Originally Posted by
jloome
Some perspectives on some of the important clauses in this deal:
(i) cash investment of $62.8M with contribution of $35.0M from Federal and Provincial
governments; $9.8M from City and $8.0M from MLSE and contribution of an additional
$10.0M from MLSE in anticipation of revenues to be received by MLSE for the sale of
naming rights;
So effectively, MLSE has already kicked in $18-million of the overall $72-million cost.
Can we assume the Argos would also be asked to pony up capital appportionment, given that MLSE was willing to contribute nearly a third of the overall cost? Say, teh cost of the expansion and another$18 million beyond that?
(ii) 20,000-seat stadium (capable of expansion to 30,000 seats and capable of conversion to a
football format) with luxury viewing suites, premier seating, FIFA specifications
including artificial field turf, food and beverage concessions and an air supported winter
field structure;
This is the only reference to use for football in the entire document, which refers to it as a "soccer stadium" about a dozen times. So Naylor's globe and mail story was disingenuous at best and inaccurate at worst. Having a clause that suggests it COULD be used for football does not suggest that it ever will be, so he could not reasonably conclude that it was not a soccer-specific stadium.
There is NO STATED RATIONALE for the artificial turf in the document, although it can be assumed they're referring to keeping the cost to a level lthe community can afford and winter use, although the latter is covered off by having to have a winter roof.
(iii) project (construction) agreement with MLSE to build the stadium on-time and on-budget
with MLSE responsible for construction cost overruns;
(iv) ownership of the constructed stadium remains with the City;
(v) management Agreement for 20 years between City/Board and MLSE to manage the
stadium on behalf of the Board and City;
In other words, MLSE has the rights to site management for the next 20 years, and the concession rights for the next 20 years. So the control over this situation is effectively in MLSE's hands, regardless of what the city wants. It can simply offer the Argos an untenable deal if it wants to keep the team out. There's nothing in this contract that guarantees access to another professional organization, only to the public.
(vi) requirement for MLSE to purchase a major league soccer franchise to be located in
Toronto;
(viii) use Agreement for 20 years between the City/Board and MLSE for the stadium to be the
home of the MLSE major league soccer franchise subject to payment of rent ;
(ix) participation Agreement for 20 years between the City/Board and CSA for the stadium to
be the home for Canada’s international soccer terms and be used annually to host
international soccer events subject to payment of rent based on seven percent of gate
receipts (less taxes);
It'll be interesting to see how the CSA explains using Saputo Stadium for national team games in light of this clause. I suppose if they want to risk the "bad faith" route they could note that it doesn't stipulate how many games.
(x) right of the City/Board to use the stadium a significant part of any available dates
annually on a cost recovery basis only for the City, CNE, World’s Fair and Olympics
(subject to use for regularly scheduled major league soccer games and FIFA games) and
for other public events;
(xi) right of the CNEA to use the stadium (subject to use for regularly scheduled major league
soccer games and FIFA games) during the 18-day CNE period;
(xii) right of the CNEA to receive 25 percent of gross revenues from stadium food and
beverage concessions during the 18-day CNE period;
(xii) City/Board retains the majority of incremental revenues from parking (except for the
partial payment to the MLSE major league soccer franchise of 33.3 percent of gross
parking revenues related to the 20 soccer games which increases to 40 percent in
Year 11);
(xiv) City/Board shares equally with MLSE any net revenues earned by the stadium;
That last one is important. MLSE has to weigh whether it can make money off the Argos; so perhaps the vehemence should be partly directed towards MLSE, which has A LOT of pull in this agreement. Make it clear they'll kill their own team if they do this, and they'll be less likely to do it.
(xv) contribution of $400,000 annually (increased by CPI annually from Year six onward)
from the stadium revenues to a capital reserve account to be held by the City; and
(xvi) MLSE will fund the first $250,000 of any operating shortfalls and thereafter, the
City/Board and MLSE share equally in funding any annual operating shortfalls or annual
shortfalls in capital expenditures.
So if the Argos cause it to lose money on paper, MLSE and the city would have to share that load. That makes it less likely, I believe, that city council woudl want to take the risk of moving the Argos back to an environment in which is has already failed.
Seems to me MLSE has a lot more pull in this than people here seem to realize. It has all the control over the money.