NFL to set 'realistic' franchise fee

May 12, 1993|By Jon Morgan | Jon Morgan,Staff Writer

The NFL is committed to setting a "realistic" franchise fee that will accurately reflect expected revenues but not unduly burden the expansion teams it expects to name this fall, a league official said.

Team owners on committees devoted to expansion and finance met jointly for four hours yesterday in New York to discuss the entry fee that will be charged the new team owners. No fee was set, but estimates have ranged from $125 million to $200 million.

"We're trying to put two successful franchises in place," Roger Goodell, vice president of operations for the NFL, said after the meeting.

He said the committee considered a number of variables, including a higher fee spread out over several years and a lower figure payable over a short period. The committees also considered likely revenue to the prospective teams from television, property sales and other sources.

A fee will be set by the full body of team owners meeting in Atlanta on May 25 and May 26. The franchises are scheduled to be named in the fall. Finalists are Baltimore, St. Louis, Charlotte, N.C., Memphis, Tenn., and Jacksonville, Fla.

Meanwhile, the NFL also has told Charlotte that it is free to set its own rules for the sale of "seats rights" as part of a premium seat campaign the five cities will conduct from July 1 through Sept. 3. The campaign is designed to test the ability of the markets to sell lucrative premium suites.

For sky boxes and club seats, the league has told the cities to collect half the first year's rent now and half six months after the city is awarded a franchise. The money will be refunded with interest in the cities not winning teams.

In Charlotte, a separate but parallel campaign will be held to sell rights for season tickets. The city does not have public funding for a stadium as Baltimore does and is proposing to finance the construction with rights fees of $500 and up for season tickets.

The league has given Charlotte permission to set its own parameters and minimum deposit rules for the licensing fees campaign, but warned officials that the results will not be meaningful if the terms are too liberal.

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