We are building it out. So once you really built a suite level, you really lose the hundred thousand dollars that you could collect if you are able to sell it. Plus, as you say, if people are buying food and so on and so forth, there is some profitability in those items, as well.
And there are people who do actually lease it and run it as a business. Are you aware of that? 213 STADIUM HEARINGS
I have been around long enough to be aware of that, Councilman.
Yes, I would think you would like to have a 15-minute break. Would you?
-- and in the interim we could hear people like Mr. Vignola and -- it is your call.
I prefer to make sure we finish today and take a quick break, if that helps do that.
Fine. We will take a 15-minute break. (Short recess.) 214 (By relief stenographer, Josephine Cardillo.)
Gentlemen, gentlemen? Mr. Banner, Mr. Montgomery, before we continue on with your testimony, would you mind if we had Mr. Pizzi testify. You could stay where you are. He has another appointment, and he's been waiting all day to testify.
It would be our pleasure. MR. BANNER it depends on what he's going to say. (Mr. Pizzi comes forward.)
Thank you, Madam President. Thank you for the courtesy, 'cause I know how busy we all are. And I would like to say good afternoon to members of City Council. My name is Charlie Pizzi, I'm president of the 215 12/1/00 STADIUM BILLS HEARING Chamber of Commerce. As with other major projects, this issue brings together diverse opinions and community concerns and fan interest. And all are equally passionate and significant. Let us remember the Center City tunnel project and the Convention Center project. As in those cases. The task and the process has been an arduous one, especially for the teams. And I, therefore, I would like to thank the Mayor, the Eagles, the Phillies, and the PIDC staff for doing such an incredible job during this process. And, therefore, I would also call on members of City Council to approve the legislative packages before you. Governor Ridge first called attention to the importance of sports exposition and cultural facilities in October of 1995 and has since devised a financial strategy to help local communities sustain and develop Pennsylvania's pressure community assets -- from sports facilities that are integral part of our community fabric to tourist and attraction convention centers. 216 12/1/00 STADIUM BILLS HEARING But State government will not be able to undertake these projects alone. We will have to work with the local and regional governments and in a partnership with the private sector. The Governor fulfilled the State government's role in this process and legislated a portion of $170 million to Philadelphia. The legislation before you today ensures our local government and its teams fulfill their responsibilities and the strategies outlined in the Governor's task force. By now, we have become with the construction of new facilities. Since 1991, new facilities have been built and 15 new 15 facilities are under construction. The short of 16 this is to say that we need these facilities to 17 become competitive in the United States. If we 18 want to be a first-class city, we have to act like 19 a first-class city. We have two teams that are 20 outstanding members of the corporate community and 21 civic community and charitable communities. Everyone has come together. And I just want to cut this very short, Madam President, to let you know that if we want to become a first-class city and remain one, and 217 12/1/00 STADIUM BILLS HEARING just as we've done with the tunnel project and the Convention Center project, the Chamber is fully supportive to have the teams build their new facilities under an entire complex, which will become a destination center. It will be unique because no other city in America has all four facilities within one complex. We think that the community is served well by how this has been arranged and also through your leadership, and we think that this can be an added benefit to the community as the whole. So I just wanted to say on behalf of the Chamber, we are strongly for this, we worked very hard in Harrisburg to get the legislation passed there, we came back here, we've been very supportive. We really do believe that this is in the best interests of the City for the City's future.
Thank you. Are there any questions from members of the Council? (No questions.)
Excuse me. Does the Chamber support the level of public funding --
We think that it is a fair level of funding, as we looked at all of the other cities, and it really puts us in synch when we look across the United States and the City is asked to pay its fair share.
Thank you. Any questions from members of the committee? (No questions.)
Was Councilman Kenney finished with his questioning? Councilman Kenney, were you finished with your questioning?
Thank you. 219 12/1/00 STADIUM BILLS HEARING Councilman Rizzo, you're being recognized.
