Thursday, September 21, 2006

Tom Benson – Will he keep the New Orleans Saints in the City

The New Orleans Saints return to the Big Easy Monday night, an event being billed by the National Football League as the second coming. If indeed the Saints are the second coming, it's going to be a short resurrection.

It has been said before, and it will be said again, the Saints ‘homecoming’ is an event that makes little if any economic sense, and long-term will prove itself to be an embarrassment to the National Football League. In a city ravaged by Hurricane Katrina, the $185 million spent on getting the Superdome renovated where it is capable of hosting a football game is a waste of money and an insult to common decency.

Long before Hurricane Katrina nearly destroyed New Orleans, Tom Benson the Saints owner had established his intent on moving the franchise from New Orleans to greener pastures unless the City of New Orleans and the State of Louisiana taxpayers replaced the Superdome.

Benson purchased the Saints for $65 million on March 1, 1985. Consider the average NFL franchise has a value in excess of $800 million 21 years later – Benson a former New Orleans banker and automobile dealer, has experienced an amazing return on his investment. He bought the Saints from John Mecom Jr. Benson and signed a forty year lease to keep the Saints in Superdome. He did however include a clause in the contract whereby he could move the Saints after the 2004 season if certain key revenue projections where not met – after Benson paid a $50 million penalty.

Tom Benson began expressing ‘concerns’ regarding the Superdome early in 2001. The Saints were last in the NFL in revenues after the 2000 season and Benson believed the team should be somewhere around the middle of the pack.

According to a New York Times report, the Saints and the State of Louisiana on July 9, 2001 they had agreed in principle to a financial package that the State of Louisiana believed would keep the team in New Orleans. Steve Perry, chief of staff to Gov. Mike Foster, said that Louisiana would provide the Saints $12.5 million in guaranteed operating cash to ensure the team's financial stability. The state also agreed to continue what was called an escalating inducement package until a new stadium or renovated Superdome is functional.

Benson made it clear he also wanted a new practice facility and a series of annual payments in excess of the State’s $12.5 million in the first year of the agreement. In addition the Superdome would have to renovated (and not along the lines of what took place after Hurricane Katrina) or replaced, with taxpayers paying a significant percentage of any construction costs. In essence Tom Benson wanted the State of Louisiana and New Orleans residents to subsidize his National Football League franchise with taxpayer dollars. The teams’ lease at the Superdome was revised through the 2010 season, with an $81 million penalty if the team left after the 2005 season.

As the Saints where heading to training camp two years later in 2003, the franchise wanted to alleviate concerns in the marketplace that Benson was going to leave the Big Easy, by signing a lease extension. The Saints and the State of Louisiana never reached an extension on the Saints Superdome lease three years ago. Benson had his very expensive ‘get out of jail card’ after the 2005 season.

Then came Hurricane Katrina, and as Spike Lee’s poignant movie “The Levee Broke” so well illustrated, the City of New Orleans would never be the same. The Saints 2005 home resembled a sideshow carnival – four games in San Antonio, three at LSU’s Tiger Stadium and one game at Giants Stadium where the Giants were billed as the visitors and the Saints as the home team. True vagabonds, the Saints ended the 2005 season with the second worst record in the 32 team NFL at 3-13.

Tom Benson kept quiet on the Saints future early in the 2005 NFL season. At the Saints-Falcons game on October 16, the second of two warm receptions of the Saints by the San Antonio community, San Antonio Mayor Phil Hardberger stated that Benson had agreed to schedule negotiations for permanent relocation once the 2005 season is over. In reference to Benson, Hardberger said, "I'm pretty comfortable in saying he wants to be here." Benson was born and raised in San Antonio.

On Monday, October 17, Benson in a story that captured national headlines dismissed Saints executive vice president Arnold Fielkow, who had been a public supporter of the Saints' importance to the state of Louisiana, and who had advocated the playing of home games in Baton Rouge. According to Fielkow, Benson told him that if he'd tender his resignation and sign a confidentiality agreement, he'd be paid the remainder of his contract; when he refused, he was fired outright.

Benson's actions quickly drew outrage from Saints fans as well as local and state officials. On Wednesday, October 19, New Orleans mayor Ray Nagin sharply criticized Benson for acts he deemed heartless and opportunistic. Said Nagin: "For them to be openly talking to other cities about moving is disrespectful to the citizens of New Orleans, disrespectful to the Saints fans who have hung in with this franchise through 30-something years under very trying times."

