http://www.examiner.com/examiner/x-3926-Business-of-Sports-Examiner~y2010m1d7-LA-stadium-offer-to-Bills-Jaguars-no-great-deal#
LA Stadium Offer to Bills, Jaguars No Great Deal
By Evan Weiner
January 7, 2010
(New York, N. Y.) -- Here is a question that Ed Roski needs to answer in his quest to yet again attract a National Football League franchise to the Los Angeles market, specifically the City of Industry. Who is funding the stadium project? You, your Majestic Realty Company or will it be Ralph Wilson or Wayne Weaver? The answer to that question is necessary because at this point it is rather unclear when the dollars that are needed to build a “majestic” stadium for an NFL owner or NFL owners to move a franchise to the market are coming from.
The stadium was supposed to cost $800 billion when the City of Industry City Council approved the plan in February 2009. The $800 million figure seems out of line and too conservative when compared with Jerry Jones’s Arlington, Texas venue for his Dallas Cowboys and the East Rutherford, New Jersey stadium that is being funded by the owners of the New York Giants and New York Giants. Both stadiums price tags are estimated at well over a billion dollars.
The National Football League used to have something called the G-3 program which loaned up to $150 million to owners who built stadiums. Money went to Denver’s Pat Bowlen, ($50 million) in 1999, New England’s Bob Kraft ($150 million) in 1999, Philadelphia’s Jeffrey Lurie ($150 million) in 1999, Detroit’s William Clay Ford ($100 million) in 2000, Seattle’s Paul Allen ($50 million) in 2000, Chicago’s McCaskey Family ($100 million) in 2000, the Green Bay Packers Board of Directors ($100 million) in 2001, Arizona’s Bill Bidwill ($50 million) in 2001, Dallas’ Jones ($76.5 million) in 2005 and Indianapolis’s Jim Irsay ($34 million) in 2005 to fund new facilities or to renovate old venues.
Even though the G-3 program was running out of money by 2006, the Giants Mara-Tisch families and the Jets Woody Johnson did get $300 million for their new Meadowlands facility from NFL owners in 2006 and the Kansas City Chiefs Hunt family ended up with $42.5 million for renovations at Arrowhead Stadium.
The loans helped fill a shortfall between public financing of projected final costs of stadiums in Denver, Philadelphia, Detroit, Seattle, Chicago, Green Bay, Glendale, Arizona, Arlington, Texas and Indianapolis. All the facilities including Foxboro, Massachusetts and East Rutherford, New Jersey received various tax breaks whether they were privately or publicly funded.
Majesty Realty plans to pursue Buffalo’s Ralph Wilson or Jacksonville’s Wayne Weaver initially. Wilson’s lease in Orchard Park ends following the 2012 season. Wilson is 91 years old and he has leased a number of home games to Toronto through the 2012 season. Toronto, Ontario is 90 miles from Buffalo and there is enough money in Toronto to support an NFL team should Wilson or his heirs decide that small market Buffalo is not for them.
Jacksonville does not have the wherewithal to support an NFL team in the 21st century as there are not enough well heeled fans or corporate dollars around to sell out the stadium. Demographers were wrong in estimating the city’s growth and potential when the NFL awarded Jacksonville a franchise in 1993. The Jaguars owner Wayne Weaver has won lease concessions from the city but has been unable to sell naming rights at the Jacksonville stadium and the team has not be able to sell out the stadium which means home games are not seen in the Jacksonville market. This despite cutting down the capacity of the stadium by covering seats.
Majesty Realty has decided that Buffalo and Jacksonville are not NFL markets by whatever arbitrary means they have created. The company will not go after San Diego’s Alex Spanos, Minnesota’s Zygi Wilf or San Francisco’s York family because those owners are attempting to find financing in those markets although the Yorks have their eyes set on Santa Clara which is 40 miles south of San Francisco with Oakland as a fallback position.
The NFL would like to see the York Family and Oakland’s Al Davis to find common ground and work on a new stadium together to solve a potential Bay Area problem. Davis lease in Oakland ends in 2013.
