bresilhac
03-26-2007, 01:23 AM
Deal buys time in Saints negotiations; Pact keeps team here 4 more years
By Jeff Duncan
Staff writer
In a goodwill gesture designed to grease negotiations for an eventual long-term deal, state officials have reached an agreement with the New Orleans Saints that keeps the team in the state for the next four years, state officials confirmed Sunday evening.
The agreement essentially eliminates termination clauses for each side, either of which could have led the team to relocate to another city in the next year, and buys time to negotiate a long-term deal.
Gov. Kathleen Blanco and state officials are expected to formally announce the deal today in a news conference at the Governor’s Mansion in Baton Rouge.
Saints officials did not respond to e-mail messages seeking comment Sunday.
Saints owner Tom Benson and most of the team’s executive staff are in Phoenix for the NFL’s three-day annual meeting, which begins today.
In a proposal sent to team officials earlier this month, the state offered to eliminate its 2008 termination clause in the existing contract and commit to further enhancements at the Superdome.
In return, the Saints agreed to drop their right to terminate the lease this spring. Under terms of the current deal, the Saints could have broken the lease before Saturday and relocated to another city without penalty as long as they reimbursed the state the $70 million it has paid the team in inducements, lease concessions and facility improvements during the first six years of the 10-year contract.
With the deadline looming, state and team officials had discussed the elimination of the exit clauses for the past few months.
At the request of Gov. Blanco, the state team, led by Jimmy Clarke, chief of staff; Jerry Luke LeBlanc, commissioner of administration; Tim Coulon, the chairman of the Louisiana Stadium and Exposition District; and Doug Thornton, regional vice president of SMG, the company that manages the Superdome for the state, pushed for an agreement before the deadline and reached an agreement late last week, Thornton said.
The agreement, which will require the fifth amendment to the original stadium deal in the past seven years, is seen as a collaborative place setting toward an eventual long-term deal. The current lease, which was amended in 2001 by then-Gov. Mike Foster, ends after the 2010 season.
State officials today are expected to announce their plans to immediately enter into negotiations with the Saints for a long-term contract. However, talks are not expected to intensify until after the gubernatorial election this fall. Blanco announced last week she will not run for re-election. NFL officials have said the league will not consider awarding a Super Bowl to New Orleans until a long-term deal is in place.
“They have not settled any substantive terms, so this is not a solution. It is simply a bit of a cease-fire while they continue to work on long-term solutions,” said Gary Roberts, the deputy dean of Tulane University’s sports law program.
Though a relocation was next to impossible, the state could have played hardball with the team by opting out of the deal after the 2007 season, electing to forgo all future inducement payments from 2008 to 2010, which total $70.5 million. In that scenario, the Saints would have had the option to terminate the lease at any time within one year without any fee or penalty.
The Saints, meanwhile, were nearing the end of a 60-day contractual window in which they could terminate the lease and relocate to another city for the 2007 regular season, a fact that had heightened anxieties among their fiercely loyal fan base. But the club gave no indication that such a controversial move was ever been considered. In fact, Benson announced late last season that the club would freeze season-ticket prices for the 2007 season.
On the heels of the most successful season in club history, in which the team made its first appearance in the NFC championship game, the Saints had little motivation to leave. They have sold all season tickets for the 2007 season and are on target to sell out of their entire luxury suite inventory, thought to be a milestone in club history.
Even if the club wanted to leave, its potential relocation options were limited at best. Los Angeles has not solved its stadium problem and is no further along in its quest to land an NFL team than it was two years ago. And NFL Commissioner Roger Goodell told San Antonio officials in January that the league has no interest in their city right now. The Saints were based in San Antonio during the Hurricane Katrina-marred 2005 season and played some of their games at the Alamodome.
The new deal renders relocation a moot point for the next four years.
“The Saints are no longer just a football team; they have become a symbol that the entire community has rallied around,” said David Carter, a principal at the Sports Business Group consulting firm in Los Angeles and the executive director of the Southern California Business Institute. “So, to the extent that either side is thought to be willing to jeopardize one of sports’ most compelling stories of late, that party will be damaged.
“Because much of the country is following this situation more closely than it does other franchise/city negotiations, it is critical for the team and the city to get it right. Otherwise, the appearance will be one of New Orleans missing an opportunity to elevate itself and be recognized as a community on the mend.”
The Saints’ amended lease gives the team nearly all revenue on game days, from tickets, advertising, concessions, parking, merchandise and club seats and suites. That revenue should increase when the second phase of a $185 million renovation of the Superdome is completed in mid-August.
