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Patriots plan hits hurdle

Prior Coverage

-- JUNE 23 --
Patriots look to win over town on stadium

-- JUNE 9 --
43 of 80 suites sold for proposed stadium

-- MAY 25 --
Stadium bill signed, but seat sales lag

Archives
Impasse on steam plant site clears
-04/02/99
Finneran offers idea on Patriots stadium
-03/25/99
In Conn., Patriots' stadium deal opponents plan lawsuit
-03/20/99
Hartford steam plant defends its moving cost
-03/19/99
Patriots stadium plan threatened
-03/18/99
Kraft has new suitor in Houston
-03/11/99
Patriots dealt setback on Conn. site
-02/24/99
Moving fee could trip Patriots
-02/17/99
Conn. must meet April 2 deadline
-02/13/99
How Kraft's Mass. dream fizzled
-12/16/98
Krafts seen winning generous deal
-12/16/98
Conn. OK's deal
-12/16/98
Activist skeptical
-12/29/98
More stadium fallout
-12/26/98
Whither Foxboro
-12/19/98

Kraft, Patriots seen winning most generous stadium deal

By Gregg Krupa, Globe Staff, 12/16/99

Despite changes over the weekend that lowered Connecticut's risk in the deal, the New England Patriots and owner Robert Kraft are the beneficiaries of the most generous stadium-financing agreement ever offered to a National Football League franchise, most observers agreed yesterday.

At a time when several mid-sized cities -- including Nashville; Charlotte, N.C.; St. Louis; and Tampa -- have offered NFL owners lavish terms to secure the status and allure of big-time professional sports, the deal approved by the Connecticut General Assembly yesterday to move the Patriots to Hartford outranks them all, experts say.

``People ought to recognize it's the worst publicly financed stadium deal ever done,'' said Mark Rosentraub, director of the Center for Urban Policy and the Environment at Indiana University. ``And anyone doing it ought to realize that by doing it, they have succeeded mostly in making one owner very wealthy.''

The provisions that make the agreement on the $375 million stadium project so strikingly generous are the state guarantees for premium seating -- potential costs that are not included in the current price of the deal.

The state has agreed to pay for as much as $13 million a year in luxury box fees and club seating tickets for at least the first 10 years of the Patriots' lease. That potential exposure was lowered over the weekend from $17.5 million, in a move that provided some momentum for the vote yesterday.

Of all of the recent stadium deals in the NFL -- at least 14 since 1992 -- two provide a guarantee of revenue from admissions.

But in one of the deals, for the Rams in St. Louis, the guarantee was financed by a private civic group, not the state, county, and city governments that paid for the $280 million RCA Dome. And unlike the Patriots' deal, the public St. Louis Regional Conventions and Sports Complex will gain portions of admissions revenue from stadium advertising and concessions.

In the other deal, San Diego agreed to buy unsold tickets for some regular seats as part of an agreement to refurbish Qualcomm Stadium, the home of the NFL's Chargers, in 1995. But those tickets are all for non-premium seats, and the maximum exposure for the city is less than $2 million per year.

Robert Kraft and his son Jonathan have said, at a legislative hearing in Hartford last week and elsewhere, that they have done a poor job of explaining their deal with Connecticut. They say, in part, that a 10 percent tax on all tickets is expected to generate as much as $8 million annually for the state. In a sense, Kraft said, the team is sharing its revenue stream with its partner.

But some observers say the tax exists only to provide money for the state's borrowing costs and does not really represent a willingness on Kraft's part to share revenue.

``My personal opinion is that [tickets are] priced that way to raise the revenue for the 10 percent tax, rather than taxing the admission price that the market will bear,'' said Dean Bonham, of the Bonham Group, a marketing consultant in Denver. Bonham argued that ``if you are guaranteed the price of many of the tickets, why not charge as much as you can?''

Jonathan Kraft has argued against that, saying that the club seating ticket prices and luxury box fees were calculated independently.

``We can only charge what the market will bear,'' Kraft said. ``This isn't 10 percent added on top of what we're charging.''

The potential $8 million annual payment to Connecticut is more than some owners are contributing to the cost of their new stadiums, but far less than some others are passing on. Georgia received no payment from the NFL's Falcons when it built the $214 million Georgia Dome, which opened in 1992. And the Rams put up no money when the state of Missouri and the county and city of St. Louis paid for the RCA Dome.

However, Charlotte's $187 million Ericsson Stadium is financed entirely by the sale of seat licenses and other private sources. And in Washington, the NFL's Redskins paid $180 million for the $250.5 million Jack Kent Cooke Stadium project, with public dollars covering the remaining $70.5 million.

The Krafts cite two other expenditures that they say are significant to the deal: $50 million for the construction of a hotel near the stadium and in the proposed Adriaen's Landing development, and $20 million for an NFL activities center.

``Never has an NFL team contributed so significantly to the redevelopment of a city,'' Robert Kraft said recently.

But observers note that the Krafts stand to profit substantially from the spending, which, they said, is more of an investment.

``When all things are considered -- the [stadium] land being for free, the [stadium] facility built for free, the state paying for renovations and maintenance, the naming rights going to the team, the annual [premium seat] guarantees, and the obvious potential for revenue from the hotel and the activities center -- there has never been anything like this,'' Bonham said. ``There is nothing in the NFL, there is nothing in professional sports, that compares with this deal.''

All content herein is ) 1998 Globe Newspaper Company and may not be republished without permission. If you have questions or comments about the archives, please contact us at any time.



 


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