St. Louis is another franchise that might be in the City of Industry mix. The Rams franchise lease ends in 2014.
Roski and his company want to develop a football village in the City of Industry complete with a stadium and other businesses. Roski doesn’t want to outright own an NFL team but would like a piece of the action and is trading the right to help fund the Roski stadium for the right to making lots of potential revenues generated in the LA market and in his stadium village and to be an owner in LA.
In other words, Roski wants an NFL owner to become his partner in a real estate venture. In the real world of the NFL, cash on the barrelhead is the preferred way of doing business. Roski ought to know this by now, he witnessed it first hand when the NFL gave LA an expansion team. All LA and Roski needed to do was to put up a stadium.
That never happened and Robert McNair and Houston got the team. Houston and Harris County approved a publicly financed stadium.
With no G-3 revenues available, with California in dire financial shape, with Jerry Jones and the Mara/Tisch/Johnson East Rutherford, NJ group still looking for a naming rights partner for their stadiums, with ticket prices far, far too high and in the City of Industry’s scheme, there would have to be a heavy Personnel Seat Licensing fee and then high prices for those buying the licenses, Roski’s deal doesn’t look like much of a bargain for Wilson or Weaver or both.
Roski might not have any lawsuits to worry about that would slow down the project and lame duck California Governor Arnold Schwarzenegger has waived environmental laws because the stadium and the other part of the construction project would in theory create jobs with Majestic estimating that the project will put 6,700 people into jobs that would create $21 million in new tax revenue and have a $762 million impact on the area.
Based on other deals that developers have cut with municipalities, it is unlikely that those figures have any accuracy. Because of various tools such as payment in lieu of taxes (PILOT), tax increment financing (TIF) and others, the City of Industry won’t be getting full property taxes assessment on the land.
If Roski and the City of Industry think that a Los Angeles market stadium will get them a Super Bowl, they are probably correct, the NFL will put the stadium in the rotation but there needs to be a history lesson here. Back in 1994-5, the NFL was trying to help Al Davis land a new stadium for his Los Angeles Raiders near the Hollywood Park racetrack in Inglewood.
The NFL, trying to sweeten the deal, offered five Super Bowls over a ten year period to get the stadium built. The deal was scaled back to three over 10 years then one, then the NFL decided LA should be a two team marketing and another team (after Georgia Frontiere moved her Anaheim-based Los Angeles Rams to St. Louis) and that Davis team would share the stadium with another franchise and share all of the revenues generated inside the building.
Davis went back to Oakland.
The Super Bowl does not guarantee that the corporate community will take a look at the area hosting the game and move some of their operations to that area. The corporate community knows Los Angeles. If that type of thinking---that corporate leaders will open up facilities in an area because it was good enough for the Super Bowl was true --- then Jacksonville should be a burgeoning area.
Jacksonville hosted the Super Bowl on February 6, 2005.
Where is the great deal that Roski and Majestic have offered? Unless they offer hundreds of millions of dollars and it might be closer to a billion dollars to buy out an owner, there is no great deal. An owner will not sell off a piece of his franchise in exchange for development rights in a bad economy in a financially downtrodden state with a high rate of foreclosures. It does not make sense.
If Roski has to spend a billion for a team, then another billion for the stadium, what does that do to a franchise’s finances? On top of that the NFL might impose a relocation fee and furthermore, there is no collective bargaining agreement in place after 2010, so owners have no clue about future budgets.
Because the stadium is privately financed more than eight percent of the stadium generated revenues will go off to pay down the debt unlike those that get public monies. No special tax district will be created unless the City of Industry decides that a special tax district for a team would be a benefit for the city and franchise. The City of Industry is not near LA, Hollywood or Beverly Hills, it is 25 miles east of LA, and will the high rollers want to venture away from the city?
