When I wrote on Monday that Indianapolis giving Indiana Pacers owner Herb Simon $600 million worth of renovation payments and operating subsidies to extend his lease for 25 years was setting a new standard in making sports leases the grift that keeps on giving, I figured that record would last, oh, I dunno, more that a couple of days. And yet:
State and New Orleans Saints officials are working toward an agreement that will keep the team in Louisiana through 2035 and include a transformative $450 million renovation of the Superdome, officials said this week.
The deal would extend the Saints’ current lease agreement with the state another 10 years and feature the most elaborate and expensive overhaul of the iconic stadium in its 44-year history.
It’s not quite as bad as that lede makes it sound: The Saints owners will be chipping in $150 million of the renovation cost. But still, that leaves $300 million to be paid for by the state, which for a ten-year lease extension means Louisiana taxpayers will be shelling out $30 million a year for the Saints to play in New Orleans — blowing away the Pacers’ just-established $24 million a year record.
This new agreement — which the New Orleans Times-Picayune calls “the lynchpin to a long-term agreement between the state and the team,” which is not at all how you should be spelling “linchpin” — would be, like the Pacers’ deal, just the latest in a long series of subsidies the Saints owners would be collecting from the state of Louisiana: Late Saints owner Tom Benson, in fact, pioneered the pay-to-play concept when he engineered a lease in 2001 where the state would pay him $18.6 million a year to play in the Superdome for another ten years. Then he got another $392 million in 2013, and now is set to receive another $300 million just six years later — adding in all the earlier money Louisiana spent on building and renovating the dome, the Saints’ five-decade total will come to $1.442 billion (non-inflation-adjusted dollars), which is even more than the Pacers’ $1.161 billion, though the Pacers got all their cash in the span of just 20 years, so they still take the subsidy-rate crown.
The latest Saints plan still needs to be approved by state officials — certainly the state bond commission, maybe the state legislature as well, though the Times-Picayune didn’t do any better a job reporting this than they did on their spellchecking. Gov. John Bel Edwards reportedly already “gave his blessing: to the plan, though, and given past history in Louisiana, it has to be considered likely to be approved. Some days, I feel like we’re making some headway in getting elected officials to at least check the literature on economic benefits or the lack thereof before lavishing tax dollars on the local sports team owner; other days, not so much.
A forgotten chapter of this whole thing is how close the Saints were to moving BEFORE Katrina. Either the Saints or Louisiana (maybe both) had an option to get out of that deal after 5 years, or after the 2005 season. Benson had “negotiations” with his other hometown (San Antonio), the usual suspect (LA) and even a wild card, (Albuquerque…yeah). While this was all from the textbook for trying to extract more money from the city/state the state in particular was hemorrhaging money and seemed like they were really going to call his bluff. Albuquerque was obviously just a pawn and LA wasn’t going to give him a dime but given that San Antonio had a stadium, an eager local government willing to pay, and a fan base (and Benson’s extensive personal and business ties to the city) it was a distinct possibility they’d leave after 2005 if everything had played out. After Katrina, everything changed: the NFL didn’t want the bad press of abandoning NO and the city and state found money to devote to the cause (I want to say the money that went towards renovating the dome and maybe even paying the rest of the per season subsidy was ultimately federal funding but wouldn’t swear to that). As a token, Benson forfeited the 2005 payment from the state as he didn’t play all games in the Superdome as the contract stipulated, although I don’t believe he gave in on that until the larger deal to rebuild at public cost and stick to the rest of the (highly favorable) 2001 subsidy was agreed to.
The other element of this story is the tens of billions pumped into the State after Katrina, and the general hundreds of million of transfers to the state from the federal budget each year.
Makes this kind of largess a lot easier to afford than it would be elsewhere because the State government has the federal government (really other states citizens) picking up so many of its normal bills.
San Antonio was always a longshot. They’d have had a team long before either by move or expansion if the Cowboys and Texans weren’t totally opposed to the idea. Very unlikely a move there would ever be approved by a majority of the owners.
I do believe the Saints were serious about moving and LA would have definitely been an option back then, but as with many of these deals there simply aren’t all that many markets open.
Kroenke proved the only way anyone was getting into LA was by paying billions of dollars for a location and stadium. I guess it’s not impossible that Benson would’ve given up free money from Louisiana or San Antonio, but it’s highly unlikely. As for the Cowboys or Texans, I think it’s overblown. Both are the 1,000 pound gorillas in their respective huge markets and are going to make money hand over fist regardless of whether anyone from San Antonio buys a ticket or merchandise. If Mark Davis hadn’t found a free three quarters of a billion dollars in Nevada, I think San Antonio was a real possibility to get the Raiders a decade later, but who knows.
Sure, but the fact that Houston and Dallas will not suffer financially at all from a team in San Antonio doesn’t not mean they can’t still demand tens or hundreds of millions in “indemnity” from a potential San Antonio owner.
Curious what renovations they are proposing to make with that money.
Well, obviously a retractable roof. Who wants to put a roof on a building whych can’t open?
Minnesota…
Detroit…
And anyone else who can get someone else to PAY for a retractable roof, naturally.
The level of amenities at “modern” stadia have much less to do with how much new revenue they generate than who pays to build and maintain them. Look to fully privately funded stadia to see what amenities are actually worth their construction & maintenance costs…
From what I have learned from Neil…
Since NFL ticket sales are league distributed excluding suites which are held by franchise owners, I’d bet my Johnson you’ll see expanded suites and “viewing” areas (including bars and egress) as the main expense for the renovations.
Yeah, I can’t think of any better use of that money either, Louisiana.
Is there any empirical evidence to suggest a city falls off the map if its NFL (or NBA, or NHL, or MLB) team moves away?
Not really. But maybe places like Hartford and Quebec City (in sports terms) come the closest.
I know Neil wishes for a day when voters would remove pols that engineer these bad deals, but I wonder if the reverse was at play here. Edwards is going to be in for a tough reelection fight this November, and I wonder if he’s driven by the desire to tell Republicans who are loyal Saints fans that he kept their beloved team in town.
He can think that if he wants, but given that there are exactly zero elected officials in history who have been voted out of office for losing teams, it’s probably bad strategy if so.
Probably wouldn’t impact election as there’s still 6 years on the current lease — an eternity in negotiating time.
I was at the Superdome in March of 18 For a truck dealer meeting in
which we had the whole dome for 2 days. There was about 1,500
of us so we got an opportunity to walk around it. I am not sure 450 million can help this place at it’s in very bad shape you would never know it was renovated in the past 10-15 yrs. Just putting lipstick on a pig until the next round of threats!!!
“Very bad shape” in what sense particularly? The stuff that looks the worst isn’t always what costs the most to fix.
I think 30 million a year is a bit chintzy on the part of Louisiana. Do I hear 40 million?