Charlotte 'rights' pass falls incomplete Backers confident

foes say shortfall is concern

September 03, 1993|By Jon Morgan | Jon Morgan,Staff Writer

The do-or-die drive to sell season-ticket rights in Charlotte, N.C., has fallen short of a sellout, but organizers of the city's NFL bid say the campaign has done well enough to keep them in the running.

"We have sold enough of them to answer the questions about stadium financing," said Max Muhleman, a consultant working on behalf of the North Carolina football bid.

But competitors, eager to raise anew the financial questions that have dogged Charlotte's application, aren't so sure.

"I'm amazed that they sold as many as they did. But the fact that they came up short I'm sure is a point of concern," said Jerry Clinton, an investor trying to bring a team to St. Louis.

Charlotte's NFL backers today will suspend the sales of "seat rights," one-time fees charged to season-ticket holders to pay for stadium construction. Today also marks the end of the two-month drive by the NFL expansion finalists to sell sky boxes and club seats.

At last count, the Charlotte group sold about 48,000 of the 62,000 ticket fees they offered for sale. The stadium will hold 72,000. Muhleman, who projected a sellout in July, said he'd like to get into the "50,000 range" of rights sales by the close of business today.

That would be nearly 25 percent below a sellout, leaving the group $25 million under the $100 million it plans to raise from the fan-paid fees. Selling all 62,000, at an average of about $2,500 each, would net $156 million, or, $100 million after taxes. About $118 million had been raised as of the start of the week, or about $70 million after taxes.

Muhleman said the group could easily sell the rest in the euphoria after a franchise is awarded. In the meantime, the investors have made provisions for the shortfall in their financing plan, which he declined to reveal. Charlotte's 100-page financing plan was hand-delivered to league offices this week, and provides for loans from the state's three largest banks.

An NFL source familiar with the plan said it assumes the rights willbe sold eventually. The city's organizers may seek guarantees -- possibly from the local business community -- that the rest of the rights will be purchased, the source said.

"We're going to look at it and see how far short they are. . . . They understand they have to give us a comfort level they can sell out," said the source, speaking on the condition of anonymity.

Organizers hope the plan would prevent them from having to divert revenue to debt service that otherwise would go to visiting teams.

Charlotte is competing against Baltimore and three other cities for a pair of NFL expansion teams due to be awarded in late October. The other cities have public funding in place for either new or renovated stadiums, but political leaders in the Carolinas balked at a massive public investment, leaving Charlotte with nagging financing questions.

The prospective Charlotte ownership group, led by ex-Colt Jerry Richardson, initially planned to finance both the stadium and franchise with loans. But the league said it was uneasy about such a large debt load.

With the $140 million franchise fee announced this spring, the owners must come up with more than $300 million to build a stadium and field a team.

In June, the Charlotte investors unveiled an ambitious plan to build the stadium largely with fees charged season-ticket holders. The idea was to require most of the team's season-ticket holders to buy a "permanent seat license" before letting them buy season tickets. The fees ranged from $600 to $5,400, depending on seat location, and would be transferable if fan wanted to sell the "license" later.

Building a stadium with fees would be an unprecedented departure from the tradition of taxpayer-funded facilities. A few, such as Texas Stadium, have been financed through interest-bearing bonds purchased by season-ticket holders. The Charlotte seat rights pay no interest.

The Charlotte plan was promoted in a carefully coordinated sales campaign featuring television, radio and newspaper ads. Applications were handed out in businesses throughout the region. A toll-free phone number was set up. Local banks agreed to provide low-interest loans for rights. Buyers were promised their names in a "walk of fame" outside the stadium. Organizers warned of an imminent sellout, possibly in the first month.

The effort generated impressive early returns. When the envelopes were opened the first day, 41,700 seat rights were sold. But only a few thousand more were sold in the following two months.

"That's what happens when you sell more tickets than anybody in the history of sports. It's tough to top the first day," Muhleman said.

Charlotte was an early advocate of the premium seat campaign, and encouraged the league to allow the cities to collect deposits on luxury seats as a way of proving market strength. The league gave Charlotte special permission to go beyond sky boxes and club seats to sell the seat rights.

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