Rams Leave Saint Louis and Missouri With $100 Million Debt

O n the domed stadium which once sported the logo of Trans World Airlines back in 2002 — TWA has been defunct since 2001 — is a logo device bearing the name Edward Jones. Consummating a deal with the Rams professional football team, the financial company signed for the naming rights with the franchise — not with the regional tourism commission which operates the facility on behalf of the dome authority; and in 2012, it extended the naming rights deal until the year 2025 for $42.3 million — but that deal was contingent on the Rams staying in Saint Louis.

The only problem — and it is a huge problem — is that the Rams returned to Los Angeles and left the Missouri city high and dry.

Rams Leave Saint Louis and Missouri With $100 Million Debt

“The state, St. Louis County and St. Louis city teamed up to pay $300 million for dome construction in 1991, before the Rams agreed to move to St. Louis. The state pays about $12 million a year toward debt and upkeep; the city and county each pay about $6 million”, according to this article written by David Hunn for the St. Louis Post-Dispatch. “The three still owe a collective $100 million, due in 2021.”

That is not all, according to the article: the city expects to lose approximately $4.2 million per year as tax revenue falls as a result of the departure of the team to Los Angeles; and the task force to plan a new stadium in the hopes of enticing the team to stay has already spent $16 million to date.

Meanwhile, Edward Jones could create a separate naming deal with the dome authority; and it also has the option to terminate its agreement if the Rams terminated its use of the domed stadium for its home games. No final decision has been reached pertaining to those naming rights.

No More Professional Football in Saint Louis?

This abandonment of Saint Louis by the Rams left some people with the consensus that the city is done with professional football; and according to the aforementioned article, Francis Slay — the current mayor of Saint Louis — said that “the city’s dealings with the league should be a warning to other local governments across the nation.”

To me, this answers my question pertaining to whether or not stadiums and sports teams are really worth the money; and my answer would be a resounding “no!”

The article also takes a look into the lucrative market of naming rights for a stadium. Airlines alone have spent millions of dollars simply to have their logos adorned on the stadium.

It is enough to wonder why airports have not yet entered the market of having large corporations pay for the naming rights of an airport. Are airports leaving many millions of dollars on the table; or does Coca-Cola International Airport not sound quite right?

Meanwhile, the Los Angeles Rams announced on Thursday, March 31, 2016 that season ticket prices will range from $360.00 to $2,025.00 in eight price categories.

Is Legislation the Answer?

You might recognize the name of Claire McCaskill — who is a Democratic senator of the United States representing the state of Missouri and a former chairwoman of the Subcommittee on Consumer Protection, Product Safety, Insurance, and Data Security — as she introduced legislation prohibiting management of hotel and resort properties from charging resort fees specifically designed to be initially hidden from the consumer; requiring disclosure of said resort fees; and include the full cost of a stay in the room rate.

She was exasperated enough by the decision of the National Football League to approve the move of the Rams back to Los Angeles for the first time in 21 years that she began drafting a bill to attempt to  return public dollars from professional sports teams which leave their hometowns prematurely, calling the years spent planning the new $1.1 billion riverfront stadium a “useless exercise” on what could have been a “massive” public investment.

Echoing the words of the mayor, “I have a chance to make sure no other community will get treated like St. Louis,” she said, according to the aforementioned article. “The heart of the NFL isn’t just in the mega media markets.”

Were anti-trust laws violated because the National Football League may not have complied with its own relocation guidelines? Could a lawsuit against the National Football League be pending?

What is This Article Doing at BoardingArea?

Professional sports teams enjoy a significant income from official sponsors and partners — especially from airlines such as Delta Air Lines, which has entered into partnerships and deals worth multiple millions of dollars with a number of sports entities, with the latest being the Washington Nationals baseball team.

At one time, Delta Air Lines was the official airline and charter carrier for the Rams.

Realize that there is a good possibility that a fraction of your airfare is most likely going towards the partnership with a professional sports entity — which is of no comfort to the residents and businesses of Saint Louis.

Summary

As for now, the dome authority has little choice but to focus on landing events and conventions, with possible hearings to be held pertaining to potential future uses of the domed stadium and alternatives for the riverfront itself, which was to have “residential towers, hotels, shops, a high-tech business incubator, plus wetlands, green space and parks stretching more than a mile, from the Gateway Arch grounds to the new Mississippi River bridge.”

I am not opposed to airlines entering into partnerships of various levels with professional sports entities to capitalize on what can be perceived as an unrealistic allegiance to a professional sports team by fans — which originated from the word fanatics; and probably for good reason — who will pay significant sums of money just to attend games in those fancy new stadiums…

…and that is where part of the fault lies.

Sometimes there is nothing like attending a game with a few friends to enjoy the camaraderie during a night out or on a day with fantastic weather; but the costs associated with attending those games can be as high as an airplane at cruising altitude when the tickets for the game itself are factored in with the costs of parking, food and souvenirs for each person…

…but to see in the age of billion-dollar sports a team leaving a city — which has spent significant amounts of money and provided resources on the backs of taxpayers to keep them there — with a mountain of debt for a now-empty stadium built exclusively for the team is unfathomable. Many entities share in the blame here pertaining to the stratospheric idolization of professional sports where a significant amount of time and money are spent cheering on a bunch of multi-millionaires who most likely do not even come from the city which the team represents

…and even a team like the Rams will shed its home city for another home city in the name of money — and possibly greed.