Two days later, Benson publicly stated that he has made no plans to move the Saints to San Antonio. "There are many factors that will affect the future location of our team," Benson said. "That is also true of many other New Orleans-based companies that are faced with deciding their future homes." He said he would make no decisions about the team's future until the 2005 season is over.

On Wednesday, October 26, Benson reiterated his commitment to the New Orleans area in the form of a full-page ad in newspapers around the region, including The New Orleans Times Picayune. The ad, a letter entitled "Tom Benson Wants to Return to New Orleans," acknowledged the negative reaction surrounding the team's recent actions, but promised that no decision has been made regarding the team's future. Said Benson in the letter, "It is too early to determine, but my desire is to return to New Orleans."

Benson's firm but noncommittal stance compares unfavorably to the statements of the New Orleans Hornets, the city's displaced NBA team. Though the Hornets are playing all but a handful of games this season in far-off Oklahoma City — and have even officially changed the team's name to the New Orleans/Oklahoma City Hornets at least for the 2005-06 and the 2006-07 seasons — the basketball team's ownership (George Shinn who moved the Hornets from Charlotte to New Orleans) insists they will be returning to the recovering city as soon as possible. The Hornets have also announced a community relations initiative to keep the team involved in the New Orleans area as it rebuilds.

Also, Benson's statements seem at odds with his team's reported efforts to break its agreement with the state of Louisiana. The team informed the state in late October it wanted to break the lease on its practice complex in Metairie, claiming the facility, which had been commandeered by FEMA as a base of operations following Katrina, was too damaged to occupy. However, a television report from WWL-TV in New Orleans showed the facility to be relatively unscathed and in spotless condition.

The problems between Benson and keeping the Saints in New Orleans continued seemingly unabated, with a report in the San Antonio Express News suggesting he would try and void his Superdome lease without penalty suggesting that an "Act of God" had prevented the team from using the stadium. Benson set a November 29 deadline. Louisiana officials where quick to suggest the Superdome, with its roof nearly blown off during Hurricane Katrina could be repaired so that the Saints could host some games in New Orleans during the 2006 season.

NFL Commissioner Paul Tagliabue met with Benson and Louisiana governor Kathleen Blanco at the Saints' first home game in Baton Rouge on October 30. After the meeting, he stopped just short of making a formal commitment to keep the Saints in New Orleans. Said Tagliabue: "The Saints are Louisiana's team and have been since the late '60s when my predecessor Pete Rozelle welcomed them to the league as New Orleans' team and Louisiana's team. Our focus continues to be on having the Saints in Louisiana."

He dispelled rumors that have the Saints relocating to Los Angeles. He also suggested that the Saints may need to focus on becoming more of a regional team, possibly implying a name change to the Louisiana Saints or the Gulf Coast Saints. Tagliabue formed an eight-owner advisory committee to help decide the team's future.

On October 30, 2005, Benson charged a cameraman with a raised hand while leaving Tiger Stadium following a Saints loss to the Miami Dolphins and lunged at the television news crew grabbing a camera and wrenching it down before being eased away by Saints security. A video also appeared to show Benson angrily responding to a heckling fan. NFL spokesman Greg Aiello said the league would likely take no action against Benson.

On November 1, 2005, an e-mail sent to Commissioner Paul Tagliabue from Benson was leaked to the press. Benson stated in the e-mail that he feared for his life and his family's safety upon his exit from Tiger Stadium, and would not be returning to any future games in Baton Rouge. Benson declared in the email that security in the stadium was "inadequate" and inaccurately claimed that his family "could all have been severely injured or killed." However, LSU officials were quick to point out that they had no negative comments from the Saints or the NFL concerning Tiger Stadium security. In addition, the videotape of Benson from October 30 showed him being escorted by at least one security guard, belying his e-mail claim that security was "non-existent." A day later, Saints spokesman Greg Bensel stated that Benson's e-mail was sent in frustration, and that Benson was undecided on whether he would attend any future games in Baton Rouge. Benson did not attend the following week's game at Tiger Stadium on November 6th against the Chicago Bears.

