newshound

Benson awaits king’s ransom

Friday, April 29, 2005
By Peter Finney

"It’s good to be the king, " said Mel Brooks in the movie, "History of the World: Part I." In the movie, it was a funny aside. In real life it’s no laughing matter, especially for Kathleen Blanco.

If our governor didn’t know before, she knows now. She’s dealing with something that might best be called the "Divine Right of Kings."

The history books suggest it all goes back to the Roman Numeral XIV, not a Super Bowl, mind you, but a king, Louis 14th of France, who is supposed to have said, "I am the state."

In a way, that’s exactly the message Tom Benson handed Gov. Blanco on Wednesday, when the Saints owner ended talks with our political leader, regarding a deal to keep the team in Louisiana, until after the 2005 football season.

It shocked the governor, who felt the state was negotiating in good faith with an organization whose annual net profit, according to one well-informed source, is at least $24 million.

But the governor has to realize: Kings answer to no one.

"Hey, " King Thomas I was saying, "I like that deal Gov. Foster forced me to sign before he went duck hunting full time. No reason to change anything. Love those subsidies."

No kidding.

It was Huey Long who said, "Every man a king." Now it’s "every NFL owner a king, " kings whose revenue books are closed, but at the same time, garner all sorts of financial goodies such as tax breaks, free rent, and in the case of our Saints, an annual dose of no-strings-attached millions.

Believe me, no franchise in big-time sports has a better contract with a state than the one Foster and Benson signed in 2001, and I’m talking about annual inducements over 10 years totaling $180.5 million.

And that was only part of the deal.

In addition to those guarantees, the Saints also received: A rent-free Superdome; game-day staffing paid by the state; 100 percent of premium seating (box suites and club seats), 100 percent of game-day parking, fixed panel advertising and video-board advertising and 50 percent of Superdome marketing fund.

The total value of the above amounts to roughly $11 million per season, which does not include ticket sales, sponsorships and broadcast fees controlled by the team.

Here’s what the Benson-Foster handshake did: It put the Saints’ bottom line in the NFL’s top 12.

Here’s what the Benson-Blanco talks are trying to do: Keep the Saints in the top 15 in net revenue (even if they keep missing the playoffs), but with a chance for Jim Haslett’s ballclub to move up, depending on success at the box office.

Blanco has to understand, when you’re dealing with kings, it’s a tough sell asking a king to accept any sort of risk.

Here’s what the Superdome and the state has meant to Benson the past 20 years: $122 million in "lease entitlements" (that includes money coming in and money you don’t have to pay); $70 million in "subsidies" (when the state forks over another $15 million in July); $6 million toward a new complex on Airline Highway; another $6 million toward an indoor practice facility.

That adds up to $204 million.

Not bad for a corporate-poor state trying to keep its NFL team. Not bad for a Superdome the team’s owner called outdated. Here’s the financial storyline Blanco inherited upon replacing Mike Foster.

When Benson purchased the Saints in 1985 for $72 million, his lease benefits included: game-day rent reduced from 10 percent to 5 percent of gross proceeds; all revenues from box suites; 35 percent of gross concession sales, merchandise sales and souvenir sales; all game-day parking revenue; 50 percent of Superdome marketing and promotional fund; free rent for administrative offices in the Superdome.

In 1994, at the request of the Saints, the lease was renegotiated. Superdome bonds were refinanced, providing $22 million for dome improvements, creating more revenue-producing opportunities for the franchise and new ticket-office facilities.

In addition to the $6 million for construction of a complex on Airline Highway, the lease did other things. Game-day rent was capped at $800, 000. Club share of concessions, merchandise and souvenir sales went from 35 percent to 42 percent. The Saints assumed responsibility for marketing luxury box suites and received 100 percent from suite rentals.

Then came a third renegotiation in 2001.

In all three cases, the Saints requested renegotiation. The ‘85 lease was scheduled to remain in effect until 2012. The ‘94 lease was for 23 years. So, yes, leases have been renegotiated. This time, it’s the state asking to renegotiate, just like the Saints have.

And now?

Well, King Thomas I is playing the fear game. He’s a king who knows he can’t do worse than make a net profit of $24 million next year. He’s also a king who realizes Kathleen I does not want to lose an NFL franchise.

She just wants the king to take a teeny-tiny risk.

The history books suggest it all goes back to the Roman Numeral XIV, not a Super Bowl, mind you, but a king, Louis 14th of France, who is supposed to have said, "I am the state."

In a way, that’s exactly the message Tom Benson handed Gov. Blanco on Wednesday, when the Saints owner ended talks with our political leader, regarding a deal to keep the team in Louisiana, until after the 2005 football season.

It shocked the governor, who felt the state was negotiating in good faith with an organization whose annual net profit, according to one well-informed source, is at least $24 million.

But the governor has to realize: Kings answer to no one.