That gets back to the original question. Just who will finance Roski’s stadium? Question two is simple. What makes Roski’s proposal a sure fire winner for Ralph Wilson or Wayne Weaver?
evanjweiner@yahoo.com
Showing posts with label Los Angeles. Show all posts
Showing posts with label Los Angeles. Show all posts
Thursday, January 7, 2010
Monday, July 27, 2009
Is Wayne Weaver the NFL's Version of Marcel Aubut
Is Wayne Weaver the NFL's version of Marcel Aubut? http://www.mcnsports.com/en/node/7475
By Evan Weiner
July 27, 2009
7:00 PM EDT
(New York, N. Y.) -- Back in January 1995, a dejected Marcel Aubut exited an elevator on the seventh floor lobby of the Marriott Marquis in Times Square in Manhattan and told whoever was listening who knew him in the crowd milling about that the Quebec Nordiques were done by the new Collective Bargaining Agreement that National Hockey League owners negotiators and players representations had just reached. Aubut owned the Nordiques and he was right. About a half a year later Aubut sold his Nordiques to Charles Lyons and his Ascent group which moved the franchise to Denver.
The owners’ pact was far too generous for the players for small market Quebec to survive and even if Aubut secured a new arena in Quebec City, he probably would not have generated enough revenues to continue a viable business. A hockey team after all is a business.
Sometime in 2011 or maybe 2012, perhaps Jacksonville Jaguars owner Wayne Weaver will emerge from some elevator and sound an awful lot like Aubut. Weaver might be saying that the Jacksonville Jaguars franchise cannot afford the new collective bargaining agreement reached by National Football League owners' negotiators and the players association.
Perhaps Weaver will keep his team and move the operations to a new stadium say in the City of Industry, California east of Los Angeles or just sell the team to people who want a franchise in the Los Angeles marketplace. Or he might find that businesses and people have flocked to Jacksonville and the city is flourishing in 2012 or 2013 just like city officials predicted back in 1991 when a number of business leaders including Jeb Bush went after a football team and formed Touchdown Jacksonville! Touchdown Jacksonville! gave up on the bid in 2003 after the Jacksonville city council said no to a financial package to rebuild the Gator Bowl.
By August 1, 1993, the city council reworked the money allocation deal and the NFL awarded the league's 30th franchise to Jacksonville with Weaver at the helm.
If a stadium is built in the City of Industry, Weaver's Jaguars, Buffalo's Ralph Wilson, San Diego's Spanos' family, Minnesota's Zygi Wilf, St. Louis' owners along with the York family in San Francisco and Al Davis in Oakland figure to be getting calls from Ed Roski who is planning the stadium. There is a catch though; Roski will not build the stadium without an agreement from at least one NFL owner.
Jacksonville, while being successful on the field, is increasingly ceasing to be viable in the NFL. Sure the team gets a lofty paycheck from the league because of television revenues but the Jacksonville market is not or cannot support the team at an NFL level based on attendance at the Jacksonville stadium.
The two pre-season games have not been sold out and even though the team could "buy" the remaining tickets and trigger a sellout which would allow the games to be shown live in Jacksonville and other cities with the Jaguars territory, the team decided it wasn’t worth the effort since the team pays the costs for TV production and the combination of buying tickets and production costs meant red ink.
The pre-season TV blackout is just the tip of the iceberg for the franchise. The city has not been able to attach a corporate sponsor on the stadium which means that Weaver is not getting millions from naming rights and a staggering total of about 17,000 of the team's 42,000 season ticket subscribers from 2008 decided for various reasons not to renew for the upcoming season. This is the third season that Weaver will not have a naming rights partner. His former partner gave him $620,000 annually to put up a shingle on the building, Weaver was hoping for $4 million annually in 2006, so far no one is really interested in putting up a new shingle.
Weaver's rebuilt Gator Bowl stadium does hold close to 77,000 people but over the years, portions are the stadium were closed off to bring the seating capacity down and with it, the likelihood of sellouts so games can be televised locally except that has not exactly happened. More than 9,000 seats were covered by a tarp beginning in 2005 but by 2007 even with less tickets to sell, Weaver failed to have a full house in two of the team's first three home games. The Jaguars bottom line has suffered in the 21st century.