Thank you, Madam Chair. During -- I will direct this to both of the teams, but during our briefing, there were some questions about the use of the facilities other than for actual game days, and the Eagles were very clear, and I think you confirmed today, that nothing would basically change, that the same activities that are held in Veterans Stadium today are the venues that you associate with are going to continue at the new facility; is that correct?
Yes, that's correct. And as I said, there's some additional activity. Hopefully, it's primarily an (unintelligible) soccer team that we would shoot for, but it's pretty much a continuation of what's been there.
And I don't think it was as clear as it could have been pertaining to the Phillies, and I apologize if you've already, Dave, addressed this issue, but has there been a written agreement on exactly what will occur in the new Phillies ballpark, other than Phillies 220 12/1/00 STADIUM BILLS HEARING games?
Well, Councilman, as I -- I did indicate earlier that, first of all, we -- each of the facilities has an obligation to the public sector for ten use days, both to the City and to the State. And my understanding is that there are some parameters in which that use is to be facilitated, but we are not necessarily restricting the use on those days. As far as we're concerned, the main -- the use of the facility for us is for the playing of baseball, and we would extend that beyond our games to include the games that -- the baseball games that are traditionally played there. In addition to that, we are going to be an outdoor facility, that I know one of the things that was contemplated in the discussions is that in a futuristic sense, because of the cluster of facilities in the sports complex, that whether it was Pan American games or something of that nature, that there may be a request that our facility be used. Our interest is to continue to use the facility to meet the current obligations of 221 12/1/00 STADIUM BILLS HEARING Veterans Stadium. And I think the example I cited that if the football-based facility has successfully developed a relationship with major league soccer and they happen to be home a weekend and we're away and therefore our facility is available and that became the facility of choice, for example, either the Promise Keepers or the Jehovah's Witnesses group, that would be the case, then we would feel we would make it available. I think our biggest concern is really the protection of the grass and dirt for the playing of baseball, Councilman.
The reason that I'm being -- that I'm really focused on this is because this is such a complicated deal, and four years from now, five years from now, and you remember the controversy -- I think you both do -- when there was an outdoor concert scheduled for one of the facilities down in South Philadelphia, and it created a lot of controversy in the community. Three or four years from now, I think that things are going to be attempted that we're going to be able to probably to have a discussion 222 12/1/00 STADIUM BILLS HEARING and say, Well, you know, it was never clear that that was a appropriate or that was it was inappropriate. And that's why I'm really trying to nail it down, even though they are a distance away from what we're really trying to do here, to get two new stadiums built, but I'm sure we just want to make sure that absolutely all of these little details are a mater of record because, again, I just don't want to -- To give you an example, I understand that if there was a major ballgame or a major event occurring at one of the complexes down there, that there's a -- there's an agreement that hospitality tents -- let's, say God willing, we had the Superbowl here.
That we could put hospitality tents up in the parking lots because most of the people coming probably wouldn't be driving, that -- these are the kinds of things that every day something new surfaces, some other little perk surfaces that could affect that community. And I think -- I don't know whether they're just buried away in the fine print or 223 12/1/00 STADIUM BILLS HEARING people aren't talking about it because they don't want the red flag to be raised. Do you really -- tell me about putting hospitality tents up in parking lots and having parties, outdoor parties in the parking lots during, hopefully, a major event.
Actually, I think you raise a good example of probably something that I would not have thought of, Councilman. And my guess is that if there were a Superbowl -- and I hope that that would be an opportunity -- then I could see perhaps a situation where there would be tents erected but perhaps on our playing field, given the fact that that event would take place during the month of January, late January, and I think that's one of the valuable ancillary uses that we could provide. In other words, taking them away from having those tents created maybe in a place where it wouldn't be wanted and move them inside on the playing fields itself and create ancillary hospitality within the bowl.
I appreciate that offer, and I'm sure the Eagles are going to accept it, but my point being today, I understand the 224 12/1/00 STADIUM BILLS HEARING agreement, if you didn't make that offer that hospitality tents of the sort could be presently -- according to this deal and, again, buried away in the fine print, permit hospitality tents to be erected in the parking lots.
