St. Louis Rams? Offer Looks Hard to Refuse : Pro football: Proposed deal instantly would make them one of the richest franchises in sports.

It’s the ultimate get-rich-quick scheme, and the Rams don’t have to invest in junk bonds, put together a pyramid scheme, go on a Las Vegas junket or blow a month’s payroll on Super Lotto tickets.

All they have to do is strike a deal to play in St. Louis. An analysis of the package currently being discussed--using figures from the NFL, the group trying to lure the team to that city and Financial World magazine--indicates that such a move would take the Rams from the NFL’s poorhouse to its financial elite.

The Rams, who are projecting a loss of about $6 million in Orange County this year, would make an estimated $20.7 million in pretax profit during their first full season in St. Louis’ new 70,000-seat domed stadium, based on expected sellouts.

“Certainly, a move to St. Louis would make the Rams one of the most profitable teams in the league,” said Paul Much, sports finance consultant for the specialty investment banking firm of Houlihan Lokey Howard & Zukin in Chicago.

The Rams, who close what could be their last season in Southern California with today’s game against the Washington Redskins, would make about $38.2 million in gate receipts and stadium revenues alone in St. Louis, where a new stadium, scheduled to be completed in October, includes 101 luxury suites and 6,550 “club seats,” an upgraded category of seating with access to exclusive food service and other amenities.

Those profits, coupled with $42 million the team would receive from NFL television contracts and local media deals, and $2.5 million from licensing and merchandising deals, would boost the team’s total annual revenues to about $82.7 million, which would put the Rams second in the NFL in total revenues behind the Dallas Cowboys and eighth among all U.S. professional sports franchises, according to Financial World’s most recent data.

But with projected expenses of $62 million in St. Louis, a figure based on Financial World’s NFL averages for 1993, Ram profits of $20.7 million would be the highest in the league. By comparison, the Rams, according to Financial World, had revenues of only $59.4 million in 1993, with expenses of $53.9 million for a profit of $5.5 million.

“You look at this deal and wonder why a team would leave the nation’s No. 2 media market,” said Alan Friedman, editor of Chicago-based Team Marketing Report. “That doesn’t matter much--what matters is what you can make in game-day operations. They can’t do in Anaheim what they can do in St. Louis.”

The reasons are simple. In St. Louis, the Rams would receive all revenue from luxury boxes, club seats and concessions and a share of revenues from in-house advertising and potential stadium naming rights in a luxurious, state-of-the-art facility. There is no parking associated with the stadium.

The team would pay $25,000 a game in rent, but $75,000 in game-day expenses would be paid for by the St. Louis Regional Convention and Sports Complex Authority.

The Rams would probably get a new, more lucrative lease if they remain in Anaheim, but current terms call for the team to give the city 20% of luxury-suite revenue, 7.5% of ticket revenue and 50% of concession and parking revenue. In addition, the Rams pay rent of 60 cents per admission, not to exceed $400,000 per year. The Rams made only $15 million in gate receipts and stadium revenue in 1993.

But the stadium lease is only part of the attraction in St. Louis. The Rams would not have to pay stadium debt service there, because the $258-million facility, an expansion of the city’s convention center, was financed by a combination of state and local government-backed bonds and revenue from a county hotel/motel tax.

The Rams’ Anaheim Stadium debt-service bill is about $3 million a year.

In addition, St. Louis has plans to launch a permanent-seat licensing program, in which fans pay a one-time fee for the right to purchase season tickets, in an effort to generate at least $60 million--$30 million to cover the remainder of the Rams’ bill for Anaheim Stadium improvements completed in 1980, about $15 million for a new practice facility and an estimated $15 million in NFL relocation fees.

What’s in it for St. Louis?

St. Louis government officials acknowledge that while there will be some economic benefit to having an NFL team--more jobs, more sales tax generated on game days--the city would actually make more on the convention center/stadium project without a team.

“The main goal of a convention center is to fill hotel rooms, and with a football team, most people will drive to the game and only stay for the day,” St. Louis County Executive Buzz Westfall said. “With 10 games a year, we’d probably lose some attractive convention dates.

“But the town wants a football team and knows our image was hurt when we lost the Cardinals (to Phoenix in 1988). We’d like that image restored.”

That’s what having an NFL team really boils down to for St. Louis--prestige.

“It’s a pride thing, knowing that you have a big sport in town,” said Chad Everett, a 32-year-old member of the St. Louis Rams Fan Club from Chesterfield, Mo. “One of the hallmarks of cities is their sports teams, and people identify with them from one part of the country to another. From that point of view, a team would draw people in from surrounding areas.

“It’s amazing that the city probably wouldn’t make any money on the Rams, but I don’t think that’s a reflection of St. Louis as much as it is on pro sports around the nation. We put them on such a high pedestal that teams are in a position to get whatever they want. If the Broncos proposed to leave Denver, that city would bend over backward to give them a similar deal.”

Indeed, St. Louis is not the only city willing to roll out the red carpet and throw immense amounts of money at NFL teams, and it most certainly won’t be the last.

Baltimore Oriole owner Peter Angelos, who spent a year trying to woo the Rams, assured team President John Shaw that he would match any St. Louis offer, and he’s currently negotiating a deal to purchase the Tampa Bay Buccaneers.

The Baltimore package included a $160-million, 72,000-seat stadium with 108 luxury suites and 7,500 club seats, paid for with bonds backed by lotteries and stadium revenues. The team would receive all revenues from tickets, luxury suites, club seats, parking and concessions, and the deal also included a renovated practice facility.

Angelos, like St. Louis, said he would pay for all relocation costs.

Earlier in the Ram derby, Hartford, Conn., made an offer that would have given the Rams all revenue from concessions, parking, luxury suites, club seats and in-house advertising in a new, $252-million stadium. Memphis, Tenn., and San Antonio also offered lucrative deals.

“It’s a clear demonstration that the driving force, at least in the NFL, is now stadium revenue,” Team Marketing Report’s Friedman said. “This is a scenario that will be played out continually in the league until every team is in a facility that is maximizing their revenues.

“It’s a case where the traditional sources of revenue have been tapped out or are close to being maximized. The national media deal is certainly generous, but they’re locked into that for a couple of years. Ticket prices can only go so high, though they still haven’t reached ceiling. And as long as there are cities looking to attract teams, NFL teams will have all the leverage.”

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Such a Deal

Here is how Ram revenue and expenses last year in Anaheim stack up against projections for a move to St. Louis:

St. Louis Anaheim (projected) (1993) Annual Revenue $82.7 million $59.4 million Gate receipts * $19.7 million $11.3 million Luxury suites, concessions, $4.1 million parking, advertising Luxury and club seats $12 million -- Concessions $3.5 million -- Stadium advertising and $3 million -- naming rights NFL licensing/merchandise $2.5 million $2.5 million Media (national, local TV, radio) $42 million $41.5 million Annual Expenses $62 million $53.9 million Player costs $40 million $31.7 million Administrative, operating costs $22 million $22.2 million Operating Profit $20.7 million $5.5 million

* Based on an average of $31 per ticket

Sources: Financial World Magazine, FANS Inc., Team Marketing Report. Some estimates based on league averages.