Though Saints officials are happy with the renovation, they also point out that the team plays in a small market with a small corporate base, limiting the amount of revenue the team can generate. Their concerns are heightened by the skyrocketing cost of doing business in the NFL, where the salary cap for players is scheduled to increase from $109 million this season to about $139 million in 2008.
The new agreement also includes a commitment by the state to continue to upgrade the Superdome, which at 31 years is one of the oldest stadiums in the NFL.
The state plans to explore financing options for a third construction project that would further upgrade the club lounges. The bulk of the $6.5 million plan involves installing large glass windows and private escalators to the club rooms at the corners of the stadium. Both projects were part of the original Phase II renovation but were scrapped because of cost overruns.
State officials hope the money for the project will be included in the next capital outlay budget, Thornton said.
With the first phase of the $185 million renovation all but finished, work has begun on Phase II, which is scheduled for completion Aug. 15. Thornton said demolition work in the club rooms and about 30 percent of the overall work on the $27 million project is complete. About 60 percent of the work has been contracted, he said.
Even without the glazing and new escalators, Thornton said the new club lounges will be drastically improved from the previous models, featuring an open layout, new carpet, furniture and upgraded concession areas.
“The club-level improvements make a dramatic impact on the stadium,” Thornton said at the monthly meeting of the Louisiana Stadium and Exposition District’s board of commissioners last week. “You’re going to have this vast space on the 200-level concourses that are going to impact this facility in a big way.”
State officials also are considering a project to replace the exterior aluminum skin of the Dome, which sustained significant damage during Katrina. The project has an estimated price tag of $21 million. Through a combination of FEMA and state financing, the state has about $9 million budgeted for the project.
State officials are trying to identify ways to pay for the extra $12 million. Potential sources are capital outlay funds and/or Community Development Block Grant dollars from the Louisiana Recovery Authority.
If money can be found, the project would be done in the spring of 2008, Thornton said.
Jeff Duncan can be reached at [email protected] or (504) 826-3404.
Copyright 2007 NOLA.com. All Rights Reserved.
While this may seem disheartening for San Antonians hoping to one day get their own team. It also frees us from having to follow this story with only a faint glimmer of hope that it would all work out in our favor. And unlike our city leaders we must never give up on this goal. I still contend San Antonio will be in the league within five years.
By Jeff Duncan
Staff writer
In a goodwill gesture designed to grease negotiations for an eventual long-term deal, state officials have reached an agreement with the New Orleans Saints that keeps the team in the state for the next four years, state officials confirmed Sunday evening.
The agreement essentially eliminates termination clauses for each side, either of which could have led the team to relocate to another city in the next year, and buys time to negotiate a long-term deal.
Gov. Kathleen Blanco and state officials are expected to formally announce the deal today in a news conference at the Governor’s Mansion in Baton Rouge.
Saints officials did not respond to e-mail messages seeking comment Sunday.
Saints owner Tom Benson and most of the team’s executive staff are in Phoenix for the NFL’s three-day annual meeting, which begins today.
In a proposal sent to team officials earlier this month, the state offered to eliminate its 2008 termination clause in the existing contract and commit to further enhancements at the Superdome.
In return, the Saints agreed to drop their right to terminate the lease this spring. Under terms of the current deal, the Saints could have broken the lease before Saturday and relocated to another city without penalty as long as they reimbursed the state the $70 million it has paid the team in inducements, lease concessions and facility improvements during the first six years of the 10-year contract.
With the deadline looming, state and team officials had discussed the elimination of the exit clauses for the past few months.
At the request of Gov. Blanco, the state team, led by Jimmy Clarke, chief of staff; Jerry Luke LeBlanc, commissioner of administration; Tim Coulon, the chairman of the Louisiana Stadium and Exposition District; and Doug Thornton, regional vice president of SMG, the company that manages the Superdome for the state, pushed for an agreement before the deadline and reached an agreement late last week, Thornton said.
The agreement, which will require the fifth amendment to the original stadium deal in the past seven years, is seen as a collaborative place setting toward an eventual long-term deal. The current lease, which was amended in 2001 by then-Gov. Mike Foster, ends after the 2010 season.
State officials today are expected to announce their plans to immediately enter into negotiations with the Saints for a long-term contract. However, talks are not expected to intensify until after the gubernatorial election this fall. Blanco announced last week she will not run for re-election. NFL officials have said the league will not consider awarding a Super Bowl to New Orleans until a long-term deal is in place.
