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Lip Man 1
05-08-2015, 11:17 AM
Today in the Tribune there is a long, long story on the Sox April / May "afternoon game" promotion and how that could be impacting the lease agreement and the Illinois Sports Stadium Authority.

It also provides some information on the agreement and given that last week the question came up in a thread about it, I wanted to share some of the details. I tried to do this without violating any board rules but mods please move to where you think best.

"The Sox, under an agreement with the Illinois Sports Facilities Authority, the public agency that owns The Cell, are required to pay a fee on each ticket sold beyond 1,930,000 in paid attendance. But that "ticket threshold," according to the agreement, excludes tickets that are given to sponsors or sold for less than $3."

"Allen Sanderson, an economist at the University of Chicago, said the Ballpark Pass may not defer enough tickets from paid attendance to stop fee payments. But, at the minimum, he said, it's another example of the agreement's favorability toward the Sox. It already requires any non-baseball events held at The Cell be approved by the Sox. And it wasn't until 2008 the Sox even paid an annual fee to use the stadium, which last year totaled $1,568,226."


"The Sox are pretty good at reading the fine print and getting around it," said Sanderson, who reviewed the agreement at the Tribune's request. "It's no different than any other corporation deciding to be headquartered in the Cayman Islands to reduce their tax burden."



"The agreement between the state and the Sox means that the attendance figure used to calculate the ticket fee is going to be lower than the team's official attendance. The agreement does, however, cap the number of tickets that can be excluded from attendance calculations those given away by the Sox to sponsors or sold for under $3 at 150,000.
Even with that cap, the attendance calculations have helped the Sox avoid paying fees. The team only had to pay a ticket fee in 2010. That 2010 fee was $455,974. However, because the Sox were allowed to apply a credit toward their payment, the team ended up paying just $95,531."

Lip

Golden Sox
05-08-2015, 11:51 AM
To make a long story short, when the White Sox draw less than 2 million fans,their making alot of money. When they draw more than 2 million fans, their making a ton of money. Forbes magazine said the White Sox were 15th in revenue in MLB in 2014. And that was with an attendance of 1.6 million. JR might have the best stadium contract in MLB. The franchise is making money big time because of that stadium contract. If the team ever won on a consistent basis this franchise would be a goldmine.

voodoochile
05-08-2015, 12:05 PM
How much rent are other teams paying? Until we know that we have no idea if their "sweetheart" lease is any better than league standard.

slavko
05-08-2015, 12:10 PM
What are chances of them topping 1,930,000 in attendance this year? I'm joking, of course.

Lip Man 1
05-08-2015, 12:14 PM
Voodoo:

Valid point. However there have been stories printed over the years quoting other economists as saying along the same lines that this is a very good deal for the Sox and has been since the stadium opened.

There was also a detailed breakdown of the original lease agreement with specifics and drawing the same conclusion in Pulitzer Prize winning author John Helyar's book, The Lords of the Realm.

It was Helyar who used the term "sweetheart lease agreement" when talking about it originally.

It again shows that JR is a very, very sharp businessman. You don't become a self made millionaire if you aren't. It also appears to back up a statement that Jimmy Piersall told me one time. Jimmy said he knows two board members and that they told him the Sox haven't lost money "for years" for whatever that may be worth to you.

Lip

Noneck
05-08-2015, 12:27 PM
Just showing this club is a money tree and always blooms, with some years being more bountiful than others.

voodoochile
05-08-2015, 12:33 PM
Voodoo:

Valid point. However there have been stories printed over the years quoting other economists as saying along the same lines that this is a very good deal for the Sox and has been since the stadium opened.

There was also a detailed breakdown of the original lease agreement with specifics and drawing the same conclusion in Pulitzer Prize winning author John Helyar's book, The Lords of the Realm.

It was Helyar who used the term "sweetheart lease agreement" when talking about it originally.

It again shows that JR is a very, very sharp businessman. You don't become a self made millionaire if you aren't. It also appears to back up a statement that Jimmy Piersall told me one time. Jimmy said he knows two board members and that they told him the Sox haven't lost money "for years" for whatever that may be worth to you.

Lip

No worries I've long suspected that to be the case. Easy to hide profit as salary to BOD members anyway. Also the parking revenue isn't counted toward profitability either. I don't have a problem with them making money. I'll just be surprised if there are a bunch of other super rich dudes out there paying lots of money to state government and JR 's rent deal is all that unique.

Lip Man 1
05-08-2015, 12:41 PM
Two other points that also have to be factored in. One is the fact that the Sox aren't themselves responsible for the upkeep on U.S. Cellular Field, that falls to the Sports Stadium Agreement. Upkeep can cost a lot of money. Don't know how many others teams may be in the same situation.

The other is that the newspaper story states the Sox didn't pay rent until 2008. The stadium opened in 1991. That's a long time. I'm sure at least that part of the newspaper story is accurate since the Sports Stadium Authority probably has to disclose these items every year as a state agency. Easy to check the records on this point so the Tribune probably had access to that and wouldn't be guessing or making that up.

No way to know with 100% accuracy if the Sox have the "best" lease in baseball, the 3rd best or the 15th best but there is a lot of circumstantial evidence over the years that shows in my mind it's "one of" the best.

