Posted March 9, 2009
Wilf Won’t "Have Heart to Move" Vikes
A Vikings executive told Sports Headliners that owner Zygi Wilf “doesn’t have the heart” to move the team, but it’s a mistake for lawmakers to presume the franchise can continue here without a new stadium to replace the nearly 30-year-old Metrodome. During an interview at Winter Park, Lester Bagley, the team’s vice president of public affairs, talked in detail about the stadium issue including his publicized criticism of Governor Tim Pawlenty for lack of leadership on the issue, and the need to recover lost revenue of $15 million or more per season if the Vikings temporarily play in the University of Minnesota’s TCF Bank Stadium while their new facility is constructed.
The Metropolitan Sports Facilities Commission, which owns and operates the Metrodome, has joined with the Vikings in lobbying for a new retractable roof stadium that could cost about $1 billion. Their position is that the facility will allow the Vikings to economically survive, present fans with a first class game experience, and provide a “rec room” type facility for community activities ranging from amateur sports to rollerblading, plus attract big time events such as NCAA tournament basketball and perhaps another Super Bowl. In addition, stadium proponents argue that the construction and later the existence of the facility will provide jobs and economic stimulus to the economy.
An economic impact analysis of the new stadium, which will be located on the present Metrodome site, was conducted by Convention Sports & Leisure International for the MSFC. Among the findings of the advisory firm:
. Construction of the stadium will support approximately 13,400 jobs, including 8,000 tradesmen utilized during the building process.
. Over half the cost of constructing the new stadium, or $577 million, will be directed toward wages and salaries for construction jobs, and jobs supported in other industries as a result of related spending.
. The total economic output during construction is estimated at $1.35 billion. That number is representative of the cumulative effects of direct spending on construction-related expenditures, which equals $734 million, as it is cycled through the state’s economy.
. Annual direct spending of $145 million is estimated upon completion of the stadium. This represents spending by fans, the Vikings, their employees and players, visiting teams and the NFL relative to games and the operation of the stadium.
. A new stadium will generate over $32 million per year in tax revenue including income and sales taxes. Presently the Vikings alone are said to generate $18 million.
Minnesotans take various positions regarding the possibility of a new stadium including whether tax monies should be used to fund it. The debate as to whether and how something should be done isn’t new because the Vikings started exploring the subject with government leaders in 1997. In 2001 state politicians were presented with details about a $475 million retractable roof stadium, costing about half of what now is the projected cost. What’s current is that the franchise’s Metrodome lease expires after three more seasons and there are only a couple of legislative sessions remaining to resolve the issue.
The Vikings are last in the NFL in team value, according to a forbes.com report last fall. The website also said the franchise was last in 2007 gross revenues ($195 million) and described the team’s stadium deal as “one of the worst” in the NFL. Bagley and additional sources report that Wilf and other partners have put in additional monies to operate the team since taking over in 2005. Of better news for Wilf and his investors, though, is that according to Forbes the team is worth $839 million after being purchased from Red McCombs for $600 million.
Stadium proponents argue that the construction and later the existence of a new stadium will provide jobs and economic stimulus to the economy.
The Vikings have been pursuing a
stadium with the state since 1997. In 2001 a stadium for $475 million was
proposed and now such a facility will cost about twice as much.
Lack of Stadium “Engagement” Frustrating
Bagley, who lives in Minneapolis but grew up in the small town of Barron, Wisconsin, was a stadium consultant for the Vikings before becoming an employee in 2005. The following are his responses to questions presented during the interview at Winter Park:
Q. What lessons did you learn growing up in Barron that still serve you well today?
A. Small town roots, connection to community and work ethic. Both my parents worked. My dad built a successful business, and my mother worked for the federal government. I grew up playing sports and was a big fan.
Q. Your wife Wendy has worked at the Capitol for years and now is a an executive in the Department of Human Services. Does her access to state administrators and the governor provide a lobbying advantage for the Vikings?
A. No, there’s no special advantage that it provides. I’ve got a 20 some year career in public affairs including at the Minnesota Business Partnership so I’ve got my own relationships. The good news over there is the governor is used to the rough and tumble of politics and he knows that he’s going to get his shins kicked every once in awhile. It wasn’t meant (the publicized criticism of Pawlenty) with any malice. It was just trying to get a point across...(with) our frustration level with our situation and we’re passed that. Zygi and the governor met and cleared the air. Now we’re moving forward and have a good dialogue going. I think the governor is also professional and smart enough (to know) that my wife has nothing to do with this project. She’s a loyal lieutenant of his and works hard for him. He’s able, I am able and my wife is able to separate the two. I wish it did give me some special advantage but it doesn’t.
Q. Is it correct to assume that given your years of experience in public affairs that it was a calculated strategy to call out the governor for lack of leadership over the years on the stadium issue?
A. I expressed a frustration. It wasn’t some sort of planned scheme like ‘let’s do this in order to get this reaction,” but it was a public frustration of something that’s been brewing and growing privately for a couple of years. It was (also) frustration I hear every day from our ownership. I spoke that day on behalf of the ownership and took the point and got the message across. It was effective because we’re finally making some headway both in the discussions with the governor as well as just generally in trying to move this project forward in a very difficult political and economic climate.