On November 2, 2005, Jacksonville officials and Weaver signed a new stadium agreement which reduced the team’s rent at the stadium between 2006-08. The deal ended the threat that Weaver would break his lease and move elsewhere.
Weaver was given a Super Bowl to host in 2005, there is one theory that smaller cities like Jacksonville bid on getting a Super Bowl because they think it is a huge opportunity to attract business. After all, corporate bigwigs, not everyday football fans attend the Super Bowl and with golfing opportunities along with mingling with local business leaders and politicians, there is always that possibility that an area can entice a CEO or a corporate decision maker to relocate in the Super Bowl host city.
Those assumptions are always wrong. Jacksonville did not land any companies because of the 2005 Super Bowl. In 1997, during the National Hockey League's expansion presentation, there was an item that related to teams moving into cities and whether a "big league" presence influenced companies to move into a city because of big time sports. There was a study done in Charlotte, North Carolina about businesses that moved into that area following the announcement that Charlotte had secured an NFL team in 1993. The answer came back that no company that moved into Charlotte between 1993 and 1997 did so because there was an NFL expansion team in the city.
Jacksonville lost season ticket holders after the 2005 Super Bowl.
Jacksonville is not the only team that is having trouble selling tickets but the Jacksonville problems manifested long before the 2008 economic meltdown and there have been reports in the past that the team was headed to Los Angeles. Weaver debunked those reports a year ago when there was a rumor he was ready to sell the franchise.
Whether Weaver can afford to own the Jaguars in 2012 in Jacksonville is open to question. NFL owners want to change the financial formula that they use to pay players, particularly signing bonuses and seem willing to go into 2011 with the idea of locking out the players in an effort to gain cost containment.
Weaver does share national TV revenues but is lagging in generating local revenues which has pitted big market owners against small market owners in league battles as the small market owners want a piece of Jerry Jones' Dallas marketing dollars or Daniel Snyder's local revenue to pay down debts or expand scouting and coaching staffs. The outcome of the 2011 negotiations will determine whether Weaver will become the NFL's version of Marcel Aubut.
eweiner@mcn.tv
By Evan Weiner
July 27, 2009
7:00 PM EDT
(New York, N. Y.) -- Back in January 1995, a dejected Marcel Aubut exited an elevator on the seventh floor lobby of the Marriott Marquis in Times Square in Manhattan and told whoever was listening who knew him in the crowd milling about that the Quebec Nordiques were done by the new Collective Bargaining Agreement that National Hockey League owners negotiators and players representations had just reached. Aubut owned the Nordiques and he was right. About a half a year later Aubut sold his Nordiques to Charles Lyons and his Ascent group which moved the franchise to Denver.
The owners’ pact was far too generous for the players for small market Quebec to survive and even if Aubut secured a new arena in Quebec City, he probably would not have generated enough revenues to continue a viable business. A hockey team after all is a business.
Sometime in 2011 or maybe 2012, perhaps Jacksonville Jaguars owner Wayne Weaver will emerge from some elevator and sound an awful lot like Aubut. Weaver might be saying that the Jacksonville Jaguars franchise cannot afford the new collective bargaining agreement reached by National Football League owners' negotiators and the players association.
Perhaps Weaver will keep his team and move the operations to a new stadium say in the City of Industry, California east of Los Angeles or just sell the team to people who want a franchise in the Los Angeles marketplace. Or he might find that businesses and people have flocked to Jacksonville and the city is flourishing in 2012 or 2013 just like city officials predicted back in 1991 when a number of business leaders including Jeb Bush went after a football team and formed Touchdown Jacksonville! Touchdown Jacksonville! gave up on the bid in 2003 after the Jacksonville city council said no to a financial package to rebuild the Gator Bowl.
By August 1, 1993, the city council reworked the money allocation deal and the NFL awarded the league's 30th franchise to Jacksonville with Weaver at the helm.
