State takes out another loan to pay Saints; What's next?
According to numerous reports, Louisiana has taken out a loan for a second consecutive year to pay its annual obligation to Tom Benson and the New Orleans Saints. Last year, Louisiana took out a $7.5 million loan, which has yet to be repaid. This year's loan will be for $10.5 million and will be conducted through the sale of a "revenue anticipation note," a financial method the state hasn't used in over a decade.
By all accounts, state officials have no idea where the revenues will come from to pay off the new loan, which will come due and owing with interest on Jan. 1, 2007.
State Treasurer John Kennedy was quoted in the Monroe News Star as saying, "What we did today wasn't pretty. If you look strictly at the numbers, you probably wouldn't do this, but there's a story beyond the numbers." Kennedy also was quoted in the Baton Rouge Advocate ("It's not pretty but you do what you have to do.") and the Shreveport Times ("It's either default on the contract or pay the Saints.")
Also, the New Orleans Times-Picayune quoted a member of the state Bond Commission, which approved the loan, as saying, "[s]hould nothing change, the (LSED) would be in...worse financial position next year." LSED is the Louisiana Stadium and Exposition District, and it oversees operation of the Superdome. Through it, the state loses money each year by selling concessions it purchases and sells with its own staff at Saints games, and then giving all the profit and then some to the Saints under the current agreement, according to an Alexandria Town Talk article from December 2004, "Saints have heavenly deal with state, look for even more."
The Alexandria Town Talk article also notes that the Saints use the Superdome rent-free, receive all gameday parking fees, all profit from anything sold at Saints games, and all advertising in the Dome. And that's not including luxury suite sales.
In other words, things don't look overly optimistic going forward for either LSED or the state.
All of which begs the question: How will the state pay off the aforementioned loans and still come up with the $20 million due next July to Benson and the Saints under the present agreement? Through another loan?
As it stands now, the only silver lining in continuing to line Benson's pockets with taxpayer gold is this: Since the state has somehow propped up its end of the deal, it means that if Benson opts out of his agreement with the state after the 2005 Saints season, the state will receive $81 million back from Benson.
Like it or not, that seems to be the most revenue anticipation there is for the state at this moment.
By all accounts, state officials have no idea where the revenues will come from to pay off the new loan, which will come due and owing with interest on Jan. 1, 2007.
State Treasurer John Kennedy was quoted in the Monroe News Star as saying, "What we did today wasn't pretty. If you look strictly at the numbers, you probably wouldn't do this, but there's a story beyond the numbers." Kennedy also was quoted in the Baton Rouge Advocate ("It's not pretty but you do what you have to do.") and the Shreveport Times ("It's either default on the contract or pay the Saints.")
Also, the New Orleans Times-Picayune quoted a member of the state Bond Commission, which approved the loan, as saying, "[s]hould nothing change, the (LSED) would be in...worse financial position next year." LSED is the Louisiana Stadium and Exposition District, and it oversees operation of the Superdome. Through it, the state loses money each year by selling concessions it purchases and sells with its own staff at Saints games, and then giving all the profit and then some to the Saints under the current agreement, according to an Alexandria Town Talk article from December 2004, "Saints have heavenly deal with state, look for even more."
The Alexandria Town Talk article also notes that the Saints use the Superdome rent-free, receive all gameday parking fees, all profit from anything sold at Saints games, and all advertising in the Dome. And that's not including luxury suite sales.
In other words, things don't look overly optimistic going forward for either LSED or the state.
All of which begs the question: How will the state pay off the aforementioned loans and still come up with the $20 million due next July to Benson and the Saints under the present agreement? Through another loan?
As it stands now, the only silver lining in continuing to line Benson's pockets with taxpayer gold is this: Since the state has somehow propped up its end of the deal, it means that if Benson opts out of his agreement with the state after the 2005 Saints season, the state will receive $81 million back from Benson.
Like it or not, that seems to be the most revenue anticipation there is for the state at this moment.
posted by cg | 11:20 PM
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