WhoDat

The battle between the State of Louisiana and the New Orleans Saints has really blown up over the last few months of the off-season. Negotiations, which had been heating up since last June when the State had to reach deep to come up with the 15 million dollar subsidy the team was due under the current agreement, finally broke down in late April when Benson announced in an open letter to fans that he was breaking off talks with the State.

Last week, Stanley Rosenberg, Benson’s long-time friend and attorney, announced publicly to a San Antonio paper that Benson has begun talks with San Antonio and Albuquerque about relocation, and that he even received an offer of $1.2 billion from an investor in, you guessed it, Los Angeles. The State has shrugged it off as normal old Benson tactics, but fans seem increasingly concerned. Will the Saints move? Will Benson sell? Are San Antonio, Albuquerque, L.A., and private investors waiting in the wings to snatch the team away from New Orleans? Many fans are mad, mainly at Governor Kathleen Blanco, who they blame for the situation. Is Blanco really some dim-witted politician who doesn’t understand the importance of the Saints? Is she letting up-State anti-New Orleans sentiment get in her way? Has she played the class warfare card one too many times?

This is just one man’s opinion but if you’re looking for a culprit in this whole mess look no further than Tom Benson. Let’s try to look at this rationally shall we?


Albuquerque, Investors, and San Antonio, oh my!

Think that there is any relevance to the fact that the relocation rumors surfaced less than one month after Benson broke off talks with the State? Blanco’s harsh (and on-point) criticism of Benson’s failure to compromise, even after having received a proposal from the State guaranteeing over $400 million in revenue, and having a potential value to the team of roughly $737 million during the next 20 years, left Benson with no other option than to use scare tactics.

What you’re seeing is two shrewd negotiators using what they’ve got. Blanco has public sentiment and class warfare – both of which she has used quite well .Benson has the only thing that might just trump that: fear - and he uses it better than most anyone else in the deep south. But will they move, you ask again. Or is Benson just bluffing? He’s bluffing. Absolutely.

Albuquerque
The idea that the Saints might move to Albuquerque is so clearly unfounded it’s almost laughable. As a metropolitan area, Albuquerque boasts a whopping 735,000 or so people, according to the 2000 census - just over half of the 1.35 million in the New Orleans metropolitan area. They also don’t have that extra million people surrounding the area that New Orleans has in the North Shore and Mississippi Gulf Coast. Albuquerque’s average annual income is below national averages, and the city has a large Hispanic population – a group know to support a different type of football (or futbol).

Oh yeah, and there’s one other small problem. Albuquerque doesn’t have an NFL stadium. Last time I checked, that was something that was kind of important to Tom Benson in his quest to “stay competitive� with the other teams in the league.

But if you believe Benson and company, a smaller poor market city lacking the fan-base that has been loyal to one of the least successful franchises in history (on the field that is) for nearly 40 years, and without a stadium looks better right now than New Orleans. In reality, Albuquerque’s demographics are so unattractive that the ARENA Football League passed at a chance to put a team in the city. The Albuquerque City Council has twice failed to pass a bill that would build a minor league baseball arena in the downtown area, but we’re supposed to believe that Benson is inches away from calling Ryder. Give me a break.

Investors
Frankly, I’m not sure what is more laughable, the idea of the Saints in Albuquerque, or the thought that someone would offer $1.2 billion for the team. According to Forbes 2004 NFL Team Valuations List, the Saints are 26th, worth about $627 million.

When Dan Snyder bought the Redskins in 1999, he paid the ungodly amount of $800 million – for a team in the Nation’s capital – a team with history, success, and a far bigger following than the Saints. The currently pending Vikings sale was announced three months ago for $625 million. The Vikings have the same stadium woes as the Saints, but they also have a larger market and more successful history. Yet, Tom Benson wants you to believe that someone offered him $1.2 billion, twice what the team is worth and more than any NFL franchise’s current value, and he simply said he had to think about it b/c he’d much prefer to keep the team in New Orleans if he can just squeeze a few million more dollars out of the state??? Sure Tom, if someone offered me $40,000 for my $20,000 headache of a car that can never seem to run right and always needs more money for repairs just to keep up with the other cars on the road, I’d have to think about it also. After all, I love that car. Give me a break.

San Antonio
Tom Benson has a house in San Antonio. His friends are there. He has business interests there. The city has the Alamo Dome, a stadium that has seated 64,000 for college Bowl Games. The city is larger (1.4 million according to the 2000 census). They already support a successful professional basketball team. Oh no, they could be a real threat, huh?

According to many close to San Antonio, the Alamo Dome would require roughly $200 million in renovations to bring it up to NFL Standards. Whether “NFL Standards� are above or below the Super Dome’s current condition is unknown. Last I checked, San Antonio wasn’t offering the Saints $170 million to renovate their stadium to add the suites Benson claims to need so badly just to stay profitable (PS – the Super Dome has 125 suites – current NFL average 137). And what would the Spurs think of renovations to what is currently their stadium? Think Jerry Jones would happily allow a third team in the state, in a city that is decidedly Cowboy-centric at present?

The Dome renovation alone, along with the State’s pledge of $267 million in guaranteed payments through 2025 is worth $401 million, and that’s if the renovations don’t make a single extra dollar for the Saints. The team estimates that the renovations would generate another $250 million. There is also an incentive that would allow the Saints to get paid even more based on team performance (no wonder Benson wants no part of the deal). All in all, the likely final figure is $737 million to the Saints in the next 20 years. Is San Antonio willing to meet an offer like that? And offset the huge costs that coincide with moving a sports franchise, pay Benson’s $81 million penalty to move the team before 2010, build him the brand new state of the art training facility that the Saints currently have, give him 100% of the concessions from every event in the goes on in the Alamo Dome, offer no sales taxes on tickets, and pay the team tens of millions of dollars each year just for its presence? I seriously doubt it.