On November 4th, 2005, Benson made a deal with Louisiana governor Kathleen Blanco that would postpone two important termination deadlines in the team's Superdome lease until after the 2006 season. Benson extended his force majeure clause period until January 2007. Presumably this will keep the Saints in New Orleans until January 2007; however, Benson can still invoke the clause any time between now and then. This bought the Saints time to explore future options with state officials without having to make a decision on the future of the franchise now. This would also allow the state to focus on more pressing needs in the recovery efforts from Hurricanes Katrina and Rita, while allowing the Saints more time to determine whether the region's economy could rebound enough to continue supporting the franchise.

In the midst of this controversy, several groups of investors have approached Benson with offers to buy the team and keep them in Louisiana, the most publicized group being one led by FOX Sports analyst and former Pittsburgh Steelers quarterback Terry Bradshaw, who is a Louisiana native.

However, Benson had previously expressed whenever asked he had no intentions of selling the team and plans to eventually hand down ownership to his granddaughter, Saints owner/executive Rita Benson LeBlanc. Benson spoke to press following an NFL owners' meeting on November 15, at which he reiterated that the team is not for sale, and also stated that other NFL owners, along with Tagliabue, were working with him to keep the team in New Orleans.

On December 17th, ESPN reported that Benson had told Saints players that he planned to keep the Saints in San Antonio for the 2006 season and possibly beyond, and that he was willing to sue the NFL for the right to stay there. This was days after NFL Players Association director Gene Upshaw advised the Saints players not to renew their leases on their homes in San Antonio because the league planned to order them to return to their home facilities in Metairie. This was also a few days after Benson had reportedly told his staff that they could not return to their Metairie facilities because it was still being occupied by FEMA and National Guard officials and that the New Orleans area had become "unlivable." The State of Louisiana responded by sending Benson a formal letter asking him and the Saints organization to return to the facility at the end of the 2005 season. Included with the letter were statements from FEMA and the National Guard stating that they were no longer using the facility.

On December 30th, two days before the Saints' final game of the 2005 season against the Tampa Bay Buccaneers, Benson announced at a press conference that the Saints will return to their Metairie facility at the end of the 2005 season, and that the team would play as many of their home games as possible during the 2006 season in the Louisiana Superdome, which he said could be ready as early as mid-September, 2006. On January 11th, 2006, Benson and Tagliabue announced plans to play all of their 2006 home games in the Superdome. Tagliabue also stated that the NFL was committed to keeping the Saints in New Orleans beyond 2006, calling it a "multiyear effort" and not just a one-year deal. He also stated that the NFL was talking with city officials about possibly hosting another Super Bowl there in the near future, which would be the city's 10th. Benson stated that he was committed to New Orleans "forever, as long as the community commits to me."

What exactly had changed Benson’s mind about the Saints future in New Orleans. He had done nearly everything to alienate the City of New Orleans and seemingly had insulted residents of Louisiana, and that was after the worst natural disaster in American history had been inflicted on the city. In May 2005, well before Hurricane Katrina, San Antonio lawyer Stanley Rosenberg told The San Antonio Express News, Benson was seriously considering moving the Saints to San Antonio. Benson knew Tagliabue was going to retire before the start of the 2006 season. There would be a new ‘sheriff in town’ soon enough; Tagliabue was a short term challenge to a long term problem.

The problems the Saints had before Katrina have only been magnified. The Superdome has 137 luxury boxes; it has been years since the boxes have been sold out for more then the occasional game. The cities population before Katrina had fallen below 500,000. It’s a safe bet the population in New Orleans will never again approach 500,000. Thousands of businesses have left the Big Easy, and they’re never coming back.

On the positive side, the Saints still have a great lease. They pay the City of New Orleans $1 million a year in rent and retain every dollar of revenue the Superdome generates. And that $12.5 million taxpayer subsidy made to keep Benson happy in 2001 has increased to $18 million a year. And remember its nearly impossible for an NFL franchise to lose money given each NFL franchise receives $106 million a year in television revenues and the league shares 83 percent of all of their revenues.

''The Saints are everything to this community,'' Michael Siegel, a New Orleans developer told the New York Times in February, ''but Tom Benson is a businessman at heart and not a sports enthusiast.''

