State could save $14 million on payments to teams
NEW ORLEANS -- Hurricane Katrina, which forced the New Orleans Saints and the New Orleans Hornets out of town, could wind up saving the state more than $14 million this year on payments owed the two teams.
As a result, the state plans to pay the Saints $2.5 million instead of the $15 million it was originally obligated to pay for the 2005 fiscal year, according to the terms of a 10-year, $186.5 million contract the state signed with the club in 2001.
Payments to the Hornets for the 2005-06 and 2006-07 seasons were waived as part of an agreement reached between the state and club in January. Those subsidies typically would range between $1.5 million and $2.5 million per season.
State representatives with the Louisiana Stadium and Exposition District and SMG, the company that manages the Superdome and New Orleans Arena, said the Saints have been made aware of the reduced payment for months.
Team officials declined comment on whether they will agree to the reduced payments.
LSED attorney Larry Rodel said he has not had contact with Saints officials or their attorneys in several months.
"It is my understanding that the Saints may make a claim against their business interruption insurer for losses stemming from Hurricane Katrina, including the loss of inducement revenues due to games not being played in the Superdome during the 2005 season," Rodel said.
NFL spokesman Greg Aiello declined comment, saying the matter is an issue between the team and state.
The Hornets' situation is clearer. On Jan. 30, the state and the NBA reached an agreement that will keep the Hornets based in Oklahoma City for next season with the understanding that the club will return to New Orleans for the 2007-08 season.
At the team's request, the Hornets' lease was amended to allow the team to play 35 games at Oklahoma City's Ford Center and six at New Orleans Arena next season.
In return, the Hornets agreed to waive all financial inducements owed the team for this past season and the 2006-07 season, an amount that could have reached $10 million.
"We're right where we're supposed to be," Hornets owner George Shinn said. "I told the governor that we would work very closely with them. There's no dispute."
Copyright 2006 by The Associated Press
