Sunday, November 14, 2004
New Orleans financials
This story in the Times-Picayune has extensive information on the financial agreements between the state of Louisiana and its professional sports teams. Here are some facts on the lease agreement with the Saints:
The team's rent is capped at $800,000 a year until the lease expires in 2018, and the team pays no in-stadium game-day expenses, such as the cost of ushers and ticket-takers. The Saints also get 42 percent of the money generated by game-day concession sales, 100 percent of that from game-day parking, 100 percent of Superdome tours year-round, 100 percent of annual box suite revenue and 100 percent of game-day Superdome advertising.The rent amounts to $80,000 a game, or less than $2 per seat. On that score, the Hornets do event better:
Besides getting use of the arena rent-free, the Hornets get 42 percent of gross concessions revenue and 100 percent of net parking revenue from their games, 100 percent of advertising and sponsorship revenue, the first $1.1 million of game-day staffing costs, plus 100 percent of the revenue (licensing fees and ticket sales for their games) from the arena's 56 luxury suites and 2,800 premium-price club seats.The two teams claim that they "needed the payments to help them compete against franchises in larger, richer markets." If you buy that, let's play some cards. These subsidies are a wealth transfer, and do little to increase the incentive to put a competitive team on the field.
They also get a subsidy to compensate them for the fact the state has failed to sell naming rights to the arena. That subsidy began at $1.5 million the franchise's first year in New Orleans and grows by 5 percent a year, meaning it's up to $1.65 million this year. If the naming rights are eventually sold, the Hornets would be entitled to more than $2.5 million a year.
