Reinsdorf’s U.S. Cellular Field Lease In Jeopardy?

[HuskyCaucasian]

(CBS)

White Sox Chairman Jerry Reinsdorf has a sweet deal with the State of Illinois.

 

He pays the Illinois Sports Facility Authority $1.5 million a year and then keeps all the profits from tickets, parking, concessions and merchandise.

 

That might change though, according to a Crain’s Chicago Business report.

 

In the past year, the White Sox have opened up a new bar called “Bacardi at the Park” and built a brand new merchandise store outside Gate 5 that will open in the spring. The team will profit off both ventures built on state property, which has prompted the ISFA to reevaluate the current lease.

 

“If you compare (lease terms) to other sports stadiums around the country, the Sox pay the lowest rent of all the facilities,” Emil Jones, chairman of the Illinois Sports Facility Authority, told Crain’s.

 

The news doesn’t exactly come at a good time for the White Sox, a team that is looking to cut back on payroll after striking out on big-money free agents a year ago.

[southsider2k5]

What are the terms under which the lease can be "reevaluated"?

[NorthSideSox72]

What are the terms under which the lease can be "reevaluated"?

Yeah exactly. The two key questions are...

 

1. When does the current lease agreement end?

2. What does the lease say about renegotiation or changes during the period that the lease is still in force?

 

[HuskyCaucasian]

If they can get away with it, i am sure they'll try and change it. They know the Sox wont be leaving anytime soon.

[NorthSideSox72]

OK, first of all, saying that the "lease is in jeopardy" is outright false. The article states the ISFA is taking another look at the details in it.

 

Second, here is the actual basis article from Crain's. The lease isn't up until 2029, which answers the first question I had. To the second question, the lease appears to give all income from added operations to the Sox ownership, and there is nothing here about any rights to renegotiate before 2029.

 

So likely, this goes nowhere. What is the ISFA going to do, look for another tenant? There is none.

 

[southsider2k5]

OK, first of all, saying that the "lease is in jeopardy" is outright false. The article states the ISFA is taking another look at the details in it.

 

Second, here is the actual basis article from Crain's. The lease isn't up until 2029, which answers the first question I had. To the second question, the lease appears to give all income from added operations to the Sox ownership, and there is nothing here about any rights to renegotiate before 2029.

 

So likely, this goes nowhere. What is the ISFA going to do, look for another tenant? There is none.

 

Unless there is some sort of an out clause for the state, there is nothing they can do.

[LittleHurt05]

So likely, this goes nowhere. What is the ISFA going to do, look for another tenant? There is none.

 

Maybe they have had secret negotiations with Theo Epstein as well?

[HuskyCaucasian]

Maybe they have had secret negotiations with Theo Epstein as well?

#LegendofTheo

[iamshack]

Unless there is some sort of an out clause for the state, there is nothing they can do.

My guess is they are re-examining it to see if the Sox actually had a clear right to build the bar and the store outside the stadium. If it's a bit ambiguous, that might open up the door to some renegotiations.

[NorthSideSox72]

My guess is they are re-examining it to see if the Sox actually had a clear right to build the bar and the store outside the stadium. If it's a bit ambiguous, that might open up the door to some renegotiations.

That's probably right, they are looking for any vague clause they can potentially use to extract more money. They may find one, who knows.

 

Also, just to make sure this is clear... the ISFA only gets $1.5M annually in rent, but the state also gets all the taxes generated from ticket sales, concessions, etc. for the team to stay in town. If ISFA doesn't exist and the stadium isn't built, the team is gone entirely.

 

[Soxfest]

Still no reason for JR to charge $23.00 dollars to park highest in MLB.............per profit for JR.

[southsider2k5]

Still no reason for JR to charge $23.00 dollars to park highest in MLB.............per profit for JR.

 

Well all except for those pesky players wanting money...

[Soxfest]

Well all except for those pesky players wanting money...

We have argued this before SS2K he pays nothing for rent 1.5 million is nothing.............NO reason parking should be that high with all other revenue JR recieves, especially for a team that has trouble drawing fans already.

Edited October 25, 2011 by Soxfest

[NorthSideSox72]

We have argued this before SS2K he pays nothing for rent 1.5 million is nothing.............NO reason parking should be that high with all other revenue JR recieves.

Do you know anything about running a business? I ask because you don't seem to see the full picture. Tickets to the Sox are on the lower end of the scale in MLB, far lower than across town in the same city. And payroll is very high. The Sox simply don't make much profit, less than a lot of clubs, though they at least aren't losing money. Most of the money is plowed back into payroll enhancements, and the payroll has risen from about 50M to about 120M in 6 years.

 

Also just as advice... one can always park somewhere else and take the train to the park if you don't like that level of cost for parking.

 

[southsider2k5]

We have argued this before SS2K he pays nothing for rent 1.5 million is nothing.............NO reason parking should be that high with all other revenue JR recieves, especially for a team that has trouble drawing fans already.

 

He also just spent $125 million on a payroll. If you want a high payroll, you have to live with the costs.

