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Here we go again: Saints owner threatens move to LA

Discussion in 'BBS Hangout' started by Faos, Nov 21, 2004.

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Faos Member

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http://www.chron.com/cs/CDA/ssistory.mpl/sports/2911341

Owner says Saints could be headed to Los Angeles

By JOHN McCLAIN
Copyright 2004 Houston Chronicle

The Saints have experienced enough controversy on the football side of the organization to last a couple of seasons, and now the administrative side has created an uproar.

Amid daily reports that coach Jim Haslett should be fired because of the disappointing 4-5 record and the chasm between the coaching staff and personnel department is growing wider by the week, owner Tom Benson has dropped a bombshell on the state of Louisiana.

If Benson doesn’t get what he wants from the state, his franchise could become the Los Angeles Saints.

Benson, who always seems to be at war with politicians over his lease and revenue, has given Louisiana a Feb. 1 deadline for agreeing to his demands. He has a clause in his lease with the Superdome that gives him the option of getting out after the 2005 season for $81 million.

That’s a lot of money, of course, for an owner who’s receiving an annual cash inducement from the state, but perhaps California politicians would agree to pay it.

Benson prefers a new downtown stadium, of course, but knows he won’t get it, so he’s agreed to settle for less. Yeah, right.

Benson will agree to stay in New Orleans through 2020 if he gets a $168 million Superdome renovation, a continuation of the annual state-funded cash inducement that was $15 million this year and will increase to $23.5 million in 2008, a 25-acre tailgate park that is estimated to cost between $5 million and $10 million, a state-operated multi-sport facility, development of eight acres of land next to the team’s practice facility so he can build a hotel and relocate the team’s Hall of Fame and a sports-oriented redevelopment of the New Orleans Centre shopping mall that’s connected to the Superdome that will be modeled after the new atrium at the renovated Lambeau Field in Green Bay.

And, get this, Benson wants the income but doesn’t intend to pay a penny out of his pocket for any of it. Some close to the Saints believe he’s making such preposterous demands because he wants Louisiana to turn him down so he can move his team to Los Angeles.

"I don't want to move,” Benson said. “I don't want to sell. We have three choices: We can build a new stadium, extend and enhance our current agreement, or tell us to leave. And we have to do this by early next year."

Benson gave the Feb. 1 deadline because owners are going to decide at the league meetings in March which cities get the 2009 and 2010 Super Bowls.

#1 Faos, Nov 21, 2004

CriscoKidd Member

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LA is going to get another team one way or another. It's only a matter of time.

But I'd rather it be an existing team than yet another expansion team. Plz let the Texans be the last one.

#2 CriscoKidd, Nov 21, 2004
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Originally posted by CriscoKidd

But I'd rather it be an existing team than yet another expansion team. Plz let the Texans be the last one.
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I agree with this, too much expansion is bad.

#3 Lil Pun, Nov 21, 2004
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They'll have to change their names to the LA Sinners.

#4 B-ball freak, Nov 21, 2004
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Originally posted by B-ball freak
They'll have to change their names to the LA Sinners.
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Doesnt Los Angeles mean The Angels?

#5 Troy McClure, Nov 21, 2004
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New Orleans, home of mardis gras, is more saintly than LA?

#6 Oski2005, Nov 21, 2004
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sheesh, just making a crack on the name.

#7 B-ball freak, Nov 21, 2004

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Another owner blackmailing the fans in order to put more money in his pocket. And the NFL supports it. Unbelievable.

#8 RocksMillenium, Nov 21, 2004
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The way the Saints are playing, they really shouldn't be threatening their fans...

#9 ima_drummer2k, Nov 21, 2004
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good thinking, new orleans is the most god-awful place in the united states.

#10 synergy, Nov 21, 2004
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Originally posted by synergy
good thinking, new orleans is the most god-awful place in the united states.
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...rivaled only by LA.

#11 Hippieloser, Nov 21, 2004
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Originally posted by synergy
good thinking, new orleans is the most god-awful place in the united states.
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what?? WHAT???? don't ever say that again, young man!!! EVER!!!

#12 MadMax, Nov 22, 2004
Deuce Context & Nuance

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I dont see the NFL expanding to anymore teams. 32 is a nice round number and works well with their scheduling.

I DO think LA will eventually get a team so it will be an exsisting franchise moving there. Why not the Saints?

#13 Deuce, Nov 22, 2004

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Originally posted by Deuce

Why not the Saints?
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because i don't want it to be!!!

#14 MadMax, Nov 22, 2004
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Let's face it. New Orleans simply can't afford an NFL team in today's sports world.

And how soon will it be until the Hornets follow them out of the city?