Lip

DumpJerry
05-08-2015, 12:56 PM
All seats (even Scout Seats) shall be $2.99!!!! :):gulp::bandance:

The Sox have a very sweet deal. They did not pay for the construction of the stadium. They did not pay for the upgrades to the stadium. They did not pay for the restaurant originally called Bacardi at the Park to be built, BUT get the revenues from said restaurant.

The Sox have a printing press for Benjamins in the basement.

(Meanwhile, up north, the owner is coughing up $500,000,000.00 of his own Benjamins to upgrade the dump)

Lip Man 1
05-08-2015, 01:01 PM
They did not pay for the restaurant originally called Bacardi at the Park to be built, BUT get the revenues from said restaurant.

Dump:

The Tribune story also mentioned the point you bring up as well. Like I said there may not be a sharper baseball owner from a financial standpoint than JR.

Lip

Irishsox1
05-08-2015, 02:14 PM
The White Sox do not pay real estate taxes. That's crazy.

Lip Man 1
05-08-2015, 02:19 PM
The White Sox do not pay real estate taxes. That's crazy.

Well they don't own the stadium, that belongs to the Sports Stadium Authority, the Sox mearly rent it so I can understand why they don't.

I don't think they own the parking lots either. Someone correct me if I'm wrong on that.

Lip

Noneck
05-08-2015, 02:22 PM
All the nonsense over the years about having only 50 cents and not being able to afford the buck product. And a lot of fans bit, oh well, live and learn time.

Irishsox1
05-08-2015, 02:30 PM
Well they don't own the stadium, that belongs to the Sports Stadium Authority, the Sox mearly rent it so I can understand why they don't.

I don't think they own the parking lots either. Someone correct me if I'm wrong on that.

Lip

If the Sox had to pay real estate taxes (like the Cubs do) the real estate tax liability would be added to the rent or be separate requiring the Sox to pay the taxes and give the Sox the ability to contest the assessor's valuation. However, since the property is owned by the state the parcels are off the tax rolls generating no real estate taxes. That's vintage Reinsdorf.

As for the parking lots, those are also exempt from real estate taxes.

voodoochile
05-08-2015, 03:09 PM
All seats (even Scout Seats) shall be $2.99!!!! :):gulp::bandance:

The Sox have a very sweet deal. They did not pay for the construction of the stadium. They did not pay for the upgrades to the stadium. They did not pay for the restaurant originally called Bacardi at the Park to be built, BUT get the revenues from said restaurant.

The Sox have a printing press for Benjamins in the basement.

(Meanwhile, up north, the owner is coughing up $500,000,000.00 of his own Benjamins to upgrade the dump)

Just to be picky though that $500M is considered an investment in an asset. Ownership of Wrigley makes the flubbies much more valuable as an asset than the Sox. Every penny Rickets puts in comes back doubled and tripled when his family eventually sells.

Wedema
05-08-2015, 03:12 PM
It wasn't just "afternoon games" that were included in the Ballpark Pass as it was every game in April and May excluding Opening Day and Konerko Day for $49 (19 games total).

DSpivack
05-08-2015, 04:25 PM
It wasn't just "afternoon games" that were included in the Ballpark Pass as it was every game in April and May excluding Opening Day and Konerko Day for $49 (19 games total).
Yeah, I've been to 5 games this season, Opening Day and 4 with the pass. My work schedule just changed, so it's hard to work around, and although I'm off today I decided not to go with the weather and the Bulls game. Saturdays I work until 7, and sunday have Mother's Day plans, so no games this series. I should be able to get to games in the Cleveland series and vs the Twins May 24.

Wedema
05-08-2015, 04:47 PM
Yeah, I've been to 5 games this season, Opening Day and 4 with the pass. My work schedule just changed, so it's hard to work around, and although I'm off today I decided not to go with the weather and the Bulls game. Saturdays I work until 7, and sunday have Mother's Day plans, so no games this series. I should be able to get to games in the Cleveland series and vs the Twins May 24.

Where have the seats been with the pass?

Steelrod
05-08-2015, 04:57 PM
All seats (even Scout Seats) shall be $2.99!!!! :):gulp::bandance:

The Sox have a very sweet deal. They did not pay for the construction of the stadium. They did not pay for the upgrades to the stadium. They did not pay for the restaurant originally called Bacardi at the Park to be built, BUT get the revenues from said restaurant.

The Sox have a printing press for Benjamins in the basement.

(Meanwhile, up north, the owner is coughing up $500,000,000.00 of his own Benjamins to upgrade the dump)
He did however get the city to throw in sidewalks and parts of Waveland and Sheffield Avenues.

johnny bench
05-08-2015, 05:48 PM
The sweetheart deal would not be possible without compliant and complicit elected officials and their appointed lackeys.

I'll stop there to comply with "no politics".

DSpivack
05-08-2015, 06:31 PM
Where have the seats been with the pass?
Depends on attendance. The lower the attendance, the better the seats, unsurprisingly. In those four games the seats have been from the UD corners to near the RF foul pole to the RF bleachers.