“They have not settled any substantive terms, so this is not a solution. It is simply a bit of a cease-fire while they continue to work on long-term solutions,” said Gary Roberts, the deputy dean of Tulane University’s sports law program.
Though a relocation was next to impossible, the state could have played hardball with the team by opting out of the deal after the 2007 season, electing to forgo all future inducement payments from 2008 to 2010, which total $70.5 million. In that scenario, the Saints would have had the option to terminate the lease at any time within one year without any fee or penalty.
The Saints, meanwhile, were nearing the end of a 60-day contractual window in which they could terminate the lease and relocate to another city for the 2007 regular season, a fact that had heightened anxieties among their fiercely loyal fan base. But the club gave no indication that such a controversial move was ever been considered. In fact, Benson announced late last season that the club would freeze season-ticket prices for the 2007 season.
On the heels of the most successful season in club history, in which the team made its first appearance in the NFC championship game, the Saints had little motivation to leave. They have sold all season tickets for the 2007 season and are on target to sell out of their entire luxury suite inventory, thought to be a milestone in club history.
Even if the club wanted to leave, its potential relocation options were limited at best. Los Angeles has not solved its stadium problem and is no further along in its quest to land an NFL team than it was two years ago. And NFL Commissioner Roger Goodell told San Antonio officials in January that the league has no interest in their city right now. The Saints were based in San Antonio during the Hurricane Katrina-marred 2005 season and played some of their games at the Alamodome.
The new deal renders relocation a moot point for the next four years.
“The Saints are no longer just a football team; they have become a symbol that the entire community has rallied around,” said David Carter, a principal at the Sports Business Group consulting firm in Los Angeles and the executive director of the Southern California Business Institute. “So, to the extent that either side is thought to be willing to jeopardize one of sports’ most compelling stories of late, that party will be damaged.
“Because much of the country is following this situation more closely than it does other franchise/city negotiations, it is critical for the team and the city to get it right. Otherwise, the appearance will be one of New Orleans missing an opportunity to elevate itself and be recognized as a community on the mend.”
The Saints’ amended lease gives the team nearly all revenue on game days, from tickets, advertising, concessions, parking, merchandise and club seats and suites. That revenue should increase when the second phase of a $185 million renovation of the Superdome is completed in mid-August.
Though Saints officials are happy with the renovation, they also point out that the team plays in a small market with a small corporate base, limiting the amount of revenue the team can generate. Their concerns are heightened by the skyrocketing cost of doing business in the NFL, where the salary cap for players is scheduled to increase from $109 million this season to about $139 million in 2008.
The new agreement also includes a commitment by the state to continue to upgrade the Superdome, which at 31 years is one of the oldest stadiums in the NFL.
The state plans to explore financing options for a third construction project that would further upgrade the club lounges. The bulk of the $6.5 million plan involves installing large glass windows and private escalators to the club rooms at the corners of the stadium. Both projects were part of the original Phase II renovation but were scrapped because of cost overruns.
State officials hope the money for the project will be included in the next capital outlay budget, Thornton said.
With the first phase of the $185 million renovation all but finished, work has begun on Phase II, which is scheduled for completion Aug. 15. Thornton said demolition work in the club rooms and about 30 percent of the overall work on the $27 million project is complete. About 60 percent of the work has been contracted, he said.
Even without the glazing and new escalators, Thornton said the new club lounges will be drastically improved from the previous models, featuring an open layout, new carpet, furniture and upgraded concession areas.
“The club-level improvements make a dramatic impact on the stadium,” Thornton said at the monthly meeting of the Louisiana Stadium and Exposition District’s board of commissioners last week. “You’re going to have this vast space on the 200-level concourses that are going to impact this facility in a big way.”
State officials also are considering a project to replace the exterior aluminum skin of the Dome, which sustained significant damage during Katrina. The project has an estimated price tag of $21 million. Through a combination of FEMA and state financing, the state has about $9 million budgeted for the project.
State officials are trying to identify ways to pay for the extra $12 million. Potential sources are capital outlay funds and/or Community Development Block Grant dollars from the Louisiana Recovery Authority.
If money can be found, the project would be done in the spring of 2008, Thornton said.
Jeff Duncan can be reached at [email protected] or (504) 826-3404.
Copyright 2007 NOLA.com. All Rights Reserved.
While this may seem disheartening for San Antonians hoping to one day get their own team. It also frees us from having to follow this story with only a faint glimmer of hope that it would all work out in our favor. And unlike our city leaders we must never give up on this goal. I still contend San Antonio will be in the league within five years.