The Los Angeles Factor

I believe NFL commissioner Paul Tagliabue when he says he wants a team in LA by 2009. It won’t be the Saints, though. LA has proven twice that the city couldn’t care less about football. Given the involvement of the commissioner, that’s not likely to happen a third time. You simply won’t get the people of LA to back a team like the New Orleans Saints. If they wouldn’t back the Raiders – one of the most storied franchises in the league, with one of the most eccentric owners, and the flat-out craziest fans – how in the hell can anyone expect them to support the debacle that is the New Orleans Saints? I expect the LA team to be an expansion team. It just doesn’t make sense to move a struggling team and supplant all that baggage.

But don’t take my word for it. NFL spokesman Greg Aiello said, “And as far as L.A., the entire L.A. process is a league matter. We have not decided on a stadium site yet, much less a team.�


Tom Benson: A lesson in negotiating (and maybe bad faith)

At this point, I really don’t know how the State can believe much of what Tom Benson says. His statements, actions, and the reports about the team contradict so sharply, it’s almost comical.

For example: for three or four years now, basically since the Saints got the current deal to receive State subsidies to offset all of the “losses� or “costs� associated with playing in an older stadium, Tom Benson has been claiming that he simply needs a new stadium to keep up with the rest of the league. He says that he cannot be profitable in a small market with an old stadium. The numbers suggest just the opposite. According to Forbes, the Saints Operating Income, which essentially measures how much money a team makes after operating expenses (but before taxes and depreciation) was just shy of $30 million in 2002. That figure ranked the team 6th in the league in 2002. In 2003, the Saints slipped to 8th, but their Operating Income rose by nearly 50% to $43.1 million. So for two years the Saints were in the top ten in the league in income earned in a single season, all while Benson was claiming that he couldn’t keep pace with the other teams.

As the current Dome renovation negotiations have gone on, the State has discovered that Benson football purchased a 122-foot yacht valued at as much as $20 million. The State has asked to see the team’s books, to verify that they really can’t make profits consistent with the rest of the league. Benson has refused, and this year Forbes is reporting that in 2004, the team estimates only $7.8 million in Operating Profit, which ranks them in the 20’s. Ask yourself – other than these negotiations, what happened that could possibly have erased $35 million of income in a single year? Ticket sales weren’t down significantly from a season ago, though they were down (not $35 million worth), and really, that matters little b/c ticket revenue is shared evenly by all teams. So is TV revenue. The team got a larger payment from the State. So what happened? Did fans buy $35 million fewer t-shirts and hats? Maybe, but I doubt it, and even if so, how is that anyone’s fault but the team’s?

It doesn’t stop there. In late April, and throughout the negotiations with the State, Tom Benson has claimed to be loyal to New Orleans – to want to keep the Saints there long-term. In breaking off talks with the State, Benson said that both sides should simply honor the deal in place. Less than a month later, he’s supposedly shopping his team around to other markets! So was he lying when he said he wanted to keep the team in New Orleans? Or is he lying now about shopping it around? To me, this feels an awful lot like bad faith. But I understand why Benson is doing it. It worked for him in the past.

In 2001, Benson threatened to move the team to Mississippi where he said he could have a new state-of-the-art NFL stadium built. A few months later, the State paid him the money he wanted (the current deal). He is simply reverting now to the same scare tactics that worked last time.

Also, keep in mind that Tom Benson is the chairman of the NFL’s Finance Committee. Do you seriously think a guy that can’t make his team any money and is constantly having to ask for hand-outs would be made chairman of a committee concerned solely with money? Tom Benson has one of the best sweetheart deals in the league right now – maybe the best. He’s knows exactly what he’s doing, and now he simply wants to go back to the well one more time rather than have to do the things it takes to make his team profitable himself (like putting a good product on the field every Sunday).

The State has offered a renovated Dome, continue direct payments to the team, and add incentives that would allow the team to make more money if it wins. Benson declined such an offer. He claims to be losing ground on the other owners, and making next to nothing, but won’t open his books to prove it. Forbes reports otherwise. He claims to want to keep his team in New Orleans long-term, but shops it around. He wants the state to honor the deal to him, but he’s willing to renegotiate, just so long as he makes even more money in a more one-sided deal. When the State offers him $400 million in guaranteed money to ease the burden of their current payment, he doesn’t want to negotiate. The team cites one economic impact study done by a professor at UNO that claims that the Saints have hundreds of millions of dollars of economic impact, but it ignores the many others that suggest that teams have nominal if any real economic impact on a market. Benson bought the Saints 20 years ago for $70 million. It’s now worth $627 million, and he’s whining about not making money. Nearly 1000% return in 20 years isn’t enough. But he needs a new stadium to make money, right? Sure, just ask Forbes:

“The New Orleans Saints play in the Superdome, one of the oldest stadiums in the NFL. But its old age doesn't prevent team owner Tom Benson from scoring big-time. In 2001, the Saints renegotiated their lease with the state of Louisiana and signed a 10-year agreement. According to this deal, the Saints must pay $186.5 million in annual payments starting at $12.5 million and ultimately rising to $23.5 million at the end of the 10-year period. Oh, yes, and the Saints pay no rent under the new deal - Touchdown!�

Folks, something is rotten in the State of Louisiana, but it’s not the governor. To find it, just cruise on over to Airline Drive. You’ll find what stinks boogyin’ all the way to the bank under a bright yellow umbrella.


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