For reasons known only to Paul Tagliabue, the now retired NFL commissioner who made it a personal and professional priority to keep the Saints in New Orleans, at least as long as he was NFL commissioner.

''The Saints are maybe a $150 million business, whatever their revenues are,'' Tagliabue told the media at Super Bowl XL. ''The league is a $5.5 billion to $6 billion business. And I told the owners from the beginning that we needed to view this as a league responsibility.''

The NFL moved forward with their ‘committee of owners’. Tagliabue with new NFL commissioner by his side made four trips to New Orleans, even announcing new marketing and sponsorship initiatives with Benson in April.

The Saints announced in mid May they had surpassed 55,000 in season ticket sales. What wasn’t widely reported, 20,000 seats were offered for sale at less than $30 per game and the club instituted a $14 per game season ticket. Remember Tom Benson’s concerns as a businessman had always been on the Saints revenue generating potential. The Saints were last among NFL franchises in revenues before Katrina, that wasn’t going to change. With close to 25 percent of the Saints ticket inventory priced well below the NFL average ticket price of $62.38, the Saints may have sold out their entire 2006 home schedule before Monday night’s game, but they did so with some of the lowest ticket prices in the 32 team NFL.

"I love watching the Saints, but the Saints aren't a priority now," says Robinson, 53, whose home just outside New Orleans was gutted by flooding. "People think, '(Ten) months after the storm, it should be back to normal.' But when you go into my neighborhood, it's frozen in time.

"I'm never going through that again."

Frank Vuono, a sports marketing consultant hired by the NFL, assisted the Saints in securing a naming rights partner for the state-owned Superdome. He believes a deal could be worth $4 -$6 million a year to the state; most new stadium deals average 20 years. The Saints had aggressively tried to sell the Superdome’s naming rights before the facility hosted its last Super Bowl in 2002. The Superdome’s corporate naming rights have never been sold.

"There's no way the Saints can be long-term viable in New Orleans without more corporate sponsorship," says Vuono, who has worked on nine NFL naming rights deals in a USA Today report "We're getting good response from five, six corporate sponsors. But when they saw the record ticket sales, it took away the sense of urgency. There's still urgency."

"The Superdome naming rights would be the best move a national company could make," Vuono says. "The Saints' home opener is on a Monday night. All eyes will be on New Orleans and the grand reopening of the Superdome.

"The exposure that company will get will be damn near the equivalent of a Super Bowl. And companies pay $2 million for 30 seconds of advertising during the Super Bowl."

While Benson told the media on May 17th he was happy with the Saints season ticket sales for the 2006 season surpassing the 55,000 mark, he took the opportunity to point out corporate sponsorship was ‘slow’ and only 81 of 137 luxury suites, with leases ranging from $55,000 to $135,000 had been sold.

"You haven't seen the total commitment yet," Benson said. "No National Football League team can just live on tickets alone. ... The next big step is that the business community needs to step up."

"For Tom Benson to make that statement, he certainly doesn't have a grasp of the small-business situation," says Linda Friedlander, former chairperson for Second Wind NOLA, a small-business advocacy group. "It's a region of micro-businesses. The small-business community has stepped up. It may not be buying Saints tickets. But we're doing everything in our power to stay open."

When Paul Tagliabue announced in January the Saints would play their entire 2006 schedule in New Orleans he also said the league would pay $20 million of the estimated $185 million it would cost to fix the Superdome.

No one directly associated with the National Football League or the New Orleans Saints is prepared to commit the Saints will be in New Orleans beyond the 2006 season. Every single indicator points to the Saints leaving after the 2006 season. It never made any sense for the NFL to return to New Orleans for one season only to be faced with the same challenges the franchise had to deal with before Katrina. The only difference – the terrible toll from Katrina, $20 million spent by the NFL and $165 million by Louisiana taxpayers to fix the Superdome.

Just how embarrassing is it going to be 12 months from now if Benson moves the Saints? Try and imagine what could have been accomplished with the $185 million invested in one season of NFL football in New Orleans? The Saints returning to New Orleans for one season should be considered offensive to anyone with a sense of decency.

For Sports Business News this is Howard Bloom. Sources cited in this Insider Report: Wikipedia, the free encyclopedia, the USA Today, The New York Times, The New Orleans Times Picayune