Bucks and Broncos
A lease announced earlier this month between the Denver Broncos and the Metropolitan Football Stadium District would give Broncos owner Pat Bowlen virtually all the revenue from football games at the proposed new stadium, including tickets, concessions, parking, and luxury-box rentals. Since Bowlen has made it clear that he wants the new $350 million stadium so he can garner more revenues to pay wildly escalating player salaries, few were surprised that the stadium-district board gave him the whole nine yards.
What's less well-known is that Bowlen will also collect the lion's share of revenue from non-football events, including Colorado Rapids soccer games, concerts, Drums Along the Rockies and assorted other events held on and off the field. Taxpayers will pay 75 percent of the stadium's final cost, but Bowlen stands to collect on everything from soft drinks sold at soccer games to private receptions held in the proposed stadium's banquet facilities.
While this seems like a lush deal for the Broncos, most members of the stadium-district board that negotiated the agreement with the Broncos insist that it's a fair deal for taxpayers. Pat Hamill, vice chairman of the stadium board, says the lease compares favorably with recent leases in other National Football League cities. "This is one of the best leases of the last seven stadium deals," says Hamill.
In several other cities, including Nashville, Cleveland, Detroit, Washington and Charlotte, team owners won the right to collect 100 percent of the revenues from non-football events. In Tampa and Cincinnati, the team and the local sports authority split the non-football revenues. In Denver, the stadium district will receive 20 percent of event revenues for the first eleven years of the lease and 50 percent thereafter.
The lease gives Bowlen's management company, PDB Sports Ltd., the right to negotiate an agreement with the Colorado Rapids. Denver collected about $350,000 last year during the eighteen-game soccer season at Mile High. The Rapids are owned by Denver billionaire Philip Anschutz, which means that in a new stadium, Bowlen would become Anschutz's landlord.
The agreement also gives the district the right to sponsor nine field events and 36 non-field events per year, with the district collecting all the revenues. "We get the ability to host the event if it's a community event," says Hamill.
While Hamill and other boardmembers tout this as a win for taxpayers, the lease gives Bowlen's management company the right to take over the sponsorship--and collect most of the revenues--from any event the district decides to sponsor. "The district must provide PDB with notice within 72 hours of its deciding to schedule any event and offer PDB the opportunity to host the event," says the lease.
That means that if the stadium district decided to sponsor the annual competition among drum-and-bugle corps called Drums Along the Rockies, Bowlen would have the right to take over sponsorship and collect 80 percent of the profits from leasing the stadium. The same holds true for concerts and for private receptions or parties hosted in the new stadium's banquet rooms.
Mile High hosts only a handful of events other than football and soccer games, but Hamill says the experience of other cities indicates that a spanking-new stadium would draw everything from weddings to bar mitzvahs.
"People will be attracted to the new facility because it will be state-of-the-art," predicts Hamill.
If voters approve the stadium sales-tax proposal in November, the Broncos will have a strong incentive to market the taxpayer-funded facility for non-football uses. In addition to its 80 percent take on non-football event revenues, Bowlen will have the right to collect 15 percent off the top to cover his overhead and expenses in managing the stadium.
According to Hamill, it would have been too cumbersome for the district to try to schedule non-football events without giving the Broncos the final say.
"It's really not feasible to have two management companies," he says.
The state legislation authorizing the stadium election specified that voters would have to see the lease between the Broncos and the district before the November vote. That requirement was intended to prevent a repeat of a widely criticized sweetheart lease between the Colorado Rockies and the baseball-stadium district, which was negotiated after the 1990 election that led to construction of Coors Field ("Keeping Score," July 16).
But opponents of the proposed stadium say the new lease is another example of a sports team taking taxpayers for a ride.
"Pat Bowlen has first right of refusal to host any and all events," says Kathleen Brown, spokeswoman for Citizens Opposing the Stadium Tax (COST). "Obviously, he'll want to host anything he can make a profit with. It shows how the stadium-district board caved in to the Broncos. They went into this with the idea they'd give Pat Bowlen anything he wanted."
When Denver struck a deal with Ascent Entertainment Group, Inc., to build the Pepsi Center, it had to agree to give up several million dollars a year in revenue from McNichols Sports Arena in return for a privately financed new arena. But the loss of non-football revenue at Mile High wouldn't hit the city very hard.
The biggest non-Broncos moneymaker at Mile High this year was a George Strait concert held in early summer. The country-music star helped Denver net about $400,000, but that's an unusually large take for a concert.
"What made that so lucrative was that it was an all-day thing, and people had to eat and drink all day," says Gary Jones, director of operations at Mile High.
Jones says Mile High rarely hosts more than one concert a year. The city collects the profits from concessions at Mile High, but Bowlen would get those revenues at a new stadium.
Non-football events have never been an important source of revenue for Mile High, says Jones. For $300, anyone can rent the press box or the Broncos' locker room, but Jones says that happens only occasionally. While Mile High doesn't have enough sex appeal to host nuptials or anniversary parties, Denver's longtime stadium does have its own sentimental pleasures.
"Some people enjoy sitting where John Elway dresses," says Jones.
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