Well, the only thing that I believe -- and I may -- I may look to the Council President on this on terminology, but it's my understanding that with the creation of the special service district, there will be some parameters placed. I mean, our -- let me try to be as specific as I can be in answering your question. Our goal is to create, as I think in my testimony in response to Councilman Kenney's question, is to create what we call "the Utah Street environment," Councilman, and to have that be a natural expense of our game. Right now, in Baltimore, Utah Street opens maybe two and a half hour prior to game time, as opposed to the gates totally open two hours or an hour and a half. So I do not want to create the wrong impression. In an environment like that, it's important that the club have the ability to create 225 12/1/00 STADIUM BILLS HEARING the type of atmosphere that we feel would be appropriate. And we think that primarily -- but, again, we're inhibited because we haven't laid this out. We think primarily that would occur on the 21-acre site that we've identified. Our goal in setting up smaller parking areas was to create parking areas. And our interest in those areas is to have them, you know, be utilized for parking. And I think we've created a new, I guess, potential boundary with our suggestion that Hartranft be included, and perhaps that appropriate in the type of discussion that you're suggesting. I'm not quite sure where your imagination's taking you, and I'm not sure I can project 30 years out. So please help me.
Well, I think that in both of our businesses, our imagination has to be a little part of it because, again, every -- after Veterans Stadium was built and after the Center was built, all of a sudden, there were issues that needed to be negotiated. And what I'm trying to do is look down the street basically and say, Hey, what could develop that could be a 226 12/1/00 STADIUM BILLS HEARING problem five, six years from now, after this facility's opened and maybe four years from now, that all of a sudden, tents start popping up in parking lot and other outdoor activities, and here we are, we're back right where we started with the Vet, people in the neighborhoods complaining about after Eagles games activities and tailgating and all of the things that become a nuisance. So I think that when it's pointed out that you have -- or the Eagles -- I'm not sure who has the right to erect tents in parking lots for a major activity, that puts a red flag up to me, saying, How would the community react to tents being put up in their neighborhood and people being drawn away from the complexes into those parking lots that you designed to alleviate a problem of on-street parking and put cars into the parking lot? Again, I said when I started that a major activity, people coming from all over the country won't require those parking lots. And in my opinion, those parking lots are locations where tents could be erected because there won't be any cars. 227 12/1/00 STADIUM BILLS HEARING
Excuse me. Councilman, are you specifically referring to the North Lot?
I'm not -- I'm not specifically referring to any location other than the fact that I understand that the teams, based on the deal that they've put together, have the ability to erect tents in parking lots. I don't know if that arrangement is specific to the North Lot or not, Madam Chairman. Again, that's what I'm asking the Phillies and the Eagles, to tell me where can they start putting tents up during a game?
Okay, let me try, Councilman, one more time, and then I may defer to Joe. But, this is -- I have two examples because I can draw on 30 years of being in this facility. Probably 30 years ago, there was not an expectation that Joe currently has that college lacrosse would reach the level of interest, that would generate the type of fan support that it currently does for the NCAA tournaments held roughly around Memorial Day in May. 228 12/1/00 STADIUM BILLS HEARING Conversely, we do not want to close an opportunity for ourselves and for the City to have, if women's professional baseball or women's professional softball would develop and they would be looking for a place to play ball in years 7 from now, frankly, we would want our facility to 8 be at least considered for that purpose. 9 As far as hospitality tents are 10 concerned, the only time that I can speak about a 11 proliferation, if that's the right word, of 12 hospitality tents just occurred this August, and 13 it was for the purpose of hosting the Republican 14 National Convention. 15 So I would hope that in our 16 deliberation as a body, both the teams and the 17 Council, that we wouldn't foreclose an 18 opportunity, because I don't believe those tents 19 -- I mean, I can't speak for the neighborhood. 20 Clearly, you would have that pulse better than I. 21 But I would hate to see that we could not 22 entertain the opportunity associated with the RNC 23 or associated with the Superbowl or whatever 24 because we were overzealous in our restriction of 25 the opportunities associated with what's going to 229 12/1/00 STADIUM BILLS HEARING be a spectacular sports complex.