[Texsox]

Still no reason for JR to charge $23.00 dollars to park highest in MLB.............per profit for JR.

 

All profit is pure, what I believe you are complaining about is the percentage of the parking fee that is profit versus cost. Does the $23 include the city tax?

[southsider2k5]

All profit is pure, what I believe you are complaining about is the percentage of the parking fee that is profit versus cost. Does the $23 include the city tax?

 

And sales tax, and entertainment tax

[chetkincaid]

Do you know anything about running a business? I ask because you don't seem to see the full picture. Tickets to the Sox are on the lower end of the scale in MLB, far lower than across town in the same city.

 

Hmmm... are you sure?

 

1. Ticket prices

The highest nonpremium ticket prices are the Boston Red Sox ($53.38), the New York Yankees ($51.83), the Chicago Cubs ($46.90) and the Chicago White Sox ($40.67).

 

I really don't think White Sox tickets are all that inexpensive.

Edited October 25, 2011 by Chet Kincaid

[NorthSideSox72]

Hmmm... are you sure?

 

 

 

I really don't think White Sox tickets are all that inexpensive.

Highest non-premium? Interesting way to see it, as it is the premium seating as a % that makes the average ticket so much more expensive at the other joints. However, you do make a good point, that from a certain perspective, the ticket prices are higher than average. Less than across town, but still higher than other teams. Or you could look at average ticket price, or cheapest available, or whatever.

 

And that number seems odd to me - non-premium tickets average $40+ at the Cell? We have front row UD tickets as a season package, and their regular face for non-premium games is like $20, $24 or $30 depending on the game. Curious what their definition is.

 

[ZoomSlowik]

And that number seems odd to me - non-premium tickets average $40+ at the Cell? We have front row UD tickets as a season package, and their regular face for non-premium games is like $20, $24 or $30 depending on the game. Curious what their definition is.

 

"Non-premium" as in not in the boxes, scout seats, ect.

 

Also, the season ticket face values are different based on what they actually charge you. The Sox pricing points aren't available on their site anymore, but I would bet those seats are at least $10 more if you tried to buy single game tickets. Face on our tickets (lower box) is $34-$48, but if you look at say a Twins game in the middle of the week for one ticket, it's closer to the $48 number.

[Milkman delivers]

Do you know anything about running a business? I ask because you don't seem to see the full picture. Tickets to the Sox are on the lower end of the scale in MLB, far lower than across town in the same city. And payroll is very high. The Sox simply don't make much profit, less than a lot of clubs, though they at least aren't losing money. Most of the money is plowed back into payroll enhancements, and the payroll has risen from about 50M to about 120M in 6 years.

 

Also just as advice... one can always park somewhere else and take the train to the park if you don't like that level of cost for parking.

 

Haven't the Sox been named one of the most profitable sports franchises? I like to think that they put a lot of their money back into the team, but I've always suspected that they're making money hand over fist.

[Balta1701]

Haven't the Sox been named one of the most profitable sports franchises? I like to think that they put a lot of their money back into the team, but I've always suspected that they're making money hand over fist.

Depends on how you define "Profit", and whether you believe the publicly available Forbes numbers.

 

In the past decade, owning the Sox has been immensely profitable...but most of that was from franchise value increases particularly after 2005.

[NorthSideSox72]

Haven't the Sox been named one of the most profitable sports franchises? I like to think that they put a lot of their money back into the team, but I've always suspected that they're making money hand over fist.

 

 

Depends on how you define "Profit", and whether you believe the publicly available Forbes numbers.

 

In the past decade, owning the Sox has been immensely profitable...but most of that was from franchise value increases particularly after 2005.

 

...which isn't "profit" at all, its equity.

 

The club, if you go by the Forbes list, is one of the most CONSITENTLY profitable, in that it tends to make a little money, but does so year in and year out (where other clubs lose a bunch of make a bunch). It is also one of the most financially stable, as its debt load is among the lowest. But its profit margins are pretty low, just a few points.

 

[Balta1701]

...which isn't "profit" at all, its equity.

 

The club, if you go by the Forbes list, is one of the most CONSITENTLY profitable, in that it tends to make a little money, but does so year in and year out (where other clubs lose a bunch of make a bunch). It is also one of the most financially stable, as its debt load is among the lowest. But its profit margins are pretty low, just a few points.

I have no idea how big the Sox's ownership group is...has there been any turnover in people owning sections of the team since 05? I'd have to imagine that cashing out some of that equity would have been a smart move in 06-07.

[southsider2k5]

...which isn't "profit" at all, its equity.

 

The club, if you go by the Forbes list, is one of the most CONSITENTLY profitable, in that it tends to make a little money, but does so year in and year out (where other clubs lose a bunch of make a bunch). It is also one of the most financially stable, as its debt load is among the lowest. But its profit margins are pretty low, just a few points.

 

Their profit margin is pretty consistently towards the higher tiers annually. They also do reinvest those profits, so they really aren't profits in the traditional sense. They usually pull in $20 to $25 million a year, but that money goes right back into the team, so the profit numbers are very misleading.