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#