Maybe the Rams Won’t Bankrupt St. Louis
The basic agreement between the Rams and FANS, Inc. was officially released Wednesday and, contrary to popular belief, St. Louis didn’t give the Rams everything in the 30-year lease.
OK, so St. Louis gave them just about everything in a sweetheart deal that, if approved by three-fourths of NFL owners, will boost the Rams’ annual pretax profits to more than $20 million.
St. Louis managed to retain 25% of stadium and convention center advertising revenue, including the rights to name the stadium. That, combined with $500,000 a year the Rams must pay in rent and game-day expenses, should net the St. Louis Convention and Visitors Commission $2 million annually.
In addition, the Rams actually will have to pay for parking spaces in existing garages around the domed stadium--the tab will amount to about $40,000 a year--and they have even agreed to share some stadium concession revenue.
FANS attorney Richard Riezman, asked if a little more than $2 million a year in stadium revenue was good considering the city didn’t have much leverage in its negotiations with the Rams, said: “Much leverage? We had zilch.”
Yes, the Rams had St. Louis over a barrel, but after losing the Cardinals to Phoenix in 1988 and failing in a 1993 bid for an expansion team and a 1994 attempt to purchase the New England Patriots and move them to Missouri, the city finally has what it wants.
And many public officials and business leaders believe the economic impact of the Rams and the prestige of having an NFL team--even the lowly Rams, who were 23-57 in the last five seasons--will more than offset the cost of getting the team from Anaheim.
But first the move must be approved by 23 of 30 NFL owners. To that end, NFL Commissioner Paul Tagliabue has set a special owners meeting for Feb. 16 in Dallas.
Tagliabue will review “all aspects” of the move, including the sale of 30% minority interest in the team to Missouri businessman Stan Kroenke. Also under review will be whether the league will exact a relocation fee from the Rams.
The Cardinals paid about $7 million in such fees in 1988, because their transfer removed Phoenix as a prime NFL expansion site. But former U.S. Sen. Thomas Eagleton, chairman of FANS, Inc., said the league has no financial claim on St. Louis because it was passed over for expansion and, therefore, cannot be considered a “prime” expansion city.
If the Rams are charged with a relocation fee, which some have estimated could be as high as $12 million, Eagleton said FANS is under no obligation to pay it.
NFL spokesman Greg Aiello said Wednesday the Rams haven’t filed an official proposal for transfer and statement of reasons for the move, but Ram President John Shaw “told us we’d have it by the end of next week.” Aiello added that owners could vote on the Rams’ move in Dallas, but it’s “unlikely.”
Just in case, FANS, Inc. has pushed up its timetable for selling personal seat licenses, the mechanism by which St. Louis will raise funds to pay for an estimated $67 million in Ram relocation costs.
The agreement called for St. Louis to sell 40,000 seat licenses by March 10, two days before the start of the league meetings in Phoenix, where owners are expected to vote on the move. A total of 45,000 seat licenses must be sold by the beginning of the 1995 season.
But Eagleton pledged to Shaw Wednesday that St. Louis would sell 30,000 seat licenses by mid-February, 40,000 by March 10 and 50,000 by the start of the season. Early returns show that St. Louis is off to a good start.
More than 2,500 seat license application requests were filled Tuesday, the day the Rams announced the move, and 700 messages requesting applications were left overnight on voice mail in the seat license campaign office.
Ten area banks are offering loans to purchase seat licenses, which range from $250 to $4,500, and at least one local company, Emerson Electric, will arrange for employees to make seat license payments through payroll deductions.
Though the Rams have the right to void the deal if the seat license goal of 40,000 is not met by March 10, Eagleton said there is no seat license “safety valve” written into the agreement.
Some other previously unreported details of the lease agreement:
--The $258-million domed stadium that the Rams plan to call home next October will have 65,300 seats for football games, not 70,000 seats. The maximum capacity of 70,000 will be available for other entertainment events, however.
--St. Louis will finance and build a Rams merchandise store next to the stadium and will use seat license proceeds to pay for construction of additional stadium luxury suites, an upgraded public address system and stadium fixtures, furniture and equipment.
--The city has the obligation to keep the stadium in the top 25% of all football stadiums, an assessment that will be measured after 10 and 20 years.