Q. What would you say that progress is?
A. The frustration we expressed wasn’t necessarily about lack of leadership. It was just basic lack of engagement. We’ve been up there in times of surplus and deficit. We keep getting put off to the point where there’s not been a serious dialogue about how to solve this problem. It’s not just the governor, it’s (also) state leaders, and generally this (stadium issue) has not been a priority. It needs to be a priority because we’re running out of time. Typically these projects need leadership from the executive branch, at the very least engagement. So the progress is that we’ve got a dialogue going with the governor and legislative leaders. We know where we stand in terms of how difficult this environment is but we’ve got an acknowledgment there that we’re running out of time. That we’ve got to address this. Let’s start to kick around some creative ideas as to how this might shake out.
Q. You have mentioned that 28 of the NFL’s 32 teams have built new stadiums or renovated existing facilities since 1997 when the Vikings first approached the state about a new facility here. Would you characterize the process here as unusually slow?
A. I think there’s been kind of an acceptance (since then) that this is something you’ve got to do. If you want to have major league sports you’ve got to have a facility. If we want to have the NFL, you’ve got to solve this problem. That’s not a threat, that’s the pressure we get everyday from the other NFL owners saying we’re tired of subsidizing this market. Because this market gets between 15 and 25 million dollars every year from other owners through revenue sharing to have a team here because the stadium is the worst economic situation in the league. So I don‘t classify this as slow. I think it’s deliberate. We’re Minnesotans. We’re thorough. Unfortunately, the down side is that the delay has cost significant dollars. In 2001 when we were at the Capitol with this project and a very similar stadium it was half the price. A retractable (roof) stadium in 2001 was $475 million. Seven years later it’s at $950 million.
"The good news over there is the governor is
used to the rough and tumble of politics and he knows that he's going to get
his shins kicked everyone once in awhile."
Lester Bagley
"If you want to have major league
sports, you've got to have a facility. If you want to have the NFL,
you've got to solve this problem."
Lester Bagley
Vikings to Lose More Money at U Stadium
Q. Why can’t the proposed funding model be a 50 percent contribution by the Vikings instead of about one-third given that the NFL is a cash cow and your ownership will benefit from commercial development around the new stadium, plus the Wilfs are a wealthy family?
A. That argument was made to the Twins. The average private contribution, including in this market with the Twins, was about 30 percent. Hennepin County put in about 70 percent. They’ve (the Twins ownership) grown on the private side as the Twins have made some independent decisions to upgrade. The average throughout the league (NFL) is about one-third (private), particularly in this size market. The Wilf’s expected contribution stands up well both locally and nationally. The other side of it is it’s a publicly owned facility used by the public year round for amateur, high school, college sporting events, (and) tournaments. There’s a community benefit.
Q. How much income per season will the Vikings lose by temporarily playing at the TCF Bank Stadium at the University? Do you expect the public sector to subsidize that income loss?
A. It’s in excess of $15 million annually. It depends a little bit on the market when we get to that point, meaning what can you charge? They have a limited number of seats, club seats, limited revenue streams. It’s (part of) the project cost (temporary less revenues). It has to be calculated. We believe it should b e part of the package. It’s a cost of solving the problem.
Q. But where specifically will the subsidy come from? Would it be considered part of the Vikings’ contribution, or from a dedicated stadium funding like car rental tax monies?
A. I would love to have that conversation with state leaders instead of the media because we’ve been asked that by others, too. Everything we’re doing on the stadium front is about trying to get Zygi to the table with state leaders to answer that. How do you deal with that issue? How do you deal with the roof? How do you deal with the owner contribution? How do you deal with (the) public contribution? And it’s frustrating to be asked to put more in, or address different pieces because we’re doing it in a vacuum. We can’t do it by ourselves. It’s a fair question but it needs to be coming from state leaders in a way that is leading toward a solution.
Q. What’s the Vikings’ strategy for the remainder of the session at the Capitol? Does it include a calculated last minute strategy to avoid less controversy?
A. It’s really not up to us. We’re going to keep coming. We’re going to keep knocking on the door until the clock runs out. We got three years left, 30 games left. We’re going to try to find an opportunity to move the project forward. If we don’t get a stadium done this year, what can we get to transition us to next year to get it done? The jobs study we think is significant and has been well received. We’re running out of time. I think we’re doing okay but this is a tough climate and legislators and the governor have very difficult jobs and we know that. But that can’t keep putting us off because they’re about out of time.
Q. If it comes to that point, when is the party over?
A. The Wilfs are doing everything right. They’re not threatening to move. Zygi doesn’t have the heart to move this team. He’s been around this state and he knows that Viking fans love the Vikings and that they’re Minnesota’s team. But at some point if we don’t solve this issue, I don’t how long they will continue as owners, and that’s the fear. There have been three different ownership groups (that lobbied for a stadium). We’re best positioned with this one. They’re ready to invest but they can’t do it alone, and at some point you have to sit back and let the market work. There are going to be other markets (cities) and other individuals who have the wherewithal. They’re going to want this team.
Lester Bagley
Zygi Wilf