#15 Toast, Nov 22, 2004
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Originally posted by Toast
Let's face it. New Orleans simply can't afford an NFL team in today's sports world.

And how soon will it be until the Hornets follow them out of the city?
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New Orleans is more than capable of supporting one or both of those teams. all the Saints need is a new stadium...they can get that done. will they?? i don't know. but it's not like benson is saying the market isn't viable...he's saying it's viable once you build me a suite-filled stadium. they're averaging about 15K per game now with the Hornets.

#16 MadMax, Nov 22, 2004
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Wasn't it just last year they were gonna move to Mississippi because they could generate more revenue there ... and they were gonna get a new stadium? Then the NOLA government threw 'em a bone with this new Superdome deal which was supposed to keep everyone happy. Yeah, that worked for a LONG time.

#17 Toast, Nov 22, 2004
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Originally posted by Toast
Wasn't it just last year they were gonna move to Mississippi because they could generate more revenue there ... and they were gonna get a new stadium? Then the NOLA government threw 'em a bone with this new Superdome deal which was supposed to keep everyone happy. Yeah, that worked for a LONG time.
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sounds exactly like bud adams, doesn't it???

#18 MadMax, Nov 22, 2004

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It's bad enough that Benson has bilked the state out of millions with these awful annual payments. But to whine on the state's dole that you MUST have a new stadium, else you'll leave is far too much. In case anybody doesn't know this, the Saints are a PRIVATE company. Why do they need govt. subsidies? It's a little known fact that the State of Louisiana pays for the various gameday costs of a Saints' embarassment (I can't call them games any longer). And he wants them to build a new stadium!

And the last time I checked, the product his club is putting on the field is just godawful. Miserable. Pathetic. A friggin' joke. So he's going to go burning bridges in New Orleans? Go to LA if that's what suits you and don't let the door hit'cha where the good Lord split ya. Sheesh....

#19 bamaslammer, Nov 22, 2004
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Originally posted by MadMax
New Orleans is more than capable of supporting one or both of those teams. all the Saints need is a new stadium...they can get that done. will they?? i don't know. but it's not like benson is saying the market isn't viable...he's saying it's viable once you build me a suite-filled stadium. they're averaging about 15K per game now with the Hornets.
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And those 15k come at a heavy price...

Bamaslammer is right - welfare for sports teams is not really justifiable in economic terms and particularly in this example.

http://www.nola.com/archives/t-p/index.ssf?/base/news-6/1100419166271830.xml

Dome, arena run on red ink
Payments to Hornets, Saints drain budget
Sunday, November 14, 2004
By Bruce Eggler
Staff writer
For officials in charge of finances at the Superdome and New Orleans Arena, life can have an almost surreal quality these days.

With the state giving hundreds of millions of dollars in subsidies to the buildings' chief tenants, the NFL's Saints and NBA's Hornets, the buildings' operators can feel as if they are on the permanently down end of a feast-or-famine seesaw.

Consider three pieces of news from this month's meeting of the Superdome Commission:

r Although state law requires government agencies to submit and live by balanced budgets, officials recently submitted a budget for 2005-06 that shows the two state-owned buildings and the Superdome Commission that oversees them are on track to run a $13.5 million deficit.

-- Although the state is required by its agreement with the Hornets to install a new scoreboard in the arena costing as much as $2 million, the same officials had to figuratively dig under the sofa cushions to find money to repair the two buildings' air-conditioning system.

-- Although the hotel tax that finances much of the two buildings' operations yielded more money than anticipated during the summer, the revenue still fell far short of what is needed. Moreover, at least some of that good news was wiped out by September's scare from Hurricane Ivan, and the prospects for spring don't look as rosy.

The root of the sometimes topsy-turvy nature of Superdome finances is the large payments the state guaranteed the Saints in 2001 to keep them in New Orleans and the Hornets in 2002 to lure them to New Orleans from Charlotte, N.C.

Both teams said they needed the payments to help them compete against franchises in larger, richer markets, many of which have facilities that offer their teams more revenue-producing opportunities than the local buildings can offer, especially in a city with few large corporations to lease expensive suites or buy naming rights.

Those contractual obligations to the two teams count against the budget of the Louisiana Stadium and Exposition District, usually known as the Superdome Commission, and so the commission and SMG, the private company that runs the two buildings, have to try to find ways to cover the payments.

It's a losing proposition.

What was expected to be growing revenue from the 4 percent hotel tax in Orleans and Jefferson parishes that financed construction of the two buildings was counted on to cover most of the obligations, supplemented by income from selling naming rights to the buildings.

But the Sept. 11, 2001, terrorist attacks and a national economic slowdown led to a decline in travel, tourism and convention attendance that cut sharply into local hotel tax revenue. In the fiscal year ending June 30, 2001, the tax yielded $34.1 million for the Superdome Commission, a figure that state and tourism officials expected would grow by at least 7 percent a year thereafter.

