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E N Q U I R E R   L O C A L   N E W S   C O V E R A G E
Experts: Reds strike good deal

Thursday, July 2, 1998

BY GEOFF HOBSON
The Cincinnati Enquirer

Marge Schott
Reds President Marge Schott reads a statement prepared and approved by the National League.
(Craig Ruttle photo)
| ZOOM |
Maybe the Reds couldn't match the Bengals, but national experts say Major League Baseball's first team ended up with a stadium deal ranking with the best in their game.

"It's right up there," said Paul Anderson of Marquette University's National Sports Law Institute. "What makes it so attractive is they have the rights to keep all revenue from the stadium. As things go on, with possible restaurants and bars, that can be a huge revenue stream."

Among teams who have new deals, only Detroit, Houston, Milwaukee and Texas have rights to all stadium revenue.

The Reds come out near the top in every key category, said a source familiar with baseball's building boom of the 1990s.

"But they had to because it's such a small market," the source said. "At one point they had to decide if they wanted to hold out for a Bengals' deal, which is one of the tops in football, or go for one of the best in baseball."

THE PLAYERS
Negotiations between the county and Reds have involved many people, in official and unofficial roles. Here are some who had important formal roles.

- Marge Schott - Suspended Reds president and chief executive officer whose role in the negotiations has been unclear because she is prohibited from discussing team business. She favored a stadium site on the riverfront west of the Roebling Suspension Bridge and was adamantly opposed to Broadway Commons. County insisted she sign the deal even though her replacement, John Allen, had authority to sign.

- John Allen - Named managing executive when Mrs. Schott was suspended June 12, 1996. His relationship with Mrs. Schott has been rocky. An unassuming accountant from Kansas, Mr. Allen has kept an eye on what kind of revenue a stadium deal could bring to the beleaguered Reds. Major League Baseball authorized him to sign an agreement.

- David Krings - Tight-lipped Hamilton County administrator served as the county's lead negotiator with the Reds, the same role he played in the Bengals stadium deal. Initially he was the primary booster for a dramatic Cinergy Field renovation in order to save the county some money.

- Bob Bedinghaus - Confident county commissioner who pushed the initial drive to raise the countywide sales tax to build the stadiums and has kept a close eye on the projects ever since. He favored a riverfront site.

- Tom Neyer Jr. - An appointed county commissioner who works in his family's development business. He has been circumspect about stadium negotiations but said for some time he'd back a riverfront site if the deal was right.

Reds Managing Executive John Allen agreed with the experts Wednesday and pointed to possible ways the club can generate revenue. "In Atlanta, where they have a plaza out behind the center field scoreboard, is a very nice entertainment area so people can come to the games a couple of hours ahead of time," Mr. Allen said. "That gives you access to the ballpark pre- and post-game."

Also key for the team:

The Reds' upfront contribution of $30 million is bigger than only those of Houston and the Chicago White Sox, which each put up nothing, and Baltimore, which put up $24 million six years ago. Of the latest deals, the Brewers contributed $90 million in Milwaukee, the Giants $140 million in San Francisco, the Mariners $45 million in Seattle and Tigers' owner Mike Ilitch $145 million in Detroit.

In 1992, the Orioles' contribution was 18 percent of the deal. With the $235 million figure for the Reds' stadium expected to inflate, the Reds' percentage could be closer to 10 percent.

The Reds' rent of $2.5 million a year for the first nine years is high, said Mr. Anderson, when comparing it with football deals. But when it comes to baseball teams, it's about average. The Astros are to pay $3.3 million a year in Houston, the Giants $1.2 million, and in Atlanta the Braves pay an annual capital fee starting at $1 million in 1997 that reaches $1.5 million in the final season of a 20-year lease.

The county plans to reimburse the team for stadium operation and maintenance up to $500,000 the first year, and a 5 percent bump every year after. Only the White Sox, Brewers and Reds have a deal in which another entity participates in those payments.

"The 5 percent escalator is huge because at the end of 30 years we're getting over $2 million back in maintenance," Mr. Allen said. "After nine years, we don't pay anything in rent . . . and that protects us in the out years."

The Reds aren't responsible for cost overruns, which will be taken note of in such cities as Seattle, where the Mariners' $45 million contribution could double because of construction.

Allen
Reds Managing Executive John Allen pointed to possible ways the Reds can generate revenue from the new stadium.
(Craig Ruttle photo)
| ZOOM |
Mr. Anderson said it's possible the Reds could wipe out their contribution with a naming rights' deal, given that Miller Brewing paid $41.2 million in Milwaukee.

But other experts think the Reds could pull $20 million at the most, with Richard Jacobs paying $13.9 million in Cleveland and Coors $1.5 million per year for 10 years in Denver.

The Reds began the negotiations looking for a Bengals-type deal with Hamilton County, which guaranteed the football team $4 million a game missed because of construction delays and about $30 million in the final nine years of the lease for reimbursement of team expenses.

"The county repeatedly said they were dealing with a different league and a different standard," said the ballpark source, referring to the Bengals' ability to get out of their lease and relocate.

"It would have been nice to be able to get the same thing, but what you have to look at is their incremental revenue is going to be a lot less than ours," Mr. Allen said. "The additional revenue we're going to generate with 81 dates versus the additional revenue they'll generate with 10 dates. So it's a two-way street."



Local Headlines For Thursday, July 2, 1998

"Haul roads' set for Butler Highway work
Archdiocese buys McNicholas High
Baesler targeted for views on abortion
Boone County "Taste' opening
City's rare rhino miscarries again
Colerain complex opening
Deal done: Wedge wins
Experts: Reds strike good deal
Reds' talent might improve
Firemen prevent disaster
Fort Wright administrator resigns
Grandmother still searches for Mary Love
Gunfire hit driver 8 times
Indicted firemen turn selves in
July 4 weekend events
Kenton Co. to sue over coverage
Mitch steps up to plate for Bunning
Moeller High volunteers flee W. Va. flood waters
Neglecting siren system mistake
No-diaper pool rule changed
Oak Hills grad channels efforts into weather
People near river keep eyes on rise
Police will be in force on 4th
Property official denies speculation at jail site
Quiet dignity defined service
Secretary of state candidate offers voter education plan
Springdale looks at options for new rec center
Sterne ends council career
Tarbell to carry Charterite torch
Ticket tax vote put on hold
War re-enactor strives for realism
Y game festival to celebrate differences
Year after tornado, Felicity has pulled together
TRISTATE DIGEST


 
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