Absolutely. And I think the purpose of these hearings are to let the people watching and listening know what the potential and what the impact could potentially be. If people are watching this session or listening to it have no problem with tents being put in their community, and you used the perfect example of the convention, and I didn't hear anyone objecting to that. But my point being is, let's be up front about it now and let's communicate it now, so five years from now, when all of these potential activities possibly occur, that it's not a surprise.
If I could just add really briefly, I don't think that there's anything that either of us have in mind at this time that is not right out there on the table. But, secondly, I think that part of the rationale for the investment that we're all collectively making in buying enough land to move these away from the community is just to accept there are certain activities that take place around these buildings, and it serves everybody's 230 12/1/00 STADIUM BILLS HEARING best interest to try to move them away from the community to an extent because, you know, there are activities that may happen at a time people don't want them to, et cetera. So I think we are creating a little bit of a buffer for even things we can't anticipate at this moment by making there be such a significant distance between the residences and the buildings. And as I said, there's nothing I'm aware of that everybody else isn't aware of that exits today or that we can think of that's likely to exist tomorrow that we're not being open about.
Okay, that's great. Did you want say something, Madam Chair?
But, Councilman, I just want to assure you that we are working with the community regarding safeguards, and they will be made a part of the term lease or the leases themselves, and there will be a penalty attached to that. So there are safeguards if they are not met. 231 12/1/00 STADIUM BILLS HEARING
That's -- I understood you mentioned yesterday some legislation that might require --
-- any of those activities to come back here to the Council.
My last question is about the concessions. You, both the Phillies and Eagles, will control the concessions; is that right?
Who will have the responsibility to price the various items? Will the concessionaire have the ability to price a hot dog, a beer, a soda? Because going to an activity is -- for a family of two, three, four people can get to be an expensive proposition. How will you decide on the pricing at the concessions?
Well, I'll be happy to discuss this, although as I said, we have not worked out our arrangement with the concessionaire, and the reason I'm happy to, actually, we believe one of the things that has 232 12/1/00 STADIUM BILLS HEARING worked against the baseball experience at the Veterans Stadium has been the cost of concessions and costs/quality. And as a result, we're anxious to have the opportunity to work with the concessionaire. We think that if we can upgrade the perception of the costs and quality associated with concession opportunities, that probably we can effectively increase the per capita associated with it; and at the same time, increase our fans' enjoyment of it. I mean, it's been very you awkward for us through the years to have a third-party relationship with a concessionaire, because I think, as you well know, Councilman, when people come to Veterans Stadium today and buy a hot dog at the Phillies game, they think the Phillies have the control over the distribution and the production of that hot dog; and the fact of the matter is, of course, that the relationship with the concessionaire today has always been through the City of Philadelphia. And we have only had at best an indirect leverage to, you know, establish criteria, both from quality and pricing standards.
Thank you very much. 233 12/1/00 STADIUM BILLS HEARING Thanks, Madam Chair.
Thank you. The Chair recognizes Councilman Ortiz.
Council President, you should understand that Councilman Ortiz took the opportunity to provide general manager advice to me during the break. And I appreciate that, Councilman.
Rick Reed and (unintelligible) will be good, but Rick Reed will give us seven good innings, but it's all right, okay? (Laughter.)
Joe and David, you have stated that the figures that we have gotten -- and for the record, I'd like to begin establishing what it is so that we have a full understanding of where we're at and what can be 234 12/1/00 STADIUM BILLS HEARING projected. So if you -- if you could tell me, for example, Joe, the expenses, the yearly expense of the Eagles, for example. For this year, in terms of players' salaries, you said it was something like $64 million?