Instead, revenue fell to $32.7 million in fiscal year 2002, to $30.6 million in 2003 and came in at $30.7 million in 2004.

Meanwhile, efforts to sell naming rights to the Dome and arena have gone nowhere.

The result is tons of red ink, except that under the law the commission can't go into the red. Meanwhile, political realities dictate that the state can't renege on its commitments to the city's two major-league professional sports franchises.

Juggling act

This year, Gov. Kathleen Blanco's administration and the Legislature resorted to borrowing about $7 million from the state's Department of Economic Development to complete a $15 million payment due to the Saints in July. How the loan will be paid back is anybody's guess, since the most obvious source is the same hotel tax that already can't meet all the demands upon it.

But just to cut its $15 million obligation to the Saints down to $7 million meant the Superdome Commission and SMG had to defer or cancel several other sizable obligations, including $2.3 million that normally would have gone into the Dome's "renewal and replacement fund," $2.5 million in insurance premiums, $500,000 owed to the New Orleans Sports Foundation and several hundred thousand dollars owed to a Baton Rouge law firm that represented the commission in a long-running arbitration proceeding.

The renewal and replacement fund normally provides the money to replace worn-out or outdated equipment and furnishings at the almost 30-year-old stadium. With the Saints payments eating up all the money for the fund the past two years, Dome officials have been unable to keep the building as up-to-date as they -- and the Saints -- would like.

Dome General Manager Doug Thornton said that if the fund had been replenished normally, most of it probably would have been used to upgrade the Dome's video display system and scoreboards, which are almost 20 years old and for which spare parts are no longer available.

At SMG's request, the commission voted this month to transfer $156,000 from a no-longer-needed arena construction account to the Dome's renewal and replacement fund and then to use $74,000 of that amount to replace a chilled water pump, a gear drive and other components in the buildings' air-conditioning system that were on the brink of failure.

Bigger bills, shrinking funds

It's not just the Dome's appearance and physical condition that are affected by the financial squeeze brought about by the $186 million in payments over 10 years that the state promised the Saints in 2001 and the millions more it promised the Hornets the next year.

The 2005-06 budget the Superdome Commission submitted to the state assumes money will resume flowing to the Dome's renewal and replacement fund; the Sports Foundation once again will get $500,000 to help it promote New Orleans as a site for major sports events; about $2 million will be available to improve the lighting, sound system, plumbing, phones and other features of Zephyr Field; and there will be about $700,000 for repairs and improvements to the Alario Center in Westwego, the Hornets' temporary practice facility.

In fact, unless a major new source of revenue is found or the Saints agree to renegotiate their deal, all those expenditures are likely to be canceled next year and for the foreseeable future to help the state meet its obligations to the Saints. Under the deal negotiated in 2001, the state owes the Saints annual subsidies of $15 million in 2005, $20 million a year in 2006 and 2007, and $23.5 million a year in 2008, 2009 and 2010.

Besides those direct payments, the Saints' lease with the Dome subsidizes the team in many other ways. The team's rent is capped at $800,000 a year until the lease expires in 2018, and the team pays no in-stadium game-day expenses, such as the cost of ushers and ticket-takers. The Saints also get 42 percent of the money generated by game-day concession sales, 100 percent of that from game-day parking, 100 percent of Superdome tours year-round, 100 percent of annual box suite revenue and 100 percent of game-day Superdome advertising.

Millions in subsidies

The Hornets' lease is much less lucrative, but it adds up to a few million a year in subsidies.

Besides getting use of the arena rent-free, the Hornets get 42 percent of gross concessions revenue and 100 percent of net parking revenue from their games, 100 percent of advertising and sponsorship revenue, the first $1.1 million of game-day staffing costs, plus 100 percent of the revenue (licensing fees and ticket sales for their games) from the arena's 56 luxury suites and 2,800 premium-price club seats.

They also get a subsidy to compensate them for the fact the state has failed to sell naming rights to the arena. That subsidy began at $1.5 million the franchise's first year in New Orleans and grows by 5 percent a year, meaning it's up to $1.65 million this year. If the naming rights are eventually sold, the Hornets would be entitled to more than $2.5 million a year.

All of which helps to explain why, in the world of Superdome finances, it often appears that black is white and day is night, and why the commission's proposed 2005-06 budget is "balanced" only by listing a mysterious $13.5 million "credit against contractual obligations." How might that credit be provided? No one knows.

. . . . . . .

Bruce Eggler can be reached at beggler@timespicayune.com or (504) 826-3320.
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#20 SamFisher, Nov 22, 2004

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