October 04, 2011
Mercedes Superdome deal to end yearly Saints subsidies?
As a change of pace, here's some good news: The New Orleans Saints and the state of Louisiana have announced a ten-year naming rights deal with Mercedes-Benz for the Superdome. No word on how much the carmaker will be paying, but apparently the fact that the dome is set to host the 2013 Super Bowl made them willing to pay more than chump change for a building that 99% of people will still just call "the Superdome."
And why should anyone other than Saints fans and luxury European car fans care about this? Because as part of the new lease signed along with the dome's recent $336 million renovation, the Saints and the state split naming-rights proceeds (after the first $1 million a year goes to the team). And while Louisiana taxpayers won't likely see any cash from the deal, they do get to use the naming-rights money to reduce the annual operating subsidies that the state has been paying the Saints to play in the dome for the last ten years.
So, rejoice! The Saints will soon only be playing rent-free, instead of paying negative rent! And all it cost was $336 million in state-sponsored renovations! C'mon, why aren't you rejoicing?
May 03, 2009
Can't tell the new Saints lease without a scorecard
It's been three days now since the New Orleans Saints agreed to a new 17-year lease extension on the Superdome, but I've been holding off on posting until I could actually understand the deal. Sadly, it seems too complicated for anyone to really wrap their brains around yet, with a crazy number of moving parts, including:
- The state of Louisiana would pay for $85 million in upgrades to the Superdome — which just got $210 million in renovations two years ago — with the Saints getting the revenues from the new luxury suites and such.
- In place of the $23 million a year that the state was paying the Saints under the old lease — that's right, the Saints have actually been paying negative rent — the team will now be paid on a sliding scale based on its revenues, with a cap of $6 million a year.
- The state will lease 320,000 square feet of office space from the Saints owners, the Benson family, paying $24 a square foot, about 33% over the going rate for downtown New Orleans. The total increase over the agencies' current rent is expected to be about $2.5 million a year.
- The Bensons will also buy the New Orleans Centre mall and an adjacent parking garage from the state, lease them back to the Superdome Commission, and share revenues from the facilities.
The upshot, then, is that this seems to be a better lease than the last, awful one that the state negotiated, but still potentially costly to taxpayers. In particular, that $85 million capital outlay could make the deal a "
February 11, 2009
New Orleans running out of stadium money, too
Indianapolis isn't the only city whose sports facilities are hemorrhaging red ink: The Superdome Commission, which runs both the New Orleans Saints' dome home and the Hornets' arena, is looking at a $27.5 million shortfall for the next fiscal year, according to the New Orleans Times-Picuyune. Of course, this may have something to do with the ridiculous leases the state agreed to with its teams, where Louisiana taxpayers actually pay the Saints and Hornets more than $46 million a year combined just to play in their state.
"There are not enough monster truck shows in the universe to make up" for the losses, Superdome VP told the state legislature in asking for more tax money to bail out the agency's budget. While it wouldn't be quite as simple as underprivileged college students subsidizing the Saints and Hornets profits with their tuition money, that's pretty close as shorthand.
New Orleans running out of stadium money, too
Indianapolis isn't the only city whose sports facilities are hemorrhaging red ink: The Superdome Commission, which runs both the New Orleans Saints' dome home and the Hornets' arena, is looking at a $27.5 million shortfall for the next fiscal year, according to the New Orleans Times-Picuyune. Of course, this may have something to do with the ridiculous leases the state agreed to with its teams, where Louisiana taxpayers actually pay the Saints and Hornets more than $46 million a year combined just to play in their state.
"There are not enough monster truck shows in the universe to make up" for the losses, Superdome VP told the state legislature in asking for more tax money to bail out the agency's budget. While it wouldn't be quite as simple as underprivileged college students subsidizing the Saints and Hornets profits with their tuition money, that's pretty close as shorthand.
January 29, 2009
Louisiana sues Merrill over Superdome bonds
If you've been wondering what's up with the auction-rate bond crisis, it's still ongoing. In the latest move, Louisiana's stadium authority has sued Merrill Lynch over the bonds it issued to refinance the Superdome, arguing that Merrill was artificially inflating the market for such bonds, and when the market later collapsed, the state was left with millions of dollars a year in added interest payments. They'll have to get in line.