"Hey, " King Thomas I was saying, "I like that deal Gov. Foster forced me to sign before he went duck hunting full time. No reason to change anything. Love those subsidies."

No kidding.

It was Huey Long who said, "Every man a king." Now it’s "every NFL owner a king, " kings whose revenue books are closed, but at the same time, garner all sorts of financial goodies such as tax breaks, free rent, and in the case of our Saints, an annual dose of no-strings-attached millions.

Believe me, no franchise in big-time sports has a better contract with a state than the one Foster and Benson signed in 2001, and I’m talking about annual inducements over 10 years totaling $180.5 million.

And that was only part of the deal.

In addition to those guarantees, the Saints also received: A rent-free Superdome; game-day staffing paid by the state; 100 percent of premium seating (box suites and club seats), 100 percent of game-day parking, fixed panel advertising and video-board advertising and 50 percent of Superdome marketing fund.

The total value of the above amounts to roughly $11 million per season, which does not include ticket sales, sponsorships and broadcast fees controlled by the team.

Here’s what the Benson-Foster handshake did: It put the Saints’ bottom line in the NFL’s top 12.

Here’s what the Benson-Blanco talks are trying to do: Keep the Saints in the top 15 in net revenue (even if they keep missing the playoffs), but with a chance for Jim Haslett’s ballclub to move up, depending on success at the box office.

Blanco has to understand, when you’re dealing with kings, it’s a tough sell asking a king to accept any sort of risk.

Here’s what the Superdome and the state has meant to Benson the past 20 years: $122 million in "lease entitlements" (that includes money coming in and money you don’t have to pay); $70 million in "subsidies" (when the state forks over another $15 million in July); $6 million toward a new complex on Airline Highway; another $6 million toward an indoor practice facility.

That adds up to $204 million.

Not bad for a corporate-poor state trying to keep its NFL team. Not bad for a Superdome the team’s owner called outdated. Here’s the financial storyline Blanco inherited upon replacing Mike Foster.

When Benson purchased the Saints in 1985 for $72 million, his lease benefits included: game-day rent reduced from 10 percent to 5 percent of gross proceeds; all revenues from box suites; 35 percent of gross concession sales, merchandise sales and souvenir sales; all game-day parking revenue; 50 percent of Superdome marketing and promotional fund; free rent for administrative offices in the Superdome.

In 1994, at the request of the Saints, the lease was renegotiated. Superdome bonds were refinanced, providing $22 million for dome improvements, creating more revenue-producing opportunities for the franchise and new ticket-office facilities.

In addition to the $6 million for construction of a complex on Airline Highway, the lease did other things. Game-day rent was capped at $800, 000. Club share of concessions, merchandise and souvenir sales went from 35 percent to 42 percent. The Saints assumed responsibility for marketing luxury box suites and received 100 percent from suite rentals.

Then came a third renegotiation in 2001.

In all three cases, the Saints requested renegotiation. The ‘85 lease was scheduled to remain in effect until 2012. The ‘94 lease was for 23 years. So, yes, leases have been renegotiated. This time, it’s the state asking to renegotiate, just like the Saints have.

And now?

Well, King Thomas I is playing the fear game. He’s a king who knows he can’t do worse than make a net profit of $24 million next year. He’s also a king who realizes Kathleen I does not want to lose an NFL franchise.

She just wants the king to take a teeny-tiny risk.

http://www.nola.com/saints/index.ssf..._state_2.html#

WhoDat

WOW - now that is a good article. How can you side with this guy? If this isn't the definition of sleezy greedy car dealer, I don't know what is.

BooBirdSaint

Maybe Benson should hire "Count de Money"...

BooBirdSaint

Maybe Benson should hire "Count de Money"...

JDib

You know that article sure puts a bad slant on Benson, but think of this. Mabey instead of bashing Benson all the people of Louisiana need to just be gratful that they have had an NFL team as long as they have, really I just don't think you all are being realistic as to what having an NFL team means or what it takes to keep them. Don't you think the people of Huston and Baltimore were saying the same stuff that alot of people in Louisiana are, but look at what they both paid to get a team back a few years later after they realized what they lost. At the time a new stadium was too much to pay for their NFL team. Only a few years later both cities paid 1 billion or more to get one back. The only difference is New Orleans will never be able to come up with the one billion to get a new team once the saints leave. Its been nice while it lasted. Just imagine what the state legislature will have to do to make up for the tax void left by the saints after they leave, aww it doesent matter screw the saints they don't do anything for the city or state. Those greedy bums.