66. And you said there were other expenses that were -- that were -- that were included somewhere that, you know, and what are those in terms of players' expense?
We play -- every team in the League pays the same amount of money into a player benefits pool. It's, you know, 401Ks, it's health insurances, it's life insurance, it's a significant list of those kinds of --
And this year, it's just a hair under $10 million. 235 12/1/00 STADIUM BILLS HEARING
So, in essence, for benefits and salaries, you have around $76 million --
And for administration, how much -- how much a year do you spend for administration?
A close estimate. You don't have to be -- within a million dollars, within a million dollars, you must have an idea of how much you spend on administration.
My CFO, who's in the back, is giving me finger signals that, I think, is saying between 5 and 6 million.
Come on up here. (Eagles CFO comes forward and confers with Mr. Banner off the record.)
You're talking administrative expenses, give me a sense as to what you're --
Administrative -- administration. You have a team, you're the chief executive officer -- or Jeff Lurie is the chief executive, and you're the chief administrative officer?
Chief operating officer. You have expenditures in terms of rent, office space, secretaries, your salary, other people's salaries. How much do the Eagles as a team spend on administration?
Yeah, we don't to know your $10 million salary and bonuses, and we don't want to know the bonuses.
I mean, if you're talking about all areas, everything from the cost of team 237 12/1/00 STADIUM BILLS HEARING travel of all of our employees and everything else like that, it's $52 million.
$52 million. Could you -- you don't have that -- give me a break -- tell me what that includes.
Come back (addressing CFO). I mean, it includes, you know, virtually everything in running a business. I mean, all of our employees' salaries, including our coaches and scouts. Scout travel, for example, is a huge line item. You know, you have obviously equipment. Team travel is a very big line item. You know, expenses at training camp: We take over a hundred people, we put them up, we feed them, and pay them for a month. You get -- I mean, I'll just give you the highlights on some of the bigger items. Obviously, we have a significant rent. We pay the visiting team's share; the visiting team's share gets 40 percent of our gate. So if our --
Is that administrative? I mean, is that an administrative expense? 238 12/1/00 STADIUM BILLS HEARING
That's why I said to you what do you include in administrative? You know, I don't. . . You know, it's hard to break it out like that because you'd have to make sure you're comparing apples to apples and talking administrative. I'm giving you a pretty inclusive number.
I'm trying to get an understanding of what are the aspect of finances of a team. We're trying to see what are the necessities, how we judge how a team -- how much money, profit margins, and so on down the line. And in order to begin -- at least for my part and I -- and on the record, I'd like to know how much money the Eagles are spending in a year in terms of administration, maintenance. Maintenance is part -- this year, we maintain the Vets Stadium, so that cost runs --
In the next year, in 2003, 2004, that will be your responsibility, correct?
Right. I mean, do understand, we do have certain maintenance. We are responsible for the maintenance of our office spaces and the spaces we use. You're responsible, obviously, for the stadium, but we have three sections of offices and a fourth section of locker room and training areas, and we are responsible for the maintenance and upkeep of those areas. But, look, here's -- here's -- you know, and I think actually it was Sam Katz who said it earlier today. We did not sit down and negotiate a deal for a stadium and try to figure out how much could the City afford to contribute, because the truth is, if we took every decision --
Joe, Joe, we've gone through that. I'm -- what I'm trying to see is if I can with any reasonable certainty or approximation is how much money the Eagles spend. 240 12/1/00 STADIUM BILLS HEARING What are your expenses yearly? You take the year -- from January to 4 December 31st. And I want -- you know, I'm trying 5 to get a close proximity of how much money you put 6 out to buy stuff, to buy footballs, pay salaries, 7 pay the light bill. What -- I don't want -- I 8 don't want it detailed; I just want a rounded 9 figure. 10 You gave me $66 million for the 11 players' salaries, fine, with a $10 million 12 benefit package. That's League and -- but your 13 expense of that is $10 million. 14
I'm just trying to 19 get a round figure somewhere around in which your marketing, your -- you know, your advertising, your maintenance and so on. How much is it that you spend in a year?
