The Jets are a franchise in that league which just so happens to be in the most important city in the western hemisphere, which means they should be at the top of the list when it comes to net value.  But they aren’t. The Giants rank #3. The Jets rank #7. They’re in the same city, the same damn stadium, and the NFL shares all the television and merchandising money equally, so why is there a $20 million difference in value, and a $30 million difference in operating revenue between those two clubs?

The average pinhead NFL fan is going to try to tell me it’s all about success on the field. That’s a lofty load of crap. Just look at the top ten teams in terms of value. The list goes by team value, and is followed by annual operating income.

1. Dallas Cowboys, $4.2 billion, $300 million
2. New England Patriots, $3.4 billion, $212 million
3. New York Giants, $3.1 billion, $133 million
4. San Francisco 49ers, $3 billion, $154 million
5. Washington Redskins, $2.95 billion, $115 million
6. Los Angeles Rams, $2.9 million, $67 million
7. New York Jets, $2.75 billion, $102 million
8. Chicago Bears, $2.7 billion, $104 million
9. Houston Texans, $2.6 billion, $129 million
10. Philadelphia Eagles, $2.5 billion, $105 million

How many teams on that list won anything in the last 20 years? How many teams on this are terrible right now? That’s because the on-field product has nothing to do with franchise value. That’s a function of real estate and market size. That’s why the Jets are pathetic. The Giants are only slightly less pathetic, but I’m convinced the real opportunity lies with the Jets.

From a management standpoint, the Jets should be a veritable goldmine. Look at what we already know. They’ve got a huge market, and they could easily dominate in terms of real estate value. If Jerry Jones, Robert Kraft, Dan Snyder can all make billions off stadiums essentially in the middle of nowhere, what could the Jets do with their own facility made to foster partnerships in the environs of the financial capital of America? The fact they haven’t done that yet is a monument to the stupidity of owner Woody Johnson. He bought this team in 2000 for $635 million, which at the time was the third-highest price ever paid for a professional sports team and the highest for one in New York.

At first, Johnson knew that getting out of Giants Stadium was the key to getting that team out of the “Rhyming Trifecta” of New York’s “Sporting Little Brothers;” the Mets, the Nets, and the Jets. But once he realized he wasn’t going to get any public money, he was more than happy to go right back to the failed “stadium sharing model.”  Make no mistake it’s a failed model.  The Giants and Jets have been doing it since 1984, and nobody else has followed suit.  They tried to do this in the Bay Area with the 49ers and Raiders. It failed.  It wasn’t even mentioned as an option in Baltimore-Washington.  The Chargers will move into the Rams new stadium in Los Angeles as an absolute last resort… they’d be better off moving to Oakland if the rumors of a Raiders’ move to Las Vegas become reality.

The “stadium sharing” model failed for two main reasons. First, do you remember having roommates when you were in college?  Not only was that a huge pain in the ass, but it wasn’t really home for either of you.  Respectful co-existence is no way to live.  Sometimes you want to watch TV naked in the dark, and sometimes you might like your Super Bowl banner hanging in YOUR OWN building.  Like them or not, the Jets can put together a pretty decent “Ring of Honor.” But they can’t do it playing “roommate” with the Giants.

Randy “Mr. Jet” Rasmussen and John Riggins. A pretty good start for a “Jet Ring of Honor.”

The second reason is less obvious, but a far larger problem.  When the Giants and the Jets formed the New Meadowlands Stadium Company, LLC (which has since been renamed the MetLife Stadium Company), they really should have named it COPIC (Cap Our Potential Income Company).  That’s exactly what it does for both teams, who really should easily be the two most valuable franchises in the NFL.

Here’s why they aren’t.

First of all, they don’t even own the land under the stadium. It’s just a 50/50 joint venture to build and operate the stadium. They lease the land indirectly from the state of New Jersey, which means the Giants/Jets 50/50 venture has to pay off a landlord. Worse yet, it’s a 25-year lease with extension options which could eventually reach 97 years.

But the upside is that after Year 15 of the lease, and every five years thereafter, one of the two teams may opt out of the lease after giving the state of New Jersey 12 months notice. The catch is that if one team leaves for a new stadium, the other would have to remain for the remainder of the lease.

Let’s be honest. The Giants aren’t going anywhere. Even though they are in New Jersey, they are nestled in between Manhattan and Bergen County, which is the perfect location for them based on what we know about their fanbase.

It makes far more sense for the Jets to go back to their roots on Long Island. There was a great bit about that here by the Unknown Blogger a while back. What that bit does a great job of explaining is while it may only be a few miles from Queens to the Meadowlands, they are worlds apart.  The Jets were the team for the people who didn’t live in “The City.” As it stands now, you could easily spend 90 minutes going from the east end of Queens to the Meadowlands.

