SBD/May 2, 2013/Franchises

Red Sox Seeking Permanent Licensing Agreement To Control Streets Outside Fenway

An estimated $5M annually came to the Red Sox from use of nearby streets
With a 10-year-old licensing agreement between the Red Sox and the city of Boston for use of temporary concession stands outside Fenway Park and the air space over Lansdowne Street "set to expire at the end of this season, the club is pushing to make the lucrative arrangement permanent," according to Borchers & Herman of the BOSTON GLOBE. The Red Sox in November sent a letter to the Boston Redevelopment Agency arguing that the "low license fee is reasonable" because John Henry's ownership group has paid $56.7M in "property, sales and meals taxes since buying the team in 2002." The BRA in '11 "charged the Red Sox an average of just $186,000 per year for use of" Yawkey Way and Landsdowne Street, even though the team generated "an estimated" $5M in revenues from them. Since Fenway's Green Monster section opened, the Red Sox have "more than tripled seat prices there." Yet the team's license fee "has increased by just 28 percent over the same period." The Red Sox in the letter "pushed for a permanent extension of the current terms, arguing that a higher fee would represent an 'unwarranted, punitive burden' on an ownership group that has never sought public financing for Fenway Park renovations or for a new stadium." While Red Sox owners have spent $285M on ballpark improvements "without public funding, they also have enjoyed substantial tax breaks that helped to defray their costs." The Massachusetts Historical Commission has awarded the club $47.7M in tax credits, and Fenway Park's "inclusion last year on the National Register of Historic Places was worth another" $45.5M in federal tax credits. Red Sox owners could gain "another financial benefit by setting their BRA agreement in stone." If granted "permanent control of the two streets, owners could claim the license as a capital assets, instead of as an expense, if they were to sell the team" (BOSTON GLOBE, 5/2).
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