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DID MEGAPLEX COMMISSION GIVE PATS TOO GOOD OF A DEAL?
Published June 8, 1995
A survey of NFL lease deals by the BOSTON HERALD shows that while the Patriots "will make bigger annual payments than other teams to play in a new megaplex, the team could also reap far greater revenues than those other franchises." According to projections prepared for the megaplex commission, the Patriots -- who will pay $5M a year for 25 years plus day-of-event operating costs -- will gross nearly $42M a year. Under the deal -- which is not yet a final lease -- the Pats keep all concession, ticket, premium seat and other revenue from football and up to 20 non-NFL events a year. Analysts noted, while comparing NFL leases is difficult, "it is rare, if not unique, for a team to control the revenue flow from as many non-NFL events as granted the Patriots." Khalil Johnson, manager of the Georgia Dome, whose Falcons lease was used as a model in Boston, said that despite the Patriots' up-front payments, the deal "could leave the public more exposed than the Falcons lease." Johnson: "We assure that the debt service and operating costs are covered before the team participates in revenues. ... Based on the raw numbers, the public sector [in MA] has a significant amount of frontside exposition while a significant amount of dollars will be made by the team." Patriots VP Jonathan Kraft argues that there is "substantial risk," since revenue could decline if the team fares poorly or events are not booked. Kraft also noted that the dome will be available to the state for other uses outside of the 30 Patriots-run events. Kraft: "We have it just 10 percent of the time, but we are covering significantly more than 10 percent of the debt service on the facility. We feel we are doing our fair share" (Phil Primack, BOSTON HERALD, 6/8). CROSS TOWN RIVAL: FleetCenter/Bruins Owner Jeremy Jacobs is taking an "active interest" in the megaplex debate, according to Meg Vaillancourt in the BOSTON GLOBE. Jacobs has formally requested information about the project from the Weld administration as he is considering investing in the project. New Boston Garden Corp. President Larry Moulter: "We're looking at a variety of approaches. Certainly our experience in financing, building and operating a sports facility in Boston suggest we'd have something to bring to the table." Vaillancourt indicates Jacobs is concerned that a megaplex dome would compete with FleetCenter for certain events (BOSTON GLOBE, 6/7). THE DONALD-PLEX? The GLOBE's Joan Vennochi reports that Donald Trump is working with former Boston city councillor Michael McCormack to put together a consortium of business people to possibly include a real estate development with casino in the megaplex (BOSTON GLOBE, 6/7).