So you're saying to me, other than players, just give you a number for all of our -- 241 12/1/00 STADIUM BILLS HEARING
You gave me players, you gave me players. All I want is the add-ons to the players.
Okay? But give me a figure, give me a total figure. Give me -- is it $100 million, is it 120 administrative in your expenses?
If you want to know what our expenses is, here's the simplest way for me to try to answer your question. If you took the 76 millions we spend on players and benefits, everything else included, we have about another $60 million of expenses.
No, we have -- I think it's 135, somewhere between 135 and $140 million of expenses.
Well, you know, revenues are -- 242 12/1/00 STADIUM BILLS HEARING
Can we go down to revenues? For example, what is the level of monies that we get -- you get -- I'm feeling like we're owners of the team, okay? But how much is it that --
I really don't understand the economics of this, but I'm willing to keep going.
I wish we were. Revenues, this year, because I want to see what projections we can have for the year '03-'04. What is the share of the Eagles in terms of the NFL television contract, in terms of 243 12/1/00 STADIUM BILLS HEARING ABC, Fox, CBS, ESPN? What is the share of the Eagles on that?
So that we can save each of us a lot of kind of time, are you trying to end up with some sense of how profitable we are, or what we make or don't make?
I want to see where the revenue streams are, because we have -- we have a clause here on Page -, and it says: Financial terms. Team to receive 100 percent of all revenues of every kind and description arising from and relating to the ballpark site, except as set forth in Fund for Children, which is a million dollars, and City and Commonwealth use day revenue. Team rights will include, without limitation, display, concessions, pouring -- I imagine that's the beer, right? The pouring?
And we expect to 244 12/1/00 STADIUM BILLS HEARING sell a lot of liquor because we're estimating that the schools are going to really make a lot of money out of this.
Sponsorship, broadcasting and naming rights, general admission tickets, preview season tickets. And I want to get a sense of what the revenue stream is, because we're talking here about a lot of stuff. We -- Frank was talking in essence about what I'm talking about in the sense that he was asking you how you're going to set the price on a hot dog. I don't want that. I want to know how much the Eagles are getting, if anything, from the concessions right now in terms of money. And beginning in the year 2003-2004, I would like to know what your projections are for revenue from these situations.
And, you know, you don't have to be exact, obviously, but you have a stadium that is going to have how many seats? 245 12/1/00 STADIUM BILLS HEARING
66,000. They will be filled every game. You have more or less an idea, given Philadelphia fans, a lot of beer is drunk inside and outside of the ballgame and stadia, you have an idea how much liquor you sell now. I'm sure you make some projections as to ideas of how much liquor and food you're going to be selling in the year 2003-2004, I'm sure you have idea of the revenues that you're going to get from advertising from the luxury suites. What is the estimated revenue from the luxury suites? These are the things that I would like to see. You're going to have club seats and licenses. What is the estimated revenue out of all of these things? And I would like to find out -- and I would to have that information before we vote. I would like to have information as to revenue streams, how much money you're wasting or spending right now this year, and how much money. And the same for the Phillies. So if we give Jose Mesa (ph.) a contract -- bad contract by the way, David, no 246 12/1/00 STADIUM BILLS HEARING good. Sam Mesa's not going to do it for us, but if give Jose Mesa a $6 million or $8 million guarantee, right, that goes into player expenditures, and then fans suffering afterwards. And that's unmeasurable, okay? I'd like to find out what is it that we're talking about, because we're throwing a lot of money here and we're talking about a lot of numbers and we're not talking about specifics in terms of the teams. And we have -- if we're going to approve these financial terms, I'd like to find out approximately how much is it that the Eagles and the Phillies are going to be spending, and how much revenue stream and how that revenue stream is divided and they're getting. And if you can't answer it right now, I'll give it to you in writing and you can submit it.
