[size=18px]My View: Anoka County residents will not like Wilf's idea of a stadium 'contribution'
Last update: April 04, 2006 Ã¢â‚¬â€œ 10:54 AM
One significant aspect of the Anoka County stadium debate has yet to be explored in detail. The Vikings say they will make a $280 million "contribution" toward the cost of building the new stadium. It is part of the $1 billion private investment they are promoting.
Here is an excerpt from the legislation regarding the team contribution: "Team contributions may include, but are not limited to, initial cash contributions, guaranteed annual payments, and assignments of naming rights and permanent seat licenses." That being the case, let's take a hard look at how Zygi Wilf, the owner of the Minnesota Vikings, can entice someone else to make his stadium "contribution" for him. He won't have to spend a dime of his own money or pay any income tax whatsoever and still get full credit for his "contribution."
The Metrodome does not provide the Vikings with an opportunity to sell the stadium naming rights. It is already named after Hubert H. Humphrey. But a new stadium is a different story. Anoka County has already agreed to give the stadium naming rights to Wilf.
Just to give you an idea of what other NFL stadium naming rights are going for, Reliant Energy paid the Houston Texans $300 million for the privilege of putting its name on the stadium. That was three years ago. The shared New York Giants and Jets football stadium naming rights will be worth significantly more than that. Isn't Wilf going to "contribute" just $280 million toward stadium construction?
One example of corporate sponsorships could be the General Mills Wheaties Bowl. The "Breakfast of Champions" might be premature. How about the Hormel Pork Palace? While the title would be fitting, it may not be the type of pork self-respecting pigskin fans want to be associated with.
Wilf and his special corporate partner will hold a big news conference and announce the winner of the naming sweepstakes. Instead of writing a check to Wilf, the corporation will pay the stadium authority and in turn give Wilf credit for making his "contribution." Wilf pays no out-of-pocket cash or any income taxes as a result of the deal.
And it gets worse. Anoka County failed to get a share of the permanent seat licenses. The Carolina Panthers received $130 million nearly 10 years ago for those rights. For people unfamiliar with this concept, think of a personal seat license as a one-time country club membership. Because most hard-working Anoka County residents aren't country club members, think of a permanent seat license fee as a really expensive Costco membership. Season ticket holders can expect to pay $2,000 or more per seat depending upon the location. The better the seat, the more you have to pay. The fans are only paying for the right to buy a ticket. The cost of the ticket is extra.
While not all seats will be licensed, season ticket holders should be prepared to pay a premium for the right to buy a good seat. The Green Bay Packers raised nearly $120 million through the sale of seat licenses. But don't mention Green Bay. Brown County actually held a referendum for the sales tax increase to fund the Lambeau Field renovation.
The NFL also has a generous stadium loan program. Wilf is upset because his $95 million low-interest NFL-backed loan might not be enough. He wants nearly $150 million. This loan will also be part of the private investment amount.
Just wait until Wilf gets all the parking and advertising revenues from his new stadium. Did you know he will be able to project advertising on the inside of the new stadium roof? The Vikings tell us there will be 4 acres of new roof. The state should take this money to pay for the roof and the road improvements.
I almost forgot about luxury suites and club seats. Luxury suite sales over a 10-year lease period will bring in more than $100 million. The Vikings estimate 7,500 club seats will sell for approximately $215 each. A 10-game club seat season ticket package would cost $2,150. Multiply that by 7,500 seats and you come up with more than $16 million a year. And don't even ask about the hundreds of millions of dollars in property development rights our economically handicapped county commissioners completely overlooked. Other stadium revenue opportunities include exclusive beverage pouring rights, food exclusives and concessions.
The reason Wilf is so eager to get a new stadium is simple. He gets very little of this revenue under his Metrodome agreement. He wants to control every bit of revenue and profits from a new stadium. Sharing a stadium means sharing revenue.
Using approximate totals from the revenues detailed above, Wilf can nearly cover the full $1 billion private investment without opening his wallet.
Our trusted Anoka County commissioners clearly don't understand how to negotiate a business deal. The hard-working taxpayers of Anoka County would be happy to show them how it's done. Put this stadium proposal on the ballot this fall, and you will see Wilf cough up enough of his pork-laden profits to eliminate the proposed countywide sales tax completely! This stadium deal isn't so complicated after all. Just follow the money.
James Hafner of Coon Rapids is a financial analyst.
My View: Anoka County residents will not like Wilf's idea of a stadium 'contribution'