Suffering in the Luxury Suites

I smell another rat.
Less than two months after clanging its tin cup on behalf of the St. Louis Cardinals' starving owners (who only want the public to give them one lousy little stadium, it turns out), the Post-Dispatch now brings us the tragic tale of the destitute fellows who burden themselves with possession of the Blues.

What decent North American didn't mist up over Sunday's headlines?
"It may be just a game, but a sports team still needs to turn a profit. The Blues are falling short."

That was on Page 1. Inside, we learned that "the St. Louis hockey franchise may not be on the shopping block yet, but its profit picture has the current owners SINGING THE BLUES."

If we are to understand the Post's "Business of Sports" analysis, the Blues rank fourth in both attendance and revenues among the 27 teams in the National Hockey League, but "the team is losing too much money too fast."

The culprit?
"The owners say the Blues are burdened by interest payments on Kiel Center, which was financed largely by private capital. In contrast, the St. Louis Rams play on the other side of downtown at the publicly financed Trans World Dome."

The implication?
Make your own call on that one. But, speaking just for myself, I got pretty darned mad when I realized that 20 of our finest local companies were forced to waste their own hard-earned dollars on the Kiel Center -- with a mere $35 million coming from public welfare (uh, the city's "help") -- while the Rams got a free ride.

What do you say we tear down the Kiel Center (it's getting antiquated and can't possibly compete with the newer state-of-the-art arenas in the Western Hemisphere, anyway) and build the Blues a fully publicly financed home instead? We can do it right after imploding ancient Busch Stadium and getting the Cardinals situated for a few years in their new stadium.

True, that would undoubtedly cause the Rams to come forward and point out that they can't possibly be expected to compete in the oldest of the city's sports venues -- by the early 00's, the Trans World Dome will be scoffed at as a crumbling fossil, in any case -- but I calculate that it will be at least six years before a third new publicly financed stadium will be needed.

Hey, if you want to be a world-class city, you have to keep up with the stadium Joneses. And if you don't believe these sports teams need help with their struggles, why, just ask them.

As is its custom, the Post presented the Blues' entire fiscal case just as it did the Cardinals': with unsubstantiated, generalized and otherwise unverifiable summary numbers claimed by team owners who just might happen to want some degree of public "support" that just might happen to be justified by its plight.

You may recall the paper's reporters praising the Cardinals for "opening their books" when the team issued a one-page financial summary. The Kiel Partners haven't yet been heaped with similar praise for their wondrous sense of accountability, but their unchallenged economic claims were duly reported as gospel.

Naturally, the only specific number that can be verified is the dreaded team payroll of $31 million, leaving the strong implication that it's those crazy player salaries that have created all this suffering. The rest, such as the assertion that "with revenue from food and beverage sales, souvenirs and clothing, advertising and other sources, Kiel Center operates at close to break-even, the Blues say," is presented with no breakdown and with no questioning of the owners' claims.

What about team executives' salaries? Does "close to break-even" refer to cash flow, or is it after depreciating players like cattle and employing Lord-knows-what other accounting strategies? How much of the partners' allegedly stifling debt service is attributable to their decisions on how fast to retire it?

There are dozens of pertinent questions that have gone unasked, and not merely unanswered, here. But that didn't stop the paper -- after a brief acknowledgment of the fuzzy line between team and arena -- from offering this tidbit:

"The Blues are at a disadvantage. 'No other U.S. team in the NHL has privately financed its own arena without an NBA franchise as a co-tenant,' (team chairman Jerry) Ritter noted in announcing the review by Goldman-Sachs."

The review, which is ongoing, is "studying options that range from boring to bold, from restructuring the partnership's finances to luring a National Basketball Association franchise to St. Louis to share the costs at Kiel."

This is all well and good, and if the Kiel Partners' financial endeavors all stay private and they don't involve further public milk runs, we should all wish them the best. Especially the part about bringing in an NBA team.

But call me a cynic if you'd like: I'm suspicious. The team wouldn't be coming forward publicly with its sad private tale if there weren't a good reason to do so.

Maybe it's simply a public-relations move to rationalize the season's mediocrity and the owners' clear direction not to invest aggressively in free-agent spending. Perhaps it's to build support for some other form of public assistance.

In its "four possible paths to fiscal health," the Post includes the possibility of the Kiel Partners "seeking real estate redevelopment rights around Kiel," much as the St. Louis Cardinals did when they built Busch Stadium in the 1960s. Would that be a contentious matter? Would that involve some sort of sweetheart deal that the average real-estate developer couldn't dream of?

I don't know. I'm not smart about these things.
I'm still wondering how some of the most successful businessmen in the nation could have been so shortsighted that they'd be getting slaughtered on a facility that opened barely more than four years ago and that is -- as far as I can tell -- doing everything it was expected to do.

The team's attendance is rocking near the top of the league despite its so-so performance. The sales-and-marketing effort is first-rate. Most of the luxury suites sold out, it was reported years ago, presumably for their asking price. There's advertising all over the building. They've got 200 nights of activity, which is about what I recall them projecting. NHL franchise values (and sale prices) continue to explode upward. The economy's great.

One would assume that all the wild spending on salaries perpetrated by the rightfully departed Mike Keenan (and on him) was made with the knowledge and approval of ownership, so it's hard to imagine that the Kiel Partners captains of industry didn't include these numbers in their calculations.

So why are the wheels falling off financially? Why is the team publicly poor-mouthing? Why are these people suffering so, and why are we the people being told about it at all?

I can't figure it out.
That's why I smell another rat.

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