Councilman, let me, on behalf of our club, see if this is helpful. I testified earlier today that as a result of the testimony yesterday, that our -- I think I indicated our player payroll, which is, you know, it's public information, was 247 12/1/00 STADIUM BILLS HEARING approximately 48 million last year. In our sport, our additional player expenses come out of what I would describe to be four categories. There is the player benefits, which is what Joe was referencing, that's actual cash out; there is team operations, which is the ability to get us from one city to another and pay the salaries associated with our manager, coaches, et cetera; there are the scouting and player development expenses, which are the combination of scouting the talent --
The scouting, it's not what you referred to GNA, I'm going to come to that. And the operation. And we've talked a little bit about the attractiveness of the Reading franchise. You know, and I'm not so sure everybody knows, that those players are really Phillies players there, that we're paying the salary for the Reading Phillies players, we're 248 12/1/00 STADIUM BILLS HEARING paying the salary of the manager and coaches there, etc., team trainer, whatnot. So in addition to our player payroll, which is the public element that people see, we have another $20 million in player-related expenses associated with that.
Does that include the aspect of the Dominican Republican campgrounds?
That's scouting and player development around the country. That is, you know, I mean, if I were to add these numbers up quickly -- excuse me, that is -- I'm low-balling already. That's $23 million in player expenses over and above the actual payroll, because we have at anytime, in addition to our big league club, we have another 150 to 170 or 80 players playing for our organization. We then break it down as follows, and I'm sure Joe does things differently. We have stadium operations expense, and it probably will surprise you -- now, in that category is our rent, 'cause we do pay rent. That is about $9 million, 8.5 to $9 million. 249 12/1/00 STADIUM BILLS HEARING
And then our marketing and ticket operations for us is 5.5 million. Our general administration, which includes the insurance of the player -- so to some degree, that's player-related -- is a little over $8 million. And then the -- our portion the major league baseball's expenses are another $2.5 million. And that's the Philadelphia Phillies expenses in the year 2000.
And, obviously, you -- baseball does not share the national contract that it gets, or do you get a share of the --
-- national TV contract? It's not obviously as profitable as the NFL at this point. 250 12/1/00 STADIUM BILLS HEARING
Our centrally- generated revenues are in the mid-teens; and, therefore, you would have that offset against the central expenses. So, you know, it gives you a frame of reference.
Do you have a TV contract for the region; is that true? For TV and radio?
And you get paid how much for those rights to be able to transmit?
Our local media contracts would also be in the mid-teens.
And, Joe, do you have a local contract, or is it all done through the local office?
We have a local radio rights contract, no local broadcast. Oh, we do some in-house, like Coaches Show, but we have only a radio rights locally.
You know, I cannot get 251 12/1/00 STADIUM BILLS HEARING that specific with you. I mean, I will help you with this, but you see, we have stations competing with each other to bid against each other for our rights. There are other markets. We are run by a CBS station in which they have CBS people competing for -- I can't -- I will help you --
We're trying to send a message to the citizens of Philadelphia, we're trying to send a message to the citizens of Philadelphia. I mean, Councilman Clarke said that the image out there is that what we're doing is subsidizing rich franchises, rich individuals, and all we're trying to do is to set a level of knowledge in which people and the people of Philadelphia know how much money the revenue stream is coming in to each of the teams. And if, you know, I asked you for what you get for the national media TV contract.
Well, let me give you three -- well, I think that's fairly public 252 12/1/00 STADIUM BILLS HEARING information. I believe that the amount from the national TV contract this past year, I think, was 64, either 62 or $64 million.
But, I mean, let me try to get where I think you're trying to get, you know, with -- which hopefully helps you answer the question you're asking without giving you things that I'm not comfortable giving you. And I'll give you a couple ways of doing this. There's one publicly-owned football in the NFL, so it releases publicly its revenues and expenses. That's the Green Bay Packers. It did this relatively recently. They were published, and the team showed a $1 million loss from operations. That was -- its expenses were $1 million than its revenues.