If a stadium is built in the City of Industry, Weaver's Jaguars, Buffalo's Ralph Wilson, San Diego's Spanos' family, Minnesota's Zygi Wilf, St. Louis' owners along with the York family in San Francisco and Al Davis in Oakland figure to be getting calls from Ed Roski who is planning the stadium. There is a catch though; Roski will not build the stadium without an agreement from at least one NFL owner.
Jacksonville, while being successful on the field, is increasingly ceasing to be viable in the NFL. Sure the team gets a lofty paycheck from the league because of television revenues but the Jacksonville market is not or cannot support the team at an NFL level based on attendance at the Jacksonville stadium.
The two pre-season games have not been sold out and even though the team could "buy" the remaining tickets and trigger a sellout which would allow the games to be shown live in Jacksonville and other cities with the Jaguars territory, the team decided it wasn’t worth the effort since the team pays the costs for TV production and the combination of buying tickets and production costs meant red ink.
The pre-season TV blackout is just the tip of the iceberg for the franchise. The city has not been able to attach a corporate sponsor on the stadium which means that Weaver is not getting millions from naming rights and a staggering total of about 17,000 of the team's 42,000 season ticket subscribers from 2008 decided for various reasons not to renew for the upcoming season. This is the third season that Weaver will not have a naming rights partner. His former partner gave him $620,000 annually to put up a shingle on the building, Weaver was hoping for $4 million annually in 2006, so far no one is really interested in putting up a new shingle.
Weaver's rebuilt Gator Bowl stadium does hold close to 77,000 people but over the years, portions are the stadium were closed off to bring the seating capacity down and with it, the likelihood of sellouts so games can be televised locally except that has not exactly happened. More than 9,000 seats were covered by a tarp beginning in 2005 but by 2007 even with less tickets to sell, Weaver failed to have a full house in two of the team's first three home games. The Jaguars bottom line has suffered in the 21st century.
On November 2, 2005, Jacksonville officials and Weaver signed a new stadium agreement which reduced the team’s rent at the stadium between 2006-08. The deal ended the threat that Weaver would break his lease and move elsewhere.
Weaver was given a Super Bowl to host in 2005, there is one theory that smaller cities like Jacksonville bid on getting a Super Bowl because they think it is a huge opportunity to attract business. After all, corporate bigwigs, not everyday football fans attend the Super Bowl and with golfing opportunities along with mingling with local business leaders and politicians, there is always that possibility that an area can entice a CEO or a corporate decision maker to relocate in the Super Bowl host city.
Those assumptions are always wrong. Jacksonville did not land any companies because of the 2005 Super Bowl. In 1997, during the National Hockey League's expansion presentation, there was an item that related to teams moving into cities and whether a "big league" presence influenced companies to move into a city because of big time sports. There was a study done in Charlotte, North Carolina about businesses that moved into that area following the announcement that Charlotte had secured an NFL team in 1993. The answer came back that no company that moved into Charlotte between 1993 and 1997 did so because there was an NFL expansion team in the city.
Jacksonville lost season ticket holders after the 2005 Super Bowl.
Jacksonville is not the only team that is having trouble selling tickets but the Jacksonville problems manifested long before the 2008 economic meltdown and there have been reports in the past that the team was headed to Los Angeles. Weaver debunked those reports a year ago when there was a rumor he was ready to sell the franchise.
Whether Weaver can afford to own the Jaguars in 2012 in Jacksonville is open to question. NFL owners want to change the financial formula that they use to pay players, particularly signing bonuses and seem willing to go into 2011 with the idea of locking out the players in an effort to gain cost containment.
Weaver does share national TV revenues but is lagging in generating local revenues which has pitted big market owners against small market owners in league battles as the small market owners want a piece of Jerry Jones' Dallas marketing dollars or Daniel Snyder's local revenue to pay down debts or expand scouting and coaching staffs. The outcome of the 2011 negotiations will determine whether Weaver will become the NFL's version of Marcel Aubut.
eweiner@mcn.tv
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