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Steelers Heinz Field: Standing up to the competition

The NFL's new economics dictated the Steelers' move to a home of their own

Friday, August 24, 2001

By Ed Bouchette, Post-Gazette Sports Writer

Thee Steelers paid nearly $30 million in signing bonuses this year, a record sum for them, and the reason is as obvious as all those yellow seats on the North Side.

Here's the view from the canopy-covered entrance ramp at Heinz Field. (John Beale, Post-Gazette)

Heinz Field was built to allow the Steelers to remain competitive in the National Football League, and it was working before the club opened the place.

The Steelers have plowed some of the extra revenue they anticipate from their new ballpark into signing bonuses.

"In the past we've lost some guys and most of the time it really came down to the signing bonus," said Art Rooney II, the Steelers' vice president and general counsel. "Having that cash flow on an annual basis and being able to compete in this market -- we were very concerned that we were going to continue to keep falling behind on those things."

Instead, Heinz Field will allow the Steelers to remain competitive in the NFL, virtually on equal footing with the rest of the teams. Although the Steelers made money right up until Three Rivers Stadium crumpled, they eventually might have lost money without a new stadium.

The economics of the NFL virtually mandated a new stadium or an extensive renovation of Three Rivers, something that was deemed not feasible by the Rooney family.

Without either, the Steelers likely would have been unable to compete in the free agent market and would have difficulty hanging on to their own players.

The NFL collective bargaining agreement, with its salary cap and free agency for players, has been hailed as the model for professional sports. But it also has forced cities to build new stadiums for teams or forced franchises to move to other cities to get new facilities.

"We had to have some kind of solution to be able to compete," said Art Rooney II, the Steelers' vice president and counsel.

That was the harsh reality facing the Steelers as they mapped out plans for the future. The NFL's salary cap system that took effect in 1993 sets a percentage of designated gross income that each team must pay its players each year.

This season, for example, the salary cap is 63 percent of the average designated gross revenue of the league's 31 teams. Teams share equally in television and other income, but they do not have to share many of the revenues from their own stadiums. Maximizing stadium revenue has become essential because huge signing bonuses have become the standard by which players judge the worth of their contracts, which are not guaranteed.

A player who gets $10 million up-front to sign a five-year contract is satisfied because the bonus is the only thing guaranteed. The team benefits because the bonus is charged against the salary cap on a pro-rated basis. A $10 million bonus on a five-year contract would count $2 million annually against the cap, unless the player is cut.

The more up-front money paid in signing bonuses, the more revenue required by the ballclub. So the teams with the better stadium deals are the ones in position to spend more and acquire better players.

The Steelers watched as new stadiums and their sweetheart deals popped up throughout the league. Every one of their competitors in the AFC Central Division -- Jacksonville, Tennessee, Cleveland, Cincinnati and Baltimore -- got new, football-only stadiums.

"We got a little taste of what it would have been like if we hadn't gotten something done," Rooney said, "in the early years where Jacksonville came in and picked off a couple of our players and Tennessee picked off Yancey Thigpen. That's where you really get concerned, where teams in your own division come in and grab some of your key players."

Heinz Field cost $281 million to build, the Steelers paying $123 million and the balance put up by the state and Regional Asset District. The building won't give the Steelers an edge against other teams with newer stadiums, but it will keep them competitive.

"There are just a lot more opportunities for us to generate revenue as compared to Three Rivers Stadium," Rooney said, "and fewer people who are sharing it. At Three Rivers we had the Pirates, the Stadium Authority, the Allegheny Club, the concessionaires. There were a lot more people involved and everybody had to get their cut."

Not only will the Steelers get all the revenue from the private suites at Heinz Field, there are more of them, 129 compared to 115 at Three Rivers. In addition, there are 6,600 premium-priced club seats in Heinz Field, there were none at the old stadium. Club seats are extra wide and have access to large lounges that are heated and air conditioned.

"Those two are the biggest pieces to the puzzle in terms of something we have now that we didn't have at Three Rivers," Rooney said. "In addition, we're going to have some opportunities to do events and other activities in the building that, again, we just didn't have at Three Rivers."

The first example of that was the 'N Sync concert on Aug. 18. The Steelers can schedule concerts and other events in the prime time of the year, from May through the middle of August. That option wasn't available to them, for the most part, at Three Rivers because the Pirates played there.

Heinz Field, at 65,000 capacity, will hold about 6,000 more fans than Three Rivers Stadium.

The Steelers contracted their own concessions deal this year and will reap much more revenue from it. They control all the advertising and sponsorship programs, something which they had to share with the Pirates and Stadium Authority at Three Rivers.

"There's another revenue stream that should be significantly improved over Three Rivers," Rooney said.

One area that did not improve significantly is parking. The Steelers will control about 1,000 parking spaces, but that is small compared to other teams' deals.

They do have the opportunity to develop the area between Heinz Field and PNC Park, which could provide more revenue. Among the proposals is construction of an amphitheater.

"There's a long way to go in terms of figuring out how it's all going to work, what revenue streams we might enjoy and what kind of costs we might have getting it up and running," Rooney said.

The fact that the playing surface is now grass instead of artificial turf should help the Steelers attract free agents and keep their own players. Some free agents have refused to sign with teams that play on turf.

"It does seem to be a factor with guys like Jerome Bettis who are comfortable being here compared to some other places," Rooney said. "He knew he was going to be on grass most of the time. Sometimes you have guys who are willing to, let's say, not test the market as long as you can get them within a [pay] range where they would be. A lot of times they are willing to stay because everything else is what they're looking for.

"We feel good about the overall situation with our facilities, our coaching staff. I really think the attitude of this team right now reflects that. This team is really looking forward to the season and feels this organization is really headed in the right direction. There's a great, positive attitude because of all those things."

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