Minneapolis stadium rendering
Another day, another hurdle for the Vikings. This time, politicians are trying to compare the values of the Twins and Vikings in two very different leagues and with very different ownership groups.
The attack dogs at the State Legislature and the lapdogs in local media are up to their old numbers tricks again. When the Twins moved into Target Field, they cut a deal with Hennepin County agreeing to pay back 18 percent of the sale price of the team if the franchise was sold as a contractual component of its funding agreement with the county. Under the plan, every year the Twins played at Target Field, that clause would drop by 10 percent – zeroing out after 10 years.
Given the early giddiness of outdoor baseball sycophants, it was logical to assume that even if the team lost, let’s say, 99 games, they would still draw between 2-3 million fans to their home games. It’s how Minnesotans are. Build a new restaurant in Minnesota and everyone in town has to try it once. There was no legitimate risk of the team being sold, because, after years of being paupers in the Metrodome, it was Fat City. They could have offered 50 percent, because it was never going to get cashed in – at least not over 10 years.
The Vikings have been put on the defensive thanks to a provision in the Vikings stadium bill that, while significantly similar in structure to the Twins stadium documentation, is different in one key respect – the payback clause if the team was sold. The language in the Vikings stadium deal would start at 18 percent of the profit made if the Wilfs sold, not 18 percent of the sale price.
What seemed to be missed in the discussion, and subsequent spinning by the state’s largest newspaper, is that, to use a cliché political term, you’re comparing apples to oranges. The Pohlads paid just $36 million to buy the Twins in 1984 and the current franchise value is $490 million – the approximate cost of Target Field and almost 14 times its 1984 purchase price.
It should also be noted that the Twins organization paid only $130 million of the $480 million needed to construct Target Field – just 27 percent of the overall cost. The current proposal for a Vikings stadium deal has the team paying $427 million of the $975 million cost – 44 percent of the overall cost – one-third more than the one-third of the project cost originally thrown out a year ago as the anticipated Vikings’ contribution to a new stadium.
The argument to have the Vikings offer up the same percentage parameters for the unlikely sell-back option doesn’t really hold water because a funny thing happened when the Twins got their stadium. Their value (and Hennepin County’s value for its investment) skyrocketed when they got into an outdoor stadium that didn’t look like a Copenhagen tin. In 2009, the last year the Twins played under the Metrodome’s collapsible roof, Forbes magazine ranked the Twins 22nd among Major League Baseball franchise values at $356 million. Two years at Target Field and that value has gone up to $490 million – a 38 percent increase.
The Vikings’ situation is markedly different. When the Wilfs bought the team from Red McCombs in 2005, they paid $625 million. In its last franchise valuation, Forbes said the Vikings were worth $796 million – 28th in the NFL. In two years, the Twins checker-jumped 10 spots on the league-wide list with their 38 percent increase. The Vikings’ value has climbed 27 percent over seven years the Wilfs have owned the team.
If, using the premise that those who want a bigger potential stake if the Wilfs sell (not relocating the team, just selling the team), the payback being 18 percent of the value of the franchise makes no logical sense. The Pohlads invested $36 million and have seen that investment expand 14-fold. The Wilfs invested $625 million for a franchise seven years ago that has expanded in value by 27 percent – approximately 4 percent a year.
Comparing the Vikings to the Twins – whether in stadium or philosophical commitment – is an exercise in futility at a minimum and, if looked at realistically, a farce. The Wilfs have gone to great pains to get a stadium deal done. They’ve been sent on a stadium scavenger hunt (find a property near major road systems, find a local partner, get Tony Bennett’s autograph on a document, etc.) and, much to the dismay of those who put the mine field in front of their snipe hunt, they bagged one and made it through. By contrast, the Pohlad’s have a Scarlet Letter on them that will never go away – no matter how hard they try.
When the Montreal Expos were becoming a financial money pit drawing tens of people to home games, MLB considered relocating its “black hole” franchise. But, the league couldn’t find any takers. A second plan was devised – let’s get rid of them – dead and buried style. But there was a problem. You can’t have an odd number of teams in baseball. With 162-game schedules, it was logistically impossible. The plan would require another team to be eliminated. The Pohlads offered to take the Twins out behind the barn, put a gun to the Temple of the franchise and squeeze. When the vote came whether or not to eliminate the Expos and Twins, the Pohlads voted against contraction, even though they offered up the franchise as a sacrificial lamb thanks to being stuck in the Metrodome. If not for Minnesotans rallying against the move and Hennepin County getting a stadium deal done, we wouldn’t have the Minnesota Twins or the Washington Nationals – the Expos franchise had to stay once Minnesota signed off on a new stadium and Washington D.C. finally stepped up and took on Montreal’s baggage.
The Vikings aren’t looking to move the team. Far from it. The Wilfs have been unflinching in that respect. They want to stay. They’ve backed it up by committing more than half of the franchise value and two-thirds above and beyond the purchase price of the franchise to commit $427 million to help give the team a new home. If they get it, why would they sell? They would have the new restaurant and, given the NFL’s dominance in terms of professional sports revenue and popularity, the only way they would sell is if somebody gave them the proverbial “offer they can’t refuse.” That amount would have to be about $1.3 billion – double the price they spent for the franchise.
In conservative estimates, the Vikings franchise would be worth more than $1 billion. Half of the NFL franchises are worth that, so, for a franchise to sell prior to the next TV deal kicking in would be ludicrous. It would take a minimum of $1.25 billion to convince the Wilfs to sell – twice the price the Wilfs paid to buy the team. Using the math in the current stadium bill, which calls for 18 percent of the profit from a sale, not the sale price, in the event of a $1.25 billion sale once a new stadium is in place, the Vikings would cut the State of Minnesota a check for $112.5 million. If the Pohlads sold the Twins today at the original contract price (even without two years of “depreciation”), the price tag would be $88 million.
The attack dogs may be barking, but the bite just isn’t there.
John Holler has been writing about the Vikings for more than a decade for Viking Update. Follow Viking Update on Twitter and discuss this topic on our message boards. To become a subscriber to the Viking Update web site or magazine, click here.