It’s the negotiating equivalent of the two-minute drill. On Friday the Minnesota Sports Facilities Commission — the public body working on the new Vikings stadium — is scheduled to approve the final deal with the NFL team, thus allowing the bonds to be sold, and so, allowing serious construction to begin
That timeline assumes the financial details are settled.
A lot has emerged in recent weeks on that topic.
It was revealed last week that the experiment with electronic pulltabs — intended to carry the state’s share of the burden — has yielded exactly zero dollars for the stadium project. This is the maximum possible error in the projection, from $35 million in the first year to zilch, and it should embarrass Gov. Mark Dayton, who bought into the optimism.
A judge in New Jersey on Monday socked the Vikings owners with more than $84 million in fines and damages in a long-running lawsuit in which the Wilfs (brothers Zygi and Mark and a cousin) were held to have committed civil fraud. The Wilfs promise an appeal; considering that the original lawsuit dragged out some 20 years, the stadium figures to be open for business long before the Wilfs ever disgorge any of that $84 million.
The verdict prompted a much-ballyhooed audit of the Wilfs’ enterprises by the stadium commission, which concluded that the Wilfs still have the financial wherewithal to meet their stadium commitments. Which is no real surprise because it has become increasingly obvious that the Wilfs are not committing much if any of their own money to the project.
Their share is supposed to be $477 million. But $200 million will come from the NFL, and the naming rights to the edifice are expected to yield something in excess of $100 million. And the rest may well come from dunning season ticket holders thousands of dollars for “personal seat licenses.”
PSLs are common with new stadiums; it’s a one-time fee over and above the cost of the tickets themselves and generally gives the holder ownership of the seats. The Twins sold personal seat licenses for the Legends Club seating area in Target Field in the range of $1,000 to $2,000 a pop.
Dayton, perhaps stinging from the failure of the e-pulltabs, this month urged the commission to limit the money to be raised through personal seat licenses. He wrote that the Wilfs should “provide a significant share of their financial contribution from their own resources, and not from Vikings fans through the sale of expensive personal seat licenses.”
The stadium legislation expressly permits PSLs (and the naming rights). The issue is how much the Vikings will be allowed to charge. The Dallas Cowboys set its PSLs at $100,000 and $150,000; the San Francisco 49ers’ licenses topped out at $80,000. The Vikings reportedly did a study on a $30,000 fee; what that revealed isn’t publicly known.
Our take on this is that the market will solve it. If the Wilfs charge too much for the seat licenses, they won’t sell enough, and they’ll have to come up with the funds themselves. And if enough fans are willing to shell out the cash, there’s no real problem. PSLs are in effect a true user fee. Those who don’t go to the games aren’t paying it.
The governor may now regret the stadium bill he helped push through the Legislature. But his regrets, if any, should be about the failed public financing plan, not which revenue stream the private money comes from.
Other view on this topic:
“I strongly urge you to negotiate a final financial agreement, which requires the Vikings’ owners to provide a significant share of their financial contribution from their own resources, and not from Vikings’ fans through the sale of expensive personal seat licenses (a.k.a. “stadium builder’s licenses”)
“Your financial assessment reportedly shows that the Vikings’ owners could finance their share of the stadium’s costs with little or no revenues from stadium builder’s licenses. Therefore, I strongly urge you to keep those prices at an absolute minimum. I have always said that this building should be a “People’s Stadium.” Excessive personal seat license fees conflict with that goal.”
— Gov. Mark Dayton in letter to the Minnesota Sports Facilities Authority.