Foxboro lease hurts sale of Patriots

March 05, 1992|By Vito Stellino | Vito Stellino,Staff Writer

The negotiations between Victor Kiam, owner of the New England Patriots, and Florida businessman Malcolm Glazer were off and then on again yesterday.

After minority owner Fran Murray said that the two sides "would not be able to make a deal," a source familiar with the talks said that Glazer still was willing to have more discussions with Kiam about buying the financially troubled team.

The problem is that the Patriots are in such bad shape that Glazer -- who heads one of three ownership groups seeking a Baltimore NFL franchise -- has to decide whether his desire to obtain an NFL team overrides financial considerations.

Glazer has leverage in the talks, because Kiam has no other potential buyers, but it isn't a good deal for him on almost any terms if he has to keep the team at Foxboro Stadium.

Glazer can buy the Patriots more cheaply than he can get an expansion team. The Patriots apparently can be purchased for $110 million -- debt would reduce the immediate cash needed to $27 million -- and a new club is expected to cost more. But he's not likely to make any money in New England because of the unfavorable lease at Foxboro Stadium.

Murray said the team pays about $1.5 million in rent per year, plus game-day expenses, and gets no revenue from the stadium for sky boxes, concessions or advertising.

"The income is zero [from the stadium] to the team, so you probably can't do worse than that," Murray said.

On the other hand, Glazer could reap a financial bonanza if he were able to move the team, although the NFL wouldn't like to leave New England, which represents the nation's No. 6 television market.

Glazer has to decide whether to make a deal in New England to gain control of the team or gamble that he can get an expansion franchise. There's no guarantee Baltimore will be awarded a team or that he would be named owner if the city got a team.

Kiam and Glazer, who had been in intense negotiations since Friday before they cooled Tuesday night, are facing a deadline in 10 days. Murray is pushing for a settlement before the NFL's annual March meetings start March 15. He has been owed $38 million for his 49 percent share of the team since October.

The team also is $45 million in debt.

Neither Kiam nor Glazer was available for comment.

Although Murray said he doesn't want his money until after expansion -- he is seeking to become an owner of a St. Louis expansion team -- he wants to make sure the majority owner has the money to pay him.

"There's got to be a resolution of the problem created by Victor's inability to meet the obligation," Murray said.

Norman Braman, owner of the Philadelphia Eagles and a friend of Kiam, said: "If Murray's situation wasn't what it is, I think he'd [Kiam] remain an owner. He's an owner in good standing. He's not in default of anything [except the debt to Murray]."

Murray said that if Kiam doesn't make a deal before the March meetings, the NFL's finance committee has recommended the league "acquire Kiam's interest and then market the club for sale primarily to those who want to keep the team in the market."

Kiam, though, hasn't yet found any prospective buyer who's willing to keep the team in New England for the long term. Even if Massachusetts comes up with the financing for a new stadium, it's likely to be five years before the team could play in it. Meanwhile, the owner would continue to suffer losses. It's also uncertain whether Massachusetts would build a stadium.

The NFL made an agreement with Kiam last year that he wouldn't ask to move before the end of the 1993 season, when the network contract expires. If the NFL loses the New England market before then, NBC, which televises AFC games, would want a rebate.

If Glazer pulls out of the New England talks, Herbert J. Belgrad, chairman of the Maryland Stadium Authority, is ready to welcome him back to the Baltimore effort.

Belgrad said Glazer showed he's serious because he heads the only group in the country that got into prolonged negotiations with Kiam. He said if Glazer pulls back from the New England deal and embraces Baltimore again, it's a sign that, as a good businessman, Glazer recognizes Baltimore is offering the NFL the best deal because it has the financing for a new stadium.

By contrast, Belgrad said, Charlotte, N.C., which is often called a front-runner with St. Louis in the expansion derby, has an "insurmountable nut to crack in debt service," because it will try to build a stadium with private funds.

Belgrad also said he feels he's on good terms with Glazer and his sons, Bryan and Joel. There was some tension when the Glazers refused to contribute $50,000 to the Maryland Stadium Authority to fund the expansion effort. The other potential owners -- Leonard "Boogie" Weinglass, the chairman of Merry-Go-Round, a nationwide chain of clothing stores, and author Tom Clancy -- made the contribution. But Belgrad said the Glazers provided the stadium authority with a copy of his application to the NFL.

Belgrad said Weinglass also provided a copy of his group's application, but Clancy refused. "He treated it as if it were a top-security document," Belgrad said.

Belgrad said if Glazer doesn't purchase the Patriots, he expects him to be at the meeting in Phoenix with Weinglass and Clancy.

"Unless we work together as a team [to get the franchise], we're not going to get to the point where they're competing with each other [to become the owner]," Belgrad said.

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