So, enough setup.  Let’s boil this all down to my plan to make the Jets the most valuable franchise in the NFL.

1) Build An Investment Group

This is going to require at least $5 billion in pure cash up front, and guys with the ability and assets to finance subsequent steps in this plan. Obviously, I don’t have that kind of cash.  I’m not sure what you think a general manager in minor-league hockey makes, but’s let’s just say I don’t have enough coin to do this on my own.  I can put together a business plan that makes the numbers work, so it’s just a question of getting the right people involved.

The parent company for all of this will be called the Long Island Sports Alliance (LISA).  There’s a lot of legal/business reasons for that, but you’ll see why one parent company will be needed to pull this off.

2) Secure Operating Capital

Money makes the world go around, and LISA never gets off the ground without a nice chunk of it.  It’s also one thing when people tell you they will do something; it’s another when the check clears. Like I said, I need $5 billion and guys who can secure future financing streams.

3) Buy The New York Jets

I’ve got to find a way to “low-ball” current owner Woody Johnson; I suppose calling him an idiot earlier didn’t help.  He owns the team outright, and I’m willing to bet he’d be willing to sell for $2.25 billion dollars, if the deal was constructed the right way. The $2.25 billion is for 90% ownership of New York Jets L.L.C, he retains 10% ownership, with the provisions that if he wishes to sell, LISA has right of first refusal on any sale, retains veto power over any potential non-LISA buyer, he has a “first-in” option on future LISA expansions (with an agreed-upon cap as to how much future ownership he can hold) and that he has a permanent seat on the LISA board of directors so long as he is alive, not adjudicated to be incompetent, and retains at least 75% of the ownership of New York Jets L.L.C retained after the original sale.

4) Break The Lease With The State of New Jersey

This one gets tricky on timing, because I’m not moving the team right away.  For sure, I’m telling New Jersey that I’m out after Year 15 on the lease, which is in 2025.  That’s only nine years form now, but I also may consider a move to break the lease before that.  Either way, I’m getting “first dibs” on that shot to escape.  The timing of the lease move is entirely dependent on the timeline for the stadium…more on that later.

One thing I’m going to use as “bait” for the deal is since in the next step you’ll see I intend to build a training facility on Long Island, so I’d be willing to give the existing facility in Florham Park, New Jersey to the state as part of the lease settlement.

5) Get Land by Partnering With Nassau County and Hofstra University, Then Finance the Stadium complex

The new Jets Stadium (when it can actually happen) is going on the land right next to the newly remodeled Nassau County Coliseum, and Nassau County is going to give/sell the land really “dirt cheap.” There’s so many opportunities here, but it will require somebody who can pull all the pieces together. There’s plenty of land for a stadium, and there’s plenty of partners in the area to build something truly unique.  First of all, there’s something to be said for moving a team called “The Jets” to a neighborhood with street named for Charles Lindbergh, Glenn Curtiss, and has an aviation museum.

Making history one Jet at a time.

Hofstra University is also in the neighborhood, and that is exactly where the Jets training facility used to be. If the county and the university donate land, LISA will build three things.

1. An Athletic Training Facility  – As previously mentioned, all New York Jets facilities will move to Long Island.  This complex will be a shared complex featuring dedicated facilities for the Jets, Hofstra University, and nearby Uniondale High School.  All of this will be surrounded by a large public park featuring both green spaces and specific playing fields, like for youth baseball, softball, et cetera. Part of the public park will be made available to the aviation museum for outdoor displays and/or “fair weather” events.
2. Shared Parking Garages – Think about it.  In urban settings, universities, stadiums, and other things which attract crowds like museums all have a common problem; parking.  That’s why it makes perfect sense to build parking garages which can be shared.  The idea is all in the scheduling.  The university needs the parking space during business hours.  The museum needs it on weekends during the day, which means they can easily avoid 8 home football games a year and the majority of events held at the Nassau County Coliseum.
3. The New Long Island Stadium – Obviously, this is going to be the home of the New York Jets.  But it’s also going to serve many other purposes.  But first, we have to build it, and the basic specifications look like this:

• 80,000 seat capacity
• Retractable Roof
• “Field Turf” sports surface
• A wide-range of “Skybox” options, with ones available to the general public at prices starting as low as $1,000
• Integrated with a convention center on the lines of the Xcel Center in St. Paul

This facility can then be used to host many other events in addition to NFL games. These include:

• New York State High School Football Championships – The “Prep Bowl” as it is called in many other states
• Neutral-Site College Football Games – this is the new rage.
• The College Football Championship Game
• A “big time” college bowl game
• Army-Navy Game
• Super Bowl

The idea is to do the exact same thing in New York that Jerry Jones is doing with AT&T Stadium.  It’s going to cost a ton of money to build this stadium, so we might as well get every use and all the revenue streams we can from it.

