SBD/Issue 100/Facilities & Venues

State Agency Unlikely To Fully Pay Saints, Hornets This Year

LSED Faces A Shortfall, Largely Due To Team
Obligations And Mounting Debt
The Louisiana Stadium & Exposition District (LSED), which is responsible for the Louisiana Superdome and New Orleans Arena, "is unlikely to have enough money to pay" the Saints and Hornets next year, according to Michelle Millhollon of the Baton Rouge ADVOCATE. SMG Senior VP Doug Thornton, whose company operates the Superdome for the LSED, yesterday told lawmakers that the LSED "is facing a $27.5[M] shortfall, largely because of obligations to the teams and mounting debt." Millhollon notes payments to the Saints and Hornets "are creating problems," but the Saints "are the bigger problem because they receive three times as much as the Hornets." Louisiana Gov. Bobby Jindal yesterday said that the Saints' current lease deal, which was brokered by a previous administration, "relied on unrealistic revenue expectations," as the lease "guarantees the team $23.5[M] a year in cash inducements." Jindal added that it is "too early to know what the state will be able to afford the next fiscal year" (Baton Rouge ADVOCATE, 2/11). The AP's Melinda Deslatte noted the state's problems with paying the Saints and Hornets have "recurred ever since a deal was negotiated with the Saints in 2001 and the Hornets came" to New Orleans in '02. Thornton: "We have revenues that are not sufficient to cover the debts." Thornton added that the LSED currently has "about $3[M] in revenue to cover the direct cash payments -- or $27.5[M] less than what is needed to pay both teams." Louisiana "needs an estimated $7[M] to pay the Hornets next year." Deslatte noted if the state "didn't make the payments to the teams, the Saints and Hornets could leave New Orleans without a penalty." Jindal yesterday said that he "intends for the teams to stay" (AP, 2/10).

IN NEGOTIATIONS: Thornton said that Louisiana "is negotiating a new contract with the Saints, but did not indicate when a deal would be struck." In New Orleans, Ed Anderson noted the current deal "expires in 2018, although the financial inducements the state pays end after the 2010 football season." Thornton added that he "would like to extend the contract by 15 to 20 years." Louisiana in addition to the $23.5M, owes the Saints $10.4M "in other contractual inducements, like concessions and parking revenues" (NOLA.com, 2/10). Also in New Orleans, Kate Moran reported Louisiana "is in lease negotiations that would keep the Saints in the Superdome after the team's current contract expires in 2010." Louisiana "is pushing to work out a new agreement by April 1, the deadline to submit preliminary bids to host the Super Bowl in 2013" (New Orleans TIMES-PICAYUNE, 2/10).

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