Well, if you're losing money, let us know. I mean, I'd like to find out. I think that the City of Philadelphia would like to know that the Eagles, currently in terms of its operations, is losing money.
And, you know, I'm 253 12/1/00 STADIUM BILLS HEARING sure that if you were losing money, you would let us know.
The second thing that I'm willing to share with you is that I will tell you that those of us who are in favor of this deal if it passes in this body will sweat out a very difficult sell we have in convincing a bank that we will be able to repay the loan on this deal; meaning, there are not some significant surplus of revenues that's going to enrich anybody, or we wouldn't have any problem qualifying for a loan. I promise you, if you're in favor of this happening, the day you hear that we've actually gotten our financing, you should breathe a big sigh of relief, because it will be very, very close whether we're going to succeed in doing that.
At what level of percentage are you -- is that loan getting repaid?
No, it isn't -- it isn't 254 12/1/00 STADIUM BILLS HEARING done in that form. It's a loan that's available around the League, and the rate at which it gets repaid will relate to how many of the teams are carrying loans, how many teams sell how many club seats. And it's a very complicated formula; it's not something you can answer like that.
Is it safe to assume that you will not pay the market rate in terms of the loan?
There will be an interest rate savings by virtue of the loan.
And we can assume that you -- the answer is that you will not pay the market rate, right?
Well, I mean, if the private-sector market rate -- that's true, but if the City borrows money at 6 percent and there's a possibility we could pay 6 percent, absolutely. Will we pay 8.5 or 9 percent, like if we went to a bank? No. We will pay less than that.
Okay. So what -- so you're getting -- you're saying that you're going to be sweating it out for a bank. I don't think a bank is going to -- that you're going to have 255 12/1/00 STADIUM BILLS HEARING problems getting a loan from a bank.
I believe -- I wouldn't be sitting here if I didn't believe we could sell this deal to a bank. But I will tell you that it's close enough that that will not be easy. We will have to be persuasive, we'll have to prove to them, just as Rosentraub testified yesterday, that the size of this market and the potential of this market will allow us to be more successful on the revenue end than almost any team in our league. If we succeed in persuading them that we are good enough and that this market is capable of doing it, then we'll get the loan.
And you will persuade that bank -- and you will persuade that bank to give you the loan by giving them some details and some details such as: What is the revenue stream, what is the size of the market, what is it that you're expecting to make from each of the articles that we're talking about? And all that we're asking is that you 256 12/1/00 STADIUM BILLS HEARING give us the same information that you're going to give the bank: What is the size of your contracts? what is the size of the expected revenues in terms of concessions? and so on down the line.
And I think I've shared -- I've shared with you, I think, enough for you to be able to come to the conclusions you're looking at. I also think, you know, Sam Katz said to you this morning, you know, a very big part of that answer is the rest of the teams in our league. Now, we put up a chart -- and I challenge anybody to disapprove any part of the chart -- that shows that we will have a massively higher amount of debt service and O&M expenses than any team in our league. Now, we have to compete with those teams, regardless of whatever the results of the information you're asking for. And how would we do that if we follow the process that you're asking us to?
I can't tell you because you're not giving us the details and 257 12/1/00 STADIUM BILLS HEARING otherwise --
-- to be able for us to make a reasonable and intelligent assumption, okay?
If you look at that chart right there and you see what our debt service and our operating expense number is going to be compared to the rest of our league, can you tell me -- no matter what the answer to the question you're asking is, how are we going to compete with those teams?
I don't know. When we get the answers to the questions that I'm asking you, then I'll better be able to relate to that.
No matter what the answer to your questions is, we still have to compete with those teams and we start with that big of difference, no matter what the answer is.
Like I said to you, I will not be able, until I find out or we find out what is that the revenue stream, what are the 258 12/1/00 STADIUM BILLS HEARING expenses, nobody on this Council can give you that decision.
All right. I'll respect that decision if that's the one that you make.