Brooklynites still have not forgotten about the day in infamy sixty years ago when the Dodgers left their beloved borough for Los Angeles, where they currently play professional baseball. You would think that a valuable lesson would have been learned way back then…

Photograph ©2016 by Brian Cohen.

3 thoughts on “Rams Leave Saint Louis and Missouri With $100 Million Debt”

  1. Captain Kirk says:

    Credit to Richard Florida:

    Subsidizing stadiums is an economic disaster

    The overwhelming conclusion of decades of economic research on the subject is that using public funds to subsidize wealthy sports franchises makes zero economic sense and is a giant waste of taxpayer money. A wide array of studies have shown that professional teams add virtually no income to local economies. In fact, some of them find that large subsidies actually have a negative effect, taking money out of the local economy. Aside from the jobs generated by actually building the stadium, most jobs inside the stadium—selling food and beer or working at team concessions—are low-paying temp jobs. It’s even worse for football stadiums, which are used for games at most a dozen times a year, and maybe a few more times for concerts or large events. Public economic development dollars can be put to much better use on things besides subsidizing sports teams and their wealthy owners.

    Ultimately, the burden of public subsides falls disproportionately on small cities that are the least able to bear the cost. For example, a $200 million public subsidy for a new stadium ends up costing a small city like Santa Clara roughly $1,650 per resident, compared to just $50 a person for L.A. And, of course, teams in bigger cities, with their bigger markets and more revenue, often do not need subsidies at all.
    http://www.citylab.com/politics/2015/09/the-never-ending-stadium-boondoggle/403666/

    I agree 100%.

  2. Blind Squirrel says:

    Brian, I’m usually supportive of your take on issues. But here I think you are opining more based on your bias against sports in general than a stadium issue. You’ve gone on record that you like going to games, however you do not necessarily watch sports on television. So you’re not exactly a fanatic BUT you do recognize the allure of a professional sports team. I’m not entirely certain that you’re lamenting the source of the funding for the stadium as you’re enjoying your peanuts and soft drinks (I know by experience you do not drink alcohol or at least have not in my presence). But I digress.

    The crux of my opposition to your argument is that you’re looking at the stadium issue through the peripheral limitations of a needle’s eye. Yes, you can reference the obvious financial figures that are made public. City/state paid this much and is left with that much. But I think you miss several economic factors that are critical to consider when looking at the overall value of a professional franchise to a city/state. To wit here is one:

    Major companies want to attract major talent. A thriving arts and professional sports’ city offers enormous “bait” power to a city. You know that I left Raleigh to return to Atlanta largely because, besides professional hockey, Raleigh had very little to offer me from an arts or sports side. And that was very important to me. It’s no mystery why so many high-priced seats and almost all suites are rented out by large companies. Who uses those seats and suites? High powered executives from the purchasing company – I know this from experience. Your most-often-cited airline, Delta, has suites, backstop seats, and even entire sections at Turner Field and other venues including fields in NY, Boston, and other major cities. And trust me, while occasionally VIP customers or vendors are in those seats, it’s not the average Joe in those seats/suites – it’s the execs. Huge companies are often located in major cities with major sports. Houston. New York. Los Angeles. Chicago. Dallas. Miami. These Fortune 500 companies attract high-salaried employee who pay high taxes. They drive the economy and housing market. They make huge purchases. The pay property taxes.

    You cite the following in support of your argument: “The state pays about $12 million a year toward debt and upkeep; the city and county each pay about $6 million” Brian, who is the state? Who is the city? Who is the county? The taxpayers. Many of whom are employed by large local companies and many of whom love their local teams. And they go to the games. While suites and high priced seats go to the execs, the remaining 99% of the seats go to folks who love their local teams. Teams are a part of civic pride and feed tribal instincts. Look at the stands and see a sea of tens of thousands of dollars spent on team paraphernalia. Those are all sales tax receipts loved by local companies.

    Where is your calculation of these economic realities? And how about the micro economies? Public transportation? Hotels and motels? Gas stations? Rental car companies? Police working and billing for overtime? Bars and eateries? And sales tax from all of the above? Why are so many cities fighting over hosting the Super Bowl? Read stories of what happens to local economies when there’s a major sports lockout or strike.

    Professional stadiums drive MUCH more revenue than what you are citing. You’re cherry picking your numbers to support a bias – which I believe is a tad hypocritical. Huge sports cities are typically huge economic engines. The two go hand-in-hand. Ask talented, portable, high powered people to move to Topeka, Kansas, and well, good luck.

    Swallow it. Professional sports, the arts, and big companies that employ lots of tax-paying folks, are much more to a thriving community than the scant selection of numbers you reference – not the dollar figure, but the number of economic factors on which you base your argument.

    JMTC

    Blind Squirrel

  3. Phoenix says:

    John Oliver summed it up very succinctly: https://www.youtube.com/watch?v=xcwJt4bcnXs

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