TayTay

If you aren't a saints fan, why are you posting on here? There is nothing wrong with posting a little negativity every now and then, but if you are going to flat out insult the saints, then just don't bother posting. I take it personally when you say screw the greedy bum saints, so please keep your comments to yourself. I may get in trouble with the mods by saying this, but I don't care. As far as I am concerned, you can leave this forum if all you will do is bash the team we love. If you don't support the saints, that is fine, but please keep your bs comments to yourself. Thanks

http://img188.echo.cx/img188/2215/untitled29jc.jpg

JDib

You know Tay Tay, I'm glad to see you take up for the Saints, they are a team I have grown up watching and love. My comments were sarcastic, and were written out of frustration with alot of people on this site as well as things in the media that think that the saints are greedy and have no business making the demands that they have. Hopefully the people of this state will wake up and so will the legislature and realize what they have and take steps to insure that it will be here for the future. I think that to many people just take for granted that they will be here regardless and that type of additude is what is going to run them out of town.

WhoDat

You said it costed Baltimore and Houston over $1 Billion to get teams back, right? I won't try to confirm or deny those numbers, let's just say you're right.

Both of those cities had to basically build from the ground up, right? New stadiums, practice facilities, advertising, infrastructure, everything. Can we agree that it costs MUCH more to get a new team, than to keep an existing one?


But the State offered a deal that would pay the Saints up to $737 million. That's nearly 3/4 of the $1 billion you said that the State could never come up with - and they're offering it to a team that's already here, and has been rumored to be anywhere in the top 6 to 12 in profit in the NFL.

I fail to see where the State is falling short. I also think that it is unwise to say that the revenue that the Saints generate is irreplaceable in the State economy. The Morial Convention Center alone generates 6 times the "economic impact" as do the Saints. Tourism in New Orleans is 16 times. How much more do you think the Port of New Orleans is? Entergy? Avondale? I've shown that 1 Costco and 1 Home Depot will generate the same amount of revenue annually as the Saints. Sure, there is definitely a loss to the State in prestige by losing the Saints, and that has an effect on the economy. No doubt. But how much more does Benson want? $850 million over 20 years? $1 billion over 20 years? Those numbers are starting to get ridiculous, especially for a team that already has one of the best deals in football, and is amongst the tops in the league in profit - despite what its owner may claim.

\"Excuses, excuses, excuses. That’s all anyone ever makes for the New Orleans Saints’ organization.\" - Eric Narcisse


\"Being a Saints fan is almost like being addicted to crack,\" he said.[i]\"You know you should stop, but you just can\'t.\"

Euphoria

"Its good to be the King". I HIGHLY doubt that any one of those stores can generate that kind of money not only have the impact on the economy as the Saints do... I can see it now, people traveling to New Orleans from out of state ect. to shop at a Cosco or Home Depot, i mean come on why would you shop at the one where you live in Miss. if you can go to New Orleans 150 miles away. Then you have to take into account the money people will lose from not having Saints mercandise... small buisness even. Hotels will have to cut down costs and lay off people because they will lost money due to games not being in town and food providers will lose money. Tourism will take a hit... part of tourism is going to see the Saints play or facilities... don't give me crap about that one the only reason I went to New Orleans was to see the Saints in camp.

WhoDat

Are joking? Seriously?

First - I said that those two stores could generate the same REVENUE, not economic impact. The Saints made something like $157 million in revenue last year. A Costco store makes $113 or something like that - I posted the exact numbers in another thread. In terms of DIRECT tax dollars from the CORPORATION, that Costco probably generates as much as the Saints - b/c they pay regular taxes on their revenue - they don't get the breaks that the Saints get.

Second - as far as economic impact, the Saints do have one, a large one. But to suggest that hotels will have to lay people off is flat crazy. Tourism will suffer if the Saints leave? Minimally, if at all. A million tourists go to Mardi Gras. I would be surprised if the Saints have 100,000 fans travel from outside of their "market" to see a game in the entire season. Try to call any hotel in downtown New Orleans in October on a weekend when the Saints are away. See if you can get a room. I bet you can't. Know why? That's CONVENTION season. Ask a hotel manager in New Orleans how much the Saints effect his business I bet you the answer will be, "not much." Ask how much the convention center or French Quarter or Mardi Gras or Jazz Fest, etc. effect his business and I bet you its far far more.


Folks - suggesting that if the Saints leave that the New Orleans economy will suffer so greatly that hotels and restuarants will be in jeopardy, or that the revenue that the Saints generate couldn't be made up demonstrates, IMO, a severe lack of understanding of macroeconomics. The Saints do NOT drive New Orleans' economy. They contribute, and they contribute to the State. But in terms of actaul loss if the Saints leave - you're looking at mostly intangible loss (i.e. loss of prestige and status) that will be very difficult to make up. The actual financial blow would be minimal. Or did I miss the 60 Minutes special on the crisis in the Cleveland, LA, and Houston economies when their teams left??? LOL

\"Excuses, excuses, excuses. That’s all anyone ever makes for the New Orleans Saints’ organization.\" - Eric Narcisse


\"Being a Saints fan is almost like being addicted to crack,\" he said.[i]\"You know you should stop, but you just can\'t.\"