As far as financing is concerned, the initial funding of $ billion will come from LISA itself.  Another chunk will come from the sale of naming rights.  The rest will come from the next round of investors, as you will see in Point#6

6) Include the Brooklyn Nets and the New York Islanders in LISA

This probably means buying controlling interests in both team, but from what I understand, that may not be as hard to do as people think. It’s no secret the Brooklyn Nets are for sale, majority owner Mikhail Prokorov put the team on the market for a while last year.  All we’ve got to do is get Prokorov as part of LISA. That gets done by making the same deal I gave Johnson for control of the Jets.  Prokorov owns 80 percent of the Nets and 45 percent of the Barclays Center, for which he had an original investment of $220 million dollars.  Given appreciation and all that, I bet he sells his holdings to LISA for $900 million, for which he stays a minority owner, has a seat on LISA’s Board of Directors, and has the same “first-in” options we gave Johnson.  He gets out of the basketball team and the arena, and yet gets to stay involved in future earnings.

It will be even easier with the Islanders.  Their ownership consists of three guys who keep flip-flopping the majority share. Toss all three the same deal I gave Johnson and Prokorov, sweeten it with $500 million and tell them to split it any way they like.  I’m pretty sure that gets me control of both those teams, and my initial group of investors for the next steps.

7) Renegotiate the Rent for Barclay’s Center

Once I have Prokorov’s 45 percent of that arena, I can either bully my way into a rent renegotiation, or better yet, I can cut the other minority owners in on the LISA deal.  I’d rather do that anyway since it broadens my investor base, and sets the table for the real plum that will keep all these guys on board.

8 ) Establish an Venue-Based Entertainment Operation

Think about it.  If all goes according to plan, by the time we get to this point, LISA will control two major arenas in the greater New York market, and will have an 80,000-seat stadium coming. Without even counting the sporting events held in them, I can fill those three venues with everything from trade shows to concerts, and once the stadium/convention center is completed, the flexibility on types of events it can host only goes up.  The point here here is that with proper planning, at least one LISA facility can be generating revenue every single day.

9) Package the Entertainment Content for Streaming

Now, if I’ve got multiple facilities hosting various types of events, I’m going to have a lot of content available for consumption.  That means I’ll have a bunch of stuff people will want to see, and I can use the operation formed in step #8 to negotiate streaming rights. The pro sports will add another wrinkle to deal with, but the possibilities with all the other stuff are endless.  It’s easy to imagine what you could do with a live-streamed concert; Metallica just did that from the Minnesota Vikings’ new stadium.  But imagine getting a convention like the Consumer Electronics Show, and partnering with them to stream a custom presentation via social media.   It’s a license to print money.

It’s that lure of money we’ll need to strong-arm the pro sports leagues into letting us stream content from the teams LISA will own.  The NHL will be the easiest, they’re already putting games on Twitter.  The NBA just got a new TV deal worth $24 billion, but they know eventually this will be a world in which content owners stream directly to the public via the web.  The iron-shackle marriage of the NFL to television will make them the toughest nut to crack, but even they’ve been putting their toe in the stream (so to speak) by putting some of those London games on platforms like Yahoo.

Without getting too heavily into the deal, the “big picture” here is to do for LISA what Ted Turner did for the Atlanta Braves by putting them on cable when that was the cutting-edge place to be.  We would just have to blaze the trail.

10) Secure streaming partners outside of LISA

It’s a big world out there, and while the appeal of the NFL outside of North America is limited at best, I’m willing to bet you can find all kinds of foreign interest for direct access to NHL and NBA content. Not to mention, all the other concert, convention, truck pulls, whatever…somebody somewhere wants to see it. The web makes it easy to find them.  Once you know how many of them are out there, it’s just a matter of putting together the partnerships to get the content to them.

Email Dubsism at dubsism@yahoo.com, and follow us @Dubsism on Twitter, or on our Pinterest,  Tumblr, Instagram, and Facebook pages.

About J-Dub

What your view of sports would be if you had too many concussions

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4 comments on “Guest Column: Joe McGrath – Want to Get Rich? Let’s Buy The New York Jets”

1. jbsptfn

   November 15, 2016

   

   Good plan. But if sharing arenas/stadiums isn’t smart, why do the Clippers do it with the Lakers? Why isn’t their new owner looking to move to Anaheim someday?

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   • J-Dub

     November 16, 2016

     

     Because the Lakers actually pay the rent for the Clippers. The NBA is going to use Anaheim as the “threat” city to get places to build arenas, like they did with Sacramento.

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     • jbsptfn

       November 16, 2016

       

       Oh, OK.

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     • J-Dub

       November 16, 2016

       

       Also, the NHL and NBA have a much different financial construct and have significantly smaller revenue bases than does the NFL, which means cutting expenses by sharing arenas makes sense. But in the NFL, the cost savings are far